Global

Global economic recovery gathered pace, with the world economy growing at 3.7% in CY 2017, aided by across-theboard recovery in developed economies, i.e. United States, European Union and Japan. Growth in Non-OECD markets, however, remained modest. Green shoots of trade recovery that was seen towards the end of CY 2016, continued in CY 2017, aided by the recovery in global demand and a sustained increase in major commodity prices. The sustained rise in global trade was led by a pickup in import demand in developed markets. While this augurs well for underlying demand trends, there are risks emerging from rising protectionism and trade tensions between major economies, and from geo-political developments in North East Asia and the Middle East.

Growth accelerated in the US as the economy approached full employment, labor markets tightened and inflation started creeping higher. The US Federal Reserve continued with the interest rate normalisation cycle in FY 2017-18 by increasing rates thrice, in Jun 2017, Dec 2017 and Mar 2018. The world is slowly coming out of the low interest rate and abundant liquidity regime as advanced economies normalise monetary policy.

Global oil demand growth remained robust at 1.6 million barrels per day (mb/d) in CY 2017 led by demand recovery in the OECD countries and healthy growth in demand from China and India. Gasoline demand trends remained robust, contributing around 68% of oil demand growth in the OECD countries. Global oil price strengthened 18% in FY 2017-18, supported by the OPEC non-OPEC co-operation to extend the oil production scale-back to 32.5 mb/d till the end of 2018.

Petrochemicals sector globally continued to see high cracker utilisation levels driven by firm product demand across key markets. Global demand for key polymer products (PE, PP and PVC) grew by 4.1% during 2017, led by India and China. Polymer margins remained healthy during the year supported by sustained demand.

India

FY 2017-18 marked a significant economic measure by the government: The Goods and Services Tax (GST) was implemented from July, 2017 as the nation moved to ‘one nation-one tax’. The reform measure has helped India move into the Top 100 Club in World Bank’s ‘Global Ease of Doing Business’ rankings.

The Indian economy continued to grow strongly, as the economy recovered in the 2nd half post stabilisation of the GST regime. Gross Domestic Product growth rate in FY 2017-18 was 6.7%, supported by consumption growth and government spending. With improving investments, there are signs that a recovery is underway. Industrial activity has rebounded with strong industrial production growth, led by a rise in consumption, manufacturing and electricity generation. Strong vehicle sales growth and improvement in road freight transport following stabilisation of GST are further positive signs for continuing demand growth. Services indicators also show positive trends with services credit, services exports and imports clocking double digit growth.

India remained the world’s 3rd largest oil consuming economy behind USA and China after overtaking Japan last year. Its annual demand for oil climbed by 0.12 mb/d to 4.68 mb/d.

For FY 2017-18, India’s oil demand grew at 5.3% y-o-y with strong consumption-led demand growth in gasoline (+10.1%) and jet fuel (+8.9%). The growth was led by robust passenger vehicle sales growth, two-wheelers sales growth and growth in domestic airline passenger traffic. Domestic diesel demand rose at 6.6% with acceleration in industrial activity.

Polymer demand growth in India continues to be driven by healthy economic indicators, infrastructure boost and higher disposable income. During the year, polyester chain margins recovered with slower capacity growth relative to demand growth. This supported healthy operating rates and favourable margins for integrated players.

Introduction of GST and emphasis on cash-less transactions have provided a fillip to organised retail sector in India. Organised retail has a 9% share in the overall Indian Retailing market, providing significant growth opportunities to the formal sector.

India’s digital services market is continuing its exponential growth trajectory with Jio expanding its coverage and further deepening in existing areas to achieve 99% population coverage during FY 2018-19. With over 186.6 million subscribers – Jio has ushered in an era of data abundance in the nation. The digital infrastructure created by Jio will play a significant role in accelerating India’s economic growth in the coming years.

LLDPE facility at Refinery Off - Gas Cracker (ROGC) complex, Jamnagar

FY 2017-18 marked the culmination of RIL’s largest ever petrochemical expansion project, with the commissioning of the Refinery Off Gas Cracker (ROGC) and related downstream units. During the year, the final phase of the Paraxylene (PX) expansion was completed and ethane cracking at Dahej and Hazira have been stabilised. The projects achieved on-spec production at design capacities in record time, a testimony to the operational excellence of RIL’s team. The robust economics of these projects reflects in sharp increase in petrochemical business earnings during the year. New volumes in polyester intermediates and polymer stream, elevated polymer margins and improving polyester chain margins were key drivers for record petrochemical business earnings. Refining business environment remained constructive with strong oil demand growth outpacing supplies, pushing global utilisation levels higher. Refining margins remained strong during the year supported by healthy light distillate cracks and recovery in middle distillate cracks.

FY 2017-18 also marked the commencement of commercial operations of Jio. Within a short period, Jio has transformed the digital landscape in India, providing high-speed internet access to 186.6 million subscribers as on 31st March 2018.

Reliance Retail business also saw significant traction with robust revenue growth (104.9% y-o-y) and EBIT growth (163.3% y-o-y). Reliance Retail added 221 stores and 3,736 Jio Points stores during the year and now operates 17.7 million sq. ft. of retail space, the largest footprint of any organised retailer in India.

Refining & Marketing – Third successive year of double-digit Refining Margins

The Refining & Marketing business reported a record EBIT of `25,869 crore during FY 2017-18 reflects RIL’s continuing focus on operational efficiencies and proactive risk management. Though global oil prices increased during the year, oil demand continued to be robust in CY 2017 at 1.6 mb/d. With limited refining capacity additions, global refinery utilisation rates remained high at 82.8%, supporting refinery margins.

Commissioning of the world’s largest Refinery Off-Gas Cracker
(ROGC) complex

Crude and product prices increased during the year, with markets re-balancing amid declining inventories. Production restraint by OPEC and some Non-OPEC countries helped restrict supply growth in the firm demand environment, leading to a drawdown in crude and product inventory levels in the OECD countries. Firm refining margins were underpinned by a recovery in middle distillates product cracks with firm diesel demand on the back of recovering industrial and mining activity.

During the year, RIL processed 8 new grades of crude, including grades from USA introduced for the first time. Commissioning of the new petrochemical units at Jamnagar (PX and ROGC) has increased the petrochemical intensity index of the Jamnagar complex, leading to further value addition to refinery streams.

Petrochemicals – 63.0% increase in earnings

Petrochemical business EBIT reached record levels of `21,179 crore with incremental volumes from project startups and supportive margin environment. During the year, the final phase of the PX expansion was completed and ROGC & related downstream units were commissioned. Also, ethane cracking stabilised at Hazira and Dahej, leading to improved yields. Project management and operational excellence was demonstrated through the rapid ramp-up of new plants to their design capacity, with on-spec production achieved in record time.

FY 2017-18 marked the culmination of the largest petrochemical expansion undertaken by RIL. Over the course of the last three years, RIL has significantly enhanced its capacities in key product lines and has improved its global rankings in key products in the polyester and polymer chain. Importantly, the new projects have materially improved RIL’s cost positions in these products with appropriate choice of feedstock, technology and scale. With the completion of these projects, RIL’s petrochemical portfolio has unmatched feedstock integration and flexibility to achieve sustainable earnings.

Oil and Gas Exploration and Production

Domestic Oil & Gas

RIL commenced commercial production from its Coal Bed Methane (CBM) block in March 2017. During the course of the year, production was ramped up to 1 MMSCMD level with more than 200 wells having been put to production. Gas from the CBM field was sold through a government mandated competitive bidding process carried out by CRISIL.

RIL, along with partner BP, have embarked on the next wave of projects to develop existing discoveries in the KG D6 block. For R-cluster development, all major contracts for supply of long lead items, installation works and drilling rigs have been awarded. Field development plans for MJ gas and condensate field and the Satellite Cluster have been approved by the Management Committee of the block.

The development and production from the three planned projects (R-cluster, Satellite Cluster and MJ fields) is expected to bring on-stream 30-35 MMSCMD of gas in phases over 2020-22.

International: Shale Gas

US crude and natural gas prices remained volatile during the course of the year, with a strong uptick in prices towards the end of the year. Natural gas prices were firm during the year with increased offtake from LNG and Mexican exports. Business conditions, however, remained challenging and RIL continued with its strategy of measured approach to development, progressing only those projects meeting the Group’s investment threshold.

During the year, Reliance divested its holdings in the Marcellus shale JV which were operated by Carrizo Oil & Gas.

Reliance continues to focus on value maximisation in the remaining two JVs with focus on improvement in well design and execution efficiency.

Retail Business – Leadership across key consumption baskets

Reliance Retail achieved revenues of over US$10 billion during FY 2017-18, becoming the first Indian retailer to cross this milestone. Reliance Retail Revenues grew 104.9% y-o-y to `69,198 crore, sustaining a revenue CAGR of 45% over the last 5 years. Reliance Retail delivered EBITDA of `2,529 crore, up 114.5% on a y-o-y basis, with profitable growth across all verticals. Reliance Retail has established a large presence across all consumption baskets, and is a leading player in food, consumer electronics and fashion retailing. During the year, Reliance Retail further expanded its retail footprint and now operates 7,573 stores in over 4,400 cities.

Digital Services – World’s largest and fastest growing mobile data network

Jio continued to set new benchmarks as it consolidated its position as the world’s largest and fastest growing mobile data network. Jio has India’s largest wireless data subscriber base of 186.6 million subscribers. Across all key performance parameters, Jio is resetting industry benchmarks with largest high quality video consumption, highest voice consumption per subscriber and the best network quality with the lowest call drops and fastest download speeds. Jio is playing a transformational role in creating the digital eco-system for India, with the growing popularity of its digital services and applications. MyJio became the fastest Indian app to cross 150 million downloads and is becoming a valuable customer engagement app. JioTV was awarded the “Best Mobile Video Content” app in the Glomo Awards 2018, while JioCinema became India’s no.1 Video-On- Demand App.

Digital Services business recorded revenues of `23,916 crore, with year-end subscribers’ base at 186.6 million and Segment EBIT was at `3,174 crore for the year, with EBIT margin of 13.3%. This is strong financial performance within very first year of commercial operations demonstrating strong fundamental and operating leverage of the business.

Media – Strengthening content and delivery platforms

High quality media content is a key differentiator in the digital and broadcast ecosystems. Reliance is committed to provide Indian consumers world-class media for entertainment, news and information across platforms. During the year, Reliance continued to strengthen original and exclusive content for its digital platforms with strategic tie-ups and investments in film, media production and music platforms.

Reliance’s flagship media Company Network18 consolidated its operations and continued to raise its standing in the Media and Entertainment sector.

Network18 subsidiary TV18 took operational control and raised its stake to 51% in entertainment JV Viacom18 (in March ’18). This will drive value-addition and synergies across the multi-platform group comprising broadcast, digital, filmed and experiential entertainment and media businesses.

Corporate Stewardship:

Reliance believes in fostering an equitable economic growth and ensuring a sustainable and inclusive growth for all.

During the year, Reliance contributed `771 crore towards various community development initiatives focused in the areas of rural transformation, health, education, sports for development, disaster response, arts, culture and heritage and urban renewal. Reliance Foundation has transformed lives of 20 million Indians across 13,500+ villages and 100+ urban locations. During FY 2017-18, Reliance contributed `86,942 crore to the national exchequer. Reliance continues to invest in Skill India, Make in India & Digital India. RIL has been at the forefront of adopting an integrated thinking in the Company’s management approach. RIL’s integrated approach to value creation culminates into its six capital approach which depicts its commitment towards a sustainable future. Reliance’s businesses are future-ready and enable the fourth industrial revolution, an amalgamation of physical, digital and biological innovations.

Digital Platforms

During the year, Reliance has initiated platform driven organisation process to tap significant potential for its businesses to improve efficiency, informed & agile decision making process.

Petcoke Gasification

Financial Performance and Review

Alok Agarwal

Srikanth Venkatachari

Delivering superior performance in today’s volatile and global environment requires sound strategy and disciplined execution. Reliance achieved a number of milestones and performance records – underpinned by solid segment earnings growth, led by volume and margin expansion. Reliance has generated record cash profit of US$8.6 billion (`56,034 crore) for the year. Additionally, Reliance became the first Indian Company to record PBDIT of US$11.4 billion (`74,184 crore) with strong contribution from Energy and Materials businesses and the Consumer-facing businesses.

The robust performance for the year also reflects strong underlying fundamentals of Reliance’s refining and petrochemicals business. The Company’s hydrocarbon and consumer business demonstrated completion of its largest ever capital expenditure cycle with all major project commissioning during the year, including cracker, paraxylene facilities, ethane project and wireless services. The structural strength in energy & materials business environment augurs well for Reliance’s new capacities that have come on stream this year.

`74,184 crore

Record PBDIT

Financial Information – Consolidated and Standalone

Reliance achieved consolidated revenue of `4,30,731 crore (US$66.1 billion), an increase of 30.5%, as compared to `3,30,180 crore in the previous year. Increase in revenue was primarily on account of higher volumes with start-up of petrochemicals projects and uptrend in prices of products in the refining and petrochemical businesses. Product prices were led by 18% y-o-y increase in average Brent oil price to US$57.5/bbl for the year. Reliance’s consolidated revenue was also boosted by robust growth in Retail and Digital Services business. Reliance Retail recorded a 104.9% increase in revenue to `69,198 crore. Digital Services business recorded revenue of `23,916 crore in its very first year of commercial operations.

Robust refining and petrochemicals margin environment, volume growth in petrochemicals and rapidly increasing contribution from consumer businesses led to significant rise in operating profits for the year. Operating profit before other income and depreciation increased by 38.9% on a y-o-y basis to `64,176 crore (US$9.8 billion) from `46,194 crore in the previous year. Profit after tax was higher by 20.6% at `36,075 crore (US$5.5 billion) as against `29,901 crore in the previous year. Higher interest and depreciation charges with the commissioning of projects across businesses resulted in relatively lower growth in profit after tax.

• Revenue from the Refining and Marketing segment increased by 22.0% y-o-y to `3,06,095 crore (US$47.0 billion) including inter segments transfers, primarily on account of higher crude prices during the year. Segment EBIT increased by 3.2% to a record level of `25,869 crore (US$4.0 billion), supported by higher Gross Refining Margins (GRM). GRM for the year was at a 9-year high of US$11.6/bbl as against US$11.0/bbl in the previous year. RIL’s GRM outperformed Singapore complex margins by US$4.4/bbl. As at the end of the year, RIL operated 1,313 petroleum retail outlets in the country. RIL’s superior retail proposition reflects in the higher offtake, with a 42% increase in MS and HSD volumes.
• Revenue from the Petrochemicals segment increased by 35.5% y-o-y to `1,25,299 crore (US$19.2 billion), including inter segments transfers, primarily due to higher volumes from new Paraxylene, ROGC and its downstream units (PE and MEG). Petrochemicals segment EBIT increased sharply by 63.0% to its highest ever level of `21,179 crore (US$3.2 billion). Earnings was supported by favourable product deltas across integrated polyester chain, PP and PVC along with volume growth. EBIT margin was higher by nearly 300bps to 16.9%, reflecting RIL’s strengthened cost positions across product chains and unmatched feedstock flexibility.
• Revenue from the Oil and Gas segment increased by 0.3% y-o-y to `5,204 crore (US$0.8 billion), including inter segments transfers. The marginal rise in revenue is due to ramp-up in CBM operations and better price realisations in US shale operations. Volumes from conventional fields and US shale were lower on account of natural decline and slowdown in development activity. Segment EBIT was at `(1,536) crore as against `(1,584) crore in the previous year. For the year, domestic production (RIL share) was at 78.9 BCFe, down 16.9% y-o-y and in US Shale (RIL share) business was 139.7 BCFe, down 19.7% y-o-y basis.
• Revenue from the Organised Retail business grew by 104.9% y-o-y to `69,198 crore from `33,765 crore in the previous year. Reliance Retail has become the first retailer in India to cross the US$10 billion revenue milestone. Retail business PBDIT grew sharply by 114.5% to `2,529 crore for the year. Retail segment EBIT increased by 163.3% to `2,064 for the year. EBIT margins for segment expanded by 70 bps to 3.0% during the year.
• In its very first year of commercial operations, Digital Services business recorded revenues of `23,916 crore, with year-end subscribers base at 186.6 million. Reliance Jio reported strong financial performance for the year despite competitive pressures. Segment EBIT was at `3,174 crore for the year, with EBIT margin of 13.3%.

Other income was lower at `8,862 crore (US$1.4 billion) as against `9,443 crore in the previous year, primarily on account of adverse yield movement.

Finance cost was at `8,052 crore (US$1.2 billion) as against `3,849 crore in the previous year. The increase was primarily on account of commencement of Digital Services business, Petrochemical projects at Jamnagar and higher loan balances.

Depreciation (including depletion and amortisation) was higher by 43.4% to `16,706 crore (US$2.6 billion) as compared to `11,646 crore in the previous year, primarily on account commencement of wireless service business in Reliance Jio. Higher depreciation also reflected the capitalisation of new projects in the petrochemicals business and reduction in reserve estimates in domestic Exploration & Production business.

Profit after tax was higher by 20.6% at `36,075 crore (US$5.5 billion) as against `29,901 crore in the previous year.

Basic earnings per share (EPS) for the year ended 31^st March 2018 was at `60.9<sup>*</sup> as against `101.3 in previous year.

The Board of Directors of the Company has recommended dividend of `6/- per fully paid up equity share of `10/- each, aggregating `4,281 crore (US$ 657 million), including dividend distribution tax.

Reliance’s fixed assets (excluding goodwill) stood at `5,85,094 crore (US$89.8 billion) as on 31<sup>st</sup> March, 2018. This includes fixed assets of `2,84,647 crore of its subsidiaries mainly in Reliance Jio, Reliance Holding USA and Reliance Retail.

Capital expenditure for the year ended 31^st March, 2018 was `79,253 crore (US$12.2 billion), including exchange rate difference. Capital expenditure was principally on account of the Digital Services business, projects in the petrochemicals and refining business and in the Organised Retail business.

Reliance’s gross debt was at `2,18,763 crore (US$33.6 billion). This includes standalone gross debt of `1,16,881 crore and balance in key subsidiaries, including Reliance Jio (`58,392 crore), Reliance Holding USA (`30,927 crore), Reliance Retail Group (`3,448 crore), Recron Malaysia (`1,023 crore), Reliance Gas Pipelines Limited (`1,309 crore) and Independent Media Trust Group (`2,203 crore).

Cash and marketable securities were at `78,063 crore (US$12.0 billion) resulting in net debt at `1,40,700 crore (US$21.6 billion).

RIL’s standalone revenue from operations for FY 2017-18 was `3,15,357 crore (US$48.4 billion), an increase of 19.0% on y-o-y basis. Standalone profit after tax was at `33,612 crore (US$5.2 billion) an increase of 7.0 % against `31,425 crore in the previous year. Basic EPS on standalone basis for the year was `53.1^* as against `96.9 in the previous year.

* Pursuant to issue of bonus shares during the year in the ratio of 1:1

Refining and Marketing (R&M)

Refining segment recorded strong operational performance led by a
9-year high GRM of US$11.6/bbl. EBIT for the year was at a record level
of `25,869 crore. RIL outperformed the Singapore refining benchmark by
US$4.4/bbl, significantly above its 5-year average outperformance. This
reflects the robust operational performance, superior configuration and
consistent high utilisation of refineries at Jamnagar complex.

`25,869 crore

Refining segment recorded its highest
ever EBIT, led by 9 year high GRM of
US$11.6/bbl.

Responsiveness to changing market dynamics continues to provide RIL an edge in crude sourcing and product placement. RIL has continued expansion of its domestic fuel retailing outlets while maintaining industry leading throughput per outlet. At the end of the financial year, RIL had 1,313 operational outlets.

Deepening integration post commissioning of paraxylene and ROGC facilities further improved petrochemicals intensity index. Petcoke Gasification project, one of the largest and most complex projects in the world, will transform Jamnagar refinery into a unique “bottom-less” refinery by converting refinery residue (petcoke) into syngas. Gasification start-up is currently in progress with DTA Gasification under stabilisation and optimisation, while SEZ Gasification is under commissioning.

Hital R. Meswani

C Borar

Srinivas Tuttagunta

P. Raghavendran

Harish Mehta

Surinder Saini

Strategic advantages and competitive strengths

Refinery
Configuration

RIL’s refinery at Jamnagar is among the largest and most complex refining assets globally, with a design capacity for processing 1.24 million barrels of crude per day (MMBPD) and Nelson Complexity Index, (a metric for quantifying and ranking the complexity of refineries) of 12.7. The complexity level of Jamnagar site is expected to improve significantly by several notches with the commissioning J3 projects. The refinery’s complexity provides it the ability to take advantage of opportunities arising out of

market volatility to procure and process different qualities of crude while meeting stringent product specifications.

Additionally, RIL has significant flexibility to alter the product mix, to capture higher netbacks with changing product supplydemand dynamics.

The commissioning of ROGC and downstream units has provided further integration with petrochemical, enabling higher value addition.

Crude Selection
and Sourcing

RIL’s refinery configuration and logistics infrastructure availability allows crude portfolio optimisation. With inherent design flexibility, RIL optimises the crude diet through a mix of term and spot supply contacts, sourcing the most advantageous crude globally. Eight new crude grades were processed in FY 2017-18, including new North American crudes.

Operational excellence with
continuous innovation

RIL continuously focuses on debottlenecking, capacity enhancement, energy conservation, and product quality improvement to enhance its competitive strengths. In FY 2017-18, these efforts included:

• Implementation of energy conservation initiatives to minimise fuel consumption
• Upgradation of logistics facility to export high value Tertiary amyl Methylene Ether (TAME)

Logistics and
supply-chain

Jamnagar has a unique locational advantage with proximity to key sources of crude supply and large product markets. RIL has state-of-theart logistics infrastructure to support the largest refining hub at Jamnagar. It includes marine facilities, rail and road loading facilities and pipeline connectivity for cost-efficient product evacuation. Marine facility comprising all-weather port and dedicated pipeline infrastructure enables berthing of wide range of ships from Very Large Crude Carriers (VLCC) to small chemical carriers. It also supports coastal movement of products to the domestic market. RIL optimises freight costs through opportunistic use of time charters.

Market access and
responsiveness

RIL continued to expand its global market reach by finding new sinks for gasoline in Latin America and Australia and gasoil to Brazil. RIL’s global outreach, including trading offices at key locations like Houston, London, Singapore and Mumbai, gives it a broad coverage for crude supplies and product sinks. Tankages at Rotterdam, Ashkelon and Singapore locations allow RIL to move its selling point closer to consumption hubs and improve responsiveness to market needs.

Petrochemical
Intensity

With commissioning of ROGC and final phase of Paraxylene complex expansion, the petrochemical intensity of the Jamnagar refinery has increased, improving value addition to refinery streams. With ROGC start-up, ethane and ethylene from refinery fuel gas is further value added to MEG, LDPE and LLDPE.

Market Environment

Robust oil demand growth enabling market re-balancing and supporting prices

Global oil demand growth at 1.6 mb/d in CY 2017 remained strong as compared to the 10-year average growth of 1.1 mb/d, even in a rising crude oil price environment. Though global oil demand was dominated by Non-OECD countries with demand growing at 1.1 mb/d, demand growth was also witnessed in relatively mature markets of OECD countries at 0.5 mb/d. Oil demand growth was distributed across petroleum products, except for fuel oil, which witnessed subdued demand. Demand growth for diesel got strong support from broad based economic growth across the globe.

During CY 2017, emerging economies in Asia accounted for close to two-third of the global oil demand growth. Chinese oil demand growth more than doubled to 0.6 mb/d in CY 2017 (0.3 mb/d in CY 2016). In China, gasoline demand growth was supported despite a slow down in the growth of conventional vehicle sales and rising penetration of hybrids and electric vehicles. Diesel demand rebounded in 2017 after a contraction in 2016 on the back of economic recovery as well as improving mining activity.

During FY 2017-18, oil demand was also firm in India led by gasoline, gasoil, jet fuel and LPG.

Refinery under natural light

Non-OPEC gains market share

Global oil supply grew by 0.4 mb/d in CY 2017. OPEC supply contracted by 0.4 mb/d as a result of adherence to the supply restraint deal between OPEC and non-OPEC producers as well as sharp production declines in Venezuela. Saudi Arabia shouldered a majority of the agreed cuts reducing its production by 0.5 mb/d. This was partly offset by increased production from Libya, which was exempted from the OPEC production cut agreement.

Non-OPEC supplies rose by 0.7 mb/d in CY 2017 after falling by 0.7 mb/d y-o-y during CY 2016. Supply from the US and Canada grew by 1 mb/d in CY 2017 as crude price recovered and US shale oil production growth returned after posting a decline in CY 2016.

Receding Inventory Lift up Prices

Brent crude oil prices averaged US$57.5/bbl in FY 2017-18, higher by US$8.9/bbl from FY 2016-17. Adherence to the production restraint by OPEC and some non-OPEC members through FY 2017-18 helped restrict oil supply growth to less than the oil demand growth for the second consecutive year. This led to the drawdown of crude and product inventories in OECD countries, with stocks in these countries receding to their lowest levels in last two years.

Oil Prices

Benchmark Refining Margins Gained on Stronger Middle Distillate Crack

Limited refining capacity additions in CY 2017 and firm oil demand growth led to refineries running at high utilisation levels globally. Global refinery utilisation remained high at 82.8% in CY 2017 as compared to a 5-year average of 81.3%. Refining margins were also supported by unplanned refinery outages in Americas and strength in transportation fuel cracks.

Light distillates

Light distillate cracks showed mild improvement in FY 2017- 18 supported by steady demand growth across regions. Rising crude prices seemed to have an impact on demand in the US, the largest gasoline market in the world, where demand was largely flat y-o-y after strong growth in the past 4 years. Growth in China and India remained stable.

Higher import requirement from Latin American nations (Venezuela and Mexico) as a result of disruptions at domestic refineries as well as supply outages in US Gulf coast due to hurricane Harvey supported cracks.

Car sales (conventional) growth in China slowed down in CY 2017 as a result of Government’s push to promote new-energy vehicles (hybrid and electric vehicles) to curb pollution. Gasoline demand however grew by 3% y-o-y despite these measures.

Demand for naphtha from petrochemical sector remained firm due to stable end product demand and favourable naphtha cracking economics with narrower spread between Naphtha and LPG.

Middle distillates

Middle distillate cracks strengthened in FY 2017-18 over the previous year on the back of broad based global economic recovery supporting strong demand growth. Middle distillate demand growth accounted for close to half of the oil product demand growth globally. This was supported by recovery in developed economies of US and Europe along with structurally growing demand in emerging economies of Asia. Gasoil demand in China grew by 2% in CY 2017 recovering from a 4% contraction in the previous year. Demand growth in CY 2017 was led by better economic growth, improving industrial demand and mining activity. India gasoil demand in FY 2017-18 also recovered strongly, growing by 6.6% y-o-y as compared to 3% growth in the previous year.

Jet fuel demand growth remained strong aided by robust 8% growth in global international passenger traffic and 7% growth in domestic air travel. Indian domestic passenger traffic remained robust, growing by 17.5% y-o-y in CY 2017.

Fuel oil

Fuel oil demand declined in CY 2017 after growing for the first time in many years in CY 2016. Fuel oil demand from the bunker fuel segment remained firm. However, demand from the power sector was impacted by natural gas substitution in the Middle East/West Asia and North Africa during the second half of the year. Lower Latin American refineries utilisation and simple refineries upgradation, especially in Russia, supported margins. Fuel oil cracks also strengthened owing to OPEC oil output cut which is targeted mainly towards medium and heavy crude grades.

Global refining environment supportive

Global oil demand is expected to grow by 1.4 mb/d in CY 2018 supported by improved global economic outlook and strong petrochemical feedstock demand. Higher crude oil production from North America as well as spare capacity available from OPEC/non-OPEC countries participating in the production curtailment agreement is expected to help meet demand growth and limit sharp increase in oil price. Gasoil demand growth is expected to stay firm on better global economic outlook. Gasoline demand growth is expected to be supported by growing demand in emerging markets aided by rising incomes. Global refinery utilisation is expected to stay high, supporting product cracks in CY 2018 with oil demand growth expected to outpace refinery capacity addition.

RIL maintained premium over regional benchmarks

RIL achieved double-digit GRM for the third year in a row. At US$11.6/bbl, refining margin was at a 9 year high. RIL maintained a significant premium of US$4.4/bbl over the benchmark Singapore Complex margins. RIL achieved superior refining margins due to strong product cracks, robust risk management and higher secondary unit throughputs. Better performance against benchmarks was underpinned by RIL’s ability to optimise product yields, expand product reach based on market movement and process a variety of crudes, including crudes from North America.

RIL processed 8 new crude grades this year, including new grades from North America introduced. During the year, 65 different crude grades were processed. Over the years, RIL has demonstrated its ability to process challenging crude grades with sulphur content of over 5%, Total Acid Number (TAN) of 5 (mg KOH/g), viscosity of ~5000 cst and an American Petroleum Institute (API) gravity as low as 10⁰.

RIL fully utilised the flexibility available in its refining system to procure competitive feedstock and optimise product yields to improve margins.

9-year high GRM of 11.6/bbl

 

Refining Margins vis-à-vis global benchmarks

Financial and operational performance

Financial Performance^*

^*consolidated

FY 2017-18 revenue from the R&M segment increased by 22% y-o-y to `3,06,095 crore (US$47.0 billion), reflecting 18.2% higher average oil prices during the year. Refining EBIT increased by 3.2% y-o-y to a record of `25,869 crore (including exceptional item of `1,087 crore). Crude throughput for the year was at 69.8 MMT.

Refinery Sales

Domestic Marketing

Market Environment

In FY 2017-18, petroleum product consumption in India increased to 205 MMT, a growth of 5.3%. The industry continues to grow across product categories with increased accessibility due to better network penetration and growing disposable income.

The strong oil demand growth was supported by transportation fuels. Gasoline demand grew by 10.1% to 26 MMT and Diesel demand grew by 6.6% to 81 MMT. Despite high base, there has been growth in diesel consumption, which has allayed some concerns pertaining to impact of growing electrification.

Growth in demand was led by retail outlet sales, in line with previous years. The total number of retail outlets in India has increased to over 62,000, as both state owned oil marketing companies and private players continue to expand their network presence.

Higher government spend on infrastructure development is expected due to the ambitious Bharatmala and Sagarmala Pariyojana. Former plans to join 550 district headquarters (with minimum 4-lane highway by developing 50 corridors) and aims to shift 80% freight traffic to national highways. Latter entails setting up of 6+ greenfield mega ports, upgrading existing ports, developing 14+ Coastal Economic Zones and 29+ Coastal Economic Units with rail, road and airport linkages to these water ports. These projects will create new avenues for network expansion and continue to support the demand growth of petroleum products in India.

Petroleum Retail

With a countrywide operational network of 1,313 fuel outlets, RIL covers the key highways in the country. Customer count enrolled in RIL’s industry leading fleet programme, Trans-Connect, grew by 31% during FY 2017-18. Supported by the network presence and the growing fleet customer count, RIL outlets registered an outstanding pump throughput of double the industry average during the year.

RIL registered y-o-y growth of 42% in diesel and gasoline retail sales volume. Share of fleet (Trans-Connect) sales in the retail volumes is significantly higher than competitors. RIL’s emphasis on quality and quantity of fuels, superior service and value added offerings at the retail outlets have resulted in industry leading outlet throughput.

1,313 fuel outlets operational countrywide

a) Operating strategy and value proposition

RIL continues to serve its family of satisfied customers with a unique Quality and Quantity fuelling experience delivered through stringent quality checks at various stages of product movement from the feeding terminals through the entire length of the primary and secondary supply chain to the Retail Outlets. This was validated with ‘nil’ adverse findings in outlets, randomly checked by a special task force.

Through real-time network at 100% outlets, RIL was the first Oil Marketing Company (OMC) to seamlessly rollout the dynamic pricing regime. The combination of latest technology, well-defined processes, value propositions with right channel partners and personnel ensures consistent delivery of superior customer experience.

RIL has partnered with key aggregators in the Banking and NBFC segment to build customised operating models for large fleet customers. Leveraging the unique synergy of Retail and Digital Services businesses, RIL is developing unique unmatchable offerings for customers.

Innovative Credit solutions to attract fleet operators and easy working capital finance for channel have been rolled out in tie-up with major financial players. Cash loading solution through Mobile apps and over 3,600 branches of major banks has vastly improved customer convenience.

Adopting best-in-class practices and technology, RIL will continue working at redefining the fuelling experience in the country, and to strengthen the enduring relationship with millions of consumers.

b) Digitisation strategy

RIL Retail Outlets have upgraded their payment ecosystem to seamlessly accept multiple modes of payment (Aadhar based, Credit Card, NFC and UPI Based). The retail network offers next generation dynamic pricing solutions to create unique and convenient options for customers.

By introducing mobile based applications, RIL has bolstered its fleet management offerings. The customers are empowered with the convenience of controlling and monitoring truck fleet on the go. The proposition has also been integrated with Jio Payment Gateway providing customers the flexibility of 24X7 funds transfer for loading their fleet account.

With digitisation gaining traction, the fleet management program is embarking on the Virtual Card feature, by linking the card with owner/driver mobile number, enabling quicker transactions.

HSD – Direct

Despite growing electrification in railways and industrial segment, Bulk Diesel market share increased y-o-y by 2.1% in line with FY 2016-17. During the year, RIL registered a y-o-y volume growth of 48% despite difficult market conditions and competition led margin pressure.

On account of superior technology and better service standards, RIL has become one of the priority supplier for the Indian Railways. Based on safety and audit reviews, Indian Railways has awarded RIL multiple “Letter of Appreciation” from across regions.

Increased sectoral focus in fisheries, infrastructure and Steel & Coal Mines (SCM) and enhanced coverage in Eastern and Southern markets augurs well for growth in RIL’s bulk sales volumes.

Aviation Turbine Fuel (ATF)

With a y-o-y Revenue Passenger Kilometer (RPK), a measure of passenger volumes, growth rate of 17.5% in 2017, India continues to be the world’s fastest growing domestic aviation market for the 3^rd consecutive year. Demand for aviation fuel grew at 8.9% y-o-y in FY 2017-18.

Boosted by the UDAN (Ude Desh ka Aam Naagrik) – Regional Connectivity Scheme (RCS) to make flying affordable to the masses, Government of India has added 80 new airports in addition to the existing 75 scheduled airports across the country over last two years. Growing traffic from this network will sustain the robust growth in Indian aviation fuel demand in the medium-term.

With network presence across 28 locations, RIL continues to be a key player in the ATF business offering innovative end-to-end solutions to its customers to bring in savings in fuel costs apart from ensuring best in class service standards. RIL has the highest market share at 25% of the airports it operates in.

To strengthen network presence and offer more choices to customers, RIL is constructing 3 new Aviation Fuel Stations (AFS) and working on adding another 10 locations in the near term.

Gasification – Air Separation Unit

Impacting customers with a difference

Title
 

Reinforcing Quality & Quantity assurance for the customer

Action
 

• Lower customer trust on account of malpractices reported in retail outlets of most of the competitors
• Addressed by launching communication campaign (on-ground, online & on-air) as ‘Desh Ka Sacha Pump’
• Leveraged being the Only OMC with 100% manual intervention proof pump

Outcome
 

Enhanced customer trust and reinforced belief in our core value proposition of Q&Q delivery

Title
 

Engagement with customer
 

Truck Drivers
 

Airlines
 

Action
 

• 80-85% of highway sales are through drivers
• RIL launching unified loyalty programme across India leveraging in-house strengths of Jio, Retail, A1 Plaza & others

• Giving End-to-end infrastructure solutions to get the product from overseas terminal into aircraft
• Helping airlines rationalize their largest cost component

Outcome
 

Differentiated customer engagement leading to higher customer retention reflected in increased sales

Title
 

Organisation agility to respond swiftly
 

Change in Law
 

Emission standards
 

Enhancing customer experience
 

Action
 

• Usage of high sulphur furnace oil banned in Delhi
• RIL responded with developing new standard fuel (LSHS)
• Immediate launch ensured no loss to customer operation

• Latent demand for Diesel Exhaust Fluid (DEF) in India post implementation of BS VI emission norms for HCVs
• RIL launched first non-OEM / non-PSU organised offering of DEF in India

• Addressing poor buying experience due to hassle of switching through multiple mode of payments
• Incorporated unique integrated system to select multiple payment options like credit card, debit card, UPI, wallets and Bharat QR code.

Outcome
 

Leveraging better responsiveness to change for delivering higher value to the customer

Improved customer experience and cemented RIL’s pioneer position in technology

Capex and Growth Plan

Petcoke Gasification

The Jamnagar Pet-coke Gasification is one of largest ‘Clean Fuel’ projects in the world. Pet-coke gasification upgrades pet-coke, a low value refinery residue, into clean syngas, to substitute high cost LNG imports. This will help in reducing the impact of LNG price volatility. The pet-coke gasification project shall transform Jamnagar into a unique “bottomless” refinery.

Syngas, from pet-coke gasification, shall be captively consumed for Hydrogen (H2), co-gen fuel and heater fuel, at the Jamnagar complex. H2 shall be used in hydro-processing units to generate clean fuels of gasoline and diesel. Syngas, as co-gen fuel, shall minimise the utility cost of the Jamnagar complex, exploiting LNG and pet-coke price arbitrage. Syngas as heater fuel, via Synthetic Natural Gas (SNG), shall unlock the ethane and ethylene potential in the refinery off-gas for maximum value addition to petrochemicals, via the ROGC. Pet-coke gasification enables indirect “Petcoke- to-Ethylene”, for cost-competitive, “Make-in-India” petrochemicals.

DTA Gasification has been started and currently, under stabilization and optimization. SEZ Gasification is under commissioning. The Jamnagar pet-coke gasification is projected to have a major impact on the Jamnagar complex operations in FY 2018-19.

Business Stewardship

The RIL refineries are built keeping the principle of responsible use of resources in mind. The Jamnagar supersite is designed to achieve zero freshwater withdrawal by implementing design efficiency. Secondly, RIL ensures productive employment for villagers residing around the refinery sites. Additionally, Reliance encourages employees to volunteer for social causes.

For a more holistic view of CSR activities, please refer to the Report on Corporate Social Responsibility.

Petrochemicals

“RIL achieved record EBIT of `21,179 crore (up 63% y-o-y) and record
production of 30.8 MMT in the Petrochemicals Segment for the year, even
though the global petrochemicals industry continues to face a highly
uncertain business environment. Consolidating its leadership position,
Reliance progressed rapidly on initiatives to enhance petrochemical
capacities, strengthen integration, improve feedstock security and
bolster sustainability."

`21,179 crore

Petrochemical EBIT was at a
record level in FY 2017-18

Entered into Advanced Materials & Composites
Working on incorporating nanomaterials and composites

Nikhil R. Meswani

Vipul Shah

Paramjit Singh

RIL’s Ethane import project is now being supported by a fully operational fleet of 6 Very Large Ethane Carriers (VLEC) and crackers have started receiving shipments of Ethane from USA. The installation of Refinery Off Gas Cracker (ROGC) and downstream projects at Jamnagar have been completed successfully during the year and plants are operating at designed capacities. FY 2018-19 will reflect full impact of all new initiatives and organic expansions are poised to drive sustainable earnings growth.

Continuing to augment its customer centricity and consumer orientation, Petrochemicals business has progressed further on the expression of ‘Chemistry for Smiles’. Reliance has created R|Elan™ – a portfolio of specialty fabrics, a perfect blend of ‘art’ and ‘smart’. Reliance is developing new lines of business in the Advanced Materials & Composites and the capabilities to design and print a wide range of products using 3D Printing technology.

To minimise any impact on environment, Reliance deploys world-class technologies across all sites to reduce fresh water consumption per unit of production, by maximising waste water recycle and minimising external discharge.”

Strategic advantages and competitive strengths

Global
Scale

• Global scale and capacities across petrochemicals
• Manufacturing Locations: 10 in India and 3 in Malaysia
• Ethane imports from North America through VLECs

Flexibility and
Integration

• Integrated Refining and petrochemicals portfolio
• Diversified feedstock slate with both naphtha and gas based crackers
• Enhanced capabilities to crack propane through ROGC project

Leadership
 

• Relentless focus on safety and continuous improvement
• Technical leadership while maintaining cost efficiencies and responsible and disciplined operations

Market Environment

FY 2017-18 witnessed strong recovery in global energy prices, which was mirrored in petrochemical feedstock and product prices. Healthy supply demand fundamentals bolstered petrochemicals operating environment and resulted in strong petrochemicals margins.

Olefins and Polymers

Global demand for ethylene increased by 5.5% y-o-y to 153 million tonne (MMT) in 2017. Global ethylene operating rates, which are indicative of the margin environment, were flat during 2017 but witnessed sustainable operation above the five-year average of 88%. Operating rates are expected to dip marginally in 2018 as new capacities in the US come online.

Global Ethylene Supply/Demand 2017

US has started 2 MMTA new capacities in 2017 with a few crackers delaying start-up due to hurricane Harvey. Approximately 6 MMTA new capacities are expected to start in 2018 followed by another 2 MMTA in 2019. Additional capacities in US are based on low cost ethane from shale gas production and are likely to impact ethylene price dynamics.

The high incremental demand of propylene from downstream derivative capacities in Asia resulted in firm Polypropylene (PP) prices during the year. The demand for propylene increased by 4.2 MMT in 2017 from the previous year, while supply gained approx. 4 MMT as compared to the previous year. Addition of 6-6.5 MMTA new global capacities in 2018 is expected to strengthen supply fundamentals in the near-term. Major capacity additions in Northeast Asia is from on-purpose units. With stringent environmental restrictions in China and rising crude and feedstock prices for Coal and Methanol to Olefins (CTO / MTO) and Propane DeHydrogenation (PDH), the operations of such units are expected to vary depending upon economic viability. Onpurpose propylene units are expected to remain marginal contributors to fulfill regional demand.

Making Life Better for Everyone by Harnessing the Power of Chemistry
Integration with refinery & within polymer and polyester chain Integration with refinery and downstream petrochemical products Cracker integrated sites at Hazira, Dahej, Vadodara and Nagothane Feedstock optimisation through ROGC at Jamnagar, configured to crack refinery off-gases and even propane Under Ethane Project created a virtual pipeline for ethane from USA via 6 VLECs
Name	Olefin	Polymers	Polyesters	Fibre Intermediates	Elastomers
Description	Unsaturated open chain hydrocarbon	Large molecule with repeating subunits	Synthetic Fibres	Raw Material for polyester and textile industries	Polymers with rubber like elasticity
RIL Portfolio	Ethylene, Propylene, Butadiene	Polyethylene(PE), Polypropylene(PP), Polyvinyl chloride (PVC)	Polyester Filament Yarns (PFY), Polyester Staple Fibres (PSF), Polyethylene Terephthalate (PET)	Purified Terephthalic Acid (PTA), Monoethylene Glycol (MEG), Paraxylene (PX)	Poly-Butadiene Rubber (PBR), Styrene Butadiene Rubber (SBR)
Applications/ Associated Industries	Industrial Chemicals and Polymers	Construction, Agriculture, Automobile, Consumer Goods	Textile / Apparel industries and Beverages	Polyester and textile industries	Tyres and Automobile
Capacities/ Global Market Position	Feedstock for petrochemical products	PE: 2.2MMTA/ 14th PP: 2.9 MMTA/ 5th PVC: 0.7MMTA/ 16th	PFY & PSF: 2.36 MMTA/ 2nd PET: 1.13MMTA/ 7th	PTA: 4.9MMTA/ 4th MEG: 1.5MMTA/ 6th PX: 4.2MMTA/ 2nd	PBR: 120 KTA SBR: 150 KTA
Key Growth Drivers	Increasing Urbanisation & Changing Demographic Mix     |    Higher Disposable Incomes    |    Rapid Digitisation Growth in per capita purchasing power    |    Economic & Population Growth    |    Burgeoning consumer class
New Growth Platforms			Long Term Growth Initiatives
Digitisation and automation initiatives to transform supply chain and deliver unparalleled customer experience at an unmatched cost basis Utilising robotics and AI in product handling, ware-housing and inventory management Expanding portfolio to advanced materials and composites to diversify RIL’s market offerings and make RIL future ready			Developed capabilities to design and print a wide range of products via 3D printing Block chain as a technology is currently being explored to enter into Smart contracts with customers and vendors
Strategic Advantages
Global Scale Global scale and capacities across petrochemicals Manufacturing Locations: 10 in India and 3 in Malaysia Ethane imports from North America through VLECs		Flexibility and Integration Integrated Refining and petrochemicals portfolio Diversified feedstock slate with both naphtha and gas based crackers Enhanced capabilities to crack propane through ROGC project		Leadership Relentless focus on safety and continuous improvement Technical leadership while maintaining cost efficiencies and responsible and disciplined operations
New Product Development
Polymer Reliance’s geotextile products being used in stabilisation and ground improvement of road in different regions. Mulch film has been used for tomato cultivation in Tamil Nadu, resulting in better growth of plants, enhancing productivity Newly developed mulch for paddy can provide better value addition for farmers		Polyester Reliance has created R|Elan™ – a portfolio of specialty fabrics, a perfect blend of ‘art’ and ‘smart’, that provide several attributes such as enhanced performance, aesthetics, enhanced breathability, dry feel, anti-odour and have excellent drape, hand feel and are among most eco-friendly fabrics		Elastomer Reliance is the only company in the world offering three different types of High Cis Polybutadiene rubbers manufactured using different Ziegler Natta catalysts: Cobalt, Nickel, and Neodymium
Digitisation			RIL’s Sustainable Growth Approach
Customer engagement and empowerment through e-CRM mobile applications Digitally signed invoices, ePOD (Electronic Proof of Delivery), auto service certification for transporters, Credit and debit notes for customers and Electronic DATA Interchange (EDI) with shipping lines Applying Machine Learning solutions to fleet risk management for enhanced distribution safety			One of the largest recycler of PET bottles in India - Converts more than 2 billion post-consumer PET bottles per year Recron® GreenGold – Sustainable Fibres for cutting edge fashion including home textiles at one of the lowest carbon foot-print globally RelWoodTM – RIL’s innovative wood substitute will help save forests; offers durable, waterproof and sustainable alternative to natural wood

Global Polyolefin and PVC Demand

Source: IHS Markit

Global polymer market demand in 2017 was estimated at 209 MMT. PE accounted for 46%, PP 34% and PVC 20% of the market. Total demand for polymers (PE, PP and PVC) grew by 4.1% during 2017 driven by China and India. Last 5 year CAGR for global polymers demand has been 4.2%. The global demand for these polymer products is estimated to grow at the same pace over 2017-21 period. The recent ban on import of recycled polymers imposed by the Chinese Government is likely to increase the demand of virgin resin in the region.

Price and Margin Environment

Polymer chain

Crude oil prices touched near 3-year high in January, 2018 with healthy demand growth projection, higher compliance to OPEC led production cut and geo-political concerns. Average naphtha prices in Asia gained, tracking strengthening of crude prices and healthy demand. Asian Naphtha prices were up by 19% y-o-y in FY 2017-18. Ethylene prices in Asia strengthened by 6% y-o-y in FY 2017-18 due to firm feedstock prices.

Southeast Asia polymer margins

Source: Platts and ICIS

Polymer margins continue to remain healthy during FY 2017-18 on account of firm end product prices and favourable supply demand fundamentals. On a y-o-y basis, PE margin corrected by 7% due to strengthening in crude and naphtha prices. PP margins were robust and improved by 19% y-o-y with strong growth in demand. PVC continues to deliver healthy margins, supported by soft EDC prices in the strong caustic price environment. Tight carbide based PVC supply due to environmental regulation in China further strengthened PVC price fundamentals. Rising trade tensions between USA and China could have an impact on global trade flows and regional polymer prices.

Polyester and Fibre Intermediates

Polyester sector witnessed healthy recovery during the year as compared to the challenging market environment in the previous year. Integrated polyester chain margins were on an uptrend through the year. Margins for the year improved across the polyester and intermediates business, leading to a 5 year high chain margin across the polyester chain.

Jamnagar Manufacturing Division

RIL benefitted from its integrated presence across the polyester chain. While margins shifted within the elements of the chain, with a notable uptick in PTA-PX margins, integrated chain margins improved significantly during the year. Capacity addition in upstream contributed to improved integrated chain margins for Reliance with reduced dependency on feedstock sourcing.

Polyester fibre and yarn markets were able to pass on fluctuation in the upstream markets due to low inventory levels and high operating rates. Polyester inventories in China remained low after the first quarter which supported the markets as fabric transactions in China remained healthy, averaging higher volumes than the last two years. Global polyester demand in 2017 increased by a robust 3 MMT, a similar gain was last seen in 2011, as against a capacity growth of 2.6 MMT.

China has in the past few years tightened environment protection norms and enforced regulations to control industrial pollution. In 2017, China restricted imports of solid waste into China, whereby it targeted to completely ban imports of solid waste (including PET) from 2018. Recycled PET is majorly used for producing PSF (Polyester Staple Fibre), which consequently witnessed a sharp price gain towards 3Q FY 2017-18. PSF prices touched US$1255/MT, highest since 2015, and consequently delta also firmed up.

International cotton prices improved 8% y-o-y during FY 2017-18. Cotton to polyester price differential remained healthy touching highest levels since 2011, favouring polyester in blending. Global cotton acreage in 2017-18 (Aug-Jul) is expected to rise amidst increased consumption. However, Indian cotton production is likely to be impacted due to increasing pest issues.

Global PET prices for the year increased by 14% y-o-y to US$1065/ MT with tight supplies due to curtailed output and good demand. Global PET demand remained healthy amidst firm beverage consumption from major developed and emerging economies, CY 2017 PET capacity increased by 1.2 MMT y-o-y against a demand growth of 0.8 MMT, however, disruptions in few western capacities resulted in tight markets.

Polyester and fibre intermediates margins

Source: Platts, ICIS, CCF Group

During the year, Fibre intermediates prices were largely firm, supported by higher crude oil prices and strong downstream demand. On the supply side, delays in the startup of a couple of PTA plants in China, plant outages and shutdowns supported prices and margins. Both PTA and MEG markets faced tight inventory levels for a major part of the year.

PTA margins improved significantly during the year, encouraging restart of idled units and startup of new units during the year. CY 2017 witnessed demand growth of 3 MMT with capacity addition of 1.9 MMT.

MEG markets remained strong with a sharp rise of 23% y-o-y in prices and 26% y-o-y in margins. Firm ethylene prices supported positive trends in MEG markets, with prices touching the highest levels in 4 years. During CY 2017, net global capacity addition of 1 MMT was lower than demand growth of 1.4 MMT. During the year, Reliance commissioned its new MEG capacity in Jamnagar. The new capacity is running at optimum throughput and the additional volume has been absorbed in domestic and export markets.

PX market witnessed oversupply in the initial part of the year with slower than anticipated offtake from downstream PTA market. This was due to delay in start-ups and restarts of idle PTA plants. Consequently, gains in upstream energy markets overshadowed rise in PX prices, affecting the deltas during the year. CY 2017 PX capacity increased by 3MMT and witnessed demand growth of 1.9 MMT. However, PTA start-ups pushed up demand for PX towards the end of the year, supporting higher operating rates.

Elastomers

Global Natural Rubber production witnessed growth of 7% y-o-y to 13.4 MMT in 2017, while demand growth was 4% y-o-y to 13.1 MMT. The excess supply of natural rubber weighed on price fundamentals during the year. Environmental restriction in China led to reduction in downstream operation of elastomers industry, which resulted in shortage of carbon black and limited tyre production.

Global capacity of butadiene continues to remain stable at 15 MMTA with average operating rate of around 77% in CY 2017. The key application for butadiene is in the manufacturing of PBR and SBR. With more light feed crackers coming up -mainly in the US, the incremental availability of Butadiene is expected to be limited. The global capacity of PBR is 4.8 MMTA in 2017 with average utilisation rate of 70%. The global capacity of SBR is 7.1 MMTA in 2017 with average utilisation rate of 67%.

PBR and SBR demand are directly linked to growth in the automobile and tyre sector. During CY 2017, global passenger car production grew at 2.3% and commercial vehicles production grew strongly by 5.3% y-o-y. The operating rates of both PBR and SBR are expected to improve in near future amid growing demand and limited capacity addition.

Domestic Scenario

Polymers

Indian polymer sector was impacted during the first half of FY 2017-18 due to GST implementation. Demand revived post stabilisation of the GST regime. For the full year, India’s polymer market registered a healthy 7% growth y-o-y. Demand growth was driven by higher economic activity, rising disposable income levels, increased spending on infrastructure and uptrend in the packaging and automobiles sector. India is among the world’s fastest growing polymer markets with a five-year CAGR (2012-17) of 9.1%. India is the second largest demand hub for polymer in Asia after China, accounting for 11% of the Asian consumption.

PP recorded 10% y-o-y demand growth supported by healthy consumption across all segments, including raffia packaging, non-woven, multifilament, automotive, hygiene applications and appliances. PE demand was higher by 9% y-o-y owing to strong offtake from flexible packaging, moulded products (e.g. portable toilets – driven by “Swachh Bharat Abhiyan”) and paper/woven sacks lamination packaging sector. PVC demand recovered towards the end of the year and posted a growth of 2% in FY 2017-18.

Financial and Operational Performance

Financial Performance

FY 2017-18 revenue from the Petrochemicals segment increased sharply by 35.5% y-o-y to `1,25,299 crore (US$19.2 billion). Revenue growth was primarily due to higher volumes from new Paraxylene, ROGC and its downstream units (PE and MEG), with the segment achieving its highest ever production level of 30.8 MMT, up 24% y-o-y. Petrochemicals segment EBIT increased sharply by 63.0% to its highest ever level of ` 21,179 crore (US$ 3.2 billion). Earnings was supported by favourable product deltas across integrated polyester chain, PP, PVC along with the growth in volumes. EBIT margin was higher by nearly 300bps to 16.9%, reflecting RIL’s strengthened cost positions across product chains and unmatched feedstock flexibility.

Polymer Production

RIL manufacture polymer products across 6 sites and supplies products to more than 70 countries. RIL maintained the leading position in the Indian polymer market with a share of 38%.

RIL is the world’s fifth largest producer of PP. During FY 2017-18, the Company produced 2.8 MMT of PP and has a pre-eminent position in the domestic PP market with 50% share.

RIL successfully commissioned the ROGC project along with downstream facilities. RIL’s total ethylene capacity now stands at 3.6 MMTPA. Post ROGC start-up RIL became the 14^th largest global PE producer with capacity of 2.2 MMTA. Also, RIL became the 7th and 11th largest producer, globally, for LLDPE and LDPE, respectively. The additional capacity has been well absorbed by the growing demand in the Indian market. RIL has a domestic market share of 21% in the overall PE market. RIL is the only producer of LDPE in India, and witnessed a surge in market share from 35% to 53% post commissioning of ROGC.

RIL’s total PVC production was at 0.7 MMT and it has a 24% market share in the domestic market.

Polyesters

FY 2017-18 polyester demand growth remained moderate, with PET (+5%), Polyester Filament Yarn (+4%) and Polyester Staple Fibre (-3%) y-o-y. Domestic cotton prices largely remained stable y-o-y owing to tight availability, which was favorable for polyester blending.

Polyester markets remain subdued due to introduction of GST regime in the first half of the year, resulting in weaker demand and low operating rates. Demand revived post stabilisation of the GST regime, but there was a sharp increase in imports due to higher GST rates on domestic production. Higher tax rates across the polyester chain also resulted in the shutdowns of textile units. Domestic markets were also impacted by the increase in imports of fabrics after the implementation of GST as almost all categories of imports increased compared to pre-GST levels. Import duties on certain categories of fabrics and end products were increased subsequently, but imports continue to stay at a high level.

Moreover, Polyester industry has been witnessing a gradual shift in the value chain. Now, the Polyester industry dynamics has shifted to ‘melt to PTY’ compared to earlier ‘melt to POY’ as most of the PTY producers have backward integrated to POY.

PET demand remained largely stable over the previous year. Higher GST slabs on the carbonated drinks segment and disruptions in South India, dampened demand from the sector; PET volumes from RIL’s Dahej facility has found good acceptance in the international markets.

Polyester and Intermediates Production

Indian operational performance

Polyester production

Fibre Intermediate Productions

Malaysian operational performance

RIL’s Malaysian operations performance improved further with focus on productivity improvement and niche markets. Free Trade Agreements (FTAs) with Turkey and focus on domestic market opportunities helped place products at higher netbacks. Operations were streamlined during the year with emphasis on improving yields of high quality products, while maintaining a low-cost profile. Firm PTA margins were supported by focus on reliability and sustainability of PTA plant operations also helped improve profitability.

Elastomers

Indian elastomers sector witnessed slow offtake at the beginning of the year owing to regulatory imposition of BSIV norms and GST preparedness and implementation. Elastomers demand gradually improved post GST stabilisation. Butadiene witnessed stable demand growth, with demand of 313 KT during the year. Domestic capacity for butadiene is 550 KTPA, with part of the production catering to export markets. PBR and SBR demand in India was around 191 KT and 300 KT, respectively in FY 2017-18 and is likely to grow at 5-7% annually in the medium-term. Shortage of Carbon Black in India affected both the Tyre and non-Tyre sector.

Elastomer / chemicals production:

Transforming RIL Petrochemical business, building an agile organisation

R|Elan™ - Fabric 2.0: Smart on the inside, Beautiful outside

R|Elan™ fabrics combine, in perfect proportions, functionality and fashion and straddle across all major apparel segments such as Active wear, Denim, Formal wear and Women’s wear. R|Elan fabrics are currently placed into three key buckets for apparel applications. They are Aesthetic/Sensorial, High-performance and Eco-friendly. R|Elan™ products will provide consumers next generation fabrics which are in line with the latest fashion trends and fulfill lifestyle needs as well.

Transforming Life to Quality Life – “Chemistry for Smiles”

Reliance Petrochemicals constantly endeavors to harness the power of Chemistry to enable products and services that add value to life and bring smiles on end-consumer’s face.

To bring this thinking alive, Reliance Petrochemicals has adopted the b2b2c (business-to-business-to-consumer) model. Entire business ecosystem including the Research & Development at Reliance is poised to partner its customers, across the value chain, and help them develop end-products that are in line with actual consumers latent and future needs. Reliance refers to this journey as the ‘Chemistry for Smiles’.

	R|ELAN™	Recron® FS
	Portfolio of specialty fabrics with perfect blend of ‘art’ and ‘smart’ Enhanced performance, aesthetics, increased breathability, dry feel, antiodour with excellent drape and hand feel Eco-friendly fabrics	Modified polyesters with embedded fire retardant components Engineered to prevent fire from spreading Enable weaving Smart Fabrics
	RELX™	Advanced Solutions
	Material innovation Advanced composites with the strength for tomorrow’s applications Creative innovation to make life more comfortable	Developing new lines of business in the advanced materials domain Incorporating 2-Dimensional and nanomaterials like graphene to existing portfolio of polymers

Advanced Material

Reliance is developing a new business vertical in the Advanced Materials domain. The 2-dimensional nanomaterials such as graphene are being added to the existing polymer portfolio to deliver new formulated materials that will provide exceptional value to the customers. RelWood™ is an example of one such material that looks and feels like high-quality wood but has superior properties. It is a durable, water-resistant, fire-retardant, and UV- and termite-proof product that can replace wood across all applications. The company is in the process of developing newer products in the areas of:

Enhanced Plastics and Elastomers – For light weighting and disruptive performance

Fibre-Reinforced Composites – For light weighting and reduction in steel usage in infrastructure projects

Composites and Carbon Fibre

During the year, RIL acquired the assets of Kemrock Industries and entered the composites business.

The Company focussed its attention on thermoset composites such as glass and carbon Fibre-Reinforced Polymers (FRPs). The ability to deliver exceptional strength (similar to or better than steel) at a significantly lower weight is a critical performance attribute of FRPs. Additionally, FRPs can withstand harsh weather, have a long life with minimal maintenance, are corrosion resistant and can be moulded into any shape. Composites are used in a wide range of markets and applications: industrial, railways, renewable energy, defence and aerospace. The market for composites in India is over `30,000 crore and growing rapidly.

RIL expects the newly launched Reliance Composites Solutions (RCS) business to be the No. 1 composites player in India. RCS will develop the full range of capabilities, ranging from composite part design, resin formulation and fibre/ fabric to the final part production. RIL will focus on design and specifications driven markets and applications that are critical to India and have the potential to grant better returns. These include:

• Wind mill blades (especially those over 65 metres long) and ancillary parts for the wind energy market
• Parts for railways and metros, which have exacting standards of performance and safety (especially fire retardant)
• Innovative solutions such as carbon wraps to rehabilitate/ refurbish India’s old infrastructure – bridges, buildings (for improved seismic performance) and pipes

RIL is investing in India’s first and largest carbon fibre production line with its own technology – to cater to India’s aerospace and defence needs as well as the specialty industrial applications

Moreover, RCS will design and administer low-cost and high-volume products such as modular toilets and homes to support the Swachh Bharat Mission, disaster relief measures and Housing for All programmes initiated by the Indian Government.

RIL is building a robust competence around application development, materials engineering and formulation development to support the new as well as the existing polymer businesses.

3D Printing

Industrial 3D printing (especially with metal) is reaching an inflection point. To bring about a potential revolution in manufacturing, RIL has developed the capabilities to design and print a wide range of products using 3D printing technology – in both plastic and metal – from prototypes to functional parts.

Facilitating entrepreneurial spirit across value chain

Action Taken: RIL has been instrumental in structuring reverse supply chain for recovery of post-consumer PET bottles which are then recycled into polyester fibres and filaments. Under this initiative, RIL has assisted in setting up of numerous recycling units - M/s. Jenex Enterprises being one such example. It started business in 2001 with volumes of 30 metric tonnes per month and today process about 500-700 metric tonnes per month, generating employment for under privileged section of society.

Outcome: Creating value out of waste and in the process, generating employment.

Circular Economy

For Reliance, ‘Sustainability’ is not just a word but it is the ‘Way Reliance Operates”. RIL continues to focus on promoting ‘Circular Economy’ and delivering ‘Societal Value’. Reliance continues to be one of the largest recyclers of the post- consumer PET waste and converting it into value added, branded products like R|Elan™ and Recron® Certified. RIL’s initiatives like Plasticulture provides support to farmers in all areas of farming and improves farm productivity substantially. Through innovation and application of technology, RIL continue to create sustainable products.

Petrochemical business has strengthened the customer supply interface with highly digitised platforms, R&D focus initiatives & product stewardship, for more information please refer to page no 127 of pdf.

Capex and Growth Plan

1) ROGC Project: RIL successfully commissioned and achieved design throughput of the World’s largest Refinery Off-Gas Cracker (ROGC) complex of 1.5 MMTPA ethylene capacity at Jamnagar. The ROGC complex is built on Reliance’s core philosophy of deep feedstock integration to establish industry leading cost and efficiency benchmarks. This innovative approach of integration with refineries provides a sustainable cost advantage, making ROGC competitive with respect to the crackers in the Middle East and North America, which have feedstock cost advantage. The complex is also integrated with downstream facilities of LDPE, LLDPE and MEG. The ROGC will help RIL to achieve scale and significantly boost product stewardship and market offerings. This complex marks a paradigm shift in the profitability and sustainability of RIL’s petrochemicals business.

2) Ethane project: RIL successfully completed the world scale ethane import project last year. All the six VLECs are operating at full capacity and delivering cargoes to Dahej. Ethane cracking at Dahej and Hazira have been streamlined and both the plants achieved the highest ever ethylene production. Modification of feedstock flexibility at Nagothane is also completed and the complex is ready to receive ethane for cracking.

Business Stewardship

In keeping with the motto of ‘Chemistry to Smiles’, Reliance continues to produce eco-friendly products such as GreenGold (made from recycled PET bottles using renewable energy, with one of the lowest carbon footprints globally), R|Elan™ (a fabric with increased breathability, anti-odour benefits, and excellent drape) among others. Additionally, the company continues to be one of the largest recyclers of PET bottles in India.

For a more holistic view of CSR activities, please refer to the Report on Corporate Social Responsibility.

Cracker Control Centre at Jamnagar

Oil & Gas Exploration & Production

The year 2017-18 marked progress on plans to monetise discovered resources and steps to rationalise the upstream portfolio.

RIL along with its JV partner plans to invest `40,000 crore (~US$6 Bn) to develop the discovered deepwater resources in the KG D6 Block. Development work for R-Cluster fields has commenced while Field Development Plans for MJ and Satellite Cluster fields have been approved by the Government. These fields are expected to come onstream in the next 3-5 years.

`40,000 crore

Investment planned over the next 3-5 years to develop KG D6 discoveries

P.M.S. Prasad

Naresh Narang

Sanjay B. Roy

With the steady ramp-up of production from the Coal Bed Methane (CBM) fields, in Sohagpur, Reliance is set to become India’s largest producer of unconventional natural gas. To sustain the production, the second phase of development has also commenced.

Reliance continues to focus on value preservation in the North America Shale Gas business. As part of portfolio rationalisation, Reliance and its JV partner Carrizo sold their stake in the Marcellus shale plays to Kalnin Ventures. Reliance and its partner Pioneer sold part of their acreage in the West Eagle Ford shale play.

Reliance conducts its operations responsibly with a track record of over 10 years of safe operations, at par with the best in the world.

Strategic Advantages & Competitive Strengths

Reliance’s upstream business encompasses the complete chain of activities from acquisition to exploration, development and production of hydrocarbons in both conventional and unconventional areas. Reliance has an advantageous position in offshore (deep-water) capabilities, coupled with the knowledge of operations in unconventional areas such as CBM and Shale Gas.

Project
Execution

India’s first and till date only greenfield deepwater project.

India’s largest surface footprint hydrocarbon project in remote tribal areas with no prior infrastructure.

Significant infrastructure
on the east coast

RIL has commenced development of discovered resources in the KG D6 Block leveraging the existing infrastructure on the East Coast.

Safety
 

Over 10 years of safe operation, with safety record amongst the best in the world since commencement of production in Deep-water block KG D6 and in Coal Bed Methane.

Partnerships
 

Partnerships with global majors in conventional as well as unconventional hydrocarbon plays.

The Partnerships combine Reliance’s Project execution skills with global expertise.

Market Environment

2017 was a turbulent year for the global oil & gas industry driven by changing demand-supply equations coupled with geo-political issues resulting in steady increase in crude prices.

Brent prices ranged from US$45/bbl in June to ~US$64/bbl by the end of the year. Average West Texas Intermediate (WTI) crude oil prices for 2017 was also higher 18% y-o-y averaging at US$50.95/bbl, US Natural Gas prices remained strong and Henry Hub (HH) Gas price stayed close to or above US$3/MMBTU for most of the year. Encouraging demand from LNG and Mexican exports coupled with subdued supplies supported higher gas prices.

With respect to Shale Gas operations, WTI and HH prices were higher y-o-y, with WTI oil prices 18% higher at US$50.95/bbl in CY 2017 and HH Gas prices 26% higher at US$3.11/MMBTU. Also, gas and condensate benchmark differentials improved.

Upstream capital spending is expected to grow in 2018. Major project FIDs are expected to come in unconventional and deep-water areas (Brazil and GOM), with Operators taking advantage of oversupply in the service sector to lock in at lower costs.

Indian Regulatory Environment

During the last year, there have been many initiatives by the Government of India to promote the Indian Oil & Gas industry.

• Policy framework for early monetisation of CBM, which provided complete Marketing and Pricing freedom for CBM gas and eased operational issues
• Launch of Open Acreage Licensing Policy (OALP), which provides options for operators to select exploration areas on their own rather than wait for formal bid rounds

Financial and Operational Performance^*

For FY 2017-18, revenues increased by 0.3% to `5,204 crore. This marginal change was on account of better price realisations and ramp-up of production in CBM which were partly offset by decline in production in KG D6 and Shale Gas. Consequently, upstream operations registered negative EBIT of `(1,536) crore.

Operational Performance – Domestic

Production Performance

Control-cum-Riser Platform – KG D6

KG D6

KG D6 gas production declined by 27% for the year to 67.9 BCF due to natural decline of field and shut-in of 2 D1D3 and 1 MA wells. KG D6 operations continue to achieve field uptime of 100%, which continues to be the global standard for deep water facilities. The major challenges faced are associated with reservoir depletion, sand and water influx.

Reliance’s near term aim is to maintain wells flowing and sustain production until future projects are commissioned. This involves effective reservoir and production management to overcome network and operational challenges.

For enhancing recovery and flow assurance, Onshore Terminal Booster Compressor Low Low Pressure (OTBC LLP) project has been commissioned. This project will help sustain D1D3 field production by extending life of flowing wells and revival of D1D3 shut-in wells.

KG D6 is India’s first and only greenfield deepwater project

CBM (Sohagpur East & Sohagpur West)

Reliance commenced commercial production from its Coal Bed Methane (CBM) block SP (West)–CBM–2001/1 in March 2017. More than 200 wells were put on production with production ramp-up crossing the 1 MMSCMD level during the year.

CBM Reservoirs are initially 100% saturated with water. At the start of production, the wells will go through the ‘Dewatering Phase’. In the dewatering phase of CBM production, water is pumped out continuously to increase gas saturation in the reservoir, resulting in ramp up of gas production from these wells. The wells put on production have been predominantly in dewatering phase this year and the production ramp-up in next 6 -12 months is expected to make RIL the largest unconventional natural gas producer in India.

Reliance Gas Pipeline Limited, a subsidiary of RIL, commissioned the 302 km Shahdol-Phulpur Pipeline from Shahdol (MP) to Phulpur (UP). This pipeline connects the CBM Gas fields with the Indian Gas Grid providing access to consumers across the country.

Marketing of 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) in 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.

RIL hired CRISIL to carry out a fully transparent and competitive bidding process with the objective of maximising price for sale of CBM Gas. Three rounds of bidding process were carried out this year. The first two rounds of bidding were for short duration. The third round of bidding, carried out in September 2017, was for sale of CBM gas till FY 2020-21. These were the first open market, transparent competitive auctions for CBM gas sales in India.

North American Shale Gas Operations

Production Performance

Industry Background

US Shale Gas industry has shown remarkable resilience in recent past and has leveraged the down turn to improve operational efficiencies and to reduce services costs. The advancement in shale technology was a key success factor in both basins (wells with longer laterals and improved completion designs). With improved cost structure and improved outlook on prices, activity picked up and rig counts increased in select shale plays (including Eagle Ford and Marcellus) during 2017.

Business Performance

The Company continued with its prudent strategy to improve the value of the remaining development inventory and securing overall cost leadership.

As part of this strategy, the portfolio was rationalised: Reliance Marcellus II LLC, a subsidiary of the company that held assets in the Carrizo joint development; signed a Purchase and Sale Agreement (“PSA”) on 5^th October, 2017 with BKV Chelsea, LLC for sale of its assets in Susquehanna, Clearfield and Wyoming counties effective 1^st April, 2017, for an initial consideration of US$126 MM subject to customary adjustments. Additionally, Reliance II LLC would be entitled to receive additional contingent consideration of upto US$11.25 MM upon certain conditions being met as per PSA. The transaction closed on 21^st November, 2017.

Reliance’s aggregate capital investments across JVs remained stable and was US$209 MM during CY 2017.

For 2018, the thrust remains on preserving long-term value through high-grading of land and development portfolio, retaining optionality, improving efficiency and well costs, as well as optimisation of well spacing and completions for enhanced recoveries.

Operational Performance

At Pioneer JV, drilling and completion activities commenced at the end of 1^st quarter of CY17 with the objective of testing new well design (down spaced wells with longer laterals and more intense frac’ing). At Chevron JV, there was no drilling and completion activity in the JV operated areas, while there was activity, in the non-operated areas. The joint ventures drilled 23 wells and put 41 wells on production. Thus there were 1,129 wells producing by the end of CY 2017.

The principle of Safety first– embedded in Reliance’s value sytsem

Gross JV production was ~0.88 BCFe/d for all 3 JVs, down 17% y-o-y. Reliance’s share of production and sales were at 139.7 BCFe and 121.4 BCFe, respectively in CY 2017, compared to 174.0 BCFe and 150.4 BCFe in CY 2016.

Pioneer JV

At Eagle Ford, development activities commenced as the JV tested wells with new well design that involves higher intensity well completion and changed well spacing, with encouraging initial results. JV drilled 11 wells while it frac’ed and put on production 20 wells during H2 2017. The 2017 wells were very successful. With limited activity and natural decline of the existing wells, year average Gross JV production was 35% down at 118 BCFe compared to 181 BCFe in CY 2016, while Reliance share of net sales volume was at 47.5 BCFe compared to 72.9 BCFe in CY 2016. The share of liquids improved slightly from 65.2% to 67.0% in CY 2017. Reliance and its partner Pioneer sold part of their acreage in the West Eagle Ford shale play which was not part of near term development plan.

Chevron JV

Progress on pad optimisation and on well designs combined with progress towards Upper Quartile (notably well costs and LOE) were key achievements during 2017. This has set stage for restarting development activity in JV operated areas during CY 2018.

Year average gross JV production declined by 5% to 159 BCFe from 166 BCFe in CY2016, reflecting slowdown in activity despite improved operational efficiency and strong well performance. Reliance share of net Sales volume stood at 55.0 BCFe, compared to 56.7 BCFe in CY 2016.

Carrizo JV

Prior to the sale in November 2017, gross JV production was 39 BCFe as compared to 43 BCFe in CY 2016, while Reliance share of net sales was at 19 BCFe compared to 21 BCFe in 2016.

Exploration Outlook

Fuel strategy and energy basket

Future energy outlook indicates deliberate shift towards cleaner fuels. There has been a revision in target investments by industry majors under the new business environment. Natural gas, being cleaner, is an ideal transition fuel and stranded resources of gas in Indian basins form a good investment option.

Considering the price forecast and low carbon economy, RIL’s exploration targets are aligned to prepare for the future by improving efficiency and leveraging integrated business model. The key components of the strategy include:

• Sustain production and expeditiously develop discovered resource base
• Safe and reliable commissioning and operation of the fields
• Maximise recovery and value generation

Digitally enabled upcoming fields

Technology & Innovations

In FY 2017-18, focus was on upgrading systems and technologies in light of upcoming deepwater development projects, so that the “Upcoming Fields” are digitally enabled in all possible manner.

A strong foundation for “Data Driven Decisions” is being laid through the use of Open stack technologies, OEM software stack and Big data analytics technologies. Efforts are being made to bring in “Platform way of working” powered by appropriate selection, design and use of digital platforms, to support the new fields.

Reliance received US Patent (No. US 9,926,250 B2) on 27^th March, 2018 for development of “System for Regenerating Mono Ethylene Glycol and A Method Therof” for RIL’s KG D6 Operations.

Business stewardship from waste water to farming

Action Taken:

• As part of gas production cycles in CBM, the gas wells go through a de-watering phase, wherein the water from the wells oozes out along with gas
• Process continues till the life cycle of the well producing roughly 1 lakh liters of water
• A gravity based water flow to the fields was designed along with farmers
• Farmers got water 2-3 times in the crop cycle even in drought like conditions
• 245 farmers of neighbouring villages sowed crop in 15 lakh square meters (370 acre) and harvested 4,000 quintals, almost doubled their yield

Outcome: Enhancing income of farmers

Bio-CBM

To increase recovery from CBM fields, Reliance has engaged in R&D efforts in addition to the established methods. Current focus of this research is Bio-CBM.

In CBM, methane gas which is adsorbed and trapped naturally in coal seams is produced. Bio-CBM technology uses microbe injection to produce in-situ methane where either the coals are devoid of methane or conventional CBM extraction is uneconomical.

Currently this technology is in nascent stage and the initial lab tests has shown encouraging results with respect to methane production potential. Further work is planned to establish ability of this technology to scale up to a commercial operation.

Reliance is leveraging its infrastructure (advance laboratories), diverse inter-disciplinary technical skills, CBM production expertise, CBM fields and knowledge of regulatory requirements to give impetus to the Bio-CBM research.

Update On Arbitration And Other Legal Issues

KG D6 Cost Recovery Arbitration

KG D6 Cost Recovery Arbitration Arbitration claim commenced by the Company in November 2011 seeking declaration that it is entitled to recover 100% of its Contract Costs under the Production Sharing Contract (‘PSC’) for the KG D6 Block. 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 (‘PILs’) were filed before the Supreme Court against the Company in relation to the KG D6 PSC seeking reliefs in the nature of disallowance of cost recovery, quashing GOI’s decision to approve the certain gas price formula, termination of PSC et al. The Company has submitted that the underlying issues in the PILs are already subject matter of ongoing arbitrations relating to the KG D6 Block. Matter is still pending in the Supreme Court.

PMT Arbitration

Arbitration initiated by BGEPIL and RIL against GOI on 16^th December 2010 under PSC for Panna – Mukta and Tapti blocks due to difference in interpretation of certain PSC provisions between Claimants and Government.

The Tribunal by majority issued a final partial award (‘FPA’), and separately, two dissenting opinions in the matter on 12^th October 2016. Claimants challenged certain parts of the FPA before the English Courts, which delivered its judgment on 16^th April 2018 and has decided to remit one of challenged issues back to the Arbitration Tribunal for redetermination. Arbitration Tribunal is yet to schedule the quantification phase of the arbitration, which will take place post determination of Claimants’ request for increase in cost recovery limit under the PSCs.

Yemen Arbitration

Arbitration filed before ICC Paris by Reliance Exploration & Production DMCC and Hood Energy Limited (together ‘Claimants’) against the Republic of Yemen (‘RoY’) claiming that Force Majeure declaration and subsequent termination of the Production Sharing Agreements for Yemen Blocks 34 and 37 were valid and that Letter of Credit cannot be drawn by the RoY. The ICC Tribunal ruled in favour of the Claimants. Annulment application against the ICC Award filed by RoY is ongoing before the Paris Courts.

Dispute with NTPC

NTPC filed suit for Specific Performance of Contract 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 the Company’s fact witnesses is to be cross examined by NTPC.

Arbitration Relating to Alleged Migration of Gas

GOI sent a notice to the KG D6 Contractor on 4 November 2016 asking the Contractor to deposit approximately US$1.55 Bn on account of alleged gas migration from ONGC’s blocks. RIL, as Operator, for and behalf of all constituents of the Contractor, initiated arbitration proceedings against the GOI. Arbitration hearings have concluded and the Award is awaited.

Capex and Growth Plan

KG D6

Reliance announced plans to embark on the next wave of projects to develop existing hydrocarbon discoveries in KG D6 Block. The three planned projects - R-Cluster, Satellite- Cluster and D55 (MJ) fields, are expected to bring onstream additional 30-35 million cubic metres (~1 billion cubic feet) of gas per day, in phases, over 2020-22. With these projects Reliance will venture into ultra-deepwater and High Pressure, High Temperature areas - a first in India.

Reliance has rich project execution experience including knowledge in deep-water oil & gas projects. Additionally, it expects to leverage its partnership with BP, existing infrastructure in the Krishna-Godavari Basin and current downturn in the capital equipment & service provider market. Production from these projects is expected to reduce India’s import dependence and amount to over 10% of the projected gas demand in 2022, benefitting India and domestic consumers at large. RIL along with its JV partner plans to invest `40,000 crore (~US$6 Bn) to develop the discovered deepwater resources in the KG D6 Block.

For R-Cluster development, all major contracts have been awarded. Engineering & fabrication activities have commenced. In FY 2018-19, Reliance plans to commence drilling & completion for development wells and its first offshore installation campaign.

Management Committee (MC) has approved the Field Development Plans for MJ fields, Satellite fields and Other Satellite fields in February, 2018. Reliance has initiated contracting long lead items for wells and facilities for these projects.

Simultaneous development of the three projects will enhance overall capital efficiency and build on project synergies.

CBM

To sustain plateau production, further CBM development is being undertaken. Development activities of block SP (West)–CBM–2001/1 Phase II and SP (East)–CBM–2001/1 block is currently underway. Phase II includes drilling and completion of more than 180 wells along with an additional gas gathering station and associated water gathering stations for collection and processing of CBM Gas and water respectively.

Business Stewardship

Employee volunteering and community participation are encouraged within the Company. Acting as a responsible business, the Company also ensures productive employment for members of the local community. For a more holistic view of CSR activities, please refer to the Report on Corporate Social Responsibility.

Business and Competitive Position

The Company’s oil and gas assets include KG D6, Panna- Mukta, Tapti and two Coal Bed Methane (CBM) blocks in addition to other domestic blocks. RIL also has two joint ventures in North American shale plays with Pioneer Natural Resources and Chevron.

CBM Group Gathering Station 12 at Night

Oil and Gas Portfolio

^* Conventional and CBM acreage converted into acres using 1 sq.km.= 247.1053 acres
During the Year, Blocks MY17 and MY18 in Myanmar were relinquished on account of lack of prospectivity.
RIL also undertook portfolio rationalisation in US Shale business with sale of assets held in JV with Carrizo, and sale of some acreage held in JV with Pioneer Resources in West Eagle Ford shale.

Recycling green Waste

Action Taken:

• Daily 260 cu. ft. of green waste is generated through the routine landscape/ Green Belt maintenance activities
• Vermicomposting unit is developed to process green waste to a fine textured good quality compost by means of earthworms
• Compost is utilised as an organic manure for existing ornamental plants & fruit orchards
• Yearly, KG D6 is recycling about 3120 cu. ft. of green waste & converting it in a 108 tonnes of fine textured vermicompost

Outcome: In-house biodegradation of the available green waste by using cost effective techniques

Retail

Reliance Retail has been one of the catalysts in the growth of modern retail in India. With its Pan-India presence, Reliance Retail has attained a leadership position in the industry that is capable of delivering unmatched customer experience at a scale comparable to none.

During the year, Reliance Retail has become the first retailer in India to cross the US$10 billion revenue milestone. Segment PBDIT for FY 2017-18 grew by 114.5% y-o-y to `2,529 crore from `1,179 crore. With 7,573 Retail stores, 495 Owned Petro Retail Outlets and 4,400+ Cities presence, Reliance Retail is India’s Largest Retailer.

The performance is a reflection of strong business fundamentals and focussed execution by a highly trained and capable team. Reliance Retail is leveraging RIL’s ecosystem and group strengths to fuel the next stage of growth.

Reliance Retail continues to deliver its promise of trust to all its customers, suppliers and employees.

`2,064 crore

Retail segment recorded its highest ever EBIT

45% CAGR

Five year revenue growth; doubling revenue every two years

Subramaniam V.

Darshan Mehta

Akhilesh Prasad

Sunil Nayak

John Wilcox

Damodar Mall

Brian Bade

Kaushal Nevrekar

Ashwin Khasgiwala

Strategic advantages and competitive strength

Diversified portfolio of stores across various consumption baskets

Reliance Retail has developed and strategically positioned wide array of stores with a mind-set to serve customers and achieve leadership within its category. The strategy has worked well as Reliance Retail has achieved leadership in key consumption baskets and has emerged as India’s largest retailer.

Adaptive / Responsive

Reliance Retail operates on a framework that fosters rapid adaptation to ever changing external environment whether it pertains to technology evolution, consumer experience or the way shopping habits are changing. This has helped Reliance Retail in maintaining its market leadership by anticipating and responding quickly to the ever evolving customer and market dynamics.

Serving the underserved markets

Reliance Retail has been consistently expanding at the rate of more than 1 store every day for the last 5 years penetrating in to markets unserved and underserved by organised retail. It enjoys a first mover advantage in many cities.

Customer focussed robust ecosystem

Reliance Retail has created an ecosystem consisting of farmers, manufacturers, suppliers, supply chain and logistics partners, distribution partners with a scalable and integrated network of infrastructure. This enables it to provide unlimited choice, superior value proposition, quality and unmatched experience across all retail stores.

Partner of Choice

Reliance Retail has emerged as the partner of choice for International brands and has established exclusive partnerships with many revered international brands. It operates the largest portfolio of international retail brands in India.

Multi-channel strategy

Reliance Retail has adopted multichannel strategy and has integrated ‘offline-online’ models to truly differentiate the customer experience.

Reliance Retail Operating Model

Market Environment

FY 2017-18 witnessed several important reforms taking place in the economy. The Government implemented Goods and Services Taxes with effect from July 2017. The Maharashtra government permitted shops and retail establishments in the state to remain open 24 hours a day, seven days a week and also reduced compliance requirements

India’s consumption story remains strong. India’s nominal GDP per capita income is estimated at `1,27,292¹ in 2017- 18 closer to US$2,000 mark². Favourable macroeconomic parameters, young and aspiring population, growth of digitisation and internet penetration, shift from traditional to modern retail channels including e-commerce are all likely to drive this consumption boom. Indian consumers are evolving with increasing willingness to spend on wider assortment of products available at better quality and value. Reliance Retail’s investments in technology, infrastructure, business processes and people would ensure that Reliance Retail is always ahead of the curve in serving its customers.

India’s retail market is estimated at US$616 billion in FY 2015-16 and is expected to grow at a CAGR of 12% reaching US$960 billion by FY 2019-20 . The penetration of organised retail in India at 9% is very low. However, organised retail is growing at a faster pace and is estimated to jump threefold from US$55 billion in FY 2015-16 to US$161 billion by FY 2024-25³.

Reliance Retail has established a large presence across all consumption baskets, and is a leading player in food, consumer electronics and fashion retailing delivering superior value to its customers, suppliers and shareholders.

Business Overview

Reliance Retail is the retail initiative of Reliance Industries and an epicentre of its consumer facing businesses. It has adopted a multi-retail concept strategy and operates a wide array of store concepts which caters to diverse needs of the customers across core consumption baskets of Grocery, Consumer Electronics, Connectivity, Fashion & Lifestyle and Petro Retail.

Presence Across Consumption Baskets

Grocery

Food & grocery is the largest consumption category accounting for 67% share of the retail market. It is estimated at US$413 billion in FY 2015-16 and is expected to grow at a CAGR of 11% reaching US$634 billion by FY 2019-20³. The penetration of organised retail is lowest at 3% in this category. However, organised grocery retail is expected to grow at a CAGR of 24% reaching US$31 billion by FY 2019-20³ from US$13 billion in FY 2015-16. This depicts tremendous potential for Reliance Retail to penetrate in this category.

In grocery, Reliance Retail operates three unique store concepts: Reliance Fresh, Reliance Smart and Reliance Market. Each store concept has a compelling store experience, engaging store staff and a unique price value proposition.

Reliance Fresh is a neighbourhood store concept focused on providing fresh fruits, vegetables and products for daily household needs with a strong focus on providing convenience, round the clock freshness at affordable prices. With three core promises of Fresh Hamesha, Available Hamesha and Savings Hamesha, Reliance Fresh provides good quality products across entire grocery needs of a household.

Reliance Smart is a destination supermarket store with a simplified and strong value proposition “Big Shopping equals Smart Savings”. The store offers wide range of products with all products competitively priced all year round, thus providing households more savings every day. www.reliancesmart.in is Reliance Retail’s strategic initiative to take Reliance Smart Omni channel and is currently operational in select cities. It is an initiative to build an online sales channel for grocery needs of consumers with focus on leveraging the fulfilment through existing network of Reliance stores and supply chain infrastructure.

Reliance Market is India’s largest cash and carry store chain serving thousands of traditional kiranas, hotel, restaurant and catering (HORECA), small and medium institutions and households. It works closely with its member partners and offers solutions encompassing delivery, payment, etc. The business operates on the principle of ‘buy for less’ – ‘operate for less’ – ‘sell for less’ – ‘grow sales’ relying on higher efficiency of asset utilisation and passing on higher value to customers. The value thus created by Reliance Markets helps in supporting member partners offering them ‘profits for your business-savings for your home’.

Over the years, Reliance Retail has developed a wide range of offerings under its own brands. Best Farms, Good Life, Masti Oye, Kaffe, Enzo, Mopz, Expelz, Home One, Graphite, RelGlow, etc. are some of the brands that are offered in categories such as home and personal care, staples, food FMCG, and general merchandise. These brands are available across Reliance Fresh, Reliance Smart and Reliance Market stores and offer superior price-value proposition.

Reliance Retail directly partners with a large number of farmers and small vendors in a farm-to-fork model. The linkages with the farm has brought about transformational changes in the quality of life of the farmers. It is enhancing the quality of produce, reducing wastage by shortening the time to move fresh produce and reducing intermediaries in the value chain, thereby benefiting all.

Consumer Electronics

Consumer electronics accounts for nearly 6% of India’s retail market. It is estimated at US$35 billion in FY 2015-16 and is expected to grow at a CAGR of 16% reaching US$63 billion by FY 2019-20 . The penetration of organised retail in this category is 25% and the organised consumer electronics retail is expected to grow faster at a CAGR of 32% from US$9 billion in FY 2015-16 to US$20 billion by FY 2019-20³.

In consumer electronics, Reliance Retail operates two store concepts viz., Reliance Digital and Jio Store. These concepts are backed by ResQ, India’s first and only ISO certified, multiproduct, multi-brand and multi–location service network providing end-to-end product life cycle solutions.

Procurement from farmers and
mandis across the country
 
 
 

47 Collection Centres & 14
Processing Centres (3.6 lac sq. ft.)
Pan-India. Overnight processing,
ensuring freshness, quality and
hygiene

Fresh fruits and vegetables
delivered every morning to all
stores at 8.00 am
 
 

Operate cold rooms at distribution centres and fleet of vehicles to ensure freshness and quality of fruits and vegetables

Reliance Digital is a destination store offering comprehensive assortment of top electronics and consumer durable brands, a large selection of innovative products, attractive pricing and best-in-class service. Its product portfolio varies from a small memory card to large household appliances offering a delightful ‘all under one roof’ shopping experience to consumers. It commands market leadership in high-end consumer electronics and home appliance categories such as ultra-high definition TVs, side by side refrigerators, top load washing machines and inverter air conditioners.

Reliance Retail has a wide portfolio of own brand products under “Reconnect”, “Jio Phone” and “LYF” brands. The brands are built on the premise of product innovation, unmatched user experience and superior quality and gives customers a wider choice of products that serve their needs.

Jio Store and Jio Point are a small store concept that caters to rapidly growing market for mobility and communication products. They offer latest assortment of mobile phones, communication devices, IT products, accessories and Jio products & services to customers. They also extend Reliance Digital’s reach by offering a large assortment of consumer durables through catalogue & web-sales. In a short period, Reliance Retail has established Jio Store and Jio Point as the country’s largest mobile phone retail chain. Jio Store and Jio Point are increasingly becoming a distribution platform for most national and international brands as they offer tremendous reach to partner brands.

Fashion & Lifestyle

Apparel & accessories account for 8% of India’s retail market and is the second largest category after grocery. Demographic dividend, proliferation of fashion retail chains and increasing demand for branded apparel continues to drive growth for the apparel & accessories category. It is estimated at US$49 billion in FY 2015-16 and is expected to grow at a CAGR of 11% reaching US$74 billion by FY 2019-20. Organised retail penetration in apparel category is at 22% and the organised apparel is expected to grow at a CAGR of 22% from US$11 billion in FY 2015-16 to US$24 billion by FY 2019-20³.

Reliance Retail is the leading fashion apparel retailer in India and has adopted a multi-model approach in reaching out to its customers through various retail concepts that cater to customer segments from value to premium and luxury.

Trends, the apparel and accessories speciality retail chain, enjoys market leadership as the largest value fashion retailer in India. Trends brings a compelling portfolio of national brands and own brands. A range of own brands such as Avaasa, DNMX, Netplay, Performax, Teamspirit, etc have found strong traction with customers seeking fashionable products at better prices. Each of these brands caters to diverse tastes and preferences of the customers. Over the years, the own brand portfolio of Trends has grown in strength and provides a competitive advantage to the business. Trends is vertically integrated with complete control over fashion value chain from designing to fabric souring, manufacturing, logistics and distribution. It has thus created a robust ‘fibre-to-wardrobe’ operating model, with strong portfolio of own brands, helping it to quickly adapt to emerging fashion trends.

1   http://www.mospi.gov.in/sites/default/files/press_release/nad_pr_2eni_28feb18_0.pdf
2   IMF: http://www.imf.org/external/datamapper/NGDPDPC@WEO/OEMDC/ADVEC/WEOWORLD/IND
3   Edelweiss Research Report titled ‘India Retail Return of the Renaissance’

Presence Across All Income Segments in Fashion and Lifestyle

Reliance Footprint is a leading family footwear destination, offering a wide range of products from over 50 prominent international, domestic and own brands. The stores have mid to premium positioning, offering varied collection of products in footwear, luggage, handbags & accessories.

Reliance Retail operates a curated fashion & lifestyle e-commerce platform www.ajio.com (AJIO). Celebrating fearlessness and uniqueness, AJIO is constantly looking to bring a fresh, current and accessible perspective to personal style. The platform features an exclusive handpicked collection of merchandise from international fashion brands, Indian brands and own labels. AJIO delivers unique value proposition by offering styles that are handpicked, on trend and at best prices.

Vertical Integration Across Fashion Value Chain

Fully integrated operations from designing to distribution

Indian brands and own labels. AJIO delivers unique value proposition by offering style that are handpicked, on trend and at best prices.

Reliance Jewels is the destination for fine jewellery with thousands of exquisitely crafted gold, diamond and bridal jewellery. The stores provide a delightful customer experience to customers with its 100% purity, transparency, range of designs and competitive pricing. It hosts an extensive range starting from traditional gold jewellery including Kundan, Polki, Filigree and Temple that showcases the legendary design and craftsmanship of various parts of India right up to contemporary diamond jewellery & solitaires.

Technology enabled safety pendant

Action Taken: The Company introduced a technology-enabled pendant, embedded with a bluetooth device that is used to trigger an alarm to 5 emergency contacts. The wearable product is called Aavaran. It is light, affordable, and has a 10 day battery life. When the distress signal is triggered, 5 people will get an IVR Recorded Call (15 sec), an SMS with the user location and the user gets an option to see and navigate to nearest safe place. “Call Police” option routes the call to the nearest police control room.

Impact: This device benefits women and addresses the societal challenge of women’s safety. The device would instil a sense of security and comfort to the individual and their families.

Reliance Retail, through Reliance Brands, has a portfolio of over 40 revered international brands that spans across the entire spectrum of luxury, bridge to luxury, high-premium and high-street lifestyle. The strong brand portfolio reinforces Reliance Brand’s position as a partner of choice for best international brands. Leveraging on to Reliance Retail’s deep market understanding, unwavering focus and strong operating capabilities, many of its partner international brands have made India as a significant market outside of their home countries and have largest store presence in India than any other country. This reflects the trust and optimism which Reliance Retail and its partner brands share with each other.

Qwik Mart – convenience store co-located with petro outlet

Jio point: Serving untapped market

Petro Retail

Reliance is a leading private sector petro retail operator with 495 owned Petro Retail outlets. These outlets yield significantly higher volumes than an average industry outlet led by efficient processes, technology backbone and well trained employees. It has Pan-India coverage offering diesel, petrol and LPG to its customers.

Financial and Operational Performance

Reliance Retail achieved a turnover of `69,198 crore in FY 2017-18, more than doubling from the turnover of `33,765 crore achieved last year. The business delivered an EBIT of `2,064 crore for FY 2017-18, more than doubling from `784 crore achieved last year. During the year, Reliance Retail added 221 stores and 3,736 Jio Points.

Reliance Retail operated 7,573 retail stores in over 4,400 cities covering an area of 17.7 million sq. ft. as on 31^st March, 2018. Reliance Retail operated 495 petro retail outlets as on 31^st March, 2018.

Business Performance

Reliance Retail demonstrated stellar operating performance during FY 2017-18 with strong growth across grocery, consumer electronics and fashion & lifestyle. This was backed by a healthy blend of store expansion and same store sales growth across all its store concepts.

In grocery, the Fruits category is consistently showing high growth in Reliance Fresh and Smart backed by its supply chain and sourcing efficiencies. According to Nielsen, Reliance Fresh and Smart account for over 50% of all fruits and vegetables sold in modern trade. Reliance Fresh and Smart stores crossed a milestone of 500 stores mark during the year and are becoming a preferred destination for buying fruits and vegetables, staples, beverages and consumer products.

Qwik Mart, a new convenience store concept, was launched during the year. Qwik Mart stores are co-located with Reliance Petro Retail outlets and efficiently leverage the group strength and resources.

Reliance Market witnessed strong same store sales growth helped by growth in Kirana customers, better value proposition and focused customer strategy.

In consumer electronics, Reliance Digital outpaced market growth across key categories and delivered high doubledigit same store sales growth. Strengthening its product proposition, Reliance Digital forged a long-term exclusive partnership with Sharp for High-End TVs. This enhances Reliance Digital’s competitive advantage in High-End TVs category. Exclusive assortment, strong value proposition, ResQ’s service promise and regional focus being the distinguishing factors which contributed to an impressive growth. ResQ carried out over 1.2 million repairs and installations during the year, an increase of 31% over last year.

To further enhance its distribution reach for consumer durables and connectivity solutions, Reliance Retail has operationalised 3,736 Jio Points in over 3,700 cities during the year. These cities are key feeder markets and would provide access to untapped semi urban and rural market for Reliance Digital. Jio points serve as a nodal point for consumers to obtain and recharge Jio services and facilitate sale of mobility, connectivity and consumer durable products directly and through catalogues, kiosks and other modes.

In fashion & lifestyle, Trends is the fastest growing apparel retailer in the country with 458 stores across 223 cities in 28 states. Reliance Retail has added over 100 Trends stores during the year with ~1 million sq.ft. of retail space. No other multi-brand apparel retail chain in the country has achieved such a large expansion in a year and widespread presence. Trends witnessed over 88 million customer walk-ins during the year, making it a preferred destination for customers.

Reliance Jewels launched ‘ASYA’, an exclusive handcrafted collection which is inspired by noble bird HAMSA (or SWAN) from a leading Indian designer during the year. It continues to attract strong customer traction by providing widest range, stunning designs, guaranteed purity & quality and a pleasant shopping experience.

Project Eve, a new store concept positioned in the mid-topremium segment, was launched during the year. Project Eve is a unique, one-stop, experiential store concept targeting women in the age group of 25+ and celebrates the spirit of women by serving them with wider fashion and lifestyle offerings, for all occasions, moods and purposes. Project Eve stores also showcase Marks and Spencer’s curated range of lingerie and beauty products through a SIS format, the first ever by Marks and Spencer in India.

AJIO with a multi-fold increase in customer eyeballs, orders and enhanced last mile delivery to over 12,000 pin codes has emerged as one of the top fashion e-commerce destinations in a very short span of time. It has reached to 2.5 million followers across social media and ranks among the top shopping apps on Apple iOS and Google Play Store.

During the year, Reliance Brands further strengthened its partnerships of international brands by acquiring 46.6% equity stake in Genesis Luxury Fashion Pvt. Ltd, which operates a rich portfolio of brands such as Armani, Canali, Michael Kors and many others. Together, Reliance Retail now operates the largest portfolio of international retail brands in India.

In petro retail, 47 petro retail outlets were recommissioned during the year. Reliance Petro Retail outlets have robust automation of daily fuel pricing at 100% of operational retail outlets, ensuring customers of correct and timely price implementation.

Reliance Retail: Partner of Choice

Outlook

Over the past decade, Reliance Retail has built India’s largest retail infrastructure with 7,573 brick and mortar stores across 4,400+ cities, 5.6 million+ sq. ft. of warehousing facility, a captive fleet of over 1,300 dedicated trucks, state of the art IT systems to manage entire retail operations and e-commerce presence serving more than 12,000 pin codes. This investment has helped Reliance Retail achieve an unprecedented growth in India’s organised retail market. Keeping pace with the market growth and evolving consumer shopping habits, Reliance Retail has a planned roadmap to capture a significant share of the organised retail. With aggressive expansion plans, Reliance Retail is getting future ready and set to further strengthen and consolidate its leadership position in organised retail. This expansion will be achieved through the following key pillars:

a) Augmenting geographical reach across all consumption baskets

“Bettering the Lives of Indians” every day has been the core focus of Reliance Retail since inception. Reliance Retail has the ambition of reaching the hinterlands of the country and is putting together a framework of expanding each store concepts across tier 2, tier 3 cities and beyond to achieve market leadership. It will leverage and interplay strengths with Reliance Jio to execute this.

b) Innovating newer store concepts and channels to meet customer expectations

During the year, Reliance Retail rolled out and expanded newer store concepts like Project Eve and Trends Woman. These newer concepts are already resonating with target customers. In order to cater to growing and diverse customer needs, Reliance Retail will continue to innovate and partner with revered international brands to bring world-class products and services to Indian consumers.

c) Enhancing customer experience across all concepts and channels

Convergence of Online and Offline retailing is being followed by all retailers to offer seamless experience to their customers. As part of 2.0 initiatives, Reliance Retail is operating a connected store concept providing anytime, anywhere, any device seamless customer experience. This provides an omni-commerce, omnipresence reach to Reliance Retail. In order to enhance this reach and augment customer experience, more initiatives are being planned, which will be rolled out in a phased manner.

d) Leveraging technology, data and insights across the value chain for agility and transformation

Today, the Indian consumers, especially the millennial, are becoming connected, digital-savvy, brand conscious and quality oriented. Global retailers are leveraging disruptive advanced technologies such as artificial intelligence, automation, virtual/augmented reality, robotics, big data analytics and internet of things to offer experience & lifestyle-driven opportunities to customers. Reliance Retail will be adopting next generation technologies that is robust to handle everincreasing volumes, flexible to meet diverse customer expectations and automation to improve productivity, efficiency and agility.

Business Stewardship

Reliance Retail’s ethos and business principles reflect upon a wide range of areas, which include health, safety, security, environment and social impacts of its operations. It ensures that its activities create societal impact and customer value while deploying all its resources. Every year, Reliance Retail executes a large number of social initiatives, and below are a few highlights of the year:

• People with disabilities are usually denied jobs in India. However, Reliance Retail trained and recruited 475 specially abled people during the year. As on 31^st March, 2018, Reliance Retail employed 793 specially abled employees. Each of these employees are valued and RIL sees lowest attrition among these employees.
• Many of RIL’s employees are first time wage earners for their family, thus providing them means of living. Reliance Retail provides valuable training, nurtures them to advance their skills and makes them a useful asset to the organisation.
• Reliance Retail was awarded contract through a tender process to support Fair Price Shops across 10 districts of Andhra Pradesh covering 5,000+ shops. This is a voluntary program facilitated by the government of Andhra Pradesh. Reliance Retail has signed up over 700 fair price shops and operationalised 41 Fair Price Shops during the year, providing ~400 SKUs across staples, food, home and personal care and much more ensuring that quality and affordable products reach common man of the state, thereby sharing value with society. Further, each of the prospective sign up shops and supply chain thereof will need to be manned, creating employment opportunities in the region.
• Reliance Trends’ leadership in India’s fashion apparel is backed by its Make in India commitment. Reliance Retail works closely with over 250 vendors across India, providing them committed volumes, education on modern manufacturing techniques and support to enhance productivity and quality.

Reliance Retail in association with Reliance Foundation has carried out numerous other initiatives contributing towards rural development and promoting livelihood development projects. With a people strength of over 90,000, it is a leading employer among organised retailers in India, making it the employer of choice.

Diversity & Inclusion: Changing societal perspective

Reliance Digital

To encourage inclusion of specially abled, Reliance Retail has explored and mapped specific job roles which can be done effectively by them. This in turn has helped them earn respect and reputation in the society. Community openly acknowledges that it is beneficial for business to hire them as on-ground evidence suggests that employing such talent helps in managing rising attrition, create a loyal workforce, and improve morale of the employees.

Reliance Market

Digital Services

The Group’s digital communications and services initiatives under Jio umbrella brand have captured unprecedented adoption and recognition not only in India, but also world over. The flagship digital communications and services company Reliance Jio Infocomm Limited (‘RJIL’ or ‘Jio’ or ‘Reliance Jio’) is ranked 17th amongst the Top 50 Most Innovative Companies in the world & is India’s Top Most Innovative Company by Fast Company.

Since starting operations in September, 2016, Reliance Jio has been redefining benchmarks, setting new milestones, inspiring unprecedented adoption, usage and service metrics that are better than the best globally, while ushering in a truly converged digital services ecosystem. Reliance Jio is the largest mobile network in the world in terms of mobile data traffic with total mobile data consumption of over 5 Exabyte in the financial quarter ending March 2018.

Reliance Jio has been not only pioneering but also has been a key catalyst in the creation and growth of wireless broadband data market in India. With its Pan-India presence, Reliance Jio has attained wireless data leadership position in the industry that is capable of delivering unmatched customer experience at a scale comparable to none. Jio continues to co-create digital eco-system and expand its network with a coverage target of 99% of India’s population. Jio reiterates its promise to shape the future of India through transformative, quality and affordable access of end-to-end digital services for every Indian and making digital India vision a reality.

186.6 million subscribers

Reliance Jio, the fastest growing digital technology and communications Company

Sanjay Mashruwala

Mathew Oommen

Pankaj Pawar

Kiran Thomas

Harish Shah

Jyotindra Thacker

Jagbir Singh

Anish Shah

Anshuman Thakur

Rajneesh Jain

V Sridhar

Strategy and vision

Jio’s strategy and vision are pivoted around Digital India and its key value propositions on commencement of services are affordable, high quality and abundant data; connected intelligence; smart, simple and secure services; and bringing people together.

Coverage

Coverage refers to anytime, anywhere mobile and wireline broadband access, backed by the largest network of 4G spectrum, tower and fiber assets, thus providing farthest reach and access to every Indian.

Data

Jio’s resilient network is engineered to provide minimum capacity of over 10 GB per month for every Indian.

Jio’s mobile consumers already consume on an average ~10GB per month. This is the largest per capita mobile consumption in the world.

Quality

Jio’s all IP network and superior Long Term Evolution (LTE) based network is backed by worldclass customer service and quality, and adoption of latest self-care and digital app platforms including next generation customer care Bots.

Affordability

Jio’s next generation network is built at an extremely efficient cost base coupled with significant technology driven operating efficiencies, which enable it to offer services at a substantially lower cost than others along with host of other value added services.

Market Environment and Outlook

Globally, humans are using digital devices and services to augment and enhance their life experience – be this in communication, entertainment, information, education health, buying/commerce, sharing or streaming events via their phones, on ever faster mobile networks. The pace and reach of this is likely to get faster exponentially.

The majority of voice calls have already moved to next generation mobile network at almost negligible cost coupled with rich communication services and plethora of infotainment and commerce applications. Now, it is the turn of home and wireless broadband convergence to drive an all pervasive Internet of Things (IoT) and fully enabled digital life.

Digitisation and data consumption in India were subdued because of inadequate investment in infrastructure, lack of credible competitive environment coupled with steep pricing. Jio’s entry not only unlocked existent latent demand, but also consumption patterns leading to exponential increase in per capita data consumption. Government’s strong policy framework and push towards ‘Digital India’ have immensely helped in accelerating the shift towards digital economy and society.

FY 2017-18 witnessed several important and transformative changes in the Industry. The industry is going through a major consolidation phase through mergers or sale of businesses and from earlier 8 plus players is heading towards a 3 to 4 player market.

Telecom Regulatory Authority of India (TRAI) has set a definitive path towards eliminating Interconnect Usage Charges (IUC) by 2020, while reducing the extant charge of 14 paise per minute to 6 paise per minute. This not only removes the artificial tariff hurdle with floor price but also allows faster adoption of more efficient technologies like VoLTE, as erstwhile legacy networks are nearing obsolescence. This, along with reduction in international calling terminal rates to 30 paise per minute from earlier 53 paise per minute, is beneficial for the end customer, while promoting technology and services which have almost negligible cost for carrying and servicing essential services like voice.

This is also a clear indication of the industry’s maturity and sets a clear forward path enabling quick adoption and implementation of digital technologies, which Jio has been pioneering.

Digital transformation across the value chain

India has become an epitome of digital transformation, driven by various private and public initiatives. During the last few years, technological advancement coupled with transformative initiatives by Jio, is enabling availability of affordable broad band internet plans. This has provided the required impetus for increasing internet usage in India.

India currently has over ~450 million internet subscribers (CAGR of ~42% over FY 2006), making it the second largest online market in the world, ranked only behind China. However, the overall internet penetration is still at 34%, skewed in favour of urban India, which has ~76% internet penetration. Rural India is still underpenetrated with only 15% penetration. With a total rural population of ~906 million, approximately 750 million users still do not use internet.

Internet users in India –
Urban Rural divide, 2014-171 (in Million)

Celebrating Digital Life

The above gap represents an opportunity of an at least ~150 million households, which are yet to be connected. As per EIU forecast, Indian households have been witnessing an upwards increase in their disposable income since the last few years. Deloitte predicts that rising affluence of households will lead to an increased demand for consumer goods, entertainment systems, etc. which will further drive demand for internet services. Hence, these untapped households will represent the next wave for internet growth in India.

Even though the mobile industry’s contribution to the country’s GDP currently stands at 6.5% (USD 140 billion)², Indian telecom industry hitherto had monolithic approach towards consumer, with limited innovation or collaboration that drives eco-system benefits to the end consumer.

Over the last few years, increase in internet penetration has been driven mostly by availability of cheaper smartphones or through narrow band wireless access. More than 92% of rural users (substantially through limited wireless narrow band access) and 77% urban users have been using mobile as a primary device for accessing internet through cellular data connections.

India would be leading the data revolution in the coming years as the largely untapped market slowly gets included into the realms of digital services.

1   Internet in India 2016 – An IAMAI & IMRB report, Deloitte-India 2018 Predictions
2   Deloitte Technology Media and Telecommunications Predictions- India 2018 Predictions

Mobile Phone continues to be the preferred primary device driving internet usage(in Million)

In early 2016, India became the second largest smartphone market in the world, trailing China and overtaking the US with about 250 million smartphone users. The telecommunications market in India is characterised by an urban-rural divide, which is manifested by an urban tele density three times higher than that of rural. This explains the high smartphone user concentration in urban cities and an overall low smartphone penetration in the country. The current smartphone penetration in the country stands at as low as ~35%. The top 30 cities make up 51% of the entire smartphone market in India.

With the increasing availability of affordable telecom services and handsets in the market and the numerous Government initiatives to connect the unconnected, Deloitte predicts that India is poised to be at the forefront of the global data revolution with the introduction of bundlebased sales of smartphones with net effective price less than US$ 25 and data rates at less than US$ 1 per GB.

The “smart feature phones” introduced by Reliance Retail (Reliance’s retail initiative to bridge the digital divide gap) in the market proved to be a game changer. These phones would potentially bridge the digital divide by reaching out to the bottom of the pyramid with several data-driven functionalities bundled into the devices.

Jio leading from front

Since Jio’s transformative entry and collaborative approach across the value chain, the industry is steadily moving towards a converged and value added bundled services approach.

Jio-Integrated digital services franchise

Seamless converged coverage and abundant capacity

Reliance Jio has built India’s largest a next generation all-IP data network with latest 4G LTE technology. It is the only network built as a Mobile Video Network and providing Voice over LTE (VoLTE) technology. It has built a future ready network which can easily deploy 5G and beyond technology in the last leg. Jio has created an ecosystem comprising network, devices, applications and content, service experience and affordable tariffs for everyone to live the Jio Digital Life.

Spectrum and network

Jio’s network is engineered for seamless service delivery using LTE technology in 800 MHz, 1800 MHz and 2300 MHz bands through an integrated ecosystem. The combined spectrum footprint across frequency bands provides significant network capacity and deep in-building coverage. RJIL’s total spectrum footprint with this stands at 1,108 MHz (uplink + downlink) across three spectrum bands namely 800 MHz, 1800 MHz and 2300 MHz band across all the 22 circles with an average life of over 15 years. All of this spectrum is liberalised and can be used for rolling out any technology.

Jio’s next generation network is amongst the best in the world. The network has advance features such as Software Defined Networking (SDN) and Network Functions Virtualisation (NFV). It is ready for future evolution of technology, including transition to 5G with minimal additional capital expenditure in the network. The Company has filed 68 patents for the path-breaking initiatives it has undertaken.

Jio is one of the largest network operators in the country where the coverage is at par with 2G coverage of existing operators. By far, Jio has the largest LTE coverage in India and is targeting 99% coverage of the country’s population.

In anticipation of the latent and untapped data and digital services demand, Jio has built a strong data network with world-class infrastructure and fiber backhaul for offering wireless services, wireline services, FTTH, Enterprise offerings, IoT services and other digital services.

Reliance Jio also signed definitive agreement for the acquisition of specified assets of Reliance Communications Limited (‘RCOM’) and its affiliates. The acquisition is subject to receipt of requisite approvals from Governmental and regulatory authorities, consents from all lenders, release of all encumbrances on the said assets and other conditions precedent. The consideration is payable at completion and is subject to adjustments as specified in the agreement.

This acquisition, when completed, would bring synergies while adding to Jio’s network infrastructure asset portfolio across spectrum, tower and optical fiber.

Superior Network Quality

• Continued expansion of 4G network coverage and further deepening in existing areas to achieve 99% population coverage during 2018
• Only network to deploy Pan-India 4G across the 800MHz/ 1800MHz/ 2300MHz bands
• World’s largest mobile data consumption network
• World’s largest VOLTE network
• Ranked fastest network over last 15 months by TRAI’s MySpeed Analytics app (average download speed of 17.9 Mbps during March 2018, as per TRAI)
• Lowest call drop rate; 100% network availability

Jio Digital Vision

Largest Distribution and Service Network

• Continuous enablement of distribution channel through latest technology enabled platforms and services
• Pan-India distribution channel with over 1 million retailers
• Rapidly growing base of digital outlets and
• Jio Points in partnership with Reliance Retail as master distributor

Devices

Jio has been actively involved in developing the ecosystem for India’s LTE phones, working with renowned Original Equipment Manufacturers (OEMs), Original Design Manufacturers (ODMs) and chipset vendors on end-to-end device design and engineering. To bridge the digital divide gap and to enable access to affordable high speed mobile data to the hitherto unserved ~500 million plus feature phone and the unconnected market, Jio has partnered with Reliance Retail in launching a smart feature phone ‘JioPhone’ catering to this untapped market. This initiative has been hugely popular with unprecedented demand and adoption.

Jio continues to work with various OEMs’, ODMs’ and other eco system partners to further innovative and cost effective devices and solutions at affordable rates to accelerate adoption and cater digital services to the unserved.

Jio – Integrated Digital Service Franchise

Partnerships and new ventures

Jio, along with its business partners, is focused on making all the components of the digital value chain available to customers. To deliver such end-to-end solutions, Jio continues to partner and collaborate with technology developers, service providers, infrastructure providers, application partners and device manufacturers.

To enhance capabilities on content, technology platforms and applications space while leveraging group synergies, a strategic transaction was announced for combination of JioMusic with Saavn, a leading global music OTT platform, to form India’s largest platform for music, media and artists.

To further digital initiatives into education space during the year, a strategic investment and partnership was agreed upon with Indiavidual Learning Pvt Ltd (“Embibe”), a leading AI-based education platform leveraging data analytics to deliver personalised learning outcomes to each student.

To bolster content during the year, a strategic partnership with Eros Media was agreed upon to jointly set-up a `1,000 crore fund for production and acquisition of Indian films and digital originals across all languages.

Jio, it’s affiliates and its business partners continue to invest, innovate and enhance the digital ecosystem for bettering and enriching customer experience, while ensuring tight integration of devices, network infrastructure, platforms and applications portfolio to ensure seamless experience to customers.

Financial and operational performance.

Reliance Jio is the flagship digital communications and services initiative of Reliance Industries Limited and epicenter of Group’s digital revolution and transformation. Realisation of this strategic vision is not only evident in the unprecedented customer engagement metrics, but also in the robust financial performance of Digital Services business in very first year of it’s commercial operations.

Financial Performance

Despite competitive pressures, Digital Services business recorded revenues of `23,916 crore, with year-end subscribers’ base at 186.6 million and Segment EBIT was at `3,174 crore for the year, with EBIT margin of 13.3%. This is strong financial performance within the very first year of commercial operations, demonstrating strong fundamental and operating leverage of the business.

Jio continues to be the most popular wireless broadband service provider in the country with its subscriber base increasing at 186.6 million as on 31^st March, 2018. Net subscriber addition for the Company during FY 2017-18 was at 83 million with lowest churn in the industry at 0.25% per month. Jio continues to set new benchmarks on various performance parameters during the exit quarter for FY 2017-18:

• Industry leading ARPU @ INR 137 per month on a diversified subscriber base.
  (Only operator demonstrating business growth and growing traction of digital life)
• Average voice consumption at 716 minutes per user per month
  (Highest per sub and traffic of 414 crore minutes per day)
• Average data consumption at 9.7 GB per user per month
  (Amongst the highest average usage on mobile globally)
• Sustained 506 crore GB data consumption
  (World’s largest and fastest growing mobile data network, with >81% total industry 4G traffic)
• Average consumption of 13.8 hours of video consumption per user per month
  (Largest high quality video consumption network, with >240 crore hours per month)

This unprecedented adoption and metrics during the year are backed by:

• End-to-End 4G coverage at par with 2G coverage in the country
• Best network quality in the country
• Lowest call drop at 0.14%
• Fastest down load speed at 17.9 Mbps
• 100% network availability since commencement of operations
• Transformation role in creating the Digital Eco-System in the country
• Growing popularity of Jio digital services and applications across the spectrum
• Customer friendly and most affordable tariffs across user segments
• Continuing market expansion and customer engagement through JioPrime

Full service Digital suite

Lifestyle Applications (app)

The Company’s all IP network apart from VoLTE driven high quality voice calling from and to other telecom networks is fully enabled and capable of delivering content focused services. This capability to carry multimedia content, including music and video offers a rich customer experience. Jio also through its Group affiliates and partners has enabled a rich suite of digital applications and tools which encompass day to day needs including information, entertainment, commerce and self-service tools.

Jio’s digital suite of applications are already amongst the most popular in their respective categories and have won various accolades.

• MyJio is the most popular self-care app with over 150 million downloads and substantial additional features;
• JioTV is the best rated live and catch-up TV app;
• JioCinema is the most popular video-on demand app;
• Combination of JioMusic and Saavn has created a music powerhouse forming India’s largest platform for music, media & artists;
• JioMags and JioNews are other highly popular customer offerings
• Jio’s KBC play along, a live tv interactive game, was one of it’s kind and was hugely popular with peak concurrent user base of 5 million participants engaged on the platform.

Jio Dhan-Dhana-Dhan

Life is beautiful

Jio Apps

Outlook

Jio will continue to evaluate and deploy various technologies, both wireless and wire line, to offer comprehensive broadband solutions to consumers, small businesses, enterprises, government and other entities, while building and innovating on a full suite of digital services and applications.

While Jio continues to march on its promise to shape the future of India through transformative, quality and affordable access of end-to-end digital services for every Indian and making digital India vision a reality, Jio reiterates its vision and ultimate goal of a full digital life style solution provider to every Indian and making a meaningful socialeconomic impact.

Jio a complete digital lifestyle solution provider

Reliance Jio – An integrated digital service company

Jio Subscribers as on 31^st March, 2018

Media and Entertainment

Network18’s widespread portfolio of media and digital commerce properties are geared towards touching the daily lives of Indians across geographies, genres and mediums. Network18 group’s core tenets of journalistic excellence, pathbreaking content creation and unparalleled reach are relentlessly pursued. The consumer recall that its flagship brands enjoy are matched only by its ambition to incubate and integrate better offerings, thereby growing the Network18 umbrella for the benefit of all stakeholders.

53

News & Entertainment
channels across India

Rahul Joshi

Sudhanshu Vats

Jyoti Deshpande

Hindi News channel News18 India rose to No. 3 spot over the year, and regularly beats the market leader in urban primetime in a highly competitive and fast-growing genre.

Reliance is committed to provide Indian consumers worldclass media for entertainment, news and information across platforms. Reliance media portfolio includes Network18 group and investment in partnerships to strengthen content for Jio platforms.

Strategic advantages and competitive strength

RIL’s flagship media property Network18 is a media and entertainment powerhouse with a robust foothold in television broadcasting, movie production and distribution, digital content and commerce, print magazines, mobile content and allied media services businesses.

• One in every two Indians consume Network18’s content. Its TV channels reach nearly 70 crore Indians, representing 90% of the TV universe in the country.
• Network18 operates India’s broadest news network with unmatched coverage through 20 channels spanning 15 languages and 26 states. (No. 1 News network by reach, No. 2 News network by viewership)
• Network18 also owns the fastest growing entertainment network in the country, with leadership channels in Hindi, English, Kids and Music genres. (No. 3 Entertainment network by viewership, in the non-sports space)
• Its digital properties are used by over 80 million people; and one in every five internet user in India is on Network18 websites or apps.

Network18’s operating model is driven by its zeal to provide consumers with best-in-class media and entertainment products that set new benchmarks in creative excellence, fair journalism and audience engagement.

Channel-agnostic
approach

Network18 strives to be channel-agnostic to ensure its content reaches seamlessly to consumers through their platform of choice. This approach is increasingly relevant considering the advent of digital entertainment and the splintering of viewer-ship and engagement across platforms.

Reach for
impact
 

Network18 is future-ready with its relentless focus on the identified axes of growth: regional content and digital delivery. This twopronged approach enables the Company to reach its audiences regardless of geography, language or demography.

Thought
leadership
 

Network18 is steered by a professional and experienced team that helps it to consistently strive to host thought leadership onair, online and on-ground. It is deriving leadership not only through consumption numbers, but also by facilitating the development of new ideas and emerging thought processes.

Network
synergy
 

Network18 comprises leading television channels, digital and mobile properties and publications in all key media genres. This facilitates cross-promotion and cross-pollination of content and expertise across its network, enabling enhanced advertising and subscription revenue generation.

Strategic
collaborations
 

Network18 has a track record of building successful strategic alliances with international media companies such as Viacom in entertainment, CNN in English general news and CNBC in business news, A+E Networks in factual entertainment and Forbes in the business magazine genre.

Brand
excellence
 

At Network18, the focus is on driving the highest standards of creative excellence by fostering a culture of innovation to build new content formats across platforms, thereby creating strong brands across diverse media.

Market Environment

During the first half of FY 2017-18, India’s Media and entertainment (M&E) sector encountered substantial headwinds due to short-term impact from implementation of tax reforms. In the second half, the industry gathered momentum owing to a sharp revival led by robust underlying content-consumption trends. The pullback in advertising spends in first half dragged down ad-growth for the year to 3%, but the market is well on its way to recovery heading into FY 2018-19 (Source: EY-FICCI Frames report, 2018).

India’s M&E industry is expected to grow at an 11.6% CAGR to reach `2,032 billion by 2020, from its estimated size of `1,306 billion in 2016 (Source: EY-FICCI Frames report, 2018). This growth will be driven by India’s need for escapism, knowledge and social acceptance.

Size & Growth CAGR of M&E segments

Growth drivers

1) Recovery in economic growth, reforms, and resultant socio-economic upliftment: Advertising contributes to the bulk of M&E sector revenues in India. It is largely influenced by the broader economic cycle, and a revival post two years of weak ad-spends led by macro-events.

2) TV viewership continues to grow at a fast clip, despite the advent of digital: India’s TV content consumption is on a rise, led by demographic/socio-economic tailwinds (as measured by BARC), despite the advent of Digital content. Thus, the conclusion is that Digital is complementary and not cannibalistic to TV’s content in India today. Moreover, TV penetration in India reached 64%, taking the total number of TV viewing household to 183 million in 2017 (recording a 3.5% growth over the previous year).

3) Segmentation of market from a genre, geography and pricing perspective: Content providers are creating new channels across genres. They are incubating segmented offerings for catering to a certain demographic, and digging deeper into attracting regional eyeballs through vernacular content; thereby expanding the market itself.

4) Digital as a new medium of personalised and untethered content consumption: The rapid advancement in telecom technology, especially 4G services, coupled with slashed data costs due to competition has created a completely new channel of content consumption through handheld devices.

5) Free-To-Air (FTA) channels as a low-cost entrypoint for a vast multitude of Indians: FTA channels resonate with a large Indian population who do not have the capacity to pay for content. FTA channels have grown rapidly over the last couple of years led by BARC measuring rural content consumption and creating an untapped advertising market.

6) Regional content consumption gaining strength: Data from BARC indicates that growth in content consumption in languages like Punjabi, Oriya, Bhojpuri, Assamese and Gujarati is almost twice the rate of growth of languages like Hindi, Tamil, Telugu and others.

7) Digitisation – ‘See your customer’: With the introduction of digitisation, the revenue dynamics of content distribution have changed. Due to enhanced transparency at the local cable operator level, multisystem operators (distributor aggregators) and broadcasters have gained.

Moneycontrol: Leapfrogging leadership position – union budget analysis

Action Taken:

• Created uniform budget section experience across platforms on moneycontrol with live blog, video interviews and expert analysis
• Use of infographics, slideshows trivia, podcasts and stand-up comedy events
• Budget Chatbot for users to interact in a new way
• 1 million concurrent users on mobile app (300% growth)

Outcome: Enhanced customer experience and real time concurrent users reflected in higher revenues.

Financial and operational performance

Financial Overview

Network18 consolidated its operations and continued to enhance its prominence in the M&E sector during a challenging year for the industry. The M&E segment witnessed a short-term pull-back in advertising spends on account of structural reforms like implementation of Goods and Services Tax (GST). This influenced advertising revenue early in the year, but the impact waned off by the end of the fiscal, triggering a sharp revival. Telecom Regulatory Authority of India’s (TRAI) tariff order on a-la-carte selling of channels remained sub-judice, which added to the pressures of FTA channels and Digital platforms on the TV subscription business. However, macro tailwinds like a recovering economy, growing TV consumption and cable digitisation remain intact. In such an industry landscape, despite competitive pressures Network18 reported revenues worth `1,839 crore and EBIT of `(25) crore on a consolidated basis.

The sharp revenue escalation is led by the impact of subsidiary TV18 acquiring control of entertainment JV Viacom18, partly offset by HomeShop18 ceasing to be a subsidiary due to its share-swap acquisition of ShopCJ during the last quarter of the fiscal. On a comparable basis (by consolidating Viacom18 and deconsolidating HomeShop18 throughout), Network18 revenue rose 16% in FY 2017-18 to `5,027 crore. Comparable (restated) EBIT also rose to `84 crore, compared to `(46) crore last fiscal, led by reduction in losses in home-shopping, a stellar year for movie production, and gains on fair valuation of financial assets.

Movies by Viacom18

Operational overview

Television business

News

Business News constitutes CNBC TV18 and CNBC Awaaz, No. 1 in English and Hindi business news genre, respectively, and CNBC Bajar, India’s first Gujarati business news channel.

Highlights of the year: CNBC TV18 garnered 79% market-share during the broadcast of the Union Budget. Also, during the budget speech, market share of CNBC TV18 was higher than all English News channels put together.

Entertainment

Hindi General Entertainment includes flagship general entertainment channel (GEC) Colors, FTA GEC Rishtey, and FTA Hindi movie channel Rishtey Cineplex.

Highlights of the year: Colors continues to be a strong leader in urban markets and Rishtey Cineplex has broken even within 1.5 years of its launch.

Youth and Music includes MTV India, the No. 1 youth brand, and 24x7 Bollywood music channel MTV Beats

Highlights of the year: MTV Beats is the fastest growing music channel in the country.

General News includes CNNNews18 and News18 India.

Highlights of the year: News18 India has successfully moved to the fourth position in a highly fragmented genre. Also, it consistently remains a leader during mega prime time with a 16.3% market share in urban/ metros.

English Entertainment has VH1, Comedy Central (India’s first 24-hour English comedy channel) and Colors Infinity.

Highlights of the year: While Comedy Central is the top-ranked English Entertainment Channel, the English Cluster comprising Comedy Central, Colors Infinity and VH1 combined control nearly 60% share of the English Entertainment space

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

Highlights of the year: Nickelodeon’s School Contact Programme reached out to nearly 850 schools across India’s multiple cities.

Regional News includes News18 Channels (including erstwhile ETV channels) and News18 Lokmat.

Highlights of the year: The market share of News18 regional channels have grown from 2.5% in late-2016 to 4.5% currently.

Regional Entertainment: The regional entertainment bouquet of Colors in Kannada, Bangla, Marathi, Gujarati and Oriya continues to entertain, educate and enthrall regional viewers through innovative and rooted content. Colors Kannada and Colors Gujarati are market leaders, while Colors Marathi and Colors Bangla have significantly grown in ratings.

Highlights of the year: Colors Tamil was launched as the seventh regional GEC, in the largest vernacular market. Amidst high competition, its impactful programming has succeeded in carving 5% viewership share within a month of launch.

Infotainment has a factual entertainment channel History TV18 and a lifestyle channel fyiTV18.

Highlights of the year: History TV18 HD was launched on 1st September and was the No. 1 factual entertainment HD channel across India in the first 2 weeks of its launch.

Film business

Film business

Film business includes Viacom18 Motion Pictures.

Highlights of the year: Worldwide release of Padmaavat and Toilet – Ek Prem Katha, both of which have left an indelible footprint on the box office.

Digital business

Digital Content includes Moneycontrol.com (leader in the finance category), Firstpost.com (India’s first and the biggest digital-only newsroom), VOOT (No. 2 broadcast OTT in the country) and News18.com (digital destination for all general News).

Highlights of the year: VOOT was rated amongst the top five video-streaming apps according to App Annie, and also won the IBC2017 Innovation Award.

Digital Commerce includes HomeShop18 and Bookmyshow.

Highlights of the year: Bookmyshow entered live business to scale growth and diversify its revenue streams. It successfully organised the prestigious Ed Sheeran concert in Mumbai in November 2017.

Print/publication business

Print/publication business has a portfolio of highly reputed magazines comprising Forbes India, Overdrive, Better Photography and Better Interiors.

Highlights of the year: Successfully executed India’s most prestigious “Forbes India Leadership Award”.

Innovation

Moneycontrol has introduced various innovative delivery methods like live streaming, podcasts, video-on-demand and so on. Besides, Moneycontrol is now truly an on-themove destination with the availability of its app on smart watches as well. With an ad-free paid app being launched, Moneycontrol now truly reaches a premium customer base with a more refined offering.

News18.com, besides being available in nine Indian languages, continued its focus on intense editorial and product innovation. The platform consistently offered rich data driven election coverage. The successful REEL awards showcased its ability to diversify its revenue steam, while differentiating itself from competition.

Firstpost has further diversified its offerings through the launch of FirstCricket (a one-stop destination for cricket enthusiasts) and ShowSha.com (an integrated entertainment and cultural destination).

VOOT’s PWA (Progressive Web App) is a class-leading tech innovation, where Network18 worked closely with Google engineers to create a mobile-website, which provides an app experience even through a browser. This opens up the target market to beyond smartphones and even include feature phones (which still dominate India’s telecom landscape), as apps cannot be used in earlier generation feature phones.

Risks

Regulatory changes: The TRAI tariff order on a-la-carte sale of channels could change the subscription business model substantially, thereby ushering a period of flux for the industry as all participants adjust. It could create both opportunities and challenges.

Digital investments: The digital content and digital commerce businesses do not have a settled monetisation model today. Substantial investments by international and domestic players to capture the Indian market are leading to cash-burn. This scenario may turn into a drag on profitability for some time.

Outlook

Network18’s growth aspirations stem from an inherently high-quality portfolio of properties, a relentless drive for garnering market-share, and a concerted effort to utilise synergies and push efficiencies across its owned and affiliate media (traditional and digital) and telecom portfolio. The Company believes that India’s M&E sector is poised for substantial growth, as the segment steadily gains international stature in terms of both advertising and consumer spends.

These growth aspirations represent the principal inspiration behind the following strategic moves during the year.

Lessons in Leadership with Satya Nadella

Mr. Narendra Modi at the News18 Rising India Summit

Network18 subsidiary TV18 took operational control and raised its stake to 51% in entertainment JV Viacom18 (March 2018). The partners believe that in India’s fastevolving M&E landscape, TV18 can drive value-addition and synergies across the multi-platform group, comprising broadcast, digital, filmed and experiential entertainment and media businesses. Viacom continues to hold 49% in Viacom18, and shares TV18’s vision for scalability and enhanced efficiency at Viacom18. Viacom18 is now a subsidiary of TV18.

Leading TV shopping players HomeShop18 and Shop CJ combined their businesses (February 2018), creating the largest home-shopping entity in India under HomeShop18’s umbrella. The ensuing benefits of scale and synergy will improve growth prospects for the combined entity, allowing it to enhance its standing in the TV home-shopping landscape and compete better with the challenge from e-commerce. HomeShop18 ceases to be a subsidiary of Network18, but Network18 remains its largest shareholder.

Umbrella brand ‘News18’ for all general News channels: With the rebranding of the remaining five ETV and IBN Lokmat regional channels, the process of having a unified brand ‘News18’ for all 17 (including 1 international) general news channels (in 15 languages covering 26 states) is complete. This makes the News18 network India’s largest general news brand.

Colors Tamil’s mid-February launch fills a vital whitespace in Network18’s regional entertainment portfolio, in a highly competitive market. Its refreshing subjects and cinematicquality content are being well received by the audience. The channel launched with 22 hours of original programming per month and will ramp-up its content and improve distribution over the year. It has garnered 5% viewership share and made strong inroads into urban markets like Chennai.

CNBC TV18’s digital destination CNBCTV18.com/CNBCTV18 app launched on 6^th April, 2018. This is a premium digital platform offering important and useful news and information about the stock market, business and economy, including fresh perspectives on entrepreneurship and leadership to audiences. It also offers video feed/clips of the channel.

Business Stewardship

Network18, the premier media company of Reliance Group, seeks to transform people’s lives by promoting health, education and sports. During 2017-18, CNN News18 did a socially-relevant sting operation to expose the menace of drug peddling and addiction in Punjab and Delhi. News18 India channel broadcast special stories to bring out the reality of government hospitals in Uttar Pradesh, the plight of Muslim women unsuccessfully seeking a divorce under Triple Talaq etc. In the financial year 2017-18, the company supported the “Young Champs” sports initiative aimed at providing training to sportspersons, Dhirubhai Ambani Scholarships programme and Health Outreach Program in Mumbai through Reliance Foundation.

Raising awareness about real-world problems through News

Liquidity and Capital Resources

Srikanth Venkatachari

Soumyo Dutta

Reliance manages its liquidity and funding risk by diversifying its resource base and tapping new investor pools across different markets. It uses a judicious mix of currencies, tenors and product types in its liability suite. Reliance Treasury has been able to deliver value by continuously reducing the spread over the benchmark rate at which it raises funding from international markets. Reliance, in partnership with various banks and financial institutions, continues to explore and deploy innovative financing solutions. Today, it is the most active Indian corporation in tapping the ECA financing route that offer credit for longer tenures at extremely competitive rates. Tight management of cash to cash cycle by extending the payables and bringing forward the receivables has ensured optimum use of debt for funding of working capital by its various businesses. Reliance continues to enjoy a strong credit rating and is currently rated two notches above sovereign by S&P and at par with sovereign by Moody’s.

Financing Strategy

Reliance has over the last few years successfully executed the largest investment cycle in its corporate history. To meet funding requirements, Reliance’s dedicated treasury management team uses unique and innovative financial instruments and structures to help de-risk projects from a financing viewpoint. The team has successfully identified key emerging trends and structured tailor-made “first-inmarket” financing solutions to raise resources at competitive costs.

Through prudent financial discipline, Reliance has maintained judicious mix of funding sources across instrument classes, financing products, financial markets and investor classes.

Reliance maintains strong relationships with more than 100 banks and financial institutions. It has also built relationships with 14 Export Credit Agencies (ECA) globally – the highest number for any corporate in the world. This, along with its exceptional credit profile and high quality credit rating, strengthens its ability to raise long-term resources from global financial markets at very competitive rates.

Reliance actively explores opportunities to optimise the cost of borrowing and align the maturity profile of its existing debt portfolio with the group’s business strategy.

As part of its liability management exercise, during FY 2017-18, Reliance successfully refinanced long- term financing of US$1 billion equivalent syndicated loan. This syndicated loan witnessed participation from 20 banks. In addition, Reliance also re-priced US$350 million bilateral loan resulting in savings in interest cost over the life of the facility.

As part of its ongoing liability management exercise, during FY 2017-18, Reliance priced rule 144A/Regulation S offering of US$800 million 3.667% Senior Unsecured Notes due 2027. This was the lowest coupon ever achieved by an Indian corporate for a 10-year issuance, the tightest ever spread over US Treasury for an Indian entity for a 10-year issuance as well as the tightest ever spread over US Treasury for a 10 year BBB corporate issuance from Asia (ex-Japan) since, global financial crises. The Notes were oversubscribed 1.6 times across 90 accounts.

The proceeds of these Notes were used to redeem the outstanding US$ 800 million 5.875% senior perpetual fixed rate unsecured notes.

RIL also issued non-convertible debentures aggregating to `20,000 crore in the Indian capital markets.

Issued unsecured notes of US$ 800 million at 3.667%, lowest ever coupon achieved by an Indian corporate

Financing in Subsidiaries

During FY 2017-18, Reliance Jio Infocomm Limited (RJIL) successfully refinanced long-term syndicated loans aggregating US$1.5 billion, resulting in substantial interest savings over the life of these loans. This deal saw an initial response from 17 banks and was further syndicated to additional 12 banks taking the total number to 29 banks.

RJIL also re-priced a part of its outstanding ECA facility guaranteed by The Export-Import Bank of Korea (“K-EXIM”) and funded by non-Korean commercial banks to the tune of US$261 million, achieving significant savings in interest cost over the life of this facility.

Capital Resources

During FY 2017-18, Reliance and its subsidiaries tied up facilities across various financing products and maturities. The table below shows debt levels for the year ended March, 2018 and March, 2017 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.

Liquidity and Treasury Management

Reliance has a strong focus on liquidity and maintains a robust cash position to ensure the group has adequate cover to respond to potential short term market illiquidity.

Reliance’s liquidity and borrowing plans are established within the context of its annual financial and strategic planning processes. Cash generated through operating activities remains the primary source for liquidity along with undrawn borrowing facilities and levels of cash and cash equivalents.

Reliance believes that the group has sufficient working capital resource for foreseeable requirements. It continuously monitors and optimises its working capital requirements by leveraging diverse trade financing solutions covering receivable and payable cycles and executing innovative structured trade products.

Reliance has a well diversified investments portfolio which assures liquidity and steady returns across different market environments. An efficient allocation of the portfolio across various asset classes ensures the most optimum risk-returns combination for the portfolio. A constant review, careful and swift calibration of duration of the 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. The risk management and investment process is regularly reviewed to refine the processes and incorporate evolving best practices.

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 obligations. Such instruments carry lowest credit risk.

The need to integrate and effectively manage environmental, financial and social considerations with business decisions is at the core of Reliance’s value system. The Company’s business strategy has been highly optimised to manage risks using four key enablers that reinforce the Company’s fundamental philosophy – ‘Growth is Life’. The four enablers are:

A) Strategic Framework
B) The Integrated Approach
C) Risk and Governance
D) Digital Platform

A) Strategic Framework

Reliance’s Strategic Framework sets out its strategy, financial and risk management framework and establishes its overarching goals. The expectations and boundaries within which each of the Company’s businesses must operate are outlined in the Framework. It provides guidance to both current and new businesses in the Group by setting effective business objectives for each. Reliance drives growth, value, innovation and societal transformation by leveraging its knowledge and asset bases, as well as by investing in strategic opportunities.

Reliance’s Strategic Framework can be divided into three pillars: Approach, Value Creation and Enablers

B) The Integrated Approach

Reliance acknowledges the interdependence of business impacts in strengthening its value creation model. Consequently, the Company has adopted the six capitals postulated by the International Integrated Reporting Council’s (IIRC) Integrated Reporting Framework to measure and showcase its performance:

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

RIL creates long-term stakeholder value by integrating the six capital approach with its activities and processes. The Company takes a holistic view of the inter-relatedness of these six capitals to enhance value creation. This is achieved by usheri6.0% increase in R&D eng in higher level of efficiencies by incorporating a lean management structure helping the Company maximise returns with minimal impacts. RIL is conscious of how its internal strategies and policies interact with the external variables affecting the business. To support the business model, RIL has put in place effective systems such as the Reliance Management System and Enterprise Risk Management Framework while leveraging digital technology.

C) Risk and Governance

Reliance recognises that effective risk management is crucial to its continued profitability and long-term sustainability of its businesses. The infrastructure for risk and governance activities at Reliance comprise of the Enterprise Risk Management (ERM) framework. The ERM framework identifies, evaluates, manages and reports risks arising from the Company’s operations. ERM enables Reliance to manage its risks within acceptable limits by using risk mitigation techniques and allocating necessary resources.

D) Digital Platform

Taking RMS journey forward and to create an agile and responsive organization, Reliance embarked on its Digital Platforms Journey in 2018. The move to Digital Platforms enables the Group to evolve the Reliance Management System (RMS) to the next level.

Natural Capital

Natural Capital

Reliance lives by its vision of creating value through sustainable measures and contributes towards cleaner air, cleaner water, preservation of flora & fauna and enhancement of biodiversity. Every manufacturing location works towards minimising its environmental footprint and endeavours to be in harmony with the ecosystem.

2 crore+

Saplings planted since inception

7.3 crore+ m³

Rainwater harvesting capacity created since inception

Pawan Kumar Kapil

Paramjit Singh

Across all sites, Natural capital considerations (air, water and soil) are integrated in RIL’s decision-making at all stages: design stage, plant operation stage, equipment operation stage and above all, the way it deals with the external world. Reliance has implemented effective governance mechanism at each manufacturing location surpassing the legal obligations with respect to air quality, fresh water usage, soil use, impact on flora and fauna, and marine footprint. Reliance works towards diligent use of scarce resources, extracting more value from bottom of the barrel production and maximum GB of data per unit of emission. Reliance’s biggest super site is designed to work without withdrawing a single drop of fresh water from lakes and other sources – through desalination of sea water, thereby enabling communities to use the precious resources. RIL believes that timely and sufficient availability of natural resources is imperative for continuity of its business operations and it is an obligation for any industry towards all its stakeholders. RIL developed over 6,200 Ha of green belt, enriching ecological balance and biodiversity.

Key Performance Indicators

United Nations’ Sustainable Development Goals

PMO’s initiatives supported by the NITI Aayog:

• National Solar Mission
• National Policy on Bio-fuels
• National Environmental Policy
• National Plan for Conservation of Aquatic Ecosystem

Key highlights of the year:
 

• 69,364 (‘000m³) water recycled
• 2 crore+ saplings planted since inception
• Continuous increase in rainwater harvesting capacity since inception

Managing Natural Capital

Focus Area Aspect	Clean Air	Clean Water	Preventing Soil Contamination	Preserving Flora and Fauna	Diligent Use of Scarce Resources
Philosophy adopted	Going beyond compliance for stack emissions by maximising operational efficiency	Minimum dependency on freshwater Zero discharge	Minimum waste disposal Zero-spill operations	In-situ preservation of ecosystems	Optimisation of resource consumption
Reliance differentiators	Reduction of emissions by using eco-friendly fuels	Desalination at Jamnagar High water recyclability Water conservation initiatives	Largest recycler of PET bottles	Asia’s largest mango orchard on arid land Over 2 crore saplings planted in greenbelt	Extracting more value from bottom-of-thebarrel production
Impact created	Emissions reduction and recovery	Reduction in water consumption Increase in water recyclability	Increase in waste recyclability	Greenbelt development Habitat restoration	Increase in operational efficiency of refineries

Managing Natural Capital at Reliance

RIL believes that energy efficiency is a core differentiator to remain ahead of the curve and has taken decisive steps to improve energy efficiency, thereby reducing green house gas emission. RIL has constituted an ‘Environmental Compliance Review Committee’ at each manufacturing location that reviews environmental performances every quarter, to go beyond compliance. Reliance has formulated the ‘Environment Policy’, which states that protection of the environment is of prime concern. The policy addresses issues related to the employees, contractors, suppliers and customers. The Company has installed Continuous Emission and Effluent Monitoring Systems (CEMS) for monitoring emissions and discharges at the refinery and petrochemical units and this is continuously reported to Central Pollution Control Board (CPCB). There are no pending or unresolved show cause/ legal notices received from CPCB or State Pollution Control Board (SPCB). Life Cycle Assessment (LCA) studies of polypropylene products were conducted at three manufacturing locations to understand the overall environmental footprint of these products. The manufacturing sites have adopted ‘Integrated Management System’ complying with Environment (ISO- 14001), Quality (ISO-9001) and Occupational Health and Safety Management Systems (OHSAS-18001). A dedicated team works relentlessly to identify and implement energy conservation initiatives, resource optimisation and renewable energy projects at all RIL’s manufacturing sites.

Clean Air

Energy Efficiency

A) Efficiency improvement:
At design stage:

1) ROGC: RIL has successfully commissioned and achieved design throughput of the world’s first ever and largest ROGC complex of 1.5 MMTPA capacity along with downstream plants and utilities. It reduced energy intensity of ROGC to 6100 BTU/ lb HVC (British Thermal Units per pound of High Value Chemicals).

2) MEG: RIL integrated three equipment namely, Ethylene Oxide (EO) stripper, EO re-absorber and light ends column, resulting in reduced energy consumption.

3) Ethane Import: Reliance is the first company to globally conceptualise large-scale imports of ethane from North America as feedstock for its cracker portfolio in India. Cryogenic integration of ethane handling facility with the cracker complex reduces load on its propylene and ethylene refrigeration systems, and in turn, significantly lowers energy consumption by about 1000 BTU/lb of HVC.

At plant / site level:

1) RIL deployed energy modelling tools for steam, power, and process units thereby reducing emissions.

2) RIL reduced unaccounted loses by continuous monitoring of flaring and energy performance of manufacturing plants and minimised flaring of hydrocarbons by incorporating innovative measures with relevant hardware.

At equipment level:

1) RIL modified gas turbines to operate more efficiently with Syngas.

2) RIL replicated the success seen with advanced technologies like Divided Wall Column (DWC) to equipment at other plants.

B) Re-engineering feedstock value chain (Integrated thinking - emission reduction with enhanced business performance)

ROGC and Pet Coke Gasification (PCG) are pivotal to the latest expansion of manufacturing prowess at the Jamnagar Manufacturing Division (JMD). While the refinery off gas is used as feedstock to produce ethylene and propylene, pet coke gasification aids in supplying Syngas as fuel. Hydrogen gas, produced as a by-product in PCG, is used as utility in the refinery and avoids operation of some energy-intensive Hydrogen Manufacturing Units (HMUs). Following this expansion, because of its top quartile performance, JMD will be the ‘last man standing refinery’ when it boils down to survival of the fittest.

Jamnagar refineries have top decile Nelson Complexity Index (a metric for quantifying and ranking the complexity of refineries) of 12.7. The complexity level of Jamnagar site is expected to improve significantly by several notches with the commissioning J3 projects. The NCI is a measure of comparing the secondary conversion capacity of a petroleum refinery with the primary distillation capacity. The index provides a metric for quantifying and ranking the complexity of various refineries and units.

Air Emissions

RIL regularly monitors emissions as it is a part of its environmental management plan. In addition to green house gas emissions, the Company closely monitors the emissions of Total Particulate Matter (TPM), Oxides of Sulphur (SOx) and Oxides of Nitrogen (NOx). During FY 2017-18, RIL implemented various initiatives for emissions reduction, which are listed in Annexure VI of Boards’ Reports. All petrochemicals and refinery sites have commissioned CEMS (Continuous Emission Monitoring Systems).

RIL has identified material topics related to climate change through a structured materiality assessment process in accordance with the GRI Standards. In its Sustainability Report, RIL discloses the management strategy to combat risks and seize opportunities and information on performance of these material topics.

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 registration and issuance of the same in the form of Certified Emission Reductions (CERs) from the UNFCCC.

Culture of energy saving at shop floor level

Action Taken:
At the Hazira plant, it was observed that pressure fluctuations in operations of the benzene column caused a reduction in heat recovery to the naphtha stream. Thus, a new control valve with a split range control was used to minimise pressure variations. Consequently, heat recovery from the benzene column overhead was increased.

Outcome: Continuous improvement in energy efficiency through process modification.

Clean Water

Best-in-class technology at JMD enables desalination of sea water, thereby saving water from fresh water sources. RIL ensures that all wastewater generated is treated and exceeds all state and central regulatory requirements.

RIL encourages its sites to enhance water reusability and recyclability by making process modifications. The Company has made focused efforts to recycle substantial quantities of wastewater from processes across manufacturing locations. Continuous improvements have enabled RIL to increase y-o-y recyclability of process water despite increasing standards of environmental compliance.

Some manufacturing locations are already zero-discharge sites and the Company aims to achieve zero-discharge status at all its operating locations.

RIL has commissioned Sea Water based Reverse Osmosis (SWRO) plants to convert sea water for industrial use at JMD. Together, with the thermal desalination units, SWRO plants enable generation of over 90 MGD (million gallons per day) generation of fresh water with optimal utilisation from the energy integration stand-point. JMD has achieved zero freshwater withdrawal by implementing design efficiency.

Preventing Soil Contamination

RIL takes conscious efforts to use resources as efficiently as possible and simultaneously works towards reducing emissions and waste generated. The Company ensures that all waste is sent only to Government-authorised disposal agencies. Effluents generated are treated to meet the most stringent state and central regulatory requirements. RIL has undertaken initiatives to ensure waste generated is converted to useful ‘bio-manure’ using vermicomposting. The Company has invested in technologies to extract value from waste and create new products, thereby reducing its waste footprint.

Reliance undertakes stringent monitoring measures to prevent spills during handling and transportation of materials. The Company monitors spills through an online incident reporting system and 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.

Reduction in fresh water consumption by design

Action Taken:
At the Hoshiarpur Manufacturing Division, water consumption was reduced by utilising treated ETP water for horticulture.

Outcome: During the year, a total of 12,720 m³ of water was saved on account of this initiative.

Plastics and Alternatives – Myth v/s Reality

Life Cycle Analysis show alternatives have nearly ~ 4X or higher environmental footprint

During production:

• Lesser energy consumption: For example, milk packing in plastic pouches consumes only ~10% of energy required for packing using 1 litre glass bottles
• Lesser GHG emissions: For example, plastics produce only ~66% of GHG emissions compared to paper bags

During use:

• Higher strength to weight ratio
• Increased food safety, quality and shelf life
• Re-sealable, reusable and easy-to-carry

During recycle:

• Lesser energy spent on recycling: For example, paper requires 91% more energy to be recycled than plastics

Waste-to-energy:

• Plastic wastes generate twice as much energy as coal

Preserving Flora and Fauna

Reliance regularly engages in initiatives such as tree plantation drives and maintenance of mangroves in coastal areas. RIL allocates resources for new and expansion projects by engaging with field experts to conduct environmental impact assessment studies and periodically monitors its impacts on the local biodiversity.

Waste to value through co-processing

Action Taken:
Manufacturing plants typically generate several types of wastes during manufacturing processes & shutdown periods. These wastes have high calorific values. The Company explored various possibilities and through experimentation, finally used co-processing of waste.

Outcome: Diligent use of resources and lower landfill.

Reducing material intensity through 100% recycled products

Action Taken:
PET bottles, which are nonbiodegradable in nature, after disposal, lead to environmental degradation.

Recron Green Gold, a polyester staple fibre, is produced by a highly ecofriendly process, Apart from being made from 100% recycled PET bottles, it also uses 90% recycled water.

Outcome: RIL is recycling about 60,000 tonnes/year of polyester waste with more than 2 billion post-consumer PET bottles per year. This results in removal of nonbiodegradable waste from the environment and diligent use of scarce resources.

At each site, RIL has taken efforts to maintain a green cover. As on 31^st March, 2018, over 6,200Ha of green belt has been developed across all manufacturing locations. Additionally, over 2 crore saplings have been planted across various green belts since inception.

RIL understands the importance of interacting with various stake holders to mobilise actions required to protect the environment. Consequently, in a one-of-a-kind partnership with the Ministry of Environment, Forests and Climate Change (MoEFCC), Government of India (GoI) and the Gujarat Ecological Commission (GEC), Reliance actively contributed to the setup of India’s first Centre of Excellence (CoE) for the study of coastal biodiversity of Jamnagar known as the National Centre for Marine Biodiversity (NCMB).

Reliance has initiated an evaluation of its environmental aspects using the Natural Capital Protocol published by the Natural Capital Coalition.

Diligent Use of Scarce Resources

RIL has taken active steps to increase its material use efficiency such as converting organic waste to manure and biogas, recycling various forms of used oil, recycling of PET bottles and spent catalysts through authorised re-processors.

According to the Solomon Energy Intensity Index, RIL refineries are in the top decile performance. A Solomon study identified RIL’s key strengths as energy efficiency, operational availability and ability to utilise processing complexities. With no products that can be classified as ‘bottom-of-the-barrel’, the Jamnagar refinery is pegged to become among the highest conversion global refineries with the installation of the gasification, paraxylene and ROGC plants.

Sensitising “Go Green” as a part of regular business

Action Taken:
Reliance Retail has 7,573 stores and an area of 17.7 million sq. ft. with footfall of over 350 million. Go Green, is an initiative by Tetra Pak in association with Reliance Smart to collect used tetra packs. Typically, a store has a collection centre towards its exit door to collect PET bottles and used tetra packs. Since 2010, over 25 lakh used tetra pack cartons have been collected through 8,000 families involving 73 societies, 12,000 employees, 8 corporates and 50,000 students and teachers through 38 schools. The initiative is listed in the Limca Book of Records for innovative development in recycling.

Outcome: Increased societal awareness & waste recycling.

Monitoring environmental footprint

Action Taken:
The Hazira plant conducted impact assessment on Biodiversity & Marine Ecosystem to determine ecological sensitivities. In Biodiversity assessment:

1. A total of 108 plant species were observed in the study area out of which 47 species of trees, 27 species of shrubs, 31 species of herbs and grass and 3 species of climbers were observed.

2. Among the faunal species, herpetofauna were represented by 26 species, avifauna by 140 species and mammals by 8 species.

3. A MoEFCC approved laboratory also engaged in marine environmental monitoring assessment, a total of 12 water quality parameters and 5 biological parameters at 23 sub-tidal sampling locations. 9 sediment quality parameters were tested at 8 inter-tidal sampling locations.

The results of the study were compared with data sets since 1983 to create an overall assessment of the ecological status.

Result: The balance within biodiversity and marine ecosystem is maintained with minimal environmental impact. RIL also developed green belts which enhances flora & fauna.

Human Capital

Human Capital

“The values and behaviours at RIL have inculcated a deeper sense of connect and engagement for its people. Reliance fosters a culture that is performance oriented, promotes rewards for results and provides equal importance to achieving results. Reliance focusses on development of employees at professional and personal level with holistic well-being.

Over 10 years

of safe operations in Reliance E&P business, at par with the best in the world

Over 40%

Millennials representation in RIL’s workforce

Hital R. Meswani

Ashwani Prashara

The development initiatives seek to promote equitable economic growth and ensure more sustainable, inclusive and people-centric development with effective use of technology and internal crowd sourcing – all embodying DNA of Reliance. The Company continues to transform its human resource management. Reliance strengthened the learning culture through social structuring, inculcating next generation social media technologies and collaboration with institutes of global eminence.

Over 40% of employees are millennial with a continued focus on learning, and reskilling. Employee diversity is across generation, gender and jurisdiction with people from over 15 nationalities. HR has evolved into a robust function which works with the aim of enabling employees to not just navigate through the current era of disruption but also profoundly influence its success.”

Key Performance Indicators

DNA of Reliance

• India-focussed history
• Employee-centric culture
• United by values and behaviour
• Focus on skilling and reskilling

Employees are well-aligned to the Company values from strategy to execution.

United Nations’ Sustainable Development Goals

PMO’s initiatives supported by the NITI Aayog:

• Atal Innovation Mission
• Support to Training and Employment Programme (STEP)

Key highlights of the year:
 

• The World Economic Forum announced establishing a new Centre for the Fourth Industrial Revolution in Mumbai, India in partnership with RIL
• Featured in ‘LinkedIn Top Companies 2018: Where India wants to work now’ for two consecutive years

Creating Employment Opportunities

The Reliance Group is among India’s largest private sector employers, and has created direct employment for 1,87,729 individuals. Reliance continues to shape a progressive work environment, where purpose-driven talent is attracted, engaged and motivated by a culture of meritocracy.

Committed to moving towards a younger workforce, 45% of Reliance’s employees today are millennials. The Company’s rate of attrition has consistently stayed below the industry average over the past 3 years.

At RIL, the entrepreneurial culture is aimed to encourage the young generation to play a vital role in the organisation's growth.

Diversity and Inclusion

Reliance recognises and respects different cultures, nationalities, races, religions and sexual orientations in the world, and among its people. The group focusses specifically on three aspects of diversity: gender diversity, multigenerational diversity and employing people with disabilities.

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 at the workplace, the Company has laid emphasis on implementing next-generation policies like 6-months maternity leave, followed by 6-months part-time work to help new mothers balance child-care priorities with work. RIL continues to undertake pro-active measures such as 24x7 toll-free helpline for women, reserved parking for expectant mothers, and self-defence workshop among others.

Quotes by R-Aadya stalwarts and other high achievers

“I got the opportunity to work with various business leaders across different functions, and today I feel honoured and proud to be the first female production manager at RIL. This is my greatest accomplishment so far and feels truly special.” - Hetal Kothari, Production Manager – Vadodara Manufacturing Division

Augmenting Capabilities and Learning & Development

Augmenting Capabilities

RIL’s team capabilities are being augmented through the HR Platform, a first-of-its-kind HR service. It leverages the micro-service architecture to provide seamless and real-time delivery and resolution of business requirements.

The use of data analytics at RIL aims to enhance the overall organisational effectiveness. Over the last year, there has been an increased focus on the use of analytics and algorithms within businesses. RIL’s business leaders are now equipped with real-time dashboards that track all relevant KPIs across the hire-to-retire cycle. FY 2017-18 also witnessed the application of predictive and prescriptive analytics in the areas of talent acquisition, workforce architecture and attrition management. Together, these applications are helping RIL create an ecosystem, where it recruits the right talent and enables them to flourish and fulfil their career aspirations within the organisation.

Learning and development

Reliance aims to maximise organisational performance through business aligned investment in learning. RIL’s expansion into diversified segments requires specialised skill sets. The emphasis lies on progressing and building a learning environment which is accessible, automated and available for all employees. The Company has expanded communications and education campaign to ensure that the learners are fully aware of the resources available to them.

1) Using technology for highly interactive, collaborative and device-agnostic platform.

Social Learning Platform	Learnet	Lynda.com
Philosophy and action	Platform for social learning and knowledge sharing across all levels and locations focussing on three pillars; a. Empowerment & democratisation of learning b. Agility and fluidity of learning c. Seamless blend of learning and work	Partnered with Lynda.com to provide high quality digital video tutorials by experts to all employees
Impact in launch stage	Employees have shared 769 self-recorded video and text blogs/ discussions so far with 6,698 comments and 31,690 likes	36,000+ employees are active, viewed over 1.2 million videos and completed over 23,000 course certificates
Outcome	Social-restructuring amongst employees. Internal crowd sourcing, breaking silos across functions, hierarchy, geographies and promoting the concept of learning from anybody, from anywhere and that too by anybody, anytime and anywhere

2) Driving talent management programmes which help align business goals and create more opportunities for employees in transitioning to next levels

• Competency Assurance System (CAS) Process – Building critical domains of technical and functional skills by addressing current and future business challenges, effectively through competent workforce
• Career Acceleration Programme (CAP) - high potential identification and acceleration programme for middlelevel management
• Corporate Graduate skills programme – A 3 year development programme that enables graduates to take accountability of their learning and perform successfully within the organisation

RIL regularly reviews the talent and potential of its employee base. Annual talent reviews have allowed RIL to strengthen its leadership pipeline and be future ready at all times

3) Learning and learner environment
RIL creates environment through series of activities like learnet studios, learning kiosks, world-class infrastructure multipoint video conferencing, organisation-wide learning week– Spectrum, organisation-wide knowledge sharing campaign, “Inspire” among others.

4) Employing measurement and analytics
tools to improve feedback mechanism and promote internal communication, transparency, employee enthusiasm and participation in learning events.

Learning & Development

Employee Engagement, Health and Well-being

Leadership Expectations

RIL has a defined a Leadership Expectations (LEs) framework, that is applicable to all senior level and group level leaders. These LEs serve as a consistent guiding compass in how RIL operates, how it leads effectively, how it makes decisions, and what it deems important.

Additionally, through R-Radio interviews and leader blogs, leaders share their personal experiences on four different components of Leadership Expectations i.e. Act Decisively, Deliver Results, Value Expertise and Inspire People. The intended focus on expanded accountabilities and followership enables direction-setting and coaching of RIL’s future leaders further expanding its leadership cadre. RIL’s behavioural learning interventions are increasingly focussing on self- learning.

To foster a culture of expressing appreciation and gratitude, a peer-to-peer recognition programme – ‘R-Sammaan’ is available to employees. This programme reinforces the values and behaviours that employees are expected to demonstrate through its tangible and digital tools i.e. social web page and mobile interface.

R-Voice is a fully confidential employee feedback survey to gain actionable insights into making the Company a great workplace. The engagement scores have shown a steady improvement in the last 3 years – constantly closing the gap to global benchmarks. As a result of R-Voice, there is a growing focus on continued manager support and enhanced employee connect.

Employee engagement practices include policy and reward awareness sessions, recognition ceremonies, town halls, and webcasts. The Bring Your Family to Work (BYFW) is an enriching initiative that fills employees’ family members with pride. It instils a deeper understanding of the vibrant workplace. This year’s BYFW event saw over 15,000 colleagues & their family members participating.

• R-University has more than 100 platforms offering collaborated learning by the learner for the learner.
• During FY 2017-18, Reliance imparted 57 lakh+ manhours of training to its people across the group.

RFD Celebration: Spirit of celebrating together

Reliance Family Day (RFD) was celebrated to commemorate the birth anniversary of Shri Dhirubhai Ambani. The theme celebrated the past, the present and the future of the Company with the incumbent Chairman highlighting key achievements and his vision for Reliance. With over 1.5 lakh colleagues and their family members participating, RFD is the biggest corporate celebration in India reflecting spirit of ‘One Reliance’.

As a testimony to the consistent efforts in making Reliance an Employer of Choice, Reliance has been featuring in the “LinkedIn Top Companies 2018: Where India wants to work now” list consecutively for 2 years. Additionally, Business Today has recognised RIL as one of the top 25 best companies to work in India in 2017

Health and Well-Being

The Company has state-of-the-art fitness centres with modern equipment, professional trainers, a gym hall, aerobics, yoga and dieticians. Dedicated ‘Sports Zones’ across the site are equipped with table tennis, chess and carrom as well as world-class grounds for cricket, football, basketball and lawn tennis. A holistic wellness approach has been implemented in the Company through several medical services, sports and other related initiatives.

The state-of-the-art facilities at its medical centres extend 24x7 prompt medical care. Periodic medical examinations are carried out for all employees and their spouses. A health score is generated through the Health Management System (HMS) for each individual. Additionally, 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. Located at each of the manufacturing locations and corporate office, the Occupational Health Centres (OHC) offer preventive, promotive, curative and rehabilitative health services. These OHCs are equipped with state-ofthe- 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. Wellness will be the major focus in RIL health improvement interventions with emotional well-being, a key driving force. In today’s digital ecosystem, JioHealthHub, an IT-enabled platform, simplifies the management of health records by enabling users to upload medical data and maintain a medical profile.

Project product loss control

Action Taken:
The bottom performing ROs were required to be revamped in terms of product loss to within permissible limits. Hence, L & D took up the business need of “Product Loss Control” on a project mode and designed a complete “on-field” assessment and training module.

Outcome: The business needs of bringing product loss under control was addressed with a 65% drop in product loss in diesel, 76% positive feedback on product loss control, training effectiveness and 91% positive feedback on increased operational efficiency

The ‘Reliance Employee and Family Emergency Response Services (REFERS)’ initiative offers assistance in case of any medical, accident, fire and security exigencies to employees and their families.

Initiatives such as Task Based Health Risk Assessment (TBHRA) and ‘R-Swasthya’ create a culture of holistic employee well-being. Additionally, the Company organises Good Health and Health Improvement awards across all its locations.

R-Swasthya:

• Through R-Swasthya, an employee holistic wellness programme, RIL sensitises its employees and their family members about the concept of work-life balance and importance of a healthy lifestyle. RIL conducts structured monthly health programmes, health bulletins and health talks to enhance the well-being of its employees and their families.

Task Based Health Risk Assessment:

• Through the Task Based Health Risk Assessment, employees are being mapped in Health Management System (HMS) – a database of health records. This has enabled RIL to provide a focussed approach to employees across job-profiles and geographies. The health risk profile mapping of individuals into HMS enables a healthy working environment.

Reliance Health Index:

• After the completion of Periodic Medical Examination, a health score for each employee is generated, based on multiple parameters (family and past history, exercise, lifestyle, and test results). The results are categorised based on the severity of risk and frequency of medical health checkup needed. Internally, Reliance has set a baseline comparable to the best global practice for Health Index with scope for continuous improvement.

RIL is globally certified as a ‘Healthy Workplace’ for the period of 2017-2019 by the Global Centre for Healthy Workplaces, Tucson, USA. RIL’s best practices for a healthy workplace has featured among 15 Global Best practices studies.

Safety

The Operating Management System (OMS) is the way RIL operates. It help deliver safe, reliable, and compliant operations. Conformance to the OMS is a dynamic process designed to continuously improve practices, manage risk and drive performance improvements. The performance improvement cycle defined in the OMS has given rise to a sustainable competitive advantage. The Company’s principles and practices includes:

1) Safety of a person overrides all production targets.

2) All injuries, occupational illnesses, and safety and environmental incidents are preventable.

3) RIL shall strive to be a leader in the field of management of Health, Safety and Environment.

A fully equipped and well-qualified Health Safety and Environment (HSE) and process safety organisation is in place at all locations providing necessary governance, documentation and HSE assurance. To usher in technical expertise and intervention, and to independent assurance, the Safety and Operational Risk (S&OR) function is in place at the corporate. RIL has developed a consistent and systematic approach for defining potential risks and protective measures at every facility level, on an annual basis. The tools for risk management, incident management, change management and operating management system (OMS) are digitalised to integrate and bring uniformity across the organisation.

The Company’s safety awareness theme for last year ‘Yes! I understand Risk’, aimed to raise risk awareness amongst internal and neighbouring stakeholders regarding the Highly Toxic Material (HTM) management programme. Various programmes like leadership panel discussion on HTM risk management, posters & other display material, sessions for contractor personnel, HTM emergency drills, among others were organised across sites.

Reliance conducts itself responsibly. Reliance E&P has a track record of over 10 years of safe operations, at par with the best in the world.

The Jamnagar Refinery Expansion project has exceeded international benchmarks in quality, safety, cost and schedule. Besides, new records for flawless start-ups and commissioning have been established.

Ethics, Human Rights and Redressal

The Company’s Code of Conduct ensures that all its employees, suppliers and vendors respect human rights not only among themselves, but also within communities in which they operate. Reliance has instituted a set of policies, codes, and guidelines to govern its employees. This mechanism includes directors, senior executives, officers, employees (whether permanent, fixed-term 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.

The Company has established a vigil mechanism for employees and directors to report concerns about unethical behaviour, actual or suspected fraud or violation of the Company’s Code of Conduct. As mentioned in the policy, an Ethics and Compliance Task Force (ECTF) has been established by the Board with a member of the Board as the Chairman. The ECTF oversees and monitors the implementation of ethical business practices within Reliance. The task force meets once in three months to review the complaints/ incidents, and reports to the Audit Committee. It comprises 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 non-compliance. While the Executive Director chairs the meetings, the Head of Business Integrity plays the role of the secretary and subject matter expert. The reportable matters may be disclosed to the Ethics and Compliance Task Force which operates under the supervision of the Independent Audit Committee. Employees may also report to the Chairman of the Audit Committee.

All the Company units maintain 100% compliance with local and national laws, with respect to 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. Reliance recognises the ‘corporate responsibility to respect human rights’, as outlined in the framework of United Nations Guiding Principles on Business and Human Rights (UNGP). RIL has therefore embedded human rights into its policies, business systems and processes to address issues related to human rights. RIL has formed the Internal Complaints Committees at 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 case of child labour, forced labour, involuntary labour, sexual harassment or discriminatory employment were reported during the period.

Freedom of Association

The Company has recognised employee unions and associations at various sites, which encourage 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 complies with the local and national laws.

Governance and Integration

The HR function has robust overall functioning and continues to raise the bar of excellence in people policies, practices, systems and data. This is being accomplished by driving a mature governance and management assurance process.

Innovation

Sustainable value creation for all stakeholders of Reliance is enabled by innovation. From sparking off the equity cult in India to setting up the world’s largest grassroots refinery to now ushering in a digital revolution in India, Reliance has always demonstrated that innovation is in its DNA. Reliance’s innovations touch many facets of life in India including transportation, retail and healthcare.

Reliance focusses on three aspects surrounding business innovation – talent, process and environment – to find innovation opportunities. Reliance develops and deploys relevant programmes leveraging technology and harnessing expertise aimed at creating value and a culture of innovation.

Quotes from Reliance Innovation Council

Nobel Laureate Jean-Marie Lehn

“I have been affiliated with many companies across the world, but Reliance is certainly the one that is boldest and with the widest perspectives, and with the conviction to turn the ideas into reality.”

Nobel Laureate Robert Grubbs

“It is interesting to watch a company do refining, followed by retail, followed by 4G – thanks mainly to its innovation in management leadership.”

Dr. William Haseltine

“The quality and excellence that Reliance is capable of executing in everything that it touches, is the best of what India has to offer. It is an inspiration not only for this country but for the whole world.”

Prof. Gary Hamel
 

“I must compliment the systemic approach Reliance is taking towards innovation – it is very rare; most organisations don’t.”

Prof. George Whitesides

“Reliance is one of the most innovative organisations together with now being one of the best R&D organisations.”

Innovation Programmes

LEAP – Democratising Inspiration	7 Innovation Habits	Mission Kurukshetra – Democratising Innovation	Beyonders	Chairman’s MK Challenge (CMKC) – Crowdsourcing Value
Innovation thrives within inspired minds. Leading Expert Access Programme (LEAP) was born with the aim of providing people at Reliance with access to global thought and innovation leaders through interactive sessions	The 7 Innovation Habits programme aims at empowering entry-level and middle-level employees at Reliance with specific innovation skills and problem-solving capabilities. Develop deep empathy for customers Look beyond one’s industry for ideas Think beyond product innovation Transform the way the job gets done Imagine the impossible Become a contrarian Beware of idea killers	Mission Kurukshetra (MK) is a step towards democratising creativity and innovation within the organisation. Through the MK technology platform, employees can submit ideas and track their progress right up to implementation	Beyonders is a programme which applies design thinking principles, with worldclass innovation tools to solve complex business problems and find innovative solutions to disrupt business models	CMKC is a unique end-toend innovation programme – starting from identifying a strategy based on market and technology trends and culminating into ideation workshops across the different organisational layers. The programme focusses on building innovation capabilities by training employees on world-class innovation tools & techniques and fostering a culture of innovation
Outcome
Since inception, 43 LEAP lectures have been organised. During the year, eminent persons who inspired and interacted with people at Reliance through LEAP are Ramji Raghvan from Agastya International Foundation, Samir Mitragotri from Harvard University, Mohandas Pai from Manipal Global Education, Deepa Malik- Olympic silver medalist, Ronnie Screwala- Founder UTV group and Arundhati Bhattacharya- Former Chairperson, State Bank of India	Almost 30 workshops of 7 Innovation Habits have been conducted till date, including for Jamnagar Manufacturing Division, Hazira Manufacturing Division and Reliance Retail teams	MK is now a treasure trove of almost 21,000 employee ideas that have a combined potential to create significant value for the organisation	Beyonders programme is a flexible innovation methodology for result-oriented project execution. The programme accelerates the natural flow of the innovative thoughts to discover novel solutions to critical problems	CMKC aims to develop innovative solutions for identified opportunities using innovation tools and crowdsourcing and implement innovative ideas on identified themes
Impact
Inspire a culture of thinking big about Reliance, the communities it operates in and the whole country	Empower Reliance employees to inculcate innovation skills	Enable a culture of internal crowd sourcing	Applying design thinking principles together with world class innovation tools to solve complex business problems and deliver first-toworld breakthrough innovations	Driving substantial innovation and fostering a culture of innovation

Function / Business Wide Campaigns

Other Innovative Ideas

Ideas from Mission Kurukshetra platform

An idea was submitted on MK to use pre-existing infrastructure in parallel pipelines to house the control equipment for a new ethane pipeline. This idea eliminated the need for new construction and led to a value addition of `90 crore.

An idea was submitted to optimise the reboiler duty of the toluene column by feeding these two streams directly into the column at different trays. This not only helped conserve energy, but also created value of `21 crore.

Intellectual Capital

Intellectual Capital

Reliance has transitioned from a smart buyer of technology to a customiser of technology and is now a flagship developer of technology. Reliance R&T has breakthrough technologies for all its principal businesses enabling it to meet the demands ahead of competition.

Jio ranked 17^th

in ‘50 Most Innovative Companies’ list 2018

24

R&D labs in Navi Mumbai R&D centre

900+

Scientists and Engineers

Hital R. Meswani

Ajit Sapre

Dr. J.V. Kelkar

Gerard Denazelle

Suketu Vakil

In the petrochemicals business, RIL has technologies for next generation composites, making polymer better than steel, replacing wood with its product that are better than wood. In exploration, RIL is developing technologies to get Oil from Algae. Besides, RIL has technology for cleaner fuel, process optimisation & energy management and much more.

Reliance’s proprietary technologies can be scaled up & patented. During the year, 68 patents have been granted. The Company uses internal crowd sourcing as an enabler to R&D and documents the R&D data, process and analytics digitally. During the year, R&D expenditure was `1,824 crore. The 24 state-of-the-art labs in Navi Mumbai R&D centre, having a total area of 120,000 sq. ft. are spread across various businesses and functions for conducting high-end inter-disciplinary research and are manned by 900+ scientists and engineers.“

Key Performance Indicators

United Nations’ Sustainable Development Goals

PMO’s initiatives supported by the NITI Aayog:

• Atal Innovation Mission
• Make in India
• National Policy on bio-fuels
• National environmental policy

Key highlights of the year:
 

• 26.0% increase in R&D expenditure
• Received FGI (Federation of Gujarat Industries) awards for excellence for ‘Research in Science & Technology’

Research & Technology (R&T)

R&D Megatrends

As the world puts more emphasis on renewables and a low carbon economy, commodity chemicals give way to highperforming specialty polymers and chemicals. Digitisation and advanced analytics, when coupled with nanomaterials and biomaterials, will pave the way to derive maximum value from existing operations.

RIL fosters a robust research and innovation culture to address emerging challenges and demands of its diverse customer base. The Company’s R&D has end-to-end presence in value chain from feedstocks to valuable products. It continually evaluates various opportunities to excel and benchmark existing products and processes with best-in-class technological progressions. It leverages various alliances and partnerships with various institutions for research and development activities.

Reliance R&T: Fundamentals to value creation

Organisational Structure

Reliance focusses on:

1) Breakthrough R&D for existing and new businesses ahead of megatrends and

2) Near-term R&D to innovate processes and products for competitive advantage

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

Reliance R&T is future ready:
Enables the fourth industrial revolution, an amalgamation of physical, digital and biological innovations

Focus areas of R&D

R&D at RIL has end-to-end presence in value chain from feedstock to valuable products. Reliance has grown to be one of the largest and most successful refining and petrochemical companies in the world. Reliance is now becoming a world-class developer of technologies in alignment with global megatrends.

Reliance Jio continues to deploy various technologies, both wireless and wireline. The focus is constantly on underlying step-out processes in network design and deployment, applications and services development, enhancements with customer experience as a pivotal focus.

Some of the key initiatives consistent with the above trends are mentioned as below:

Development of composites from polymer - stronger than steel

RIL innovated and developed a novel disentangled high molecular weight polyethylene (DPE) and the polymerisation process to make polymer strength better than steel in axial direction. The process is scaled up to pilot (first time in the world) and can be deployed in armour & other applications (tested & found suitable). The DPE polymer made into high strength and high modulus tapes, composites, ropes, molded pipes, pultruded rods and discs. RIL has patented this stepping stone towards nanomaterial & composites.

Catalytic gasification

RIL has developed catalyst that can gasify feed like pet coke at temperature below 7500C. The catalytic process can be used to convert high ash Indian coal to high value syngas. Work is underway to demonstrate the technology at larger scale. Patent applications have been filed in multiple countries.

Innovative product Relfarm S - food productivity

India has 3.8 million hectares of uncultivable sodic soil and about 80 million hectares of sulphur-deficient soil. Relfarm S will help in improving soil productivity and convert uncultivable land for farming.

Eco-smart PVC for specialised applications

Inherently Polyvinyl chloride (PVC) is processed with higher quantity of external plasticisers which subsequently leach out resulting in deterioration of product quality and performance. RIL has developed PVC which does not need any external plasticisers. Eco-smart PVC retains its inherent properties, has better extrudability, better transparency and does not deteriorate over the life cycle of product.

Fuel Cell - Alternate energy

A NMITLI project with CSIR collaboration resulted in development of 3 kW Polymer Electrolyte Membrane (PEM) fuel cell stack. Work is underway to extend it to make a complete fuel cell system for telecom tower power backup application in collaboration with suitable partners.

Bio-compostable polymers

Globally, plastic pollution is an environmental concern which is predominantly contributed by packaging plastics. RIL has developed biodegradable polymers for packaging applications. The developed product has performance that is at par with current packaging polymers in terms of physical and mechanical properties. This development will reduce plastic waste generation and adverse environmental effects.

Algae platform technology development

RIL has developed a catalytic hydrothermal liquefaction (RCAT-HTL) process, which utilises water available in the wet biomass and bio-waste to initiate a myriad of chemical and physical reactions to convert biomass organics to valuable bio-products and recovers water as well as nutrients. RIL has developed some of the world’s most innovative algae cultivation systems. RIL is exploring multidisciplinary biology and engineering scientific streams to create a safe and sustainable source of biofuels, bio-chemicals and nutritional products as food and feed. Algae bio-crude will help reduce India’s dependence on energy import and also fortify the rural economy by creating large number of jobs.

Biodiesel (Jatropha and others)

The key focus is to enhance the productivity of bio-diesel crops such as Jatropha, Calophyllum and Pongamia, etc. and cellulosic ethanol crops. RIL has made significant progress in the development of high-yielding Jatropha hybrids. RIL is also partnering with global leaders in creating a benchmark amongst the technology available worldwide. It will enable production of biodiesel, helping address the energy security of India through rural development.

Syngas to bio-chemicals

Reliance is poised to be the largest producer of syngas from the petcoke gasification units at Jamnagar. Besides being used as energy feedstock, additional valorisation of syngas is possible by converting it to bio-chemicals using fermentation. Using synthetic biology approaches, novel biochemical pathways have been designed to produce various chemicals in syngas utilising bacteria at Reliance. Significant progress has been made in demonstrating these pathways in bacteria and optimising the metabolic flux. State-of-the-art capabilities have been built in the metabolic engineering area. The techno-economics of making these chemicals from syngas using biological ways are extremely competitive when compared with conventional ones.

Coal Bed Methane (CBM)

The unminable coal, if not redeemed for its value in the form of methane production, would be a waste of natural resources. RIL BioCBM process is targeted at converting unminable coal to methane, a fuel that can improve the country’s energy security.

Synthetic Biology - Multiple Cross discipline research for functional food, feed, nutrition, and unique biomaterials

Synthetic biology with all other allied technology developments in today’s world is becoming much more robust, intelligent, high-throughput and serves as one of the most important pillars of 4th industrial revolution, where biology, digital and physical platforms will merge to deliver revolutionary technologies to meet future demands of growing and prosperous humanity. Multiple and diverse disciplines, viz. molecular biology, genetic engineering, systems biology, biophysics, computer science, big-data analytics, and robotics are clubbed under the umbrella of synthetic biology. Synthetic biology makes it easier to assemble pieces of DNA effectively and modularising them in an automation pipeline for standardisation and rapid commercialisation.

Synthetic biology platform for society at large, with Reliance’s strong capabilities in digital technology promises to contribute and create opportunities in agriculture, environment, and health.

RIL is committed to leverage the next generation biology advancement to create significant societal impact and make life healthier and more comfortable.

Green solution to India’s growing energy demand using waste as a resource

Action Taken:
Catalytic Hydrothermal liquefaction (R-Cat HTL), developed by RIL, converts wet biomass and organic waste into energy and recovers fertiliser-rich water and bio-char.

Potential: is done and is fully operational. This scheme if scaled up & found suitable, has potential to solve dumping waste problem for society at large and will emerge as a environmentally sustainable process.

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

Ionic liquids replacing Hydrofluoric Acid

RIL has developed an Ionic Liquid (IL)-based catalyst process technology to replace the Hydrofluoric Acid (HF) in the manufacturing of Linear Alkyl Benzene (LAB). HF is potentially hazardous and can be replaced with the Ionic Liquid. Customer trials are underway based on the material produced at pilot plant. The Company’s two commercial LAB manufacturing units, in Patalganga and Vadodara, will be converted from licensed HF-based technology to inhouse IL-based technology. RIL has patented IL technology.

Slag waste to chemicals

Hydro process, requires large quantity of acid or alkali for leaching or the pyro process, which involves very high temperature i.e. above 17000C. RIL has developed a low cost low temperature hybrid green process to extract vanadium from gasifier slag. The green process is being scaled up from lab to pilot.

Direct conversion of CO₂ to Dimethyl Carbonate (DMC)

RIL and CSIR have jointly developed a mixed oxide stable catalyst to directly convert methanol and CO₂ to a high value product e.g. DMC. Until now, DMC production is being done through non-green phosgene process which inherently results in high cost of production. Thus various application of DMC including its use as additive for gasoline gets ruled out. DMC is also the gateway for making polycarbonate and thus of high strategic value. DMC used as fuel allows for economical methanol consumption without the demerits of direct use of methanol in Internal Combustion (IC) engine. The joint process and catalyst has been tested on a continuous scale, providing stable operation. A strategy for scaling up is being explored.

Hydrodesulphurisation (HDS) and Hydrodenitrogenation (HDN) of fuel products

Government regulations and environmental standards on sulphur content in fuels are becoming more stringent. Reliance is working on new Ionic Liquids (IL) to produce cleaner fuel using chemical processes which operate at moderate conditions to remove sulphur and nitrogen species that are difficult to remove in traditional HDS / HDN processes. The indigenous process can be easily incorporated in the existing hydro-treating plant and can help in producing cleaner fuel.

Replacement of natural wood pulp in cement flat boards in autoclave

Currently, wood pulp is used in cement fibre boards for the autoclave process. Research is being carried out to replace partial amount of wood pulp with polyester short cut fibres to get the required strength and to save natural resources.

R&D Key Product Stewardship

Refining

Capable of Euro VI –readiness for future product at global market. The key focus areas for R&D in refining are around process improvements and value extraction, through processes like coking, hydro processing, Fluidised Catalytic Cracking (FCC), crude processing and advance separation, gasification, syngas and CO₂ value creation, reliability improvement, and molecular level process optimisation. Besides conventional refining areas, RIL is also venturing into new areas such as CO₂ to chemicals, biomass gasification, value addition through refinery by-products and nanotechnology-based applications.

Petrochemicals

Using the theme of Chemistry for Smiles RIL has introduced products such as Recron® GreenGold which uses CertainT, a proprietary DNA-molecular based traceability system that identifies, tags, tests and tracks the original recycled PET pellets to finished products. The CertainT platform helps assure the origin, authenticity, traceability, sustainability and quality of GreenGold. For details on the product please visit the website: www.r-elan.com

Advance Process Control (APC) & Real Time Optimisation (RTO)

• APC and RTO applications facilitates minimising variations, increasing throughput, optimising yields, minimising utility consumption, improved stability, reliability and profitability of process units.

E&P

Reliance received US patent for development of system for regeneration mono ethylene glycol and a method thereof.

Retail

• Project Eve is an experiential store crafted for independent and sophisticated women. It offers apparel, beauty & cosmetics, accessories, footwear, in-store salon and a café, all under one roof and provides a differentiated, engaging store environment with a sophisticated yet simple, inclusive and comfortable store ambience.
• Reliance Retail launched JioPhone which has opened up possibilities for ~500 million feature phone users to experience digital freedom. The innovative phone brings in features of a smart phone in a revolutionary device with its proprietary operating system KaiOS. The phone operates on 4G LTE, supports VoLTE (HD Voice), Video Calling, NFC, hosts range of Jio apps, and can be operated via multilingual voice commands. JioPhone can project content on any TV with JioMediaCable.

Jio

Jio continues to innovate across the digital value chain through process innovations and optimisation, technology platforms and stack applications, big data analytics and other key network infrastructure components as well as in customer service areas. Jio has so far filed 68 patents of which 11 have been already granted in various jurisdictions. Jio continues to invest in integration and innovation across the digital value chain.

R&D Enablers

Infrastructure

The state-of-the-art R&D department, headquartered in Navi-Mumbai is one of the largest in the country and is counted amongst most sophisticated labs in India. It includes 24 labs having a total area of 120,000 sq. ft. This centre is supported by its regional R&D Centres spread across India. All the R&D centres are well equipped with best-in-class infrastructure for conducting high-end inter-disciplinary research.

R&D Centres and their Focus Areas

Navi Mumbai

Catalysis, chemistry, process engineering, modelling, simulation, material science, synthetic biology, biotechnology, downstream polymer processing, product applications and advanced analytical

Hazira

Polypropylene catalysis, and pilot scale testing

Vadodara

Catalysts, adsorbents, organic chemistry, process development, applied biology, environmental science, and polymer applications and technologies, elastomer application and technologies

Patalganga

Polyester materials, processes, products, and applications

Jamnagar

Crude characterisation, process research, and pilot scale facilities for supporting refining operations and renewable energy technology development

Gagva

Pilot plants in over 40 acres of land to develop algae on sea water and convert biomass to biofuel

Samalkot

Biotechnology for biofuels

Naroda

Performance properties for apparel fabrics and auto textiles

Collaboration

Reliance continues to actively pursue collaborations 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 the research and development activity, RIL has a pool of scientists and engineers (900+) from reputed Indian and international institutes, few of them are listed below:

Indian

Indian Institute of Science, Bangalore
Indian Institute of Technology (IIT) – Mumbai, Delhi,
Kharagpur, Kanpur, Madras
Institute of Chemical Technology (ICT), Mumbai
Tata Institute of Fundamental Research (TIFR), Mumbai

International

Florida State University
Massachusetts Institute of Technology
Washington University in St. Louis
Louisiana State University

Some of RIL’s scientists have membership/fellowship in reputed bodies such as IICHE, NBRI & FANE.

R&D Expenditure*

Intellectual Property

The patent filings are mainly driven by the objective of creating business-aligned patent portfolio having a good mix of patents on improved and cutting-edge technological solutions. In FY2017-18, a total of 57 patents were granted to RIL. Reliance is recognised in Asia IP Elite, a select club featuring companies from Asia Pacific region which emphasise on integrating intellectual property with commercial decision-making.

Organised Big Data and Digitisation in R&D

Reliance has implemented fit-for-purpose management systems, work processes and tools for achieving excellence. Few of the examples of the digitisation and process centric initiatives are mentioned below.

a) Electronic Laboratory Notebook (ELN)

R&D 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 is an experiment and/or procedure-driven electronic laboratory notebook application designed to give the scientists a robust platform to capture and store both structured and unstructured data as they conduct experiments or execute laboratory procedures. 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.

b) New Product Development & Introduction (NPDI)

R&D 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”. This module is integrated to several other SAP & non-SAP modules viz. FICO, P&C, HCM, IMPS, ELN and others.

c) Intellectual Property Management System (IPMS)

R&D has implemented an enterprise-wide Intellectual Property Portfolio Management application from product leaders “Thomson Reuters” for centralisation of patent filing. It enables focussed patent filing and helps in having a centralised repository for various stakeholders.

Manufactured Capital

Manufactured Capital

“Every day, advances in manufacturing technologies make factories smarter, safer and environmentally more sustainable. Jamnagar expansion project, one of the world’s most complex and highly integrated project, set a world record for fast track project execution.

It has re-defined refining and petrochemicals integration. The investments in megaprojects and complex supply chains have enabled it to improve energy efficiency and reduce operating costs. Reliance has entered the world of advanced materials & composites by using the technology of 3D printing. Reliance leverages digital technologies such as Platforms, Artificial Intelligence, Machine Learning, Robotics Process Automation, Big Data, Internet of Things (IoT), Blockchain, 3-D Printing and Augmented/Virtual Reality to create innovative solutions for business value addition.”

Hital R. Meswani

Pawan Kumar Kapil

B Narayan

Paramjit Singh

Deepak Datta

Ravinder Batra

A. Srinagesh

Lalit Kasliwal

Key Performance Indicators

Jamnagar Refinery Expansion Project

• 3.5 million m³ concrete poured, equivalent to 13 Burj Khalifa towers
• 4,60,000 MT structural steel erected, equivalent to 59 Eiffel Towers
• 6300 km of pipe erected - Srinagar to Kanyakumari and back
• 14 million engineering man-hours, engineering performed over 20 locations globally
• 1,200 million construction man-hours
• Vast variety of complex materials of construction to handle temperatures from (-)190⁰C to (+)1,480⁰C and pressure ranges from vacuum to 120 atm

United Nations’ Sustainable Development Goals

PMO’s initiatives supported by the NITI Aayog:

• Make in India
• Digital India
• Atal Innovation Mission

Key highlights of the year:
 

• World’s largest off gas cracker & downstream PE and MEG units
• Largest PX project globally
• Refinery utilisation levels during the year remained above 5 year average
• Pan-India 4G-LTE across 800/ 1800/ 2,300 MHz bands

Smart Manufacturing

RIL is a forerunner in the oil and gas industry for adopting state-of-the-art technologies and smart manufacturing processes in its value chain. Smart manufacturing integrates data from various systems with process expertise enabling proactive and intelligent manufacturing decisions in dynamic environments. Smart manufacturing technology also aids the Company to improve its performance in terms of integrity, reliability and effectiveness of business and manufacturing operations.

With the availability of vast amount of operational data and big data technologies, RIL initiated the development and implementation of Industrial Internet of Things (IIoT) based solutions for realising “last mile” of optimisation across its manufacturing facilities.

• Smart sensors and control elements
• No touch, remote operation, paperless manufacturing and workflow execution
• Advanced predictive and perspective analytics to predict future performance and alert equipment failure

Reliance is enhancing the skills of its internal domain experts in the fields of data science and IIoT. These experts are being trained on analytical platforms, machine learning and AI algorithms, and programming languages. These newly acquired skill sets coupled with domain expertise are applied in prescribing the solution for process performance and equipment health improvement. The Company is working with its partners to have its own manufacturing data platform so as to enable elimination of data latency and drive quick adoption of big data analytics. This will allow efficient application of new ideas to meet ever-changing business requirements. The Operator Training Simulator (OTS) at Reliance has enabled all greenfield and most brownfield plants to train engineers on smooth start-up, shutdown and handling of abnormal situation. RIL has also piloted Virtual Reality (VR)-based technology for training.

Mobility applications and robotics technology are few examples of RIL’s several other initiatives that are being developed and tested in manufacturing operations. The Company is co-developing these solutions in collaboration with several research organisations and premier educational institutes. RIL has already leveraged existing practices using smart manufacturing technology including:

1) Use of robotics for high-risk jobs such as catalyst loading in inert atmosphere

2) Development and implementation of smart pressure testing methods using wireless protocol. This minimises risk in addition to improvement in operational efficiency

3) Use of drones for inspection of inaccessible positions such as flare tips, pipe racks and cable tray, emergency situation evaluation

4) Implementation of new technologies in Rotary/ Inspection and corrosion monitoring:

• Early event detection for rotary equipment
• Developed and deployed thickness measurement and corrosion monitoring methods for static asset reliability

5) Real-time control loop assessment and performance insights to improve process stability and minimise operating cost

6) Machine learning based solution for prediction of equipment and process health to take corrective/ preventive actions for any future performance deterioration

In addition to development of in-house solutions, RIL is developing an ecosystem to integrate smart manufacturing solutions along with technology partners. This includes the support of infrastructure available through Jio network and Jio cloud. With this initiative, RIL is not only optimising its own process, but also contributing towards the inclusion of other small scale industries (SMEs) in the journey.

Machine learning & data analytics

Action Taken:
Hybrid models using machine learning (ML) and artificial neural network (ANN) algorithms coupled with engineering principles were developed to predict the run-length of a furnace. The tool also provided diagnostics for Overall Equipment Effectiveness (OEE), energy usage, prescriptive analytics for process improvement and avoidance of unplanned shutdown.

Outcome: The turnaround planning, resource optimisation and inventory management of the furnace were improved.

At RIL, smart manufacturing is known as RIL Secured Connected System (RILSCS). This is based on real-time insight into operations by learning through advanced analytics to predict the future state established on the foundation of securely connected sensors and systems. The principles of RIL SCS are described in the diagram below:

Principle of RIL Secured Connected System

Research:	Infrastructure: Jio Ground Based Mast	Chemical: New Catalyst Development	Catalyst: Spent Catalyst	Product: Complex Product Technology
Application:	Ground based mast structure occupies lesser space compared to conventional towers, reduction in size by 5X	RIL’s catalyst is a unique four component system metal salt, ligand, and two co-catalysts eliminating dependency on the external licensor	Extensive collaboration with regenerators & catalyst vendors to ensure optimum performance from regenerated catalyst	Scientific innovations in Polyolefin catalyst and product technology by R&D team with Prof Grubbs- Nobel Laureate
Outcome:	Transition from a smart buyer of technology to a fast customiser of technology and a flagship developer for complex process with potential of licensor technology

Switching spinneret cleaning from a hazardous to a safer process

Action Taken:
A new system for cleaning the spinnerets in the system was developed and commercialised that is safer, eco-friendly & costeffective.

Outcome: Process safety and risk reduction.

Digitisation

Within manufacturing operations, RIL has begun the journey of creating a digital manufacturing platform with the objective of providing near real-time business insights to end-users so that they can take fast and effective decisions through a common and intuitive User Interface (UI). Going forward, RIL aims to have all the underlying solutions cohosted within the digital manufacturing platform envisaged along with innovative digital technologies to drive business objectives and outcomes.

1) Portfolio

RIL has a large portfolio of more than 1,800 applications being used across various businesses, including worldclass implementations such as Meridium APM for asset performance management; GE SmartSignal for predictive maintenance; Honeywell Intuition Executive for process and performance monitoring; SAP HCM for hiring, onboarding and training; and state-of-the-art visualisation software.

2) Collaboration with Industries

RIL is exploring collaboration with industry leaders such as GE, Honeywell, Siemens, Emerson, Schneider Electric, among others to build foundation blocks for its long-term Industrial Internet of Things (IIoT) strategy and the digital manufacturing platform. Reliance is building state-of-the-art and fit-to-purpose industrial applications on the IIoT and analytics platforms by leveraging RIL’s deep process and operational experience in the hydrocarbon business and Jio’s 4G data and communication platform. Through such collaborations, RIL is co-creating capabilities to add value to the society and industry.

3) Cyber Security

In today’s connected world, cyber security continues to be a key area of focus. Many state-of-the-art technology solutions have already been deployed at RIL to detect, mitigate and prevent various cyber threats. It is working to fortify its frameworks and architecture to bring continuous improvements to its already strong monitoring, detection, and mitigation capabilities. During this year, while its petroleum retail business got Payment Card Industry (PCI) Data Security Standard (DSS) certified, the petrochemicals business was also re-certified for ISO 27001.

Applied Technologies:

1) Robotics Process Automation:

RIL has created a highly reliable, fast, accurate, roundthe- clock virtual workforce, propelled by Robotics Process Automation (RPA) technology. RPA has been successfully deployed across functions such as HR, Finance, Procurement and others for various repetitive and monotonous tasks performed by individuals resulting in improved operational efficiencies. Chat bots have enabled to increase vendor engagement and accurately addresses vendor queries on status of orders, payments and so on.

2) Augmented Customer Experience:

A new Supply Chain Management (SCM) transformation programme “Augmented Customer Experience” (ACE) to enhance customer experience based on voice of customers and enable value added services is currently under way. A desired outcome of this programme is to strengthen Customer Relationship Management (CRM) by enhancing agents and customer experience through dashboards and mobile applications. This initiative will enable integrated business planning through advanced analytics, better supply planning and execution, and thus to higher customer service levels. Fleet Risk management dashboard through machine learning solution leveraging IoT technology was implemented to minimise the risk for the captive and external fleets. Umpteen sensors fitted into the fleet collect various data points which in turn are used for analysis and risk management. This is expected to give insights into various parameters of logistics fleet management. E-seal (Electronic Seals (RFID Seals)) auto updating in the vendor portal uses BOTS as part of statutory compliance requirement by Indian customs for export movement. Bulk uploading of excel based data on vendor portal is also automated using BOTS technology.

3) Reliance Project Management Group (RPMG):

RPMG has successfully executed the third phase of the Jamnagar Refinery Expansion project – J3. As a part of digitisation initiatives at RPMG, a strategic initiative was taken up to develop an Integrated Framework (IFW) with a focus on “end-to-end digitisation” from FEED to Operations. Advanced technologies of Integrated Engineering data using SmartPlant 3D model, intelligent P&IDs and 2D are leveraged to build plant assets. The J3 project leveraged integrated data availability using dashboards which helped in effective task execution, project planning and reporting. Advance data analytics and machine learning algorithms helped to monitor project KPIs and help set new benchmarks for future CAPEX projects.

4) Smart Contract:

Blockchain as a technology is currently being explored to enter into smart contracts with customers and vendors for instant matching and settlement processing on blockchain connected platform, eliminating intermediaries.

5) R-Cash:

Petroleum Marketing has introduced digital transformational initiatives, which are first of its kind in the industry like R-Cash (digital cash management solution), R-Delight (payment solution for digital), Manthan (card-less trans-connect fleet application) and I-Sure (cash loading made easy for fleet customers). Aligning to the vision of ‘Digital India’, RIL pumps are accepting multiple modes of payment. RIL’s network is ready to offer the next generation dynamic pricing solutions to create unique and convenient options for RIL’s customers.

Jamnagar Projects

Jamnagar Refinery Expansion Project, one of the world’s most complex and highly integrated project, is nearly complete. Jamnagar Refinery Expansions has set a world record for fast track project execution as the schedules achieved are substantially better than those accomplished for similar projects worldwide. The project has re-defined refining and petrochemicals integration and extracting more value from bottom of the barrel products. PX project has resulted in a seamless transition from net importer to net exporter of Para-Xylene.

• 14 million engineering man-hours: More than J1 & J2 combined. Engineering performed over 20 locations globally
• 1,200 million construction man-hours: 60% more than J1 & J2 combined
• Peak manpower mobilisation of about 1,50,000
• 7,261 equipment erected flawlessly with some of complex heavy lifts
• Peak P&M deployment of 10,000 including some of the largest capacity cranes in the world
• Typically, stabilisation period for ROGC projects is 6 months; this was achieved in less than 30 days at Jamnagar
• Plants in ROGC complex are currently operating higher than design capacities. ROGC has one of the lowest ethylene costs globally
• Vast variety of complex materials of construction to handle temperatures from (-)190⁰C to (+)1,480⁰C and pressure ranges from vacuum to 120 atm

Emerging Technologies:

Reliance recognises opportunities in artificial intelligence, machine learning, big data analytics, IIoT, blockchain, 3D printing, artificial intelligence, virtual reality, among others and has been hard at work setting the stage to build institutional competencies in these areas.

1) Virtual Reality (VR):

RIL is piloting Virtual Reality (VR) through a virtual walkthrough plant environment for interactive training, testing, and process simulation of all critical plant personnel so as to increase safety and reliability.

2) 3D printing:

3D printing will be an important component of the RIL’s digital manufacturing architecture. RIL has procured state-of-the-art printers for its employees to experiment and learn about this new technology platform while developing potential use cases in manufacturing.

3) Analytics platform:

RIL is implementing a world-class analytics platform and a data lake using the best-in-breed technologies for its big data initiatives. RIL has also developed extensive in-house expertise in programming languages such as R, Python, and big data technologies such as Hadoop, Cassandra among others. Multiple advanced stage pilots are being done to establish extensive use of machine learning and artificial intelligence use cases with a view of long-term adoption and institutionalisation.

4) Cloud First, Mobile First:

True to RIL’s vision of a “Cloud First, Mobile First” organisation, RIL employees can securely access transactional, analytical, and informational capability on their mobile devices anytime and anywhere, thus improving productivity, response time, safety and operational reliability.

At RIL, the need to leverage both internal and external sources of information to identify and create valuegenerating opportunities has been recognised. The RIL IT team, through a combination of motivated and engaged talent and an eco-system of technology partners, is well positioned to enable the RIL digital journey.

RIL is developing a partner ecosystem to successfully implement smart manufacturing solutions. This includes the support of infrastructure available through Jio network and Jio cloud. With this initiative, RIL not only optimises its own processes, but also contributes towards the inclusion of other small scale industries (SMEs) in the journey.

Product Stewardship

Reliance embraces product stewardship by reducing the environmental, health and safety impacts of products throughout their lifecycles. The three key categories of products that the Company manufactures are – transportation fuels, polymers and polyester fibres. By setting a uniformly high standard for product development and going beyond regulatory requirements, Reliance proactively ensures that its products positively impact the environment and society at large. Product stewardship initiatives undertaken in FY 2017-18 are listed below:

Refining & Marketing

RIL continuously focusses on debottlenecking, capacity enhancement, yield and product quality improvement to enhance its competitive strengths. Examples of such initiatives include:

• Euro VI capable refinery
• Energy conservation initiatives to minimise fuel consumption were implemented

Petrochemicals

Polymers

• Reliance’s geotextile products started being used in stabilisation and ground improvement of roads
• A breakthrough was achieved for usage of impact Copolymer Polypropylene (PP) in mud liner of vehicles

Polyesters

• Reliance launched a range of future fabrics under the brand R|Elan™ that includes inherent moisture management mechanism, limits bad odour, is suitable for both formal and casual wear, and has one of the lowest carbon footprints in the world.

Advanced Material, Composites and 3D Printing

• Reliance has entered the world of composites, materials that can deliver exceptional performance in terms of strength, durability and corrosion resistance at significantly lower weight compared to steel.
• Using the technology of 3D printing, Reliance has developed capabilities to design and print a wide range of plastic and metal products, from prototypes to functional parts.

R|Elan™ - Smart Fabric 2.0

Advanced Material

Exploration & Production

Reliance has an advantageous position in offshore (deep-water) capabilities, coupled with the knowledge of operations in unconventional areas such as CBM and Shale Gas. Some of the innovative measures are as follows:

1) Upgrading systems and technologies in light of upcoming deepwater development projects.

2) A strong foundation for ‘data-driven decisions’ is being laid through the use of open stack technologies, OEM software stack and big data analytics technologies.

Jio

Jio’s state-of-the-art digital services network enables fast internet connectivity, high-quality communication services and rich digital services.

• It is the only network conceived as a Mobile Video Network from the ground up and supporting Voice over LTE (VoLTE) technology
• Play along platforms on JioChat are an innovative engagement tool

Retail

• In FY 2017-18, Reliance Retail focussed on innovation in new store concepts such as Project Eve and Trends Woman and online channels to meet customer expectations.

Media

The various initiatives undertaken in the media business in FY 2017-18 were:

• Live streaming, podcasts, video-on-demand, and others through moneycontrol app
• News18.com introduced in 5 new languages

Global Corporate Security

Global Corporate Security (GCS) is a distinct function of RIL mandated to de-risk, safeguard and secure India’s largest private sector company. GCS officers are engaged roundthe- clock towards safeguarding RIL’s people, assets & operations, ensuring business continuity at all times, and reducing the cost of doing business.

GCS apex leadership comprises a multidimensional and diverse range of experts, including veterans from the military & paramilitary forces, law enforcement agencies, intelligence services, as well as technical experts from the industry. To ensure a high-quality leadership pipeline, GCS operates the Reliance Security & Risk Management Academy (RSRMA), a first-of-its-kind training institution in India. Dedicated to producing world-class security professionals, the academy, set up in 1998, has trained more than 900 security officers thus far.

Aided by a cutting-edge technology solutions team, GCS stands out as the only organisation in the country to host the largest security workforce, comprising 20,000 security personnel. Today, GCS provides security cover to the Jamnagar Refinery, 16 major petrochemical manufacturing sites in India and supports Telecom and Retail businesses across 29 States and 7 Union Territories.

To fulfil its mandate of preventive and proactive risk mitigation, GCS employs a future-ready “de-risking” framework, leveraging national capacity, and ensuring net value for all stakeholders. Other salient security services provided by team GCS include – threat and risk assessments, intelligence & vigilance, asset protection, and technology solutions.

Reliance Retail Store

Security team at Jamnagar

Financial Capital

Financial Capital

“Reliance is always focussed on improving shareholder returns by maintaining an optimal capital structure. The Company has significantly enhanced its operational performance by establishing prudent risk management framework. Reliance ensures access to funding to meet its operating needs and strategic objectives while securely and reliably managing its cash flows in a cost-efficient manner.

Reliance actively explores opportunities to optimise the cost of borrowing and aligns the maturity profile of its existing debt portfolio with its business strategy. Reliance retained its domestic credit ratings of ‘CRISIL AAA’ from CRISIL and ‘IND AAA’ from India Rating and an investment grade rating for its international debt from Moody’s as Baa2 and BBB+ from S&P. Cash generated through its operating activities remains the primary source for liquidity along with undrawn borrowing facilities and levels of cash and cash equivalents.”

Key Performance Indicators

United Nations’ Sustainable Development Goals

Social and Relationship Capital

Social and Relationship Capital

P.M.S. Prasad

Jagannatha Kumar

“RIL’s ambition is to create more societal value through creating more and more opportunities - directly and indirectly for the wider society. While direct interventions are designed to benefit the local communities in a structured way, the Company also ensures that the voices of its other stakeholders such as customers and suppliers are factored in RIL’s decision-making process.

RIL strives for social innovation through its products and services to ensure sustainable and inclusive growth. With the launch of digital services, the society is at the inflexion point realising fruits of fourth industrial revolution – the power to enjoy higher standard of living with abundance of resources at affordable prices for benefit of entire society.

The Company will continue to work with every strata of the economy to benefit the society, industry and ultimately, the nation.”

Key Performance Indicators

United Nations’ Sustainable Development Goals

PMO’s initiatives supported by the NITI Aayog:

• Support to training and employment programme (STEP)

Key highlights of the year:
 

• 9 startups graduated from JioGenNext and won the ‘Hot 100’ awards for technology

Stakeholder Engagement

RIL has identified eight key stakeholders – Investors and Shareholders, Employees, Customers, Suppliers, Trade unions, Government and Regulatory authorities, Local community and NGOs – with whom the Company establishes strategic dialogues.

Reliance’s relationships with the startup ecosystem, suppliers, government authorities, academia and other institutions, is addressed in this section. For details about all other stakeholders (customers, employees, local communities and NGOs), refer the individual business sections, Human Capital section, and CSR Report.

RIL believes that good corporate governance can be achieved by effective stakeholder engagement. Hence, through frequent engagement and established processes RIL develops a robust understanding of stakeholder expectations and is able to foster strong relationships with them. For more details on identification of stakeholders, frequency of engagement and key priorities of stakeholders, refer to the RIL Sustainability Report at www.ril.com.

JioGenNext Hub: A Unique Start-up Ecosystem

India is the third largest startup ecosystem in the world. It has 25,000 plus startups and the number has grown 270% in the past six years. By 2025, India is slated to become the second largest startup ecosystem with an estimated 1,00,000 startups, which will employ over 3 million people and impact 30 million SMEs with advanced tools and technologies.

During the year, JioGenNext received 3,000+ applications from startups and aspiring entrepreneurs in India across its two cohorts – of which 29 startups made the cut to be selected in India’s most coveted corporate venture programme.

Since 2014, JioGenNext has been mentoring and advising startups on various areas of business – product roadmap, customer discovery, go-to-market strategy, customer acquisition & engagement, talent hiring, pitching and fund raising.

JioGenNext is a bridge for startups to explore various engagements with Reliance business units in the form of pilots, commercial partnerships, joint GTM, strategic investments or a combination thereof.

Key Metrics

6 Cohorts till date

80 Startups selected

30+ Engagements with RIL

6,000+ Applications from startups and aspiring entrepreneurs

75+ Mentors

JioGenNext, through its unique model of ‘Customer–as-a- Mentor’, enables startups to launch their business in the Jio and RIL ecosystem at scale and grow with the rapid growth of Reliance. Over the past four years, it has perfected this model by closely engaging with all the relevant stakeholders in the RIL and Jio ecosystem. The uniquely designed ‘mentorship’ programme for startups includes features such as regular pitch sessions, planning and execution of Proof-of- Concepts, measuring results and discussing improvements in the roadmap so as to achieve product-market fit. This year, JioGenNext has integrated 10+ startups within the Jio, RIL ecosystem for long-term partnerships.

JioGenNext is a structured six-weeks immersive programme spread across 18 weeks, which apart from providing startups with access to RIL leadership and domain experts, also offers state-of-the-art co-working space, technology partnerships with global companies like Microsoft, Google, Facebook, etc., external ecosystem mentors and most importantly an opportunity to test, validate, launch and scale their business in Jio/RIL.

JioGenNext is focussed on startups operating in the following three areas of strategic interest - Digital Consumer Services, Enterprise Solutions and Retail & Logistics. The sectoral break-up of the 80 startups engaged so far is as follows - 34 in Enterprise Solutions, 30 in Digital Consumer Services, and 16 in Retail & Logistics sector.

This year, JioGenNext ran two cohorts – Cohort 5 (11 startups) and Cohort 6 (18 startups) with a total of 29 startups. The industry network has strengthened to a staggering 75+ mentors and 20+ active partners during the year.

Pillars of JioGenNext – Talent, Technology and Trust

Talent: JioGenNext looks for passionate and technically gifted individuals and nurtures their talent to become pioneers in their respective fields. This is done through one-on-one mentoring sessions with distinguished leadership of Reliance and external mentors who are subject matter experts. JioGenNext is Reliance’s gateway to build a talent pipeline for the next disruptive technologies.

Technology: JioGenNext is focussed on engaging with entrepreneurs who are building disruptive businesses using some of the most powerful technologies like Artificial Intelligence (AI), Machine Learning (ML), Blockchain, Augmented Reality/Virtual Reality, Big Data Analytics, Internet of Things (IoT), Robotics & Drones, India Stack, Home Automation, and Advanced Materials, among others. JioGenNext backs entrepreneurs with deep technical knowledge and capability, and helps them with business mentoring to ensure they build sustainable products and businesses.

Enguru

Action Taken:
Through Jio phones Enguru app was adapted, to help millions of Jio customers learn English at the comfort of their home

Outcome/progress: Enguru app increased its reach by 5,00,000+ users in less than a week.

LegalDesk

Action Taken:
To digitise the legal documentation and contracting process in Reliance.

Outcome/progress: It is being piloted by administrative departments of RIL for robustness under various conditions and use-cases.

Trust: JioGenNext stands for trust between start-ups and Reliance. It has fostered a trust-based ecosystem to ensure a mutually win-win situation for all ecosystem entities. As a strategic scalerator platform, JioGenNext is able to facilitate discussions and transactions as a neutral party.

For more information, please visit www.jiogennext.com

Responsibility towards Suppliers

The Company’s vendors are globally reputed and leading Indian corporates. Most of these corporates have their own sustainability programmes in place and disclose their sustainability initiatives publicly. Its contractor base includes top performing engineering/supervision companies, construction companies, installation and commissioning service providers, joint ventures and consortia.

RIL’s Supplier Code of Conduct strengthens its relationship with its suppliers. It reflects RIL’s belief in its suppliers to achieve and adhere to Reliance’s core values, and comply with labour, human rights, health & safety, environmental protection, business integrity and confidentiality laws and standards. Consequently, Reliance conducts a rigorous screening process for registration and evaluation of all suppliers. Suppliers’ site visits are a regular part of the procurement team’s responsibilities.

RIL has procured goods and services (non-crude/nonfeedstock) worth over `14,070 crore from indigenous suppliers. Through sustained investment in mega projects and operations, RIL has developed India’s chemicals and engineering supplier base. Today, leading Indian engineering companies, raw material companies and industrial goods companies are RIL’s long-term vendor partners. Currently, majority of RIL’s suppliers and contractors are India based. RIL supports and encourages its suppliers to indigenise and to expand their capabilities and increase their economic value.

RIL’s manufacturing sites act as an economic nerve centres for nearby communities and businesses. The Company ensures that it engages local villagers and small businesses around its areas of operation in productive employment, especially through vehicle hiring, material handling, housekeeping, waste-handling and horticulture contracts. Some of these vendors have been serving the Company for the past two generations.

Sustainable Sourcing

RIL’s sustainable sourcing is aimed at social progress, economic development and reduces environmental impacts by contributing to five strategic focus areas:

Energy Management, Environment Responsibility, Product Stewardship, Occupational Health and Safety and Social Institution Building. RIL’s sustainable sourcing ethos focusses on nine key parameters:

• Green packaging
• Environment protection
• Regeneration/Safe disposal
• Contract worker care
• Community support
• Supplier collaboration
• Make In India and development of India’s engineering talent
• Learning through P&C academy
• Digitally stitched Procedure to Pay (P2P)

The Company has adopted RC-14001, an international environmental management system to effectively manage its activities like manufacturing, distribution and the use of chemicals in the products. For improving human health impacts and the protection of environment, the Company has sourced REACH (Registration, Evaluation, Authorisation and Restriction of Chemicals) compliant materials, and its requirements include that its Tier 1 suppliers also procure REACH-compliant materials. RIL ensures 100% compliance to statutory laws and regulations, and labour laws by its contractors.

The Company has adopted sustainable sourcing practices such as local vendor engagement, digital invoicing, contractor care and supplier query redressal. RIL’s determination to reinforce local manufacturing, will help bridge the gap between robust domestic consumption and constrained supply, thereby leading India to become self-sufficient.

Digitally Transformed Procure to Pay Cycle (P2P)

Globally, the procurement functions are transforming themselves to achieve a digital platform based P2P. RIL has embarked on a journey to make P2P Cycle more predictive, stakeholder (suppliers and internal customers) relationship management more proactive and transactional procurement more automated. Reliance’s technology architecture aims to achieve ‘Touchless P2P’. It is imperative that leading emerging technologies such as IoT, Blockchain, Machine Learning, Big Data, 3D printing are leveraged to ensure maximum benefits.

Partnerships for change

Government and other global institutions

RIL has its representation in several business and industrial associations such as The World Economic Forum, The American Chemistry Council (ACC), Indian Chemical Council (ICC), The Chemicals and Petroleum Manufacturers, Association (CPMA), Gulf Petrochemicals & Chemicals Association (GPCA), World Business Council for Sustainable Development (WBCSD), European Petrochemicals Association (EPCA), American Fuel & Petrochemical Manufacturers (AFPM), Association of Oil and Gas Operators in India (AOGO), Federation of Indian Chambers of Commerce and Industry (FICCI), Confederation of Indian Industry (CII), Associated Chambers of Commerce and Industry of India (ASSOCHAM) and Association of Synthetic Fibre Industry (ASFI), Synthetic and Rayon Export Promotion Council (SRTEPC), The Synthetic and Art Silk Mill’s Research Association (SASMIRA).

RIL understands the importance of interacting with various stakeholders to mobilise actions required to protect the environment. Consequently, in a one-of-a-kind partnership with the Ministry of Environment, Forests and Climate Change (MoEFCC), Government of India (GoI) and the Gujarat Ecological Commission (GEC), the Company actively contributed to the set up of India’s first Centre of Excellence (CoE) for the study of the coastal biodiversity of Jamnagar known as the National Centre for Marine Biodiversity (NCMB).

Businesses

Hydrocarbons

RIL and BP formed a transformational partnership in the oil and gas sector. The partnership aims to combine BP's deep-water exploration and development capabilities with Reliance's exceptional project management and operations expertise.

RIL is exploring collaboration with industry leaders such as GE, Honeywell, Siemens, Emerson, Schneider Electric, and others to build foundation blocks for its long-term Industrial Internet of Things (IIoT) strategy and the digital manufacturing platform. Reliance is building state-of-theart and fit-to-purpose industrial applications on the IIoT and analytics platforms by leveraging RIL’s deep process and operational experience in the hydrocarbons business.

RIL has two joint ventures in North American shale plays with Pioneer Natural Resources and Chevron.

Retail

Reliance Retail has emerged as the partner of choice for international brands and has established exclusive partnerships with many revered international brands. 7 out of 10 premium international fashion brands have partnered with Reliance Retail. Retail operates the largest portfolio of international retail brands in India with over 40 brands that span across the entire spectrum of luxury, bridge to luxury, high–premium and high–street lifestyle. Reliance Brands further strengthened this presence by acquiring 46.6% equity stake in Genesis Luxury Fashion Pvt Ltd, which operates a rich portfolio of brands such as Armani, Hugo Boss, Michael Kors and many others.

Digital Services

Jio, along with its business partners, is focussed on making all components of the digital value chain available to its customers. To deliver such end-to-end solutions, Jio continues to partner and collaborate with technology developers, service providers, infrastructure providers, application partners and device manufacturers. Other strategic partnerships like Saavn, Embibe and Eros Media further enable Jio to enrich the customer experience, while enhancing the digital ecosystem.

Academia Partnerships

Reliance ‘Industry to Academia Programme (ITAP)’ bridges the gap between academic excellence and the needs of the industry by connecting students from universities with the industry. ITAP has 35 subject experts and engages across 13 subjects. More than 80% of students feel that this programme will help them apply their classroom knowledge in professional work. Digitised platforms are extensively used for material sharing and the same is constantly evolving.

Reliance University

Reliance is working towards establishing a globally benchmarked, multi-disciplinary university in Maharashtra. It will provide an enabling environment and cutting-edge research facilities to students.

Reliance partners with ISRO – ‘Make in India’

Action Taken:
ISRO gave quality clearance to the first master batch of Hydroxyl Terminated Poly-Butadiene (HTBP) resin, a fuel binder produced by Reliance, for use in rocket launch. The resin was tested in rockets and the batch was accepted.

Outcome: This activity contributes to fuel India’s space efforts.

Connected by purpose

Jio is a disruptor. It has catalysed India’s digital adoption with a network that is uniquely designed to support multimedia content and unparalleled customer experience.

A study shows that Jio has led to US$10 billion in annual savings for India, a per capita expansion of 5.65% in GDP and an unparalleled increase in data consumption*. Further, within six months of operations, the network had enabled India to catapult to the rank of the highest mobile data user in the world. Such unprecedented success by a digital network is attributable to its ability to make broadband and digital services accessible to every nook and corner of the nation through its sheer affordability. Jio has touched a billion lives, opening up a world of possibilities and opportunities for its customers.

* Source: Institute for Competitiveness, 2018

Opening the window to Tadoba

Thanks to Jio, Hans Dalal, a noted tiger conservationist, could leapfrog the villages around the Tadoba Andhari Tiger Reserve (TATR) in Maharashtra from digital darkness to 4G. His letter to Smt. Nita M. Ambani (Founder Chairperson, Reliance Foundation) saw all seven villages in the Moharli region of TATR get digitally connected within a month.

Finding one’s own voice

Rameshwar, who hails from Jalna, Maharashtra, does not let his speech impairment come in the way of living a full life. With the need to communicate through sign language, Jio’s video calling facilities help him stay connected even with those who are far away.

Fishing for good times

After being trained by Reliance Foundation on the use of GPS devices and being helped to buy a mobile device, Balagam and his crew were able to save time and money as they now had easy access to information on potential fishing zones along with regular Sea State Forecast.

Giving wings to dreams

Reliance Foundation’s toll-free helpline, powered by Jio, enabled Priyanka to connect with the outside world and send out her application for higher studies. A resident of Dundi Sarrai village, she got admission in a Government recognised university free of cost; without adding any additional burden on her poor parents.

Jio – World’s largest and fastest growing mobile network

Data consumption of 9.7 GB per user per month in exit quarter

Jio the only network to deploy Pan-India 4G

across the 800MHz / 1800MHz / 2300MHz bands

Growing better

With the easy availability of information services through a Jio-powered phone, Nudigoppala was educated on the timely application of suitable fertilisers and chemicals, enabling him to reduce expenses and increase his yield as well as revenue.

Fodder for thought

When Dhirendra Nayak needed a way to reverse the situation where his Jersey cows were not producing optimum volume of milk, the information he garnered through the internet helped him. He was able to get advice on fodder management as well as on proper care and treatment of cattle, all of which gave him more success in his business.

The fearless traveller

The Jio revolution is keeping people connected anytime, anywhere. A common scene in the trains nowadays is of passengers on video calls. Affordability and seamless connectivity have taken the fear away from roaming charges.

Breathing life into art

For master weaver Haji Hasin Mohammed, Jio has breathed new life into his business. The display window for his product has now shrunk to his smartphone screen. With the Jio network making data affordable and accessible, he is able to reach out to his clients easily and in real-time. Almost 75% of his orders are now through the digital medium.

Enabling the Fourth Industrial Revolution

Reliance is making its humble contribution in societal transformation both within its businesses, and by enabling various systems in society such as start ups, research and technology, CSR, platforms, digital enablement for all, etc.

Reliance is a leader or an enabler across all the key industrial revolution trends. Additionally, for most of these trends, Reliance is also enabling multiple start-ups in preparing for the Fourth Industrial Revolution.

Reliance’s Sustainability Reporting Journey

RIL has been publishing Sustainability Reports annually since FY 2004-05 based on the Global Reporting Initiative’s (GRI) reporting guidelines. For the last decade, the reports have been GRI checked with an ‘A+’ application level.

Furthermore, the Company published its first sustainability report according to GRI Standards’ (including Oil and Gas sector disclosures) ‘In accordance – Comprehensive’ option which was introduced in FY 2016-17. The report has been externally assured (Type-II, High Level) indicating highest level of comprehensive disclosures for GRI Standards. RIL is a member of World Business Council of Sustainable Development (WBCSD) and Global Reporting Initiative (GRI). WBCSD’s ‘Reporting matters’ 2015 & 2017 has recognised RIL’s sustainability report as a leading example on aspect of ‘Reliability’. The reports are available at http://www.ril.com/ Sustainability/CorporateSustainability.aspx

In addition to GRI and IR frameworks, this year’s Integrated Annual Report respects the following 12 frameworks:

1) United Nations Sustainable Development Goals (UN SDGs),
2) American Petroleum Institute/The International Petroleum Industry Environmental Conservation Association (API/IPIECA),
3) United Nations Global Compact (UNGC) Principles,
4) Business Responsibility Framework based on the principles of National Voluntary Guidelines on Social, Environmental and Economic Responsibilities of Business (NVG - SEE),
5) World Business Council for Sustainable Development’s (WBCSD’s) focus areas,
6) Greenhouse Gas (GHG) Protocol,
7) Task Force on Climate-related Financial Disclosures (TCFD) recommendations,
8) Natural Capital Protocol (NCP),
9) United Nations Guiding Principles on Business and Human Rights (UNGP),
10) Social return on investment (SROI),
11) The Global Recycle Standard (GRS) Version 3.0 for traceability of fibres, and
12) Prime Minister’s Office (PMO) initiatives for India/NITI Aayog.

KPMG has provided highest level of assurance, please refer Page No. 194 of pdf.

Reliance’s Materiality Assessment Approach

As a key strategic focus area, sustainability is crucial to the delivery of the Group’s strategy and is integrated across all areas of business. RIL conducts a formal materiality assessment in accordance with GRI Standards to identify and prioritise the most significant sustainability topics, set KPIs and targets for improvement that guide the content of Sustainability Report. The KPIs and management approach for identified material topics undergo a monthly review through the sustainability council, which advises on improvement measures and action plans. Additionally, an annual review is conducted by the Board committee.

RIL’s materiality assessment involves the process of identifying and assessing numerous potential economic, environmental and social topics that could affect its business and stakeholders and prioritise them into key material topics. The identification of material issues has been largely aligned to the Company’s risk management framework and its strategic approach based on the four areas:

• Strategic and Commercial risks
• Safety and Operations
• Compliance and Control
• Financial risks

Reliance aims to build strong and long-lasting relationships with its stakeholders through structured dialogues. For more information on Materiality refer to the Sustainability Report.

PMO’s initiatives supported by the NITI Aayog includes:

1) Skill India: Atal Innovation Mission, Support to training and employment programme (STEP)

2) Make in India

3) Digital India

4) Clean India: National Solar Mission, National offshore wind energy policy, National Policy on biofuels, National environmental policy, National plan for conservation of aquatic ecosystem

5) Healthy India

Risk and Governance

Nikhil R. Meswani

Harish Shah

Laxmidas V. Merchant

“A disciplined approach to risk is important in a diversified organisation like Reliance to enable the achievement of its strategic objectives and to ensure that Reliance has an acceptable level of risk commensurate to expected returns. Reliance’s Enterprise Risk Management framework drives a consistent and systematic approach for identifying and managing risks, both at the strategic and operational levels. Reliance’s integrated risk management framework provides the capability for timely and informed response to address risks and to capture opportunities”. “Reliance has a comprehensive Reliance Management System, a holistic set of management systems, organisational structures, processes, policies and governance framework. During the year, significant progress has been made with driving a risk aware culture through integrating the risk process into planning and decision - making processes, assigning clear accountabilities for risk ownership and ongoing oversight by designated Committees. Furthermore, Reliance is strengthening its continuous controls monitoring capability across the three lines of defense, enabled by analytics technology, covering all key risk areas.”

Enterprise Risk Management

1) Introduction

Reliance actively stimulates entrepreneurship throughout the organisation and encourages its people to identify and seize opportunities. The current economic environment in combination with significant growth ambitions of the Reliance Group carries with it an evolving set of risks. Reliance recognises that these risks need to be managed to protect its customers, employees, shareholders and other stakeholders in the society to achieve its business objectives and enable sustainable growth. Risk and opportunity management is therefore a key element of the overall Reliance strategy. This section provides Reliance’s view on risk and the key risk factors for Reliance as well as how it manages risks through its risk management framework.

2) Reliance's View On Risk

2.1) Risk Appetite

Reliance’s risk appetite is linked to its strategic approach and is based on the stance it has taken across four areas:

• Strategic and Commercial: Reliance manages strategic risk in the pursuit of profitable growth in both mature and emerging markets. Given the volatile markets and economic climate in which it operates, the adaptability of its people, its service offerings and its infrastructure are key.
• Safety and Operations: Reliance is committed to conduct all its activities in a manner appropriate to avoid harm to employees and the community. Reliance strives to deliver safe, reliable and compliant operations.
• Compliance and Control: Compliance with laws and regulations is fundamental to maintaining its licence to operate in the various industries that it operates in. Reliance also believes that accurate and reliable information provides a competitive advantage and is key to effective management of its business. It therefore accepts minimal risk in relation to reporting risks.
• Financial: Reliance manages financial risk to maintain a prudent financing strategy, even when undertaking major investments and therefore taking controlled risks in this area.

In Reliance, risk appetite is formally articulated through specific policies related to common risks, business decisions or activities. For example, policies such as financing and deal limits, vendor selection criteria, HSE, customer credit and new country entry describe the level of risk Reliance is willing to take including the specific tolerances, limits and other boundaries within which decisions shall be taken or activities shall be carried out. These policies are then enforced through controls integrated in its business processes and its governance architecture.

2.2) Risk Factors

Reliance emphasises risks that threaten the achievement of the Group’s business objectives over the short to medium term. As part of its annual planning process, Reliance reviews plan related risks, opportunities and uncertainties. It identifies those as having a high priority for particular oversight by the Board and its various committees and by Executive Committees. An overview of these risks is provided hereafter, including the actions taken to mitigate these risks and any related opportunities:

I) Strategic And Commercial Risks

a) Commodity Prices and markets

Reliance’s financial performance is subject to the fluctuating prices of crude oil and gas and downstream petroleum products. Prices of oil and gas products are affected by supply and demand, both globally and regionally. Factors that influence fluctuations in crude prices and crude availability include operational issues, natural disasters, political instability including geopolitical risks, economic conditions and Government pricing policy of petroleum products among others.

Mitigation: Since Reliance operates an integrated hydrocarbon business, some of these risks can be offset by gains in other parts of the Group. To mitigate the risks resulting from non-availability of crude and feedstock, Reliance has a diversified crude sourcing strategy from multiple geographies (Asia, the Middle East, West Africa, Latin/ South America and North Africa) under both short-term and long-term arrangements. In addition, Reliance has put in place commodity risk management policies which provide the framework for decision-making with respect to exposures from commodity trading positions.

Changes since last year:
There have been no significant changes in the nature of the risk exposures over the last 12 months.

b) Cyber security risk

As Reliance continues to forge ahead with digital technology led business process enablement, it faces an increased exposure to cyber risks. A digital security breach or disruption to digital infrastructure, due to intentional or unintentional actions, such as cyber-attacks or human error could lead to serious business impact. These include injury to staff, loss of process control, impact on business continuity or damage to assets and services, harm to the environment, the loss of sensitive data or information, legal and regulatory breaches and reputational damage.

Mitigation: Reliance continues to strengthen its responses to cybersecurity threats through proactive and reactive risk mitigations. These include, proactive activities to continuously enhance its cybersecurity policies, standards, technical safeguards, ongoing monitoring of new and existing threats and cyber security awareness initiatives. Reactive responses to cybersecurity threats, which include IT disaster recovery, emergency response and business continuity management capabilities, enable the reduction of the impact of a cybersecurity event.

Changes since last year:
The industry continues to witness a growth in cybersecurity risks, both in their prevalence and in their disruptive potential. Breakdown of critical information infrastructure and networks (Critical information infrastructure breakdown) has been identified as one of the top cyber security risks by the World Economic Forum (WEF) in its latest Global Risk Report (2018). It notes that cyber dependency increases vulnerability to outage of critical information infrastructure (e.g. internet, satellites, etc.) and networks, causing widespread disruption. Large-scale cyber attacks or ransomware as well as massive incidents involving data fraud or theft affecting the organisation or the supply chain are some of the key cyber security risks that have the potential to cause massive economic damages, geopolitical tensions or widespread loss of trust in the internet.

Considering the large digital footprint of Reliance, ongoing efforts are required to continuously counter these evolving threats.

Some of the notable measures are:

1) A Continuous Improvement Program (CIP) for cyber security that was instituted across Reliance, to keep pace with ever increasing threats, has now been extended to cover the Critical Information Infrastructure located at plant operations.

2) While Reliance routinely conducts Cyber Security Awareness programs and ongoing user awareness connect activities across the Group, remote plant locations as well as international operations have also been brought under this awareness initiative.

3) Several businesses of Reliance are now benchmarked against ISO 27001, the global standard for ISMS (Information Security Management System)

4) Retail business operation’s card payment transaction processing is now certified to the global PCI DSS 3.2 (Payment Card Industry Data Security Standard)

c) Jio Customer Experience and Retention

Reliance Jio has now more than 186 million customers following an innovative customer acquisition strategy. Along with expansion of its current customer base, customer retention and experience are of utmost importance for Jio to generate sustainable business performance and return on its investments. Jio is committed to deliver on a differentiated customer experience and constant endeavour is to proactively mitigate any such risks that may weaken Jio’s value propositions, brand and customer loyalty.

Mitigation: To successfully capitalise on Pan-India all IP network, backed by extensive fiber to deliver next generation digital services and for ensuring sustained customer value proposition, Jio’s strategic and risk framework encapsulates the following mitigations/plans:

1) Leverage Jio’s Pan-India network footprint and digital ecosystem to expand Jio’s product offerings to diversify revenue sources and customer base.

2) Ongoing investments and operational excellence in the network infrastructure contributes to delivering on full population coverage with superior customer experience.

3) Jio Prime Membership Programme: A loyalty programme that not only offers most competitive monthly tariff plans in the industry, but also many other attractive deals and offers from both Jio and its partners to ensure retention and loyalty.

4) Jio pricing and tariff strategy focuses on continuous innovation on products/service offerings keeping various customer segment needs, requirements and affordability. The offerings are always benchmarked with best value and quality service assurance vis-à-vis competition.

Changes since last year:
There have been no significant changes in the nature of the risk exposures over the last 12 months.

II) Safety and Operational Risks

a) Health, Safety and Environmental (HSE) risks in Operations

Reliance is exposed to a wide spectrum of HSE risks, given the diversity and complexity of the industry, it operates in. The exploration & production of oil and gas and their further refining and processing is regulated by various HSE related regulations across the geographies where Reliance operates. A major HSE incident, such as fire, oil spill, security breach can result in loss of life, environmental degradation and overall disruption in business activities.

Mitigation: The Reliance HSE policy requires that ‘Safety of persons overrides all production targets’. This ensures that all employees strive for excellence in their own personal safety and the safety of others including employees, contractors, customers and the communities within which Reliance operates. Furthermore, Reliance believes that all injuries, occupational illnesses as well as safety and environmental incidents are preventable. Reliance focusses on process safety management as a key area to manage its risks. A separate Safety and Operational Risk (S&OR) function which is independent of the line provides oversight on safety & operating exposures and periodically conducts assessments and reviews to provide independent assurance on the conformance to the Operating Management System.

Changes since last year:
All entities within the Reliance Group have progressed risk management through its annual risk review process which is in place upto facility level. This process confirms that controls are in place and it sets priorities for further risk reduction or elimination. Accountabilities for risk reduction actions are clear and actions tracked. A cascaded governance structure is in place to provide risk oversight. Additionally, for the highest risks, action plans have been defined and endorsed by Executive Management involving capital investments as well as enhancing administrative and operational controls.

Reliance has made good progress in enhancing conformance to the requirements of its integrated Operating Management System (OMS). The transition to the OMS was prioritised with a proactive focus on incident prevention. The focus was on those OMS sub-elements which have a high impact on process safety, reliability and control of day-to-day activities performed by its personnel. Conformance to OMS requirements are continuously monitored through a three lines of defense model. These initiatives contribute to safety and operating excellence delivering HSE Excellence.

b) Safety and environmental risks during Transportation

Technical integrity failure, natural disasters, extreme weather, human error and other adverse events or conditions could lead to loss of containment of hydrocarbons or other hazardous materials, as well as fires, explosions or other personal and process safety incidents during transportation by road, sea or pipeline.

Reliance is exposed to a complex and diverse range of marine risk including: exploration vessels, oil tankers, chemical tankers, gas tankers, dry cargo vessels, operating ethane vessels, operating chemical tankers, operating a large fleet of tugs and port service vessels as well as owning and operating a significant amount of port and terminal infrastructure. With 96% of all crude being supplied to Reliance by vessel and the overwhelming majority of refined products being exported by vessel it is essential that these activities are actively managed to avoid HSE incidents, oil spills or disruption to business activities and processes.

Mitigation: An augmented ship vetting programme has been introduced to ensure that all vessels contracted to carry Reliance cargoes undergo an enhanced risk assessment screening using state-of-the-art predictive risk software. For incident response in shipping formal documentation and cascading has been completed.

Reliance is further improving the controls framework for road transportation working hand in hand with its contractors. Reliance has enhanced its capabilities through defensive driving training, route hazard mapping and real time tracking. Contractors are able to use these in an integrated way to deliver safe operations while on contract with Reliance.

Changes since last year:
Road transport contractors have been utilising the services for improving safety in their operations. The emergency response communication facility has been enhanced through a dedicated emergency response centre for road transportation in the country so that contractors can immediately respond to any emergency.

c) Physical Security and Natural Calamity risks

Hostile acts such as terrorism or piracy could harm the Company’s people and disrupt its operations. Some of Reliance’s sites are also subject to natural calamities such as floods, cyclones, lighting and earthquakes. If the Company does not respond, or is perceived to not respond, in an appropriate manner to either an external or internal crisis, its business and operations could be severely disrupted. Inability to restore or replace critical capacity to the required level within an agreed timeframe would prolong the impact of any disruption and could severely affect Reliance’s business and operations.

Mitigation: Reliance maintains a proactive posture by continuously monitoring and assessing emerging threats, vulnerabilities and risks to manage its physical security. Global Corporate Security (GCS) is a distinct function of Reliance mandated to de-risk, safeguard and secure the Company by harnessing expertise from across the spectrum. The group security function and embedded security teams provide assurance to businesses at all levels with respect to the management of security risks affecting its people, assets and operations. It actively monitors the threat landscape to prevent/mitigate risks using a ‘de-risking’ framework, ensuring safe operations and business continuity.

To respond to natural calamities, Reliance maintains disaster recovery, crisis and business continuity management plans to respond to a disruption or an incident.

Changes since last year:
Despite the prominence and increased perception of environmental and natural disasters, cyber and terrorism risks continue to be increasing globally. Intelligence based on detailed analysis of past events and emerging trends indicate that dealing with these threats is likely to become more complex in the inter-connected world. Continuous application of pre-emptive mitigation measures is being ensured to reduce exposure levels. Reliance is proactively engaging with as many stakeholders as possible through external strategic interventions to mitigate future security risks to Reliance. This includes capitalising and strengthening sustainable relationship with the government agencies to enhance the security cover at an enterprise level, especially against terrorism.

III) Compliance and Control Risks

a) Regulatory compliance risks

The evolution of the global regulatory environment and at home the Government of India’s ambition for reforms and transparency has resulted into increased regulatory scrutiny that has raised the bar with regards to regulatory compliance. This signifies the alignment between corporate performance objectives, while ensuring compliance with regulatory requirements.

Mitigation: Reliance recognises that meeting all applicable regulatory requirements can be challenging. A comprehensive and digitally enabled compliance management framework has been deployed which is designed to:

• Understand changes in regulatory standards in a timely manner and assess their impact to strengthen decision-making processes and integrate these in the business strategy of each of the industries in which it operates;
• Convergence of risk, compliance processes and controls mechanisms to ensure continued operational efficiency and effectiveness of business processes;
• Assign single point of accountability for compliance activities in the organisation.

Changes since last year:
With GST being implemented as a regime change for the country, the efforts have been focussed on a seamless migration. There have been no significant changes in the nature of risk exposures related to other regulatory compliances during the last 12 months. Automation of a comprehensive compliance management framework has been key for this period and has been successfully implemented across the Group in India, resulting in better and transparent controls related to regulatory compliances.

IV) Financial Risks

a) Treasury risks

Treasury risks include, among others, exposure to movements in interest rates and foreign exchange rates. Reliance also maintains sufficient liquidity, so that it is able to meet its financial commitments on due dates and is not forced to obtain funds at higher interest rates. It has access to markets worldwide and uses a range of products and currencies to ensure that its funding is efficient and well diversified across markets and investor types.

• Interest Rate risk
  Reliance borrows funds from domestic and international markets to meet its long-term and short-term funding requirements. It is subject to risks arising from fluctuations in interest rates.

Mitigation: The interest rate risk is managed through financial instruments available to convert floating rate liabilities into fixed rate liabilities or vice versa, and is aimed at reducing the cost of borrowings.

• Foreign Exchange risk
  Reliance prepares its financial statements in Indian Rupee (INR), but most of the payables and receivables of hydrocarbon business are in US Dollars, minimising the cash flow risk on account of fluctuations in foreign exchange rates. Reliance avails long-term foreign currency liabilities (primarily in USD, Euro and JPY) to fund its capital investments. Reliance also avails short-term foreign currency liabilities to fund its working capital.

Mitigation: Foreign exchange risk arising from mismatch of Foreign Currency Assets, Liabilities and Earnings is tracked and managed within the risk management framework.

The foreign exchange market is highly regulated and Reliance ensures compliance with all the regulations.

Changes since last year:
There have been no significant changes in the nature of the risk exposures over the last 12 months. Monitoring mechanisms within the Treasury function have been enhanced to further strengthen the control framework.

3) How Reliance Manages Risk

Reliance manages, monitors and reports on the principal risks and uncertainties that can impact its ability to achieve its strategic objectives. The Company’s risk management framework encompasses internal control in an integrated manner and is tailored to the specific Reliance segments, businesses and functions. It takes into account various factors such as the size and nature of the inherent risks and the regulatory environment of the individual business segment or operating company.

The Reliance management systems, organisational structures, processes, standards, code of conduct and values and behaviours together govern how Reliance conducts its business and manages associated risks.

Reliance’s risk management framework is designed to be a simple, consistent and clear framework for managing and reporting risks from the Group’s operations to the Board. The framework and related processes seek to avoid incidents and maximise business outcomes by allowing management to:

• Understand the risk environment and assess the specific risks and potential exposure for Reliance
• Determine how to deal best with these risks to manage overall potential exposure
• Manage the identified risks in appropriate ways
• Monitor and seek assurance of the effectiveness of the management of these risks and intervene for improvement where necessary
• Report up the management chain to the Board on a periodic basis about how risks are being managed, monitored, assured and the improvements that are being made

3.1) Group Risk Management Framework

The Group Risk Management Framework is designed to help ensure risk management is an integral part of the way that Reliance works everywhere to enable risks to be identified, assessed and managed appropriately. The Group Risk Management Framework comprises three levels:

• Oversight and Governance - Reliance’s Board, along with executive and functional leadership have articulated an absolute commitment of the Group to effective risk management and provides oversight to identify and understand significant risks; both long-term (such as climate related risks, opportunities and its financial impacts) and short-term (such as commodity price risks, exchange fluctuation risk etc.). They also put in place systems of risk management, compliance and control to mitigate these risks. Dedicated Executive sub-committees review and monitor group risks throughout the year depending on the criticality and impact with the respective risk owners to drive a risk management culture.
• Business and Strategic Risk Management - Through Business Risk and Assurance Committees (BRAC), Reliance businesses and functions manage risk as part of key business processes such as strategy, planning, operations, performance management, resource and capital allocation and project appraisal. The BRAC’s do this by collating risk data, assessing risk management activities, reviewing near misses and incidents through root cause analysis followed by implementation of required improvements.
• Day-to-day Risk Management - Management and staff at Reliance’s facilities, assets and functions identify and manage risk, promoting safe, compliant and reliable operations. For example, Reliance’s Group-wide Operating Management System (OMS) integrates Reliance requirements on health, safety, security, environment, social responsibility, operational reliability and related issues. These requirements, along with business needs and the applicable legal and regulatory requirements, underpin the practical plans developed to help reduce risk and deliver strong, sustainable performance.

3.2) Continuous Assurance Through the

Three Lines of Defense

Reliance has adopted a Three Lines of Defense model to enable continuous and real time assurance on key risk exposures and the ongoing effectiveness of controls.

First Line of Defense
Business and functional Leaders continuously verify for themselves that risk management activities they have in place are effective. In conjunction with the risk management activities themselves, this monitoring activity provides the first line of defense.

Second Line of Defense
A network of functional experts provides functional assurance to the businesses in their area of expertise by:

1) Providing a view, independent of the line, of risks within their area of functional expertise

2) Setting standards for the management of risks and provide guidance on mitigations to relevant businesses in their area of expertise

3) Monitoring or verifying the effectiveness of controls and other risk management activities completed by the business

Third Line of Defense - Group Audit
Reliance has established an independent Group Audit function, reporting to the Chairman of the Board and the Audit Committee. The Group Audit function is mandated to provide assurance and advisory support on the management systems that manage the key group risks across all subsidiaries and investments by the Reliance Group. Group Audit function is aligned to the key business segments in order to deliver Group Wide assurance coverage as part of the third line of defense.

The Group Audit function has been set up as a multi-disciplinary teams that deliver assurance across all areas of risk including strategic & commercial, safety & operational, compliance & control and financial risks across all business segments. Specialised resources, real time assurance technologies, data mining, analytic techniques and external benchmarking of best practices are leveraged extensively to achieve Group-wide assurance coverage and deliver audits in an efficient and effective manner. The Group Audit function operates in line with international auditing standards and continuously improves its functional capabilities to achieve world-class assurance best practices.

Digital Platforms

Kiran Thomas

Anish Shah

Rui Bastos

Leveraging Digital technology capabilities to enable rapid innovation, organizational agility and market responsiveness

Reliance is moving to a digital strategy that leverages the new digital and cloud capabilities to create new value propositions for the businesses and markets in which Reliance operates.

Reliance’s digital strategy aims to reformulate a company’s value proposition in the markets in which it operates by integrating a combination of products and digital services that seek to anticipate and respond to current and future customer needs. To consistently deliver new digital solutions, Reliance is investing in new digital business capabilities:

• A cloud enabled operational IT backbone to drive efficiency and operational excellence,
• A digital services platform to support business agility and rapid innovation through new digital products and services.

Reliance has built its operational IT backbone over many years for all its businesses. Existing operational IT backbones provide foundational capabilities that are needed to enable digital services platforms but have historically been designed for reliability and efficiency, rather than speed, agile development and elastic scaling required for rapid digital innovation.

Reliance is therefore evolving its existing operational IT backbone with technology and business capabilities to build and operate digital services platforms which deliver on its digital strategies, while still ensuring the efficiency, scalability, reliability, and predictability of Reliance’s core operations.

Digital services platform enable rapid innovation and agile change through technology and business capabilities that facilitate rapid development and implementation of digital solutions and innovations. The architecture of a digital services platform also facilitates experimentation and reusability of technologies and digital services to improve operational performance, user experiences and new sources of value. The Reliance digital services platforms strategy includes the rollout of 4 key elements:

1) Software as a service (SaaS) based platforms - Cloud based hosting environments for storing and accessing loosely connected services which deliver business solutions and services

2) Enterprise data lake - Integrated repository of massive amounts of data, whether from internal and public sources (e.g., from social media), purchased or derived from sensors (e.g. IoT)

3) Analytics and Data Science engines - Computing capabilities used for converting data into meaningful insights through data visualization, machine learning and artificial intelligence

4) Enterprise Integration capabilities - Scalable connections to data and processes that reside in the company’s operational backbones.

The deployment of cloud enabled operational IT backbones and digital services platforms also require developing and embedding fundamental management practices related to:

• Rapid innovation and agility in identifying emerging trends and opportunities
• Cross-functional development of digital solutions and usercentered product and service design that integrate business partners (customers, suppliers, other stakeholders)
• Agile development and DevSecOps practices and the use of MVP (minimum viable product) concepts and continuous improvement capabilities and mindsets
• Leveraging business insights from big data repositories of structured and unstructured data
• Reusing and redeploying plug-and-play technologies and business skills and capabilities

Moving to digital services platform strategy is therefore a strategic investment in building integrated, difficult-toreplicate capabilities that deliver and sustain Reliance’s long term strategy in a digital future.

Awards and Recognitions

Business Leader Award for Corporate Excellence

Golden Peacock Award CSR - 2017

Golden Peacock Award

Most innovative project - CII

Leadership

• Shri Mukesh D. Ambani won ET Business Leader award for corporate excellence in 2017
• Shri Mukesh D. Ambani ranked amongst the World’s 50 Greatest Leaders by Fortune Magazine in 2018
• Shri Mukesh D. Ambani is the only Indian business leader to be ranked amongst the ‘World’s 75 Most Powerful People’ by Forbes magazine
• Smt. Nita M. Ambani, India’s first woman member of the International Olympic Committee, made it to two prestigious commissions: Olympic Channel Commission and Olympic Education Commission
• Smt. Nita M. Ambani, founder of Reliance Foundation felicitated by Metropolitan Museum of Art for her philanthropic work

Human Resources

• Recognised as one of the 25 companies in the LinkedIn 'Top companies - where India wants to work' list-2018
• Won Golden Peacock Award 2017 for Corporate Ethics
• Three employees of RIL received ‘Shram Awards’ declared by Government of India organised by Ministry of Labour and Employment at Vigyan Bhavan, Delhi held on 26^th February 2018

Quality

• A “Quality Circle- Lakshya” from HDPE Plant was awarded with highest category “Gold Award” at International Convention on Quality Control Circles (ICQCC) 2017
• ‘Jazbaa’ Quality Circle was awarded with ‘Par Excellence Award’ and ‘Topaz’ Quality Circle was awarded with ‘Distinguished Award’ at the 31^st Annual Convention of National Level competition on Quality Concepts (NCQC) 2017

Energy and Water Conservation/ Efficiency

• Received Excellent Energy Efficient Unit Award at CII’s 18th National Award for Excellence in Energy Management in 2017
• A chlor-alkali plant received the best performer award under PAT scheme by BEE in 2017
• First petrochemical complex in India to achieve CII “GreenCo Gold” certification

Technology, Patents, R&D and Innovation

• Received highest category ‘Gold’ rating by International Research Institute for Manufacturing at IGMC Award 2017
• Received the ‘Drivers of Change’ award at the Financial Times ArcelorMittal Boldness in Business Awards
• ‘Best Innovation Award’ in R&D at RTM for development and commercialisation of low cost anti-coking and sulphiding additive
• Won the IBC Innovation Award 2017
• Product innovator of the year in petrochemical sector by FICCI for ‘Indigenous Technology for Polypropylene Catalyst & External Donor system for Raffia grade’
• 8th PLASTICON award for innovation in green technology for ‘High Energy Efficient & Zero Residue Process For High Performance Catalyst For Producing Homo & Impact PP’
• ICC - Acharya PC Ray award for RIL First-to-World RELS precursor based Polypropylene Catalyst Technology Development
• ICC award for “Excellence in Process Design and Engineering” for development and commercialisation of indigenous technology for benzene recovery from FCC gasoline

Capital Resources

• The Asset Corporate Award – Platinum Award, 2017 to Reliance Industries Limited. Highest industry recognition bestowed by The Asset to leading corporates in Asia
• The Asset Triple A Asian Awards, 2017 – Best Syndicated Loan for Reliance Industries Limited’s US$ 1.75 billion syndicated term loan facilities
• Asia Pacific Loan Markets Association (APLMA) –Syndicated Corporate Deal of the Year Award for Reliance Industries Limited’s US$ 1.75 billion syndicated term loan facilities

Health, Safety and Environment

• Won the Golden Peacock Eco-innovation Award 2017 for reducing its carbon footprint in Recron Green Gold products
• Received Gold Award for outstanding achievement in Safety Management in Textile Sector at the 16^th Annual Greentech Safety Award 2017
• Received “Golden Peacock Environment Management Award 2017” in the “Petroleum sector”
• Received the “Most Innovative Project” at “CII - Environmental Best Practices Awards 2017”
• Globally certified as a ‘Healthy Workplace’ by Global Centre for Healthy Workplaces, Tucson, USA for the period of 2017-2019
• CASHe and Wellness initiatives won a Special Mention Award by International SOS foundation in the innovation category of Duty of Care Awards 2017

Risk Management

• Received the award for Best Risk Management Framework & Systems– Conglomerate at India Risk Management Awards 2018

Corporate Social Responsibility

• Won Golden Peacock Award 2017 for CSR.
• Reliance Foundation was awarded ‘Rashtriya Khel Protsahan Puruskar’ by Honourable President on the occasion of National Sports Day for its contribution towards promotion of sports
• RF Jr. NBA programme entered the Guinness Book of World Records as over 3400 Jr. NBA students received basketball lessons from the legendary Kevin Durant in the world’s largest ever tech-enabled NBA clinic held for future basketball talent
• Reliance Foundation received mBillionth Award South Asia 2017 under Agriculture & Environment Category for its information services to farmers, fish folks and livestock owners
• Reliance Foundation received India CSR community initiative award 2017 for supporting the flood affected communities through technology driven digital platforms during relief operations in Madhya Pradesh
• Reliance Foundation received the Best Corporate Supporter of Indian Sports at the third Mahindra Scorpio Times of India Awards for its contribution towards promoting multiple sports in the country
• Received to Gold IAA Olive Crown Awards 2018 under the categories “Corporate Crusader of the Year” and “Events”

Sustainability

• Won the best ‘Sustainable Corporate of the year’ 2018 at Sustainability 4.0 awards by Frost and Sullivan and TERI
• Won the ‘Golden Peacock Award for Sustainability’ in 2017 in the ‘Petroleum Sector’
• Reliance Corporate Park recognised as ‘Iconic Indian Project in Energy Efficiency and Sustainability’ in ACREX Hall of Fame 2018
• Received ‘Commendation for Significant Achievement in Corporate Excellence’ from CII in sustainability

Retail

• Reliance Smart was awarded ‘Hypermarket of the Year’ at Annapoorna Food Retail Awards 2017
• Reliance Digital was awarded ‘Consumer Durables Retailer of the Year’ at Star Retailer Awards
• Reliance Digital won ‘CDIT & Telecommunications Retailer of the Year’ in India Retail Awards 2017
• Reliance Jewels won ‘Innovative Jewellery of the Year’ award at Gemsfield Retail Jewellery Award 2017
• Petro Marketing training won two awards at the CLO Awards organised and evaluated by TISS and Leap Vault

Digital Services

• Reliance Jio ranked 17^th in American business magazine Fast Company’s ‘50 Most Innovative Companies list’ 2018
• Won ‘Best Mobile Operator Service for Consumers’ at Global Mobile Awards 2018
• JioTV won the ‘Best Mobile Video Content’ award at Global Mobile Awards 2018
• Won ‘Global Game-Changer Award’ in the seventh edition of the Marico Innovation Foundation Awards 2018
• Won gold for best work in the ‘Brand Identity’ category at the German Design Awards 2018
• Won ‘Innovative Mobile TV’ award for ‘Jio TV’ at the 8th edition of Aegis Graham Bell Awards
• Won ‘Data Science’ award for its innovation ‘Smart Network Coverage’ at the 8th edition of Aegis Graham Bell Awards
• Won ‘Best Integration of Digital Content with TV’ award in Prime Time Awards 2017
• Won bronze medal in ‘Best Integrated TV campaign’ award in Prime Time Awards 2017
• Won the ‘Best Mobile Game for Marketing’ award in the 8th edition of India Digital Awards 2018
• Awarded ‘The Disruptor’ title in CNBC TV18 India Business Leader Award 2018

Media

• CNBC TV18 and CNBC AWAAZ were awarded with the English and Hindi Business News Channel of the Year respectively, at the exchange4media News Broadcasting Awards (ENBA) 2018
• India Business Hour won the ENBA Best Business Program award
• VOOT awarded the coveted ‘Best of 2017’ apps by the iOS App Store
• VOOT’s Progressive Web App product was awarded the IBC Global Innovation Award 2017 in Amsterdam
• MoneyControl was awarded the Best Mobile App for Business at the GSMA Asia Awards in June 2017