Reliance Industries Limited Enhancing the quality of life. Starting up to a digital life. Annual Report 2015-16 Review of Operations Refining and Marketing Petroleum refining and marketing (R&M) is an integral part of Reliance’s drive for growth and global leadership in the core energy and materials value chain. PERFORMANCE IN FY 2015-16 RECORD EBIT `23,598 CRORE 49.1% y-o-y FY 2015-16 `23,598 crore FY 2014-15 `15,827 crore REGIONAL MARGINS (US$/BBL) USGC FY 2015-16 US$11.8/bbl FY 2014-15 US$12.4/bbl Rotterdam FY 2015-16 US$6.3/bbl FY 2014-15 US$5.4/bbl Singapore Complex FY 2015-16 US$7.5/bbl FY 2014-15 US$6.3/bbl RIL FY 2015-16 US$10.8/bbl FY 2014-15 US$8.6/bbl RIL outperformed Singapore benchmark with a premium of US$3.3/bbl Top to Bottom: Aromatics Complex at Jamnagar • Jamnagar SEZ Refinery Facing Page, Top to Bottom: Employee at Jamnagar Refinery • Port Jetty at Jamnagar 26 Corporate 02 Management 55 148 Financial 256 Shareholder 380 Overview 54 Review 147 Governance 255 Statements 379 Information 396 Review of Operations COMPETITIVE STRENGTH ACHIEVEMENTS IN FY 2015-16 • Largest single site refinery: US$10.8 bbl Crude processing capacity of 1.24 Refining margins outperformed MMBPD Singapore benchmark with premium of US$3.3/bbl • Robust configuration: Nelson Complexity Index of 12.7 US$19.3 billion Total exports of refined products • Ability to sustain high operating rates: State-of-the-art operating Over 1,000 and maintenance practices Petroleum retail outlets operational currently • Dedicated world-scale port facilities: Strong crude and product 230 KL/month freight economics One of the highest throughputs per outlet • Ability to process wide range of challenging crudes: Competitive 66 feedstock costs Different crude grades processed during the year • Flexibility to swing product slate: Agile and opportunistic response Petcoke Gasification to volatile markets The petcoke gasification project is on track towards achieving sustainable long- • RIL’s robust logistics set-up and term energy cost reduction proficient product placement team enables placement of large Every 4.3 minutes volumes of refined product An aircraft is fuelled by Reliance globally 80% • Integrated supply and trading team y-o-y increment in RIL’s sales to airlines in works real-time with the refinery terms of volume operations to optimise asset utilisation Top to Bottom: Aromatics Complex at Jamnagar • Jamnagar SEZ Refinery Facing Page, Top to Bottom: Employee at Jamnagar Refinery • Port Jetty at Jamnagar Read more about Refining and Marketing operations on Pg. 62 2727 Reliance Industries Limited Enhancing the quality of life. Starting up to a digital life. Annual Report 2015-16 Review of Operations Petrochemicals RIL offers an extensive range of polymers, polyesters, fibre intermediates, aromatics and elastomers providing world-class experiences to its customers across a range of applications. End-use sectors include packaging, infrastructure, agriculture, automotive, housing, and healthcare among others. PERFORMANCE IN FY 2015-16 RECORD EBIT `10,221 CRORE 23.3% y-o-y FY 2015-16 `10,221 crore FY 2014-15 `8,291 crore OVERALL PETROCHEMICAL PRODUCTION IN INDIA 24.7 MMT 12.3% y-o-y FY 2015-16 24.7 MMT Top to Bottom: FY 2014-15 22.0 MMT Petrochemical Cracker • Safety first practised Facing Page, Top to Bottom: Polyester bobbins • Latest take-up winders in the new polyester production unit 28 Corporate 02 Management 55 148 Financial 256 Shareholder 380 Overview 54 Review 147 Governance 255 Statements 379 Information 396 Review of Operations COMPETITIVE STRENGTH ACHIEVEMENTS IN FY 2015-16 • World’s leading producer of 2.3 MMTPA PTA petrochemicals with global scale capacity successfully commissioned capacities 4.65 MMTPA • 11 manufacturing locations in India and 3 PTA capacity - global capacity in Malaysia share of 4% • Diversified feedstock mix, with both 33% naphtha and gas based crackers Domestic polyester market share • Vertical integration from oil and gas to 36% refining and downstream petrochemical Domestic polymer market share products World’s largest • Focus on technology leadership, cost single location bottle grade PET resin efficiencies and responsible operational plant at Dahej practices Recron Green Gold is one of the greenest fibres globally Top to Bottom: Petrochemical Cracker • Safety first practised Facing Page, Top to Bottom: Polyester bobbins • Latest take-up winders in the new polyester production unit Read more about Petrochemicals operations on Pg. 69 29 Reliance Industries Limited Enhancing the quality of life. Starting up to a digital life. Annual Report 2015-16 Review of Operations Oil and Gas Reliance is one of the largest exploration and production players in India. RIL’s upstream portfolio consists of onshore and offshore blocks in India as well as acreages in US Shale play. PERFORMANCE IN FY 2015-16 KG D6 JV PRODUCTION BCF MMBBL 139.1 1.8 Gas Oil and condensates US SHALE JV PRODUCTION BCFe/day ~1.26 Gas 7% y-o-y FY 2015-16 1.26 BCFe/day FY 2014-15 1.17 BCFe/day EBIT Top to Bottom: Control Riser Platform at KG D6 offshore • Floating Production `378 CRORE Storage and Offloading at MA Field location Facing Page, Top to Bottom: Eagle Ford Drilling site • Employees working at Control Riser Platform 30 Corporate 02 Management 55 148 Financial 256 Shareholder 380 Overview 54 Review 147 Governance 255 Statements 379 Information 396 Review of Operations COMPETITIVE STRENGTH ACHIEVEMENTS IN FY 2015-16 • Strong offshore capabilities in 203.8 BCFe India RIL’s share of production (CY 2015) in US shale operations • Strategic partnership with BP in the domestic upstream business US$1.07 billion Monetisation of RIL’s entire interest in EFS • Leveraging the existing Midstream LLC for, unlocking significant infrastructure, knowledge and value for shareholders experience 1,040 • Achieved materiality in the Shale gas producing wells at the end of unconventional business CY 2015 • Balanced portfolio with growth 124 BCFe potential RIL’s share of production in India 2.61 TCFe RIL’s share of proved US Shale reserves CBM Project Nearing completion Read more about Oil and Gas operations on Pg. 78 31 Reliance Industries Limited Enhancing the quality of life. Starting up to a digital life. Annual Report 2015-16 Review of Operations Retail Reliance Retail’s nationwide network of retail outlets delivers a world-class shopping environment and unmatched customer experience powered by state-of-the-art technology and seamless supply-chain infrastructure. PERFORMANCE IN FY 2015-16 REVENUE `21,612 CRORE 22.5% y-o-y 29% CAGR FOR 5 YEARS FY 2015-16 `21,612 crore FY 2014-15 `17,640 crore EBIT `506 CRORE 21.3% y-o-y FY 2015-16 `506 crore FY 2014-15 `417 crore Top to Bottom: Reliance Digital, Hamley’s, Reliance Trends Facing Page: Reliance Fresh 32 Corporate 02 Management 55 148 Financial 256 Shareholder 380 Overview 54 Review 147 Governance 255 Statements 379 Information 396 Review of Operations COMPETITIVE STRENGTH START-UPS AND INITIATIVES ACHIEVEMENTS IN FY 2015-16 • Integrated ‘offline-online’ model to • Launched www.ajio.com, the 3,245 differentiate customer experience curated fashion and lifestyle Stores operated with over 12.8 million e-commerce platform square feet of retail space across India • Experience in managing multiple business and currently operating 3,383 stores models of retail, wholesale, licensing, joint • India ke Hunger ki Bajao - Reliance ventures and emerging multi-channel Fresh has joined hands with 624 commerce Akshay Patra, an NGO which serves New stores added during the year nutritious meals to over 1.4 million • Ability to manage complexity, scale, speed children in more than 10,000 40+ and diversity across retail concepts and schools across 10 states of India Brands portfolio span across the entire operating environments spectrum of luxury, bridge to luxury, • During the year, Reliance Retail high-premium and high-street • Best-in-class infrastructure of IT systems launched ‘LYF’ its own brand of 4G lifestyle space and supply chain enabling scale, speed and LTE smartphone and 4K televisions efficiency 30 million • For pan India distribution set-up Registered members under customer • Largest portfolio of international brands over thousand distributors were loyalty programme making Reliance Retail a partner of choice on-boarded with another 1,20,000 device outlets signed Over 500 Cities and towns covered • Launch of 2 new renowned international brands - BCBG MAX Reliance Retail 2.0 initiatives Azria and Juicy Couture Encompassing Fashion and Lifestyle e-commerce, development of market place platforms and building of a distribution ecosystem for 4G devices are on track and are being rolled out in a phased manner Largest cash and carry player Reliance Market continues to build on its leadership position as the largest cash and carry player Read more about Retail operations on Pg. 88 33 Reliance Industries Limited Enhancing the quality of life. Starting up to a digital life. Annual Report 2015-16 Review of Operations Digital Services Jio promises to shape the future of India by providing end-to-end digital solutions for businesses, institutions and households and seamlessly bridging the rural-urban divide. SPECTRUM 846.1 MHz INFRASTRUCTURE 8,100 KM Cable System - Bay of Bengal Gate 2,50,000+ KM Largest fibre network ~5,00,000 SQ. FT. Integrated data centres PRESENCE 29 STATES 18,000+ towns 1,50,000+ villages 34 Corporate 02 Management 55 148 Financial 256 Shareholder 380 Overview 54 Review 147 Governance 255 Statements 379 Information 396 Review of Operations COMPETITIVE STRENGTH ACHIEVEMENTS FOR FY 2015-16 • With proposed investment outlay of over `1,50,000 crore, • As part of the trial launch currently over 15 lakh users are Jio is the world’s largest start-up.