RELIANCE INDUSTRIES LIMITED
ANNUAL REPORT 2010-2011
DIRECTOR'S REPORT
Dear Shareholders,
Your Directors are pleased to present the 37th Annual Report and the
audited accounts for the financial year ended March 31, 2011.
Financial Results:
The financial performance of the Company, for the year ended March 31, 2011
is summarised below:
2010-2011 2009-2010
Rs. crore $Mn* Rs. crore $Mn*
Profit before
Depreciation, Interest
& Tax 41177.44 9234 33041.18 7359
Less: Interest 2327.62 522 1997.21 445
Depreciation 16241.33 13477.01
Less: Transfer from
Revaluation Reserve 2633.75 13607.58 3051 2980.48 10496.53 2338
Profit before Tax 25242.24 5661 20547.44 4576
Less: Provision for
Current Taxation 4320.44 969 3111.77 693
Provision for Deferred
Tax 635.50 143 1200.00 267
Profit after Tax 20286.30 4549 16235.67 3616
Add: Balance in Profit
and Loss Account 4999.45 1114 5384.19 1199
Amount Available for
Appropriation 25285.75 5663 21619.86 4815
Appropriation:
General Reserve 16000.00 3588 14000.00 3118
Debenture Redemption
Reserve - - 189.50 42
Dividend on Equity Shares 2384.99 535 2084.67 464
Tax on Dividend 386.90 87 346.24 77
Balance carried to
Balance Sheet 6513.86 1453 4999.45 1114
25285.75 5663 21619.86 4815
* 1 $ = Rs. 44.595 Exchange Rate as on March 31, 2011
(1 $ = Rs. 44.90 as on March 31, 2010)
Results of Operations:
The first full year of operations, after commissioning of the Company's two
large scale projects namely KG D6 and SEZ refinery at Jamnagar, resulted in
a record performance during the financial year under review.
* Turnover increased by 29% to Rs. 2,58,651 crore ($ 58.0 billion)
* Exports increased by 33% to Rs. 1,46,667 crore ($ 32.9 billion)
* PBDIT increased by 25% and achieved a record level of Rs.41,178 crore ($
9.2 billion)
* Profit Before Tax increased by 23% to Rs. 25,242 crore ($ 5.7 billion)
* Cash Profit increased by 24% to Rs. 34,530 crore ($ 7.7 billion)
* Net Profit increased by 25% to Rs. 20,286 crore ($ 4.5 billion)
* Gross Refining Margin at $ 8.4 /bbl for the year ended March 31, 2011.
The Company is one of India's largest contributors to the national
exchequer primarily by way of payment of taxes and duties to various
government agencies. During the year, a total of Rs. 28,719 crore ($ 6.4
billion) was paid in the form of various taxes and duties.
Dividend:
Your Directors have recommended a dividend of Rs. 8/-per Equity Share (last
year Rs. 7/- per Equity Share) for the financial year ended March 31, 2011,
amounting to Rs. 2772 crore (inclusive of tax of Rs. 387 crore) one of the
highest ever payout by any private sector domestic company. The dividend
will be paid to members whose names appear in the Register of Members as on
May 9, 2011; in respect of shares held in dematerialised form, it will be
paid to members whose names are furnished by National Securities Depository
Limited and Central Depository Services (India) Limited, as beneficial
owners.
The dividend payout for the year under review has been formulated in
accordance with the Company's policy to pay sustainable dividend linked to
long term growth objectives of the Company to be met by internal cash
accruals and the shareholders' aspirations.
Credit Rating:
The Company continues to have the highest domestic credit ratings of AAA
from CRISIL and Fitch. Moody's and S&P have reaffirmed investment grade
ratings for international debt of the Company, as Baa2 and BBB,
respectively. Its continued Balance Sheet strengthning in financial year
2010-11, resulted in Moody's, Fitch and S&P recently upgrading their
outlook for the Company from Stable to Positive. The Company's
international rating from S&P is higher than the country's sovereign
rating. Strong credit ratings by leading international agencies reflect the
Company's financial discipline and prudence.
Employees Stock Option Scheme:
The Company implemented the Employees Stock Option Scheme (Scheme'') in
accordance with the Securities and Exchange Board of India (Employee Stock
Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 (the
SEBI Guidelines'). The Employees Stock Compensation Committee, constituted
in accordance with the SEBI Guidelines, administers and monitors the
Scheme.
The applicable disclosures as stipulated under the SEBI Guidelines as at
March 31, 2011 (cumulative position) are given below:
a. Options Granted 5,96,61,400
b. Exercise Price
Options Granted Exercise Price
(plus applicable taxes)
5,74,56,000* 642*
54,000* 842*
20,16,000* 1146*
1,00,200* 644.50*
16,000 995
19,200 929
*adjusted for bonus issue
c. Options Vested 1,65,41,026
d. Options Exercised 36,79,706
e. The total number of shares arising 36,79,706
as a result of exercise of Options
f. Options Lapsed 1,24,30,574
g. Variation in terms of Options -
h. Money realised by exercise Rs. 261.39 crore
of Options
i. Total number of Options in force
[(a)-(d)-(f)] 4,35,51,120
j. Employee wise details of Options granted to:
i. Senior managerial personnel
1. Shri Nikhil R. Meswani 14,00,000
2. Shri Hital R. Meswani 14,00,000
3. Shri P.M.S. Prasad 10,00,000
4. Shri P.K. Kapil 1,00,000
ii. Any other employee who received a grant
in any one year of Options amounting to
5% or more of Options granted Nil
iii. Identified employees, who were granted
Options, during any one year, equal to or
exceeding 1% of the issued capital (excluding
outstanding warrants and conversions) of the
Company at the time of grant Nil
k. Diluted Earnings Per Share (EPS) before
exceptional items pursuant to issue of shares
on exercise of Options calculated in accordance
with Accounting Standard (AS) 20 Earnings Per Share' Rs. 62.00
The issuance of equity shares pursuant to exercise of Options does not
affect the profit and loss account of the Company, as the exercise is made
at the market price prevailing as on the date of the grant plus taxes as
applicable.
The Company has received a certificate from the Auditors of the Company
that the Scheme has been implemented in accordance with the SEBI Guidelines
and the resolution passed by the shareholders. The Certificate would be
placed at the Annual General Meeting for inspection by members.
Management's Discussion and Analysis Report
Management's Discussion and Analysis report for the year under review, as
stipulated under Clause 49 of the Listing Agreement with the Stock
Exchanges in India, is presented in a separate section forming part of the
Annual Report.
The Company has entered into various joint ventures, partnerships and
contracts in the area of oil and gas, refining and petrochemicals
businesses. While benefits from such contracts will accrue in future years,
their progress is periodically monitored.
In line with its aspirations of ongoing growth, Reliance is investing its
resources in core business across the integrated energy chain. While doing
so, the Company is also taking the initiative of investing in new
technologies and businesses that help meet changing aspirations of millions
of Indian consumers. These strategies and initiatives are aimed at ensuring
that Reliance delivers long-term sustainable growth and creates
unprecedented value for all its stakeholders.
Some of the major events of the year include the following:
* RIL-BP alliance:
RIL has entered into a strategic partnership with BP and signed the
relationship framework and transactional agreements. The partnership across
the full value chain comprises BP taking a 30% stake in 23 oil and gas
production sharing contracts that Reliance operates in India, including the
producing KG-D6 block. The two companies will also form a 50:50 joint
venture for the sourcing and marketing of gas in India and will endeavour
to accelerate the creation of infrastructure for receiving, transporting
and marketing of natural gas in India. BP will pay an aggregate
consideration of $ 7.2 billion for the interests to be acquired in the 23
production sharing contracts. Future performance payments of up to $ 1.8
billion could be paid based on exploration success that results in
development of commercial discoveries.
* Shale gas joint ventures:
During the year, the Company, through its subsidiaries, in the United
States of America entered into three distinctive joint venture agreements
with Atlas Energy, Pioneer Natural Resources and Carrizo Oil & Gas and
acquired 40%, 45% and 60% interests, respectively in the shale gas acreage
positions to be explored by these joint ventures. The net Shale acreage
acquisition by Reliance is 3,12,430 acres. It also entered in to a separate
joint venture with Pioneer Natural Resources aimed at addressing the mid-
stream opportunity in gas evacuation and transportation.
* Joint venture for Butyl Rubber production in India:
During the year, RIL and Russia's SIBUR announced a joint venture for the
setting up of a facility for producing 100,000 MT butyl rubber in India.
This is a significant step towards Reliance's commitment to service India's
growing automotive sector by bringing in complex technologies, available
with only a very few companies globally. The setting up of domestic
manufacturing of butyl rubber which is expected to be commissioned by 2013,
will fulfill a longstanding demand of the Indian tyre and rubber industry.
* Spearheading the knowledge revolution:
During the year, RIL acquired a substantial stake in
Infotel Broadband Services Limited (Infotel Broadband), which emerged as a
successful bidder in all the 22 circles of the auction for Broadband
Wireless Access (BWA) Spectrum conducted by the Department of
Telecommunications (DoT). RIL owns 95% of the equity share capital of
Infotel Broadband.
RIL sees the broadband opportunity as a new frontier of knowledge economy
in which it is confident of taking leadership position and providing India
with an opportunity to be in the forefront among the countries providing
world-class 4G network and services.
Others:
The Honorable Supreme Court of India delivered its judgment in the Reliance
Natural Resources Limited (RNRL) - RIL dispute. The judgment recognized the
dominant role of the provisions of the Production Sharing Contract and
upheld the policies formulated by the Government under which it has the
authority to regulate the production and distribution of natural gas. RIL
and RNRL signed a Gas Supply Master Agreement in compliance with the Gas
Utilization Policy and EGoM decisions. RIL and Reliance ADA Group companies
approved and signed an agreement canceling all existing non-compete
arrangements entered into between the two groups pursuant to the scheme of
reorganization of the Reliance Group and entered into a new simpler, non-
compete agreement with respect to gas based power generation.
Consolidated Financial Statements
In accordance with the Accounting Standard AS-21 on Consolidated Financial
Statements read with Accounting Standard AS-23 on Accounting for
Investments in Associates and AS-27 on Financial Reporting of Interest in
Joint Ventures, the audited Consolidated Financial Statements are provided
in the Annual Report.
Subsidiaries
In accordance with the general circular issued by the Ministry of Corporate
Affairs, Government of India, the Balance Sheet, Profit and Loss Account
and other documents of the subsidiary companies are not being attached with
the Balance Sheet of the Company. The Company will make available the
Annual Accounts of the subsidiary companies and the related detailed
information to any member of the Company who may be interested in obtaining
the same. The annual accounts of the subsidiary companies will also be kept
open for inspection at the Registered Office of the Company and that of the
respective subsidiary companies. The Consolidated Financial Statements
presented by the Company include the financial results of its subsidiary
companies.
Details of major subsidiaries of the Company are covered in Management's
Discussion and Analysis Report forming part of the Annual Report.
Directors
Shri Ramaniklal H. Ambani, Shri Nikhil R. Meswani, Prof. Ashok Misra and
Shri Yogendra P. Trivedi, Directors, retire by rotation and being eligible,
offer themselves for reappointment at the ensuing Annual General Meeting.
Group
Pursuant to intimation from the Promoters, the names of the Promoters and
entities comprising the group' are disclosed in the Annual Report for the
purpose of the SEBI (Substantial Acquisition of Shares and Takeovers)
Regulations, 1997.
Directors' Responsibility Statement
Pursuant to the requirement under Section 217(2AA) of the Companies Act,
1956, with respect to Directors' Responsibility Statement, it is hereby
confirmed that :
(i) in the preparation of the annual accounts for the year ended March 31,
2011, the applicable accounting standards read with requirements set out
under Schedule VI to the Companies Act, 1956, have been followed and there
are no material departures from the same;
(ii) the Directors have selected such accounting policies and applied them
consistently and made judgments and estimates that are reasonable and
prudent so as to give a true and fair view of the state of affairs of the
Company as at March 31, 2011 and of the profit of the Company for the year
ended on that date;
(iii) the Directors have taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provisions of the Companies Act, 1956 for safeguarding the assets of the
Company and for preventing and detecting fraud and other irregularities;
and
(iv) the Directors have prepared the annual accounts of the Company on a
going concern' basis.
Auditors and Auditors' Report
M/s. Chaturvedi & Shah, Chartered Accountants, M/s. Deloitte Haskins &
Sells, Chartered Accountants and M/s. Rajendra & Co., Chartered
Accountants, Statutory Auditors of the Company, hold office until the
conclusion of the ensuing Annual General Meeting and are eligible for
reappointment.
The Company has received letters from all of them to the effect that their
reappointment, if made, would be within the prescribed limits under Section
224(1B) of the Companies Act, 1956 and that they are not disqualified for
reappointment within the meaning of Section 226 of the said Act.
The Notes on Accounts referred to in the Auditors' Report are self-
explanatory and do not call for any further comments.
Cost Auditors
The Central Government has approved the appointment of the following cost
auditors for conducting Cost Audit for the financial year 2010-11 -
(i) For the textiles business - M/s. Kiran J. Mehta & Co, Cost
Accountant;
(ii) For the chemicals business - Shri S. N. Bavadekar, Cost Accountant,
M/s. V. J. Talati & Co., Cost Accountants, M/s. Diwanji & Associates, Cost
Accountants, M/s. K. G. Goyal & Associates, Cost Accountants; and
(iii) For the polyester business - Shri Suresh D. Shenoy, Cost Accountant,
M/s. V. Kumar & Associates, Cost Accountants.
Secretarial Audit Report
As a measure of good corporate governance practice, the Board of Directors
of the Company appointed Dr. K.R. Chandratre, Practicing Company Secretary,
to conduct Secretarial Audit of records and documents of the Company. The
Secretarial Audit Report for the financial year ended March 31, 2011, is
provided in the Annual Report.
The Secretarial Audit Report confirms that the Company has complied with
all the applicable provisions of the Companies Act, 1956, Depositories Act,
1996, Listing Agreements with the Stock Exchanges, Securities Contracts
(Regulation) Act, 1956 and all the Regulations and Guidelines of SEBI as
applicable to the Company, including the Securities and Exchange Board of
India (Substantial Acquisition of Shares and Takeovers) Regulations, 1997,
the Securities and Exchange Board of India (Prohibition of Insider Trading)
Regulations, 1992 and the Securities and Exchange Board of India (Employee
Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999.
Particulars of Employees
In terms of the provisions of Section 217(2A) of the Companies Act, 1956,
read with the Companies (Particulars of Employees) Rules, 1975 as amended,
the names and other particulars of the employees are set out in the
annexure to the Directors' Report. Having regard to the provisions of
Section 219(1)(b)(iv) of the said Act, the Annual Report excluding the
aforesaid information is being sent to all the members of the Company and
others entitled
thereto. Any member interested in obtaining such particulars may write to
the Company Secretary at the registered office of the Company.
Energy Conservation, Technology Absorption and Foreign Exchange Earnings
and Outgo
The particulars relating to energy conservation, technology absorption,
foreign exchange earnings and outgo, as required to be disclosed under
Section 217(1)(e) of the Companies Act, 1956 read with the Companies
(Disclosure of Particulars in the Report of Board of Directors) Rules, 1988
are provided in the Annexure-I to this Report.
Transfer of amounts to Investor Education and Protection Fund
Pursuant to the provisions of Section 205A(5) of the Companies Act, 1956,
dividends, interest on debentures and matured debentures which remained
unpaid or unclaimed for a period of 7 years have been transferred by the
Company to the Investor Education and Protection Fund.
Corporate Governance
The Company is committed to maintain the highest standards of Corporate
Governance and adhere to the Corporate Governance requirements set out by
SEBI. The Company has also implemented several best corporate governance
practices as prevalent globally.
The Report on Corporate Governance as stipulated under Clause 49 of the
Listing Agreement forms part of the Annual Report.
The requisite Certificate from the Auditors of the Company confirming
compliance with the conditions of Corporate Governance as stipulated under
the aforesaid Clause 49, is attached to this Report.
Acknowledgement
Your Directors would like to express their appreciation for the assistance
and co-operation received from the financial institutions, banks,
Government authorities, customers, vendors and members during the year
under review. Your Directors also wish to place on record their deep sense
of appreciation for the committed services by the executives, staff and
workers of the Company.
For and on behalf of the Board of Directors
Mukesh D. Ambani
Chairman and Managing Director
April 21, 2011
Annexure - I
Particulars required under the Companies (Disclosure of Particulars in the
Report of the Board of Directors) Rules, 1988
A. Conservation of Energy
(a) Energy conservation measures taken:
Major energy conservation measures carried out during the year 2010-11 are
listed below:
Allahabad Manufacturing Division
* Installation of Awwa nozzles on spinning machines leading to reduction in
compressed air consumption.
* Recycling of filter water and cooling water.
* Installation of capacitor on HT circuit, leading to improvement in power
factor.
Barabanki Manufacturing Division
* In order to utilize wind energy 45 Eco-ventilators were provided at
various locations in the plant to improve the working atmosphere and reduce
the heat load. Fans were provided at Draw line roof, Ware house and DG
roof.
* Energy efficient motors were provided at Husk Boiler ESP (Electrostatic
Precipitator) unit. Total seven motors were replaced.
* A Solar system Geyser installed and commissioned at canteen for hot water
use.
* One solar light has been installed and commissioned at road side, outside
the main gate.
* At Nitrogen Plant one line has been fabricated and installed, this has
resulted into Stoppage of Nitrogen purge compressor.
Dahej Manufacturing Division
* Realized energy savings by optimization of Gas Turbine load by
implementation of Export-Import tieline control at Captive Power Plant
(CPP).
* Achieved water savings by reduction in water to monomer ratio at Poly
Vinyl Chloride (PVC) plant.
* Reduction in energy consumption by distillation vent steam utilization at
Ultra-high-molecular-weight polyethylene (UHMW) - HDPE II (High Density
Poly Ethylene) plant.
* Reduction in effluent generation by replacing 5% Caustic with 32% Caustic
for pH control at Vinyl Chloride Monomer (VCM) plant.
* Reduction in energy consumption by providing isolation valve in High
Pressure (HP) steam header in Phase-I at CPP
Hazira Manufacturing Division
* Uprading Gas Turbine (GT) capability of GT-3 and GT-5 at Captive Power
Plant & Utilities (CPP&U).
* Installation of additional motor driven BFW Pump (B-900) and stoppage of
Boiler Feed Pump Turbine (BFPT) at Cracker Plant to achieve energy savings.
* Replacing Existing bowed Super Heater (SH) modules of Heat Recovery Steam
Generator (HRSG) #1 and 2 with drainable and finned super heaters.
* Reduction in steam and power consumption by reducing the water/Aqueous EO
(Ethylene Oxide) ratio in glycol reactors at Mono Ethylene Glycol (MEG)
plant.
* Piping / Process modification in Condensate Trim Cooler (EA 1553) heat
exchanger scheme to improve energy performance and reliability at CPP&U.
* Improvement in Waste heat recovery performance of (Make up water heater)
MUWH# 3 and MUWH#5 at CPP&U plant.
* Hiboil reflux ratio optimization at Vinyl Chloride Monomer (VCM) plant.
* Maximizing loading on Recycle Ethylene Di-Chloride (REDC) column and
minimizing on HB column to reduce SIP consumption by 1.0 Tonnes Per Hour
(TPH) and Reflux flow optimization in REDC column.
* Increase in Purified Terephthalic Acid (PTA)-3 Process Air Compressor
(PAC) power export.
Hoshiarpur Manufacturing Division
* Reduction in energy consumption by installation of inverter for chilled
water pump.
* Stopped one exhaust blower of Draw Machine # 3 to conserve energy.
* Reduction in specific steam consumption in Draw Machine # 1, 2 & 5.
* Reduction in specific power consumption in Draw Machine # 2 & 5.
Jamnagar (DTA) Manufacturing Division
* Improvement in heat recovery in Amine Treating by replacing shell and
tube heat exchanger with new plate-frame type.
* Reduction of Low Pressure (LP) steam consumption in Amine treating Units
by the reduction of lean amine circulation rate.
* Optimization of Coker FGRS (Flare Gas Recovery System). MP steam
consumption in ejector reduced and Flare loss reduction by optimizing
operating parameters.
* Improvement in centrifugal air compressor's efficiency. Inter-stage
cooler bundles replaced with phenolic coated tube bundles to minimize
fouling. Implemented in 4 out of 6 compressors.
* Installation of Heat exchanger in Cracked Naphtha Hydro Treaters (CNHT)
to recover naphtha splitter Overhead stream heat. Earlier it was routed
directly to fin fan cooler.
* Improvement of Ortho Xylene (OX) and Heavy Aromatics (HA) column reboiler
heater efficiencies by online cleaning of radiant section.
* Steam Leak reduction. Steam leak survey carried out across the complex.
Identified source of leak arrested.
* Fuel saving by improvement in steam load distribution. Steam generation
load on HRSG maximized and load on auxiliary boiler reduced. Heat rate
lower for HRSG.
* Propylene Treater Regeneration Sequence Modification in Propylene
Recovery Unit (PRU) to avoid Propylene loss.
* Power saving in Pumps and compressors by optimizing process parameters.
Jamnagar Manufacturing Division (SEZ):
* Reduction in LP Steam dumping by taking following measures:-
a) Changing over the process unit turbines to motor driven in Crude /
Vaccum Gas Oil (VGO) High Tension (HT) / Coker / Clean Fuels (CFP) Complex.
b) Reducing the LP Steam generation in Diesel Hydrodesulphurisation (DHDS)
-1/2
c) VGO HT-3 S-18 Steam generator bypass.
* Zero main flare achievement on continuous basis by
a) Arresting the leakages in Hydrogen Complex.
b) Implementation of Energy conservation schemes in Alkylation Unit
(Refrigeration compressor seal modification).
c) Implementation of Energy conservation scheme in Flare Gas Recovery Unit
(Additional 30' suction piping for the flare gas recovery compressor).
d) Implementation of Energy conservation scheme at Propylene Recovery Unit
(PRU) [PRU regeneration gases to Low Low Pressure (LLP) flare].
* Minimization of H2 flaring / H2 to FG by product pressure-feed control
scheme as well as integration of SEZ and DTA hydrogen complex.
* Running only 3 air compressors in place of 4 in utility complex.
* Routing of regeneration gases (high N2 conc.) to LLP Flare in PRU.
Nagpur Manufacturing Division
* Reduced energy consumption by replacement of old Beacon make Chilled
Water Pumps with Grundfos make new energy efficient pumps -Two Nos.
* Reduced energy consumption by replacement of Vertical Turbine pump with
Submersible pump at River Intake Well resulting in stoppage of water
lubrication pump.
Nagothane Manufacturing Division
* Stopping of DM water pump to process plants and utilizing the excess
capacity available in DM water supplying to CPP.
* Stopping of both vent absorber (C-05 and C-20) tails pump (P-95 and P-56)
by rerouting of tails to stripper through different nozzle and utilize
stripper vacuum.
* Installation of New Plug flow Steamer (FB501) for hydrocarbon stripping
from Polypropylene (PP) powder.
Naroda Manufacturing Division
* Replacement has been done of 2 nos. Bore-well Pumps with Energy Efficient
Pumps.
Patalganga Manufacturing Division
* Corrocoating of Cooling Water pumps in Linear Alkyl Benzene (LAB) and PTA
Plants.
* Chemical cleaning of Convection Bank Heater Tubes in Paraxylene Plant.
* Ceramic coating on Heater Tubes in Paraxylene Plant. Vadodara
Manufacturing Division
* Use of Aerofoil designed Fibre-reinforced plastic (FRP) blades for
cooling tower fans. Scheme was
implemented in two cooling towers i.e. N2O2 (1 fan) and A CN cooling tower
(1 fan). In addition to that A CN cooling tower internals were replaced
resulting in reduction in make up water by 4.5 m3/hr.
* Blocking of muffle block inside burner assembly for 4 burners of Hot Oil
heater, LAB plant, resulted in saving of Fuel Gas.
* Reduction in excess Oxygen in flue gas in H106, of Naphtha Cracker Plant
(NCP), from 4.0% to 2.4% by 4 burner blank off lowered the fuel gas
consumption significantly.
* Reduction in HF inventory by Single Reactor settler trial led to power
saving due to stopping of one pump.
* Installation of Energy Efficient Retrofit Metal halides/ Compact
Fluorescent Lamp (CFL) in place of the conventional lighting was done to
reduce power consumption.
* VCM EDC (Ethylene Dichloride) Cracker Stack temperature and excess Oxygen
(O2) reduction was done with the help of Damper adjustment.
* Insulation Health check was carried out for Out Side Battery Limited
(OSBL) steam header. Insulation repair work was done for HP and MP header.
* Reduction in Hot Oil circulation flow from 145M3/Hr to 120M3/Hr in LAB.
* Stripper column bottom 2 pump was operated for reduction in Chemical
Oxygen Demand (COD) in A CN plant.
(b) Additional investments / proposals being implemented for reduction of
consumption of energy:
Dahej Manufacturing Division
* Improvement in heat recovery by increase in residue gas exchanger area at
Gas Cracker plant.
* Improvement in heat recovery by installation of new E 521 exchanger at
MEG plant.
* Reduction in power demand by installation of hydraulic Turbine at Ethane-
Propane Recovery Unit (EPRU).
* Recovery of heat energy by replacing exchanger E 624 which a shell and
tube type exchanger with a plate type heat exchanger and rerouting of
recycle water through it.
* Energy savings by supplying LP ethylene to VCM from Gas Cracker Unit
(GCU). This will reduce the
refrigeration load on compressors C2R and C3R at Gas cracker plant.
* Steam savings by cent rate water heat recovery at PVC. Hazira
Manufacturing Division
* Provision of Glycol ejector in place of steam ejectors in CP-2/3 at
Partially Oriented Yarn (POY) plant.
* Improvement in run length of Gasoline Hydrogenation Unit (GHU) 1st stage
reactor with replacement of catalyst with Ni catalyst at cracker plant and
reducing no. of regenerations of GHU 1st stage reactor from 4 to 2
regenerations.
Hoshiarpur Manufacturing Division
* Reduction in energy consumption by installation of Uninterrupted Power
Supply (UPS) for Plant lighting system.
* Reduction in energy consumption by stopping return air blower of POY
quenches Air Handling Unit (AHU).
* Reduction of energy consumption by installing inverter on Raw water
/Cooling water pump
Jamnagar (DTA) Manufacturing Division
* In LPG recovery improvement scheme across Re-contact Drum (RCD) loop,
under the scheme of routing separator liquid to recovery plus unit,
stoppage of two pumps at Recovery plus can save 300 kW power which could be
Rs 1.29 crore /annum.
Jamnagar Manufacturing Division (SEZ):
* Provisions of new 8' bypass line to LP Steam generator S-18 in VGO HT-4
Unit.
* Reduction of MP steam by re-routing Light Coker Gas Oil (LCGO) pump
around to stripper re-boiler in Coker-2.
* Replacement of MP steam by LP steam in Fluidized Catalystic Cracker (FCC)
reactor stripper using thermo-compressor.
Nagpur Manufacturing Division
* Replacement of 12 nos. centrifugal pumps with high efficiency pumps.
Nagothane Manufacturing Division
* Anti Corrocoat coating is to be applied to all cooling water pumps to
improve efficiency.
Naroda Manufacturing Division
* Energy Saving by replacing Old Inefficient Electrical Motors by Energy
Efficient Motors.
* Gas Conversion of Stenters in Menswear Process House from Gas Fired
Thermic Fluid Heating.
* Augmentation of Humidification Systems in Worsted Spinning.
Patalganga Manufacturing Division
* Corrocoating of Cooling Water pumps in Energy Center and Utility Plants.
* Installation of Heat Pipe Heat Exchanger (HPHE) in Bertram Heater (Dow
Vapor service) and CP6 Heater (Dow Liquid service) of Utility Plant.
* Providing efficient Air Intermingling Jets in TORAY FDY Plant.
* Improved Steam traps management. Vadodara Manufacturing Division
* Heat recovery scheme of EO column bottom and EO stripper bottom to
preheat Cycle gas going to Contactor.
* Proposal to preheat the feed for Low boiler Tower (T-410) with the
overhead product stream of High Boiler Tower (T-420) in PBR1 plant is under
conceptual stage. Preheating for Feed to T-410 column with bottom product
is also under consideration.
* Steam Network audit on regular basis to identify quantify and control
steam leak through valves, pin hole and traps.
* Installation of Variable Frequency Drive (VFD) in Induced Draft (ID) and
FD fans of LAB heater.
* In PBR2 plant, Condensate flashing by reducing the condensate drum
pressure (V-152) to 1.2 Kg/cm2 g resulting in additional heat recovery.
* LAB plant, Pacol Compressor motor replacement to avoid the Gear Box
resulting in power saving.
* Recovery of H2 rich gas during reduction of PGH 1st stage reactor.
* By arresting the Flue gas losses through the by-pass stacks of GT's and
Insulation health check, the energy loss will be prevented.
* GT2 output improvement by 7.5% and heat rate reduction by 2%. This will
be achieved by up-rating the gas turbine major components.
(c) Impact of measures of (a) and (b) given above for reduction of energy
consumption and consequent impact on the cost of production of goods:
Allahabad Manufacturing Division
* Reduction in compressed air consumption due to installation of Awwa
nozzles on spinning machines has resulted savings of Rs. 12.46 lacs per
annum.
* Savings of Rs. 8.93 lacs per annum has been achieved due to recycling of
filtered water and cooling water.
* Installation of capacitor on HT circuit leading to improvement in power
factor and realized savings of Rs. 4.63 lacs per year.
Barabanki Manufacturing Division
* In order to utilize wind energy 45 Eco-ventilators were provided at
various locations in the plant to improve the working atmosphere and reduce
the heat load. Fans were provided at Draw line roof, Ware house and DG
roof.
* Energy efficient motors were provided at Husk Boiler ESP unit. Total
seven motors were replaced.
* A Solar system Geyser installed and commissioned at canteen for hot water
use.
* One solar light has been installed and commissioned at road side, outside
the main gate.
* At Nitrogen Plant one line has been fabricated and installed this has
resulted into Stoppage of Nitrogen purge compressor.
* All the above energy conservation measures has resulted savings of Rs.
0.85 lacs per year.
Dahej Manufacturing Division
* Total annual savings worth Rs. 2.89 crore has been achieved on
implementation of energy saving schemes as indicated in Section (a).
* Estimated savings worth Rs. 92 lacs per year can be achieved by increase
in residue gas exchanger area for better heat recovery at Gas cracker
plant.
* Estimated savings worth Rs. 46 lacs per year can be achieved by
installation of new E 521 exchanger for better heat recovery at MEG plant.
* Estimated savings worth Rs. 78 lacs per year can be achieved by
installation of hydraulic Turbine at EPRU.
* Recovery of heat energy, worth Rs. 87 lacs per year, can be achieved by
replacing exchanger E 624 which a shell and tube type exchanger with a
plate type heat exchanger and rerouting of recycle water through it.
* Energy savings worth Rs. 119 lacs per year can be achieved by supplying
LP ethylene to VCM from GCU. This will reduce the refrigeration load on
compressors C2R and C3R at Gas cracker plant.
* Estimated saving worth Rs. 53 lacs can be achieved by savings steam by
centrate water heat recovery at Poly Vinyl Chloride (PVC) plant.
Hazira Manufacturing Division
* Uprading Gas turbine capability of GT-3 and GT-5 at CPP&U. (Savings: Rs.
14.19 crore approx.)
* Installation of additional motor driven Boiler Feed Water (BFW) Pump (B-
900) and stoppage of BFPT at Cracker plant to achieve energy savings.
(Savings: Rs. 8.21 crore approx.)
* Replacing Existing bowed SH modules of HRSG#1 and 2 with drainable and
finned super heaters. (Savings: Rs. 7.05 crore approx.)
* Reduction in steam and power consumption by reducing the water/Aqueous EO
ratio in glycol reactors at MEG plant. (Savings: Rs. 3.54 crore approx.)
* Piping / Process modification in Condensate Trim Cooler (EA 1553) heat
exchanger scheme to improve energy performance and reliability at CPP&U.
(Savings: Rs. 3.77 crore approx.)
* Improvement in Waste heat recovery performance of (Make up water heater)
MUWH# 3 and MUWH#5 at CPP&U plant. (Savings: Rs. 2.45 crore approx.)
* Hiboil reflux ratio optimization at VCM plant. (Savings: Rs. 1.30 crore
approx.)
* Maximizing loading on REDC column and minimizing on HB column to reduce
SIP consumption by 1.0 TPH and Reflux flow optimization in REDC column.
(Savings: Rs. 1.13 crore approx.)
* Increase in PTA-3 PAC power export. (Savings: Rs. 0.91 crore approx.)
* Provision of Glycol ejector in place of steam ejectors in CP-2/3 at POY
plant. (Anticipated Savings: Rs. 2.50 crore approx.)
* Improvement in run length of GHU 1st stage reactor with replacement of
catalyst with Ni catalyst at cracker
plant and reducing no. of regenerations of GHU 1st stage reactor from 4 to
2 regenerations. (Anticipated Savings: Rs. 0.42 crore approx.)
Hoshiarpur Manufacturing Division
* Savings of Rs. 2.47 crore made by optimizing steam consumption.
* Savings of Rs. 57 lacs were made by taking various energy conservation
measures such as Installed inverter for chilled water pump, Stopped one no.
exhaust blower of Draw Machine # 3, Reduction in specific power consumption
in Draw Machine # 2 & 5.
* Estimated savings of Rs. 4.9 lacs per year can be achieved by installing
UPS for plant lighting system.
* Estimated savings of Rs. 9.7 lacs per year can be achieved by stopping
return blower of POY quench AHU.
* Estimated savings of Rs. 2.2 lacs per year can be achieved by installing
inverter on Raw water/ Cooling water pump.
Jamnagar (DTA) Manufacturing Division
* Improvement in heat recovery in Amine Treating Unit-4 by replacing shell
and tube heat exchanger with new plate- frame type rich/lean amine heat
exchanger, saving 7 TPH LP Steam (saving Rs. 4.7 crore / annum).
* Reduction of LP steam consumption by 10 TPH in Amine treating Units by
the reduction of lean amine circulation rate (Saving Rs. 6.95 crore /
annum).
* Optimization of Coker FGRS system to reduce MP steam consumption by 1.25
TPH and Flare loss reduction by 6 Month Till Date (MTD) (saving Rs. 6.02
crore / annum).
* Improvement of centrifugal air compressor's 6, 7, 8 and 9 efficiency in
DTA Utilities by the replacement of inter-stage coolers with phenolic
coated tube bundles in all the compressors one by one, reduction of power
consumption by 1245 KWhr. (saving Rs. 5.35 crore / annum).
* Installation of S03 stripper feed Heat exchanger in CNHT to recover
naphtha splitter OVHD stream heat which is going to fin fan cooler A01,
saving 6 MTD of Fuel gas (saving Rs. 4.91 crore / annum).
* Improvement of OX and HA column reboiler heater efficiencies by radiant
section online cleaning, saving 3.47 MTD of Fuel Gas (saving Rs. 2.84 crore
/ annum).
* Steam Leak reduction by survey across the complex conducted by energy
cell, saved 4 TPH LP steam (saving Rs. 2.67 crore / annum).
* Fuel saving by load improvement in HRSG 1 and 5, saving 1 MTD fuel
(saving Rs. 0.82 crore / annum).
* Propylene Treater Regeneration Sequence Modification in PRU to avoid
Propylene loss in Flare at the beginning of regeneration, reduction of
flare loss by 1 MTD (saving Rs. 0.23 crore / annum).
* Power saving in LNUU Recycle gas compressor by optimizing Gas to Oil
Ratio, saving power of 150 KWhr (saving Rs. 0.64 crore / annum).
* Power saving by stopping of one out of two in Tatoray stripper bottom
pumps, saving power of 50 KWhr (saving Rs. 0.215 crore / annum).
* Power saving in HMU-1 due to increase in efficiency of RFG compressor by
providing new tube bundle with additional baffles in Inter stage cooler,
saving 14 KWhr power (savings Rs. 0.06 crore / annum).
Jamnagar Manufacturing Division (SEZ)
* Energy savings worth Rs. 1714.3 lacs per year has been achieved by
reducing LP steam dumping from 84 to 50 TPH.
* Achieved hydrocarbon saving of 31 TPD by recovering all hydrocarbons
released to flare header. There is zero flaring from Main flare now
(savings Rs. 1150.7 lacs per annum).
* Achieved 18.9 TPD saving of fuel by reducing H2 getting lost in fuel gas
(savings Rs. 701.5 lacs per annum).
* Achieved 12.2 TPD of fuel savings by running only 3 compressors in
utility (savings Rs. 450.9 lacs per annum).
* Achieved 2.1 TPD savings of fuel by recovery of regeneration gases by
routing them to LLP flare (savings Rs. 77.9 lacs per annum).
* An estimated energy saving quantity of 26.4 TPD (Rs. 970.6 lacs per year)
of fuel by providing a bypass to LP steam generator can be achieved.
* Energy savings worth Rs. 534.5 lacs per year can be achieved by re-
routing LCGO pump around to stripper re-boiler in Coker-2.
* Energy savings worth Rs 979.9 lacs per year can be achieved by
replacement of MP steam by LP steam in FCC reactor stripper using thermo-
compressor.
* Energy savings worth Rs. 81.3 lacs per year can be achieved by routing
vent gases from degassing column to FG header.
Nagpur Manufacturing Division
* Savings of Rs. 4.5 lacs per year achieved due to reduced energy
consumption by replacement of old Beacon make Chilled Water Pumps with
Grundfos make new energy efficient pumps -Two Nos.
* Savings of Rs. 1.0 lacs per year achieved due to reduced energy
consumption by replacement of Vertical Turbine pump with Submersible pump
at River Intake Well resulting in stoppage of water lubrication pump.
* Estimated saving worth Rs. 12 lacs per year can be achieved by
replacement of 12 nos. centrifugal pumps with high efficiency pumps.
Nagothane Manufacturing Division
* Energy savings worth Rs. 7.10 lacs per year has been achieved by stopping
the DM water pump supplying water to process plants. (Power Savings is 30
KW per Hour @ Rs. 2.7 per KWH )
* Stopping of both vent absorber (C-05 and C-20) tails pump (P-95 and P-56)
by rerouting of tails to stripper through different nozzle and utilize
stripper vacuum has resulted energy saving worth Rs. 0.61 lacs per annum.
(Power savings is 2.6 KW per hour @ Rs.2.7 per KWH)
* Reduced steam consumption by Installation of New Plug flow Steamer
(FB501) for hydrocarbon stripping from PP powder. This has achieved energy
savings worth Rs. 10.51 lacs per year. (Steam savings is 300 Kgs per Hour.
Considering a cost of Rs.400 per MT the annual savings is Rs.10.51 lacs)
Naroda Manufacturing Division
* Energy savings worth Rs. 16.60 lacs per year has been achieved by
replacement of 2 nos. Bore-well Pumps with Energy Efficient Pumps.
* Estimated Energy Saving worth Rs. 83.67 lacs per year can be achieved by
replacing Old Inefficient Electrical Motors by Energy Efficient Motors.
* Energy Saving worth Rs. 47.33 lacs per year can be achieved by Gas
Conversion of Stenters in Menswear Process House from Gas Fired Thermic
Fluid Heating.
* Estimated Energy Saving worth Rs. 62.34 lacs per year can be achieved by
augmentation of Humidification Systems in Worsted Spinning.
Patalganga Manufacturing Division
* Energy savings worth Rs.19 lacs per year has been achieved by efficiency
improvement on Corrocoating of Cooling water pumps in LAB and PTA plants.
* Energy savings worth Rs.16 lacs per year achieved by chemical cleaning of
Convection Bank Tubes in Paraxylene Heater (D5001).
* Energy savings worth Rs.30 lacs per year can be achieved by providing
efficient Intermingling Jets in TORAY FDY plant.
* Energy Saving worth Rs. 30 lacs per year can be achieved by installation
of HPHE exchanger in Bertram and CP 6 Dow heaters.
Vadodara Manufacturing Division
* Savings realized due to blocking of muffle burner block in Hot Oil heater
of LAB plant, savings to the tune of Rs. 45 lacs/annum have been realized.
In addition to that stack damper adjustment of EDC cracker furnace has lead
to Rs. 40 lacs saving. Likewise, blocking of 4 burner blocks in H-106
helped in reducing the excess O2 in flue gas from 4 to 2.4% and a saving of
Rs. 33 lacs/annum. Thus, total Energy savings worth Rs. 161 lacs have been
realized.
(d) Total energy consumption and energy consumption per unit of production
as per Form A' attached hereto.
B. TECHNOLOGY ABSORPTION
(e) Efforts made in technology absorption - as per Form B given below:
Form B
Research and Development (R&D)
1. Specific areas in which the research and development (R&D) is being
carried out by the Company
* Development of in-house additives for increase in propylene yield in
fluidized catalytic cracker (FCC).
* Selection of lower cost FCC catalysts and additives for improved
conversion and yields.
* Processing of cheaper and heavier varieties of crude to widen the crude
blends window.
* Propylene yield improvements and benzene reduction in refining.
* Desalter operation improvements.
* Computational fluid dynamics (CFD) studies for plant trouble shooting.
* Molecular compositional blending models.
* Polypropylene quality control.
* Coker streams processing in FCC.
* Studies to produce good quality feedstock for carbon black industry.
* Heterogeneous catalysis for hydrocarbon transformations.
* Homogeneous catalysis for specific organic synthesis.
* Development of adsorbents and adsorption processes.
* Development of catalysts for polymerization of ethylene and butadiene.
* Polymer based specialty products development.
* Chemical and microbial treatment of effluent water.
* Development of model for simulated moving bed processes.
* Development of dehydrogenation catalyst for linear alkyl benzene (LAB).
* Polyolefin inorganic precursor technology development.
* High performance polypropylene (PP) homo and impact copolymers (ICP)
grades catalyst technology.
* Development of high performance additives for polyolefins.
* Development of catalytic process for on purpose 1-hexene.
* Development of morphologically controlled catalyst for producing HDPE
grades.
* Development of clarifiers for PP grades.
* Development of reactor grade thermo plastic olefins (TPO).
* Development of high flow high stiffness PP grades.
* New co-catalyst systems for enhancing bottle-grade resin productivity.
* Barrier property enhancement for polyethylene terephthalate (PET) resin.
* Development of PET with new additive for cost reduction and color
improvement.
* Development of yarn from alternate polyester (Polytrimethylene
terephthalate, Polybutylene terephthalate).
* Productivity enhancement through polymer modification.
* Asbestos replacement in cement sheets.
* Indigenous spin finish development for various products.
* Development of anti-pill polyester, elastic polyester, low melt
polyester, low cost flame retardant polyester , low antimony/antimony free
polyester, full dull/cotton look polyester fiber, hollow and bulky fibers,
and super micro denier polyester staple fiber.
* Development of PolyVinyl Chloride (PVC) separation techniques in PET
recycling.
2. Benefits derived as a result of the above R&D
* Potential benefit of Rs. 50 crore/annum for additional extraction of
benzene from light reformate, which also helped in reducing the benzene
content of gasoline in refinery.
* Rs. 20 crore/annum from additional propylene recovery in the FCC unit in
refinery.
* Rs.12 crore/annum saved on design and downtime costs in refinery coker
heater through CFD modeling.
* Rs. 35 crore/annum by demonstrating capability to process additional
coker LPG in the refinery propylene recovery unit.
* Potential benefits of Rs. 58 crore/annum from polyester R&D projects.
3. Future plan of action
* Hydro-processing catalyst development and evaluation.
* Creation of coker pilot plant / related facilities.
* Catalyst development for improving FCC profitability.
* Development of process for widening of crude window.
* High throughput facilities for catalyst development and evaluation.
* CFD studies for reliability improvement.
* Molecular characterization of crude and refinery streams.
* Reduction of impurities in propylene stream.
* Advanced catalyst characterization facilities.
* Process for chlorination of polyvinyl chloride (PVC) to produce
chlorinated polyvinyl chloride (CPVC).
* Process for purified terephthalic acid (PTA) from inexpensive raw
material.
* Development of reforming catalyst for xylenes production.
* Development of ethyl benzene dealkylation catalyst for aromatics plant.
* Specialty chemicals from C8 olefin mixture streams.
* Development of transalkylation catalyst for production of C8 aromatics.
* Adsorbent for separation of xylene isomers form C8 aromatics.
* Microbial and photocatalytic processes for effluent treatment.
* Anticoking additives for thermal cracking of hydrocarbons.
* Oxidation catalysis.
* Micro-meso porous and nano-materials for catalysis applications.
* Development of super absorbent polymers.
* Functionalized polybutadiene rubber (PBR) based rubber products.
* Development of PP grades for foamed products.
* Inorganic materials from spent catalysts.
* Implementation of newly developed polyester bottle grade co-catalyst for
fiber and filament application.
* Development of extrusion blow moulding grade PET.
* Improvement of productivity/tenacity in super high tenacity polyester.
* Development of New generation spinnerets' for productivity increase and
functional enhancements.
* Development of eco-friendly/green partially oriented yarn (POY).
* Up-scaling of moisture management yarns.
* Exploring the application of polyester in various segments/products.
4. Expenditure on R & D
Rs. crore
a) Capital 202.88
b) Revenue 314.33
c) Total 517.21
d) Total R & D
expenditure is 0.2%
of total turnover.
Technology absorption, adoption and innovation
1. Efforts, in brief, made towards technology absorption, adoption and
innovation:
* Selection of better catalysts and additives for FCC using pilot plant
facilities.
* Technology development for processing cheaper and heavier crudes to widen
the crude blends window.
* Enhancing propylene recovery in refinery.
* Technical support for marketing of FCC spent catalysts.
* High capacity revamps in paraxylene plants.
* Adsorbent change in paraxylene plants.
* Innovative method for increasing benzene /olefin ratio in alkylation at
linear alkyl benzene (LAB) plant.
* Enhancing low density polyethylene (LDPE) plant capacity.
* Development of alternate co-catalyst for producing high density
polyethylene (HDPE).
* Enhancing butene recovery in solution polymerization PE plant.
* Linear low density polyethylene (LLDPE) plant capacity enhancement by
innovative methods.
* Improve quality of polymer grade butene.
* Development of specialty PP grades for foamed products.
* Food grade hexane (FGH) and polymer grade hexane (PGH).
* Startup of bottle to bottle (B2B), PET recycling project.
* Polyester staple fiber (PSF) based product to improve the shelf life of
fruits and vegetables in ambient storage conditions.
* Increased productivity and color enhancement through commercialization of
new co-catalyst on continuous bottle-grade resin plants.
* Spinning productivity enhancement through application of in-house
developed technology.
* Low shrinkage industrial yarn through in-house hardware modification.
* Development of environment friendly silicone spray system' for wiping of
spinnerets.
* Improved and low cost spin finish development for polyester products.
* Debottlenecking of polyester filament yarn (PFY) machines for super
coarse deniers.
* In-house technology development for anti pill polyester.
* Development of super micro denier polyester staple fibre.
* Production of dope dyed PSF through recycle route.
* Development of high shrink PSF.
2. Benefits derived as a result of the above efforts
* Increase in propylene yield with new catalyst based on pilot plant
studies.
* Reduction in import of low sulphur residue feedstock in refinery.
* Rs. 3 crore on additional sales of FCC spent catalyst.
* Potential benefit of Rs. 167 crore/annum by high capacity revamps and
adsorbent change in paraxylene plants.
* Benefits of Rs. 32 crore/annum from polyester R&D projects.
3. Information regarding Imported Technology
Product Technology Year of Status
import import implementation
from / absorption
Recycled OHL 2010-11 Successfully
PET Engineering absorbed and
GMBH implemented.
PET Recycling
Technologies,
Germany
C. FOREIGN EXCHANGE EARNINGS AND OUTGO
(f) Activities relating to export, initiatives to increase exports,
Developments of new export markets for Products and Services and Export
Plan
The Company has continued to maintain focus and avail of export
opportunities based on economic considerations. During the year, the
Company has exports (FOB value) worth Rs. 1,46,667 crore (US$ 32,889
million).
(g) Total Foreign exchange earned and used
Rs. crore
a. Total Foreign Exchange Earned 1,40,557.55
b. Total savings in Foreign Exchange
through products manufactured by the
Company and deemed Exports 55,189.28
(US$ 12,375.66 Million) sub total (a+b) 1,95,746.83
c. Total Foreign Exchange used 1,86,365.41
Form A'
Form for disclosure of particulars with respect to conservation of energy
Part A'
Power & Fuel Consumption Current Year Previous Year
1. Electricity
a) Purchased Units (Lacs) 3,887.53 3,337.19
Total Cost (Rs. In Crores)# 149.63 134.89
Rate/Unit (Rs.)# 3.85 4.04
b) Generation through captive power facilities
1) Through Steam Turbine/Generator:
Units (Lacs) 52,193.98 47,052.53
KWH per unit of fuel 5.45 4.93
Total Cost (Rs. In Crores) 2,140.50 **1,997.54
Cost/Unit (Rs.) 4.10 **4.25
c) Own Generation
1) Through Diesel Generator
Units (Lacs) 776.06 949.72
KWH per unit of fuel 4.17 4.16
Fuel Cost/Unit (Rs.) 6.88 5.83
2) Through Steam Turbine/Generator
Units (Lacs) 54,475.91 55,353.33
KWH per unit of fuel 4.43 4.39
Fuel Cost/Unit (Rs.) 3.04 2.81
3) Through Wind Mill Turbine
Units (Lacs) 22.38 24.24
Purchased Fuels consumed
2. Furnace Oil
Quantity (K. Ltrs) 55,273.35 92,781.54
Total Cost (Rs. In crores) 144.95 186.28
Average rate per Ltr. (Rs.) 26.22 20.08
3. Diesel Oil
Quantity (K. Ltrs) 2,256.30 2,860.00
Total Cost (Rs. In crores) 8.56 9.33
Average rate per Ltr. (Rs.) 37.92 32.62
4. Others:
(a) Gas
Quantity (1000 M3) 4,692,326.01 3,800,717.26
Total Cost (Rs. In crores) 5,574.51 4,033.09
Average rate per 1000M3 (Rs.) 11,880.06 10,611.39
(b) Coal/Husk/Wood Fire
Quantity 32,882.75 27,896.98
Total Cost (Rs. In crores) 8.62 5.71
Average rate per MT (Rs.) 2,621.70 2,047.90
Internal Fuels consumed
5. Gas
Quantity (1000 M3) 3,484,015.37 3,361,717.54
6. GT fuels
Quantity (K. Ltrs) 199,413.97 831,596.35
#Excluding Demand Charges ** Restated to reflect current year method
B. Consumption per unit of Production:
Product Electricity Furnace Oil/
(KWH) HSD/ HFHSD
(Ltrs)
Current Previous Current Previous
Year Year Year Year
Fabrics (Per 1000 mtrs) 4,704 4,969 1 2
PFY (per MT) 708 700 2 12
PSF (per MT) 357 357 13 21
PTA (per MT) 307 305 - 2
LAB (per MT) 600 610 8 27
MEG (per MT) 454 458 - -
PVC (per MT) 438 429 - -
HDPE (per MT) 563 567 - -
PP (per MT) 302 309 1 -
FF (per MT) 587 666 81 42
PET (per MT) 251 270 - -
PX (per MT) 209 208 5 40
Petro-products (per MT) 75 73 1 9
PBR (per MT) 612 646 - -
Caustic Soda (per MT) 2,613 2,574 - -
Acrylonitrile (per MT) 484 479 - -
Product LSHS Gas
(Kgs) (SM3)
Current Previous Current Previous
Year Year Year Year
Fabrics (Per 1000 mtrs) - - 473 475
PFY (per MT) - 8 88 75
PSF (per MT) - - 92 81
PTA (per MT) - - 12 9
LAB (per MT) 1 1 306 263
MEG (per MT) 5 3 66 52
PVC (per MT) 2 1 31 34
HDPE (per MT) 2 1 17 19
PP (per MT) - - 61 55
FF (per MT) - - 48 109
PET (per MT) - - 74 75
PX (per MT) - - 366 315
Petro-products (per MT) - - 78 73
PBR (per MT) 16 13 506 512
Caustic Soda (per MT) 11 5 79 89
Acrylonitrile (per MT) (7) - (64) (54)
For and on behalf of the Board of Directors
Mukesh D. Ambani
Chairman and Managing Director
April 21, 2011
Name of the Entity:
Aavaran Textiles Private Limited
Anuprabha Commercials Private Limited
Deccan Finvest Private Limited
Ekansha Enterprise Private Limited
Farm Enterprises Limited
Futura Commercials Private Limited
Jagadanand Investments And Trading Company Private Limited
Jagdishvar Investments And Trading Company Private Limited
Kankhal Investments And Trading Company Private Limited
Kardam Commercials Private Limited
Kedareshwar Investments And Trading Company Private Limited
Krish Commercials Private Limited
Kshitij Commercials Private Limited
Madhuban Merchandise Private Limited
Neutron Enterprises Private Limited
Nitya Priya Commercials Private Limited
Pams Investments And Trading Company Private Limited
Petroleum Trust
Priyash Commercials Private Limited
Reliance Aromatics and Petrochemicals Limited
Reliance Chemicals Limited
Reliance Consolidated Enterprises Private Limited
Reliance Consultancy Services Private Limited
Reliance Energy and Project Development Limited
Reliance Global Commercial Limited
Reliance Industrial Infrastructure Limited
Reliance Petroinvestments Limited
Reliance Polyolefins Limited
Reliance Ports and Terminals Limited
Reliance Universal Commercial Limited
Reliance Universal Enterprises Limited
Reliance Utilities and Power Private Limited
Reliance Utilities Private Limited
Reliance Welfare Association
Sanatan Textrade Private Limited
Saumya Finance And Leasing Company Private Limited
Silvassa Hydrocarbons And Investments Private Limited
Sudarshan Enterprises
Synergy Synthetics Private Limited
Terene Industries Private Limited
Vita Investments and Trading Company Private Limited
Abhayaprada Enterprises LLP
Adisesh Enterprises LLP
Ajitesh Enterprises LLP
Badri Commercials LLP
Bhuvanesh Enterprises LLP
Chakradev Enterprises LLP
Chakradhar Commercials LLP
Chakresh Enterprises LLP
Chhatrabhuj Enterprises LLP
Devarshi Commercials LLP
Harinarayan Enterprises LLP
Janardan Commercials LLP
Kamalakar Enterprises LLP
Karuna Commercials LLP
Narahari Enterprises LLP
Pavana Enterprises LLP
Pitambar Enterprises LLP
Rishikesh Enterprises LLP
Samarjit Enterprises LLP
Shripal Enterprises LLP
Srichakra Commercials LLP
Svar Enterprises LLP
Taran Enterprises LLP
Tattvam Enterprises LLP
Trilokesh Commercials LLP
Vasuprada Enterprises LLP
Vishatan Enterprises LLP
MANAGEMENT DISCUSSION AND ANALYSIS
Forward-looking statements
The report contains forward-looking statements, identified by words like
plans', expects', will', anticipates', believes', intends', seen to
be', projects', estimates' and so on. All statements that address
expectations or projections about the future, but not limited to the
Company's strategy for growth, product development, market position,
expenditures, and financial results, are forward-looking statements. Since
these are based on certain assumptions and expectations of future events,
the Company cannot guarantee that these are accurate or will be realised.
The Company's actual results, performance or achievements could thus
differ from those projected in any forward-looking statements. The Company
assumes no responsibility to publicly amend, modify or revise any such
statements on the basis of subsequent developments, information or events.
OVERVIEW
Value creation through operating excellence and new initiatives
In line with its aspirations of ongoing growth, Reliance is investing its
resources in core businesses across the integrated energy chain. It is
also taking an initiative of investing in new technologies and businesses
that help meet changing aspirations of millions of Indian consumers. These
strategies and initiatives are aimed to ensure that Reliance delivers
long-term growth and creates unprecedented value for its stakeholders.
Reliance Industries Limited (RIL) has an integrated business model that
combines a long-term perspective, with focus on operational excellence and
disciplined approach towards capital investment to deliver shareholder
value. The Company has identified, developed and executed projects while
applying best practices that ensure superior project returns across a range
of scenarios. It has regularly generated higher income from its productive
capital base, as demonstrated by superior returns on average capital
employed. It has delivered industry-leading financial and operating results
that multiply long-term shareholder value. RIL's proven and tested
business model, and superior cash flow served its shareholders well in the
Financial Year 2010 - 2011 (FY-11).
FY-11 was a strong year for its upstream oil and gas business. RIL
completed two years of operations of its KG-D6 production facility. It not
only delivered new supplies of crude oil and natural gas to the nation, but
also provided significant value for the Company and its
shareholders. Production from KG-D6 for FY-11 was 7.95 million barrels
(MMBL) of crude oil, and 720 billion cubic feet (BCF) of natural gas - a
growth of 97.6% and 41.7% respectively.
In FY-11, Reliance entered into four Joint Ventures (JV) in the United
States of America. These JVs, over a period, will enhance Reliance's
position in development of unconventional natural gas and oil resources and
develop new competencies in operating new businesses. The Company is
confident that the combination of its complementary strengths will open new
opportunities to meet the growing global energy demand and raise value for
its shareholders.
In the downstream and chemical business, RIL maintained a long-term
strategic approach during the recent economic downturn. The Company
maintained operating rates upwards of 100% in the refining and
petrochemicals business. It processed 66.6 million metric tonnes (MMT) of
crude, the highest ever, at its Jamnagar refinery complex.
For the sixth consecutive year, RIL has been featured in the Fortune Global
500 list of the world's largest corporations. Its current rankings are as
follows:
- 175 based on revenues
- 100 based on profits
RIL - BP alliance
During the year, RIL and BP announced a strategic partnership in the oil
and gas business. This partnership comprises BP taking 30 per cent stake
in 23 oil and gas production sharing contracts that Reliance operates in
India, including the KG-D6 block, and the formation of a joint venture
(50:50) for sourcing and marketing gas in India. The partnership will also
endeavour to accelerate the creation of infrastructure for receiving,
transporting and marketing natural gas in India. The partnership will
combine BP's world-class deep-water exploration and development
capabilities with Reliance's project management and operations expertise.
BP will pay RIL an aggregate consideration of $ 7.2 billion, and completion
adjustments, for the interests to be acquired in the 23 production sharing
contracts in India. Future performance payments of upto $ 1.8 billion could
be paid based on exploration success that results in the development of
commercial discoveries.
Completion of the transaction is subject to Indian regulatory approvals and
other customary conditions. RIL has applied to local regulatory
authorities and the Government of India for necessary approvals for this
partnership.
Shale gas joint ventures
The growing importance of U.S. shale gas resources is reflected in USA's
Department of Energy's EIA Annual Energy Outlook 2011 energy projections,
with technically recoverable U.S. shale gas resources now estimated at 862
TCF. Given a total natural gas resource base of 2,543 trillion cubic feet
(TCF), shale gas resources constitute 34% of the domestic natural gas
resource base and 50% of 48 onshore resources in the US. As a result, shale
gas is the largest contributor to the projected growth in production, and
by 2035, shale gas production is expected to account for 46% of U.S.
natural gas production as per the report.
During the year, the Company took a significant step by entering into
partnerships in the United States of America with Atlas Energy, Pioneer
Natural Resources and Carrizo Oil & Gas through three distinctive joint
venture agreements. It has also entered into a separate joint venture with
Pioneer Natural Resources aimed at addressing the mid-stream opportunity in
gas evacuation and transportation.
RIL, through its subsidiary, Reliance Marcellus LLC, has entered into a
joint venture with the USA based Atlas Energy, Inc., Pittsburgh,
Pennsylvania, under which Reliance acquired a 40% interest in Atlas's core
Marcellus Shale acreage position. The acreage will support the drilling of
over 3,000 wells with a net resource potential of approximately 13.3 TCFe
(5.3 TCFe net to Reliance).
RIL, through its subsidiary, Reliance Eagleford Upstream Holding LP, has
entered into a joint venture with the USA based Pioneer Natural Resources
Company, Irving, Texas, under which Reliance acquired a 45% interest in
Pioneer's core Eagle Ford shale acreage position. The acreage will support
the drilling of over 1,750 wells with a net resource potential to the joint
venture of nearly 10 TCFe (4.5 TCFe net to Reliance).
RIL, through its subsidiary, Reliance Marcellus II LLC, has entered into a
joint venture with the USA based Carrizo Oil & Gas Inc., under which
Reliance acquired 60% interest in Marcellus Shale acreage in central and
northeast Pennsylvania. The acreage will support the drilling of
approximately 1,000 wells with a net resource potential of nearly 3.4 TCFe
(2.0 TCFe net to Reliance).
Joint venture for Butyl Rubber production in India
During the year, RIL and Russia's SIBUR announced a joint venture for the
setting up of a facility for producing 100,000 tonnes of butyl rubber in
India. This is a significant step towards Reliance's commitment to service
India's
growing automotive sector by bringing in complex technologies, available
with only a very few companies globally. The setting up of domestic
manufacturing of butyl rubber will fulfill a longstanding demand of the
Indian tyre and rubber industry.
Spearheading the knowledge revolution
During the year, RIL acquired a 95% stake in Infotel Broadband Services
Limited, which emerged as a successful bidder in all the 22 circles of the
auction for Broadband Wireless Access (BWA) spectrum conducted by the
Department of Telecommunication, Government of India. RIL has invested Rs.
4,201.64 crore by way of subscription to equity capital issued by Infotel
Broadband. RIL sees the broadband opportunity as a new frontier of
knowledge economy in which it is confident of taking leadership position
and providing India with an opportunity to be in the forefront among the
countries providing world-class 4G network and services.
Continuing success in exploration and production
This was yet another successful period for RIL's oil and gas exploration
and production business. The Company made five oil discoveries in the on-
land exploratory block CB-ONN-2003/1 (CB-10 A&B) in the Cambay basin,
awarded under the NELP-V round of exploration bidding. These discoveries
are significant as this play fairway is expected to open more oil pool
areas, leading to better hydrocarbon potential within the block. The block
covers an area of 635 sq. km. in two parts, viz. Part A & Part B. RIL
holds 100% participating interest (PI) in the block.
The Company also made a gas discovery in the exploration block KG-DWN-
2003/1 (KG-V-D3) of NELP-V. The deep-water block KG-DWN-2003/1 is located
in the Krishna basin, about 45 km. off the coast in the Bay of Bengal. The
block covers an area of 3,288 sq. km. in which RIL holds a 90% PI. During
the period, the following six discoveries were notified to the Directorate
General of Hydrocarbons (DGH), Government of India:
- Dhirubhai-47 in Well AF1 in CB-10 block
- Dhirubhai-48 in Well AJ1 in CB-10 block
- Dhirubhai-49 in Well AT1 in CB-10 block
- Dhirubhai-50 in Well AN1 in CB-10 block
- Dhirubhai-51 in Well AR1 in CB-10 block
- Dhirubhai-52 in Well W1 in KG-V-D3 block
Supreme Court judgement in RNRL-RIL dispute
The Honourable Supreme Court of India has delivered its judgment in the
Reliance Natural Resources Limited (RNRL) -RIL legal dispute. The judgment
recognized the dominant
role of the provisions of the Production Sharing Contract and upheld the
policies formulated by the Government under which it has the authority to
regulate production and distribution of natural gas. RIL and RNRL signed a
Gas Supply Master Agreement in compliance with the Gas Utilization Policy
and EGOM decisions. During the year, RIL and Reliance ADA Group companies
approved and signed an agreement cancelling all existing non-compete
arrangements entered between the two groups in January 2006, pursuant to
the scheme of reorganization of the Reliance Group and entered a new
simpler, non-compete agreement with respect to only gas-based power
generation.
Financial performance
Turnover Rs. 2,58,651 crore + 29%
$ 58,000 million + 30%
PBDIT Rs. 41,178 crore + 25%
$ 9,234 million + 26%
Cash profit Rs. 34,530 crore + 24%
$ 7,743 million + 25%
Net profit Rs. 20,286 crore + 25%
$ 4,549 million + 26%
The net profit for the year was at Rs. 20,286 crore ($ 4,549 million) with
a Compounded Annual Growth Rate (CAGR) of 23% over the past 10 years. RIL
has announced a dividend of 80% amounting to Rs. 2,772 crore ($ 622
million), including dividend distribution tax. This is one of the highest
payouts by any private sector company in India.
RIL continues to play a pivotal role in the growth of India's economy and
endeavours to contribute to the nation's progress. It accounts for:
- 13.4% of exports
- 6.9% of the indirect tax revenues
- 4.8% of the market capitalisation
- Weightage of 11.9% in the BSE Sensex
- Weightage of 10.1% in the NSE Nifty
FINANCIAL REVIEW
RIL delivered superior financial performance with improvements across key
parameters. The turnover achieved for the year ended March 31, 2011 was
Rs. 2,58,651 crore ($ 58.0 billion), a growth of 29% over the previous
year. The increase in revenue was due to 11% rise in volumes and 18% rise
in prices. During the year, exports including deemed exports, were higher
by 33% at Rs. 1,46,667 crore ($ 32.9 billion).
The consumption of raw materials increased by 31% from Rs. 1,47,919 crore
to Rs. 1,93,234 crore ($ 43.3 billion). This was mainly on account of
higher crude oil processed in the SEZ refinery. Traded goods purchases were
Rs. 1,464 crore ($ 328 million) as compared to Rs. 2,996 crore in the
previous year.
The staff cost was Rs. 2,624 crore ($ 588 million) for the year as against
Rs. 2,350 crore in the previous year.
The operating profit before other income increased by 25% from Rs. 30,581
crore to Rs. 38,126 crore ($ 8.5 billion). The net operating margin for
the period was 15.4 % as compared to 15.9% in the previous year.
Other income was higher at Rs. 3,052 crore ($ 684 million) against Rs.
2,460 crore, primarily due to higher average cash balances.
EBITDA increased by 25% from Rs. 33,041 crore to Rs. 41,178 crore ($ 9.2
billion).
Interest cost was higher at Rs. 2,328 crore ($ 522 million) as against Rs.
1,997 crore. The gross interest cost was lower at Rs. 2,802 crore ($ 628
million) as against Rs. 2,981 crore for the previous year on account of
lower interest rates. The interest capitalised was lower at Rs. 474 crore
($ 106 million) as against Rs. 984 crore in the previous year due to
commissioning of projects.
Depreciation (including depletion and amortisation) was higher at Rs.13,608
crore ($ 3.1 billion), against Rs. 10,497 crore in the previous year,
primarily on account of higher depletion charges in oil and gas and
incremental depreciation due to the SEZ refinery.
Profit after tax was Rs. 20,286 crore ($ 4.5 billion) as against Rs. 16,236
crore for the previous year, an increase of 25%.
The earning per share (EPS) for the year was Rs. 62.0 ($ 1.4).
Net gearing at 13.5%, net debt to equity of 0.17, return on capital
employed at 13.2% and return on equity at 15.5% are measures of RIL's
strong financial position at the end of the year.
During the year, the Company has issued and allotted 29,99,648 equity
shares to the eligible staff of the Company and its subsidiaries under
Employees Stock Option Scheme. As a result, the Company's equity share
capital stands at Rs. 3,273 crore.
The net capital expenditure for the year ended March 31, 2011 was Rs. 6,068
crore ($ 1.4 billion).
During the year, a total of Rs. 28,719 crore ($ 6.4 billion) was paid in
the form of taxes and duties.
RIL maintained its status as India's largest exporter. The exports,
including deemed exports, were at Rs. 1,46,667 crore ($ 32.9 billion) as
against Rs. 1,10,176 crore in the previous year.
RIL exported to 122 countries around the world. The exports represent 57%
of RIL's turnover. Petroleum products constitute 88% while the balance is
contributed by petrochemicals.
Resources and liquidity
In FY-11, RIL took advantage of low interest rates and raised capital at
historically low costs. During the year, RIL raised $ 1 billion through
external commercial borrowings at competitive rates and issued Rs. 500
crore of debentures.
Additionally, Reliance Holding USA, Inc., a wholly owned subsidiary of RIL
raised $ 1.5 billion through the issuance of 10 and 30 year senior notes.
The notes were tightly priced as a result of significant investor demand
and allowed Reliance to considerably extend its maturity profile. The
offering was India's largest corporate bond issuance and the first US
Dollar 30 year bond issuance out of Asia since 2003, showcasing the
creditworthiness of Reliance and its access to public capital markets.
RIL continuously undertakes liability management to reduce cost of debt and
to diversify its liability mix.
As on March 31, 2011, RIL's total long-term debt was at Rs. 55,092 crore ($
12.4 billion). RIL's cash and cash equivalent stood at Rs. 42,393 crore ($
9.5 billion) as at March 31, 2011. RIL's net debt was Rs. 25,004 crore
which is the equivalent of 0.60 times of its FY-11 EBITDA. The increase in
cash was primarily driven by the receipt of Rs. 9,004 crore ($ 2.0
billion), part of the total consideration of $ 7.2 billion to be received
from BP Exploration (Alpha) Limited. RIL continued to efficiently manage
its short-term resources by placing them in very liquid, highly rated
securities such as bank fixed deposits, CDs, Government securities and
bonds.
RIL's short-term debt of Rs. 12,305 crore ($ 2.8 billion) is adequately
covered by its net working capital.
As at the end of the fiscal year, RIL's total debt was Rs. 67,397 crore.
85% of long-term debt and almost all of RIL's short-term debt was
denominated in foreign currencies.
RIL's long-term debt to equity ratio was at 0.37. RIL's gross debt to
equity ratio, including long-term and short-term debt as on March 31,
2011, was at 0.44, while the net debt to equity ratio was at 0.17. As on
March 31, 2011, RIL's net gearing was 13.5 %.
RIL's superior credit profile is reflected in its lending relationships,
with over 100 banks and financial institutions having commitments to RIL.
RIL's financial discipline and prudence is also reflected in the strong
credit ratings ascribed by rating agencies. Its continued balance sheet
strengthening in FY-11 resulted in Moody's, Fitch and S&P recently
upgrading their outlook for the Company. Moody's has rated RIL's
international debt at investment grade Baa2, with an upgraded outlook from
stable' to positive'. S&P has rated RIL's international debt as BBB,
which is a notch above India's sovereign rating.
S&P recently upgraded its outlook on RIL from stable' to positive'. RIL's
long-term debt is rated AAA by CRISIL and Ind AAA' by Fitch, the highest
rating awarded by both these agencies. RIL's short-term debt is rated P1+
by CRISIL, the highest credit rating assigned in this category.
BUSINESS REVIEW
OIL & GAS EXPLORATION AND PRODUCTION
Energy markets have improved significantly over the past 12-15 months as a
result of improved economic growth, higher demand for refined products and
limited supplies of crude oil. In 2010, global oil demand grew by 3.4% (or
2.9 MMBD) to 87.9 MMBD, which is the highest growth in the last 30 years.
Emerging Asia which comprises India and China, accounted for 40% of the oil
demand increase. Global LNG markets also grew by 13% and are currently at
275 million tonnes per annum (MMTPA).
Crude prices increased 25% during the year wherein Brent oil prices
averaged $86.7/bbl vis-a-vis $69.5/bbl in FY-10. In FY-11, the US
benchmark Henry Hub gas prices averaged $4.13/MMBTU vis-a-vis $3.98/MMBTU
in FY-10. Prices remained range-bound in the US due to excess drilling and
lack of export infrastructure. However, Asian LNG prices remained linked to
crude oil and spot prices in recent months touched $10-12/MMBTU.
It is expected that global energy consumption growth will average at around
1.7% per annum over the next two decades. Of this, non-OECD energy
consumption is expected to be 68% higher by 2030, averaging 2.6% p.a.
growth, and accounting for 93% of global energy growth. OECD energy
consumption in 2030 is expected to be around 6% higher than today, with
growth averaging at a measly 0.3% p.a. over the next two decades.
The fuel mix is changing relatively slowly, due to long asset lifetime, but
gas and non-fossil fuels are gaining share at the expense of coal and
crude oil. The fastest growing fuels are renewables (including biofuels)
which are expected to grow at 8.2% p.a. 2010-30; among fossil fuels, gas
grows the fastest (2.1% p.a.).
Non-OECD countries are likely to account for 80% of the global rise in gas
consumption, with growth averaging at around 3% p.a. Demand growth is
expected to be the fastest in non-OECD Asia (4.6% p.a.) and the Middle East
(3.9% p.a.). It is expected that over the next two decades, China could
consume about 43 BCF per day, which is comparable to that of the 47 BCF per
day that EU currently consumes. The growth is expected to remain modest in
OECD markets (1% p.a.), particularly in North America.
Oil continues to suffer a long run decline in market share, while gas is
steadily gaining. Natural gas is projected to be the fastest growing
fossil fuel globally. Production is expected to grow in every region except
Europe, with Asia accounting for the world's largest production and
consumption increments.
The IEA estimates that global upstream capital spending, which had fallen
by 15% in 2009, has rebound in 2010 and is pegged at $ 470 billion. Global
offshore capital expenditure is estimated at $ 150 billion and nearly $ 874
billion is expected to be spent over the next five years. A substantial
portion of this investment will flow into deep-water. Deep-water capital
expenditure is pegged at nearly $ 50 billion and deep-water production is
set to double in the next five years. Currently, there are very few fields
with water depths of more than 2,000 meters under development. Many of the
recent discoveries have been in those water depths. The capital
expenditure sanctioned in this water depth is likely to double by 2012.
The role of unconventional oil is also expected to increase significantly
and will touch 10% of world oil demand by 2035.
India continues to remain amongst the fastest growing economies of the
world with a projected growth of 8-9%. Consequently, India's energy needs
are expected to treble by 2035 from 468 million tonnes of oil equivalent
(MTOE) to nearly 1405 MTOE. India can fulfill its agenda for climate
change as natural gas used to generate power has half the CO2 emissions of
conventional coal power generation and near-zero sulphur emissions.
Indian gas market
In India, gas constitutes around 10% of the current energy basket compared
to the global average of 24% and hence presents a vast potential for
growth. The demand for natural gas in India is expected to grow at a CAGR
of 10% over the next five years and could soon be a significant player in
the global gas market.
RIL - BP partnership
On February 21, 2011, RIL and BP announced a strategic partnership between
the two companies and signed the relationship framework and transactional
agreements. The partnership across the full value chain comprises BP taking
a 30% stake in 23 oil and gas production sharing contracts that Reliance
operates in India, including the producing KG-D6 block. The partnership
will aim to combine BP's deep-water exploration & development capabilities
with Reliance's project management & operations expertise. The two
companies will also form a joint venture (50:50) for the sourcing and
marketing of gas in India and bid together for incremental opportunities
in the deep-water blocks in the east coast of India.
BP will pay RIL an aggregate consideration of $ 7.2 billion, and completion
adjustments, for the interests to be acquired in the 23 production-sharing
contracts. Future performance payments of upto $ 1.8 billion could be paid
based on exploration success that results in development of commercial
discoveries. RIL will continue to be the operator under the production-
sharing contracts. Completion of the transactions is subject to regulatory
and the Government of India approvals.
RIL gas marketing
KG-D6 was the single largest source of domestic gas in the country for FY-
11 and accounted for almost 35% of the total gas consumption in India. The
gas from KG-D6 catered to demand from 57 customers in critical sectors like
fertilizer, power, steel, petrochemicals and refineries. The gas from KG-
D6 accounted for about 44% of the total domestic gas production paving the
way for increased energy independence for the country.
RIL's E&P business: KG-D6
KG-D6 gas fields completed 730 days of 100% uptime and zero-incident
production. An average daily gas production from KG-D6 block for the year
was 55.9 MMSCMD with a cumulative production of 1,257 BCF since inception,
of which 720 BCF was produced in the current fiscal. An average oil
production for the year from the block was 21,971 barrels per day with a
cumulative production of 14 MMBL of oil and condensate since inception, of
which 8 MMBL of oil and 1 MMBL of condensate was produced in the current
fiscal.
In the D1-D3 gas fields a total of 20 wells have been drilled, of which 18
are production wells. Of these, 2 wells have been drilled this fiscal.
6 wells in the D26 field are under production. Of these, MA-2 which was
earlier a gas injection well has been converted to a production well since
April 2010.
An integrated development plan for all gas discoveries in KG-D6 is being
conceptualized. This will encompass existing wells and other discoveries
within the block to maximize capital efficiency and to accelerate
monetization.
Other domestic blocks
The Company made six discoveries during the year which are as follows:
* Well W1 in the KG-V-D3 block
* Well AF1, AJ1, AT1, AN1 and AR1 in on-land CB-10 block
The Company has also submitted initial proposal for commerciality to DGH
for review and discussion for the following blocks:
* Discovery D33 in GS-01 block
* Discoveries D39 and D41 in KG-V-D3 block
* Discovery D36 in KG-D4 block
RIL has submitted an integrated appraisal programme for all discoveries in
Part A of CB-10 block. Further, RIL has been continuing with the appraisal
activities for the other discoveries in KG-D6, KG-V-D3 and CB-10 blocks.
In FY-11, RIL has relinquished CB-ON/1 block due to their poor
prospectivity. Currently, RIL's portfolio consists of 28 exploration
blocks.
Panna-Mukta and Tapti fields
The Panna-Mukta fields produced 9.3 MMBL of crude oil and 52.1 BCF of
natural gas in FY-11 - a decline of 31% and 25% respectively over the
previous year. The lower volumes are on account of complete shutdown due to
failure of the single point mooring system (SPM) and parting of anchor
chains 4 and 5 to the SPM from July 20, 2010 to October 25, 2010.
Tapti fields produced 1.2 MMBL of condensate and 95.2 BCF of natural gas in
FY-11 - a decline of 22% and 13% respectively over the previous year. The
decrease in production was due to a natural decline in the reserves.
Drilling of 6 wells in Panna-L is expected to commence soon and oil
production is expected in the later part of FY-12. Its reserves are
estimated at 7.0 MMBL. The anticipated production from all 6 wells is
approximately 3,000 BOPD.
CBM blocks
RIL holds 3 CBM blocks in Sohagpur (East), Sohagpur (West) and Sonhat. So
far, RIL has completed the following work in the Sohagpur (East) and
Sohagpur (West) blocks:
* Over 40 core holes drilled, logged and tested for gas content,
permeability and coal properties
* 31 wells air drilled and tested for productivity
* 75 hydraulic fracturing jobs done
* 5 cavitation completion wells and 2 sets of in-seam horizontal wells
The process for acquiring land for well sites, market assessment &
infrastructure for evacuation and transportation of gas has commenced.
International business
During the year, Reliance entered into one of the fastest growing
opportunities emerging in the U.S. unconventional gas business through
three upstream joint ventures. These joint ventures will materially
increase Reliance's resources base and provide Reliance with an entirely
new platform to grow its exploration and production business while
simultaneously enhancing its ability to operate unconventional resource
projects in the future.
RIL - Chevron
RIL, through its subsidiary, Reliance Marcellus LLC, entered into a joint
venture with Atlas Energy, Inc. (now owned by Chevron Corporation) under
which Reliance acquired a 40% interest in Atlas' core Marcellus shale
acreage position. The acquisition cost of participating interest in the JV
consisting of $ 339 million of upfront payment and an additional payment
of $ 1.36 billion under a carry arrangement for 75% of Atlas's capital
costs over an anticipated seven and a half year development programme.
Reliance becomes a partner in approximately 300,000 net acres of
undeveloped leasehold in the core area of the Marcellus shale in
southwestern Pennsylvania. The acreage will support the drilling of over
3,000 wells with a net resource potential of approximately 13.3 TCFe (5.3
TCFe net to Reliance).
While Atlas will serve as the development operator for the joint venture,
Reliance is expected to begin acting as development operator in certain
regions in coming years as part of the joint venture. Under the framework
of the joint venture, Atlas will continue acquiring leasehold in the
Marcellus shale region and Reliance will have the option to acquire 40%
share in all new acreage. Reliance also obtains the right of first offer
with respect to potential future sales by Atlas of around 280,000
additional Appalachian acres currently controlled by Atlas.
RIL - Pioneer
RIL, through its subsidiary, Reliance Eagleford Upstream LP, entered into a
joint venture with Pioneer Natural Resources Company under which Reliance
acquired a 45%
interest in Pioneer's core Eagle Ford shale acreage position in two
separate transactions. Pioneer and Newpek LLC, Pioneer's existing partner
in Eagle Ford, simultaneously conveyed 45% of their respective interests in
the Eagle Ford to Reliance. Newpek owned an approximate 16% non-operated
interest in Pioneer's core Eagle Ford shale acreage. Following the
transaction, Pioneer, Reliance and Newpek own 46%, 45% and 9% of the joint
venture interests, respectively.
The joint venture has an approximate net working interest of 91% in 289,000
gross acres implying 263,000 net acres. Reliance paid $ 1.315 billion for
its implied share of 118,000 net acres. This upstream transaction
consideration included combined upfront cash payments of $ 263 million and
additional $ 1.052 billion capital costs under a carry arrangement for 75%
of Pioneer's and Newpek's capital costs over an anticipated four years.
The joint venture's leasehold, which is largely undeveloped, is located in
the core area of the Eagle Ford shale in south Texas. Low operating costs,
significant liquids content (70% of the acreage lies within the condensate
window) and excellent access to services in the region combine to make the
Eagle Ford one of the most economically attractive unconventional resources
in North America. Pioneer believes the acreage will support the drilling
of over 1,750 wells with a net resource potential to the joint venture of
approximately 10 TCFe (4.5 TCFe net to RIL).
The joint venture plans to increase the current drilling programme to
approximately 140 wells per year within three years. Also included in the
transaction is current production of 28 MMCFe/d (11 MMCFe/d net to
Reliance) from five currently active horizontal wells. While Pioneer will
serve as the development operator for the upstream joint venture, Reliance
is expected to begin acting as development operator in certain areas in
coming years as part of the joint venture. Under the framework of the
joint venture, Pioneer will continue acquiring leasehold in the Eagle Ford
Shale and Reliance will have the option to acquire a 45% share in all
newly acquired acres.
Additionally, Reliance and Pioneer formed a midstream joint venture that
will service the gathering needs of the upstream joint venture. Reliance's
subsidiary, Reliance Eagleford Midstream LLC, paid $ 46 million to acquire
a 49.9% membership interest in the joint venture. Pioneer and Reliance
will have equal governing rights in the joint venture and Pioneer will
serve as operator.
RIL - Carrizo
RIL, through its subsidiary, Reliance Marcellus II, LLC, entered into a
joint venture with Carrizo Oil & Gas, Inc.
Under the transaction, Reliance acquired a 60% interest in Marcellus shale
acreage in Central and Northeast Pennsylvania that was held in a 50:50
joint venture between Carrizo and ACP II Marcellus LLC, an affiliate of
Avista Capital Partners. Pursuant to the transaction, Reliance acquired
100% of Avista's interest and 20% of Carrizo's interests in the joint
venture. Reliance and Carrizo own 60% and 40% interests, respectively, in
a newly formed joint venture between the companies. Reliance agreed to a
total consideration of $ 392 million, comprising $ 340 million of initial
payment and $ 52 million of drilling carry obligations. The drilling carry
obligations will provide for 75% of Carrizo's share of development costs
over an anticipated two year development programme.
The joint venture will have approximately 104,400 net acres of undeveloped
leasehold in the core area of the Marcellus shale in central and northeast
Pennsylvania, of which Reliance's 60% interest will represent approximately
62,600 net acres. This acreage is expected to support the drilling of
approximately 1,000 wells over the next 10 years, with a net resource
potential of about 3.4 TCFe (2.0 TCFe net to Reliance).
Conventional E&P international blocks
RIL has 13 blocks in its international conventional portfolio, including 2
in Peru, 3 in Yemen (1 producing and 2 exploratory), 2 each in Oman,
Kurdistan and Colombia, 1 each in East Timor and Australia; amounting to a
total acreage of over 99,145 sq. km.
Reliance Exploration & Production DMCC (REP DMCC) has farmed in Block 39
(Peru) with 10% participation interest and relinquished Block 155 (Peru)
where REP DMCC had 28.30% participation interest.
During the year, the following activity was undertaken as part of the
exploratory campaign:
* 2D acquisition in Yemen (Blocks 34 and 37), Oman (Block 41) and Peru
(Block 39). The total 2D acquisition was 1395 LKM.
* 3D acquisition of 800 and 400 sq.km. of 3D in Colombia Borojo North and
South respectively.
* Drilled 3 exploratory wells, 1 each in East Timor, Rovi and Sarta.
Drilling in Timor was met with limited results.
The results following the drilling campaign in blocks Oman 18 and East
Timor K have not been encouraging and accordingly, the expenditure
incurred on these blocks amounting to $177 million (Rs. 807 crore) has been
fully provided for in the books of REP DMCC, a wholly-owned subsidiary of
RIL.
REFINING AND MARKETING
A year of consolidation and growth
The crude oil demand recovered strongly after a period of contraction in
2009. As a consequence, oil inventories reduced to five-year averages
resulting in lowering OPEC spare capacity. Higher oil production also
resulted in lower spare capacity and consequently putting upward pressure
on prices. Higher demand for light products and higher refining utilisation
rates resulted in widening light-heavy differential.
The growing gap between demand and oil supply, coupled with strong crude
prices, is encouraging OPEC producers to further ramp up production. This
is resulting in increased supplies of heavier crudes and further impacting
light-heavy differentials. This should cause light-heavy spread to widen,
and hence improved complex refining margins.
For FY-11, Arab light-heavy differential averaged at $ 3.2/ bbl, an
increase of 86% over the previous year.
According to IEA, oil demand in 2010 grew to 87.9 MMBPD, up 3.4% in 2010
vis-a-vis 2009. It is pertinent to note that demand growth in 2009 was (-)
1.3% vis-a-vis 2008 and therefore, seen in the context of the change over
the last 2 years, growth in 2010 was in excess of 4.5%, the fastest
recovery in over a decade. Demand growth in 2010 was driven by non-OECD
countries which contributed to an additional growth of 2.2 MMBPD (5.7% on
a year-on-year basis) which was 76% of global demand growth.
Average crude oil prices ($/bbl)
FY-11 FY-10
High Low Average High Low Average
WTI 106.8 65.6 83.3 83.5 45.9 70.6
Brent 116.9 67.6 86.7 80.5 46.5 69.6
Dubai 111.6 68.2 84.2 81.3 47.2 69.5
(Source: Platts)
The consumption of middle distillates, the part of the barrel that is most
levered to the economic cycle has picked up particularly strongly in
recent months, leading to higher global oil demand. Middle distillate
product cracks are expected to continue to rise due to strong demand for
these products across Asia. Stronger oil demand, delays in new refining
capacities in Asia, and widening light-heavy oil price differential going
forward provide a further upside to complex refining margins in Asia.
Geopolitical unrest in the Middle East/North Africa regions has been a
major cause for the oil price increase in early 2011, with increasing
focus on potential contagion to major oil exporters beyond Libya. Since the
oil price spiked in February 2011, refining margins have strongly
recovered and remain higher across all regions, driven by strong diesel
margins, with Asian margins close to all-time highs.
Refinery outages of around 1.4 MMBPD in Japan have taken away around
350,000 BPD of diesel supply from the domestic market. Prior to the
earthquake, Japan's 4.5 MMBPD refining capacity was running at close to 90%
with diesel production of around 1.25 MMBPD. Large Asian export-oriented
refiners are likely to shift products to Japan, leading to tightening
supply in the European market.
Refinery capacity and utilization
It is estimated that the net refining capacity addition in 2009 was 2.6
MMBPD and a further 0.5 MMBPD in 2010. Limited capacity addition in 2010,
strong demand growth and wider margins have helped utilization rates
improve during the year. The average capacity utilization rates in FY-11
for refineries in North America, Europe and Asia were at 83.8%, 77.8% and
83.9% as compared to 81.6%, 76.6% and 83.5% of last year's respectively.
With higher global GDP forecasts and higher global oil demand forecasts
coupled with minor capacity additions, refining utilisation rates are
expected to improve over the next few years.
Demand for petroleum products
Light distillates
Gasoline was a weak link in the otherwise improving refining business. For
most of the year, high inventories kept gasoline markets in USA amply
supplied. Structural issues, like tightening fuel standards and rising
share of ethanol, are likely to impact the gasoline cracks in the medium
term.
Recent improvement in overall economic condition has had its positive
impact. Gasoline inventory draws are presently higher at 1.9% and below
the 5-year average and 5.3% below the year-ago level. On a year-on-year
basis, the DOE of USA estimates gasoline demand is up 1.1% as Americans
drove 0.2% more in early 2011 compared to the year-ago period.
Gasoline consumption in non-OECD is underpinned by rising incomes, younger
demographics and surging car sales of China, India, Brazil and other
emerging economies.
Middle distillates
These have been the harbinger of the improvement seen in refining margins
during the year. Better demand and improving prospects have resulted in
diesel cracks at early 2008 levels. It is pertinent to note that the
refining industry has actually had to operate at close to 2008 peak diesel
yields in 2H FY-11 in order to meet demand.
Given the loss of refinery capacity in Japan, growing industrial demand for
diesel generators in the country and on-going diesel demand from emerging
market economies, the supply cushion is clearly smaller than it otherwise
would have been.
Middle distillate stocks are at a virtually identical level to those seen
at the beginning of 2007, six months ahead of the start of the rally that
culminated with diesel cracks close to $50/bbl. With crude oil stocks once
again tight, and concern rising as to whether OPEC supplies will be
sufficient to meet peak summer demand, the conditions for a rapid
distillate stock draw - similar to the one seen in 2007 - are highly
possible.
A much faster and stronger economic growth in non-OECD has resulted in
higher demand for diesel. Supporting factors for Asian diesel market were
strong demand for low sulphur diesel from India. China suffered from diesel
shortage in the second half of the year, prompting increased import
requirements.
Increased business, personal travel and global trade led to demand growth
and better aviation fuel margins.
Changing trends
Petroleum products demand growth, product mix redistribution and
progressively stricter quality requirements will continue to reshape the
refining industry. The trend is towards lighter and lower sulphur refined
transportation fuels. All regions of the world, except Africa, will reduce
sulphur in gasoline to below average 150 ppm by 2020. For diesel, all
regions except Africa will have sulphur content below an average content
of 50 ppm.
Changing product specifications for sulphur (parts per million)
Country 2010 2015 2020
Gasoline
US 30 30 30
EU 10 10 10
Brazil <1000 <1000 10
China 150-50 150-10 50-10
India 500-50 50-10 50-10
Russia 500 50-10 10
Gasoil
US 15 15 15
EU 10 10 10
Brazil 500-50 50 10
China 350-50 350-10 50-10
India 500-50 50-10 50-10
Russia 2000-150 50-10 10
The continuing global trend of tightening product specification presents
new trade and margin opportunities for large modern refiners like
Reliance, which has the ability to produce large quantities of ultra-clean
fuels.
Demand for petroleum products in India
The demand for petroleum products in India increased from 130.5 MMT to
134.4 MMT, reflecting a growth of 2.9% in FY-11. The Indian refining
capacity increased to 184.1 MMT from 179.9 MMT. Details of product-wise
demand and growth during the last year are as follows:
(In KT) FY-11 FY-10 Growth (%)
Diesel 59,869 56,148 6.6
Gasoline 14,200 12,818 10.8
ATF 5,078 4,627 9.7
LPG 13,679 12,516 9.3
Kerosene 8,928 9,304 -4.0
Naphtha 8,951 9,014 -0.7
Others 23,674 26,131 -9.4
Total 134,378 130,559 2.9
An increase in per capita income led to higher penetration of personal
vehicles (cars and two-wheelers) which resulted in double digit growth in
gasoline demand. Higher economic activity resulted in higher diesel demand
as well as increased air travel. Increase in availability of natural gas
resulted in reducing demand for naphtha while improved distribution of LPG
and lower domestic production impacted sales of kerosene.
Gross refining margins
A robust demand in Asia led to improvement in key product cracks virtually
throughout the year. A strong growth in personal automobile ownership in
developing Asia resulted in healthy gasoline cracks in the region. Middle
distillates were the largest contributors to improved
refining margins in the region. Economic growth, shortage of diesel in
China, particularly in the second half of the year and cold winters, were
seen to be the key contributors to the strength seen in diesel cracks.
Robust petrochemical demand also meant that for most part of the year,
naphtha cracks remained strong. Fuel oil crack was the notable exception
and remained in the negative, thus creating a drag to simple refining
margins. This was mainly on account of abundant supply as US became a
major exporter to key Asian markets.
Key product cracks
Singapore US Europe
($/bbl) FY-11 FY-10 FY-11 FY-10 FY-11 FY-10
Gasoline 8.3 6.7 10.4 7.9 6.8 9.2
Jet-kero 14.8 7.9 15.8 6.9 13.6 8.7
Diesel 13.8 7.3 13.2 5.1 14.5 9.0
Naphtha 0.4 (0.4) 7.5 3.7 (2.0) (1.2)
FO (7.1) (4.1) (9.3) (7.0) (8.9) (4.8)
Source: Platts
Singapore margins benefit from growth in demand fuelled by emerging Asian
economies. Widening of light-heavy differentials added to the widening
complex margins in the region. Europe was impacted by lacklustre petroleum
demand and strong Brent price resulting in higher feedstock prices.
Gross Refining Margins ($/bbl) FY-11 FY-10
RIL 8.4 6.6
Regional benchmarks
Singapore (Dubai) 5.2 3.5
US Gulf Coast (Brent) 1.1 2.7
US Gulf Coast (WTI) 6.4 3.2
Rotterdam (Brent) 3.6 3.1
Source: Reuters
For the year under review, RIL's Gross Refining Margin (GRM) was $ 8.4
/bbl, a premium of $ 3.2 /bbl over the Singapore complex margin.
Performance review
RIL processed 66.6 million tonnes of crude and achieved an average
utilization of 107%, which is significantly higher than the average
utilization rates for refineries globally. Exports of refined products were
at $29.3 billion. This accounted for 38.6 million tonnes of product as
compared to 32.8 million tonnes the previous year.
GAPCO
Reliance has consolidated operations of its GAPCO subsidiaries in East
Africa. GAPCO group owns and operates large storage facilities and also
has a well-spread retail distribution network. It owns and operates large
coastal storage terminals in Dar-e-Salaam (Tanzania), Mombasa (Kenya) and
an inland terminal at Kampala (Uganda) and has well-spread depots in East
Africa.
GAPCO achieved a turnover of $ 1.1 billion for 2010 (January-December)
which was 36.2% higher as compared to the previous year. GAPCO's EBITDA
for 2010 was $ 29.7 million, an increase of 26.9% on a year-on-year basis
while profit before tax increased by 24.5% to $ 19.3 million. It sold 1.6
million kilo litres of petroleum products during 2010, which was 23.6%
higher over the previous year.
Strategy and outlook
Reliance is best positioned to capture top decile margins as a result of
processing cheaper, heavier crudes and benefitting from low operating
costs. Built in the last decade, the RIL refineries are state-of-the-art
and among the most complex refineries in the world. Strategically located
on the west coast of India, it benefits from low transportation costs for
its feedstock and also from its proximity to the high-growth markets of
Asia. From a product slate perspective, the refineries have been designed
to produce higher quantities of middle distillate products like diesel and
jet-kero and also ultra-clean fuels that provide it the potential for
higher refining margins.
PETROCHEMICALS
Ethylene scenario
Ethylene is the primary building block and a major feedstock for polymers.
It is a raw material used in the manufacture of polymers like
polyethylene, polyvinyl chloride and polystyrene, as well as organic
chemicals like ethylene oxide and ethylene glycols. These products are
used in a variety of end markets, such as packaging, transportation,
electronic, textile and construction.
Global ethylene markets continue to recover from a state of oversupply that
developed in 2008-2010, stemming mainly from the construction of new
capacity in the Middle East and Asia and recessionary global conditions.
Global ethylene production totalled 122 MMT in 2010, representing an
operating rate of 84.9% as compared to 84% in 2009.
World Ethylene supply/demand - 2010
Production by feedstock Demand by end use
Production : 122 MMT Demand : 122 MMT
Naphtha 50% PE 61%
Ethane 33% Ethylene Oxide 14%
Propane 8% EDC 11%
Butane 4% EBZ 6%
Others 5% Others 8%
Capacity additions in the Middle East and the Asian continent during the
recent past have dramatically changed the supply scenario. The Middle East
now accounts for 18% of global ethylene capacity as compared to 10% in
2005. Similarly, Asia now contributes to 33% of the global ethylene
capacity as compared to 29% in 2005. With the capacity that has become
operational in the Middle East, the feedstock mix for cracker has also
changed in favour of gas.
Ethylene capacity additions trend: 2005 - 2010
Ethylene capacity (KT) 2005 2010 2005-2010
(% CAGR)
USA 34,842 32,706 -1%
European Union 25,313 26,087 1%
Middle East 11,803 25,290 16%
Asia 33,504 47,630 7%
Others 10,412 11,890 3%
World 115,874 143,603 4%
Source: CMAI
Strong economic growth in developing Asia has resulted in the demand for
key petrochemical products reaching an all-time high. Petrochemical prices
also improved on account of higher demand and cost push from higher
feedstock prices.
Polymers are used in a wide variety of applications like agriculture, food
packaging, healthcare, automotive components and household appliances.
Plastics growth will continue to be driven by applications where plastics
can deliver a cost advantage and performance enhancement.
Global commodity plastics consumption in 2010 was estimated at 196 MMT. Of
this, polyethylene (PE) accounts for 36% of all plastic consumption,
followed by polypropylene (PP) which accounts for 25% and polyvinyl
chloride (PVC) which accounts for 18% of plastic demand.
Global Polyolefins + PVC demand
(in MMT) 2008 2009 2010 Growth%
2010 vs
2009
LDPE 17.7 17.9 18.7 4.5%
LLDPE 18.4 18.9 20.8 10.1%
HDPE 29.5 30.9 32.9 6.5%
PP 43.5 45.1 48.5 7.5%
PVC 32.4 31.6 34.8 10.1%
Ethylene 108.2 111.5 120.3 7.9%
Propylene 66.7 69.0 74.6 8.1%
Source: CMAI
Operating rates in Asia improved on account of higher demand and planned
maintenance shut-down by cracker operators. The US saw a remarkable
improvement in the operating rates with improved demand and advantageous
feedstock. Competitive pressure on margins has resulted in the closure of
some high-cost assets in Western Europe.
In 2010, PP capacity addition of 4.7 MMT exceeded incremental growth in
demand of 3.4 MMT. Consequently, operating rates declined to 82.3% vis-a-
vis 83.2% in 2009. In the next four to five years, around 90% of
incremental capacity is expected to come up in the Middle East, Asia and
Africa reflecting the region's growing prominence in the sector.
Operating rates for PE declined to 81.9% levels in 2010 from 83.0% in 2009
as incremental capacity of 8.1 MMT exceeded incremental demand of 4.8 MMT.
In 2010, global demand for PE grew by 7.1% following the economic revival.
While the whole of Asia is leading in demand growth for PE, new capacity
is being built predominantly in the Middle East and China. Global capacity
addition in 2010 was 8.1 MMT, out of which 6.2 MMT is in these two regions.
In 2011, 2.3 MMT of additional capacity is expected globally and most of
it is coming up in Asia and the Middle East.
The operating rate for PVC increased to 75.9% levels in 2010 from 72.5% in
2009, with capacity addition of 2.5 MMT, lagging behind the incremental
demand of 3.2 MMT. In 2010, global demand for PVC grew by 10.1% following
the strong demand from Asia. In 2011, 4.5 MMT of additional PVC capacity
is expected globally.
The product price recovery continued throughout the last year, although not
at the same pace of feedstock prices. Product margins remained stable in
most parts despite the high price environment.
Product prices
Price ($/MT) FY-11 FY-10 % change
Naphtha 744 602 24%
PP 1,370 1,172 17%
HDPE 1,236 1,202 3%
PVC 1,005 892 13%
Source: Platts
RIL performance
Reliance maintained its leadership in the domestic market with a commodity
polymer production share of 47%. RIL's polymer production for the year
remained unchanged despite turnaround activities carried out during the
year. RIL's cracker operating rate was at 90% in FY-11 as compared to 98%
in FY-10. Due to cracker shutdown at Hazira, Nagothane and Gandhar
manufacturing sites, the production of ethylene decreased by 8% to 1,686
KT while the production of propylene decreased by 5% to 696 KT as compared
to the corresponding period of the previous year.
Polymer production in KT
FY-11 FY-10
PP 2,496 2,399
PE 967 1,068
PVC 631 624
Total 4,094 4,091
PP
The domestic demand scenario has been extremely bullish for PP, reaching
2.6 MMT with an annual growth rate of 18% in FY-11, after a robust 20%
growth in FY-10. The demand for PP in India is expected to grow at a
healthy CAGR of over 10% over the next 4-5 years.
RIL, with its portfolio of PP grades being produced through multi-line
production, is positioned well to capture the future growth. With an aim
to capture new markets and opportunities, RIL introduced a new random co-
polymer grade SRX100 catering to the fast growing rigid packaging sector.
It has the potential to replace styrenics and imported high clarity random
PP grades.
PE
RIL's production of PE declined by 9.4% to 967 KT in FY-11. This was due to
cracker shutdown at Nagothane and planned turnaround at cracker at Gandhar
complex.
The domestic LDPE demand reduced by 9% due to widening LLD- LD price delta
and as a result most processors started using LL rich blends.
In the PE business, market expansion with value-added grades is an ongoing
activity to have an edge over competition. Some of the grade development
activities during 2010 were:
- Introduced F46003E for HD film sector as alternate for F46003.
- Introduced HP19010 for the packaging film sector.
PVC
PVC consumption in India is estimated to be 1.9 MMT in FY-11, which
represents a growth of 6% over the previous year. India imported about 650
KT of PVC during FY-11. Pipes and fittings continued to be the major market
accounting for 72% domestic PVC demand. PVC is a major product for the
infrastructure sector, applied in irrigation pipes, drinking water supply,
sewerage schemes, profiles for the building industry, wires and cables,
etc.
New developments and growth initiatives
Reliance took a lead role in creating new market by conducting customer
meets - 'Rishta' throughout India, to propel growth of PP, PE, and PVC in
the field of engineering, agriculture, infrastructure and packaging sector.
Geotextile made from PP has immense potential in construction of roads with
improved durability and in river and sea embankment, to prevent erosion.
Reliance worked in tandem with textile ministry, industry bodies to
facilitate new investment in this 'Technical Textile'. Several states of
India have already specified use of PP geotextile in road and river
embankment.
Agriculture is a prime sector for sustainable growth of India. Non-woven PP
has proven to be an ideal solution in banana plantations. The Company has
tied up for new projects with several agricultural institutes to establish
PP in other fruits and vegetables plantation. Apart from increased yields,
it will help farmers to grow high quality produce for export business.
The Company worked with leading consumer durable manufacturers to
successfully introduce PP in four-wheelers, refrigerators and water
filters. Reliance is also driving metal replacement and import substitution
programme with major commercial/two wheeler manufacturers by introducing
niche grade of PP.
Reliance has made another break-through in glass replacement by using PP
bottles in 'flavoured milk' packaging. Light weight, clear, break-
resistant PP bottles will now replace glass bottles. This is a landmark
innovation of Reliance offering high technology, safe and hygienic
product.
Chemicals Business
Global scenario
The global chemical industry has undergone a transformation since major
financial crisis of 2008. The chemical industry benefitted from industry
discipline and rapid economic recovery, especially in China and India.
Despite unplanned outages, the industry demonstrated a slow and consistent
improvement in production volumes. The overall margins improved as increase
in raw materials could be passed on to the end-user even as operating rates
remained stable.
An excessive demand pull from the automotive sector coupled with high
natural rubber prices created high margin environment in the elastomer
segment. Shortage of cotton created superior performance in acrylic fibres
and provided support to acrylonitrile.
Benzene: The global capacity of benzene in 2010 was 56 MMT against
production of 40 MMT, resulting in average operating rate of 72%. Demand
for the year was 39.8 MMT. Globally, capacity has increased by more than
7.5 MMT in the past 4-5 years resulting in excess capacity.
Butadiene: North-East Asia remains the world's largest market with a global
market share of 44%, followed by 22%, and 21% by USA and Europe
respectively. The demand grew at 10% on a year-on-year basis.
Polybutadiene Rubber (PBR) is the second largest synthetic rubber among
elastomers and its demand is estimated at 2.7 MMT. Global demand for
synthetic rubber in coming years is expected to grow at 4.8% annually.
Caustic Soda (CS): The installed capacity of caustic soda is 85 MMT
globally. The global consumption of caustic soda increased to 63 MMT in
FY-11, an increase of about 6% over FY-10 and operating rate of 74%. Around
55% of the global chlor alkali capacity is now in Asia.
Linear Alkyl Benzene (LAB): Globally, the consumption of LAB is pegged
close to 3 MMTPA against capacity of 3.6 MMTPA. The consumption growth is
at 2.5% per annum and is expected to continue at this rate driven by Asian
demand. With an installed capacity of 182 KT, Reliance is the world's
fifth largest producer of LAB.
Acrylonitrile: The global capacity of acrylonitrile in 2010 was 5.7 MMT
against production of 5.1 MMT, resulting in average operating rate of 90%.
The demand for the year was 5.08 MMT.
Indian chemical scenario
The Indian chemical industry environment was in line with the global
business environment with the exception of the elastomer segment due to
the excessive demand from the automobile segment. RIL has leadership
position in aromatic segment constituting benzene, toluene and xylene.
The demand from downstream sectors covering SBS rubber, PBR, ABS and
styrene butadiene latex recovered during the year and total demand is
pegged at 117 KT. Domestic demand for PBR is met by RIL besides imports
with consumption estimated at 135 KT. The market estimates demand for PBR
to reach 155 KT by 2013 (a growth of 5% CAGR).
RIL is the sole producer of acrylonitrile in India with a capacity of 41
KTA. RIL's production in entirety is sold in the domestic market and
represents nearly 30% share with the rest being imported.
RIL's crackers at Hazira, Nagothane, Dahej and Vadodara are among the
world's most integrated petrochemical complexes with upstream refining,
E&P and downstream chemical facilities. RIL is a leading producer of LAB,
benzene and butadiene in India. RIL also produces basic aromatic building
blocks of the highest purity, conforming to the product grades. These
include toluene, mixed-xylene and ortho-xylene.
For the year, RIL's benzene production was at 700 KT, a growth of 4% on a
year-on-year basis. Total sales for the year were 681 KT, out of which 381
KT was exports, 215 KT was domestic and 85 KT was for captive consumption.
Exports of benzene during FY-11 were at 381 KT mainly to the US, Europe,
besides Middle East. Toluene, a major bi-product of BTX group, registered
production volumes of 105 KT.
RIL produced 174 KT of butadiene during the year of which 61 KT was
exported after meeting the entire domestic requirement and captive
consumption.
RIL is the only manufacturer of PBR in India. During the year, it produced
76 KT, an increase of 4.7 % on a year-on-year basis, most of which was
sold in the domestic market.
RIL has the annual capacity to produce 168 KTA of caustic soda and 141 KT
of chlorine. RIL's capacity utilization for the year was at 97% as against
average domestic capacity utilization of 75%.
RIL produces 163 KT of LAB on an annualized basis. Tightness of normal
paraffins resulted in lower utilization of LAB capacity.
RIL's entire production of acrylonitrile was sold in the domestic market.
The upswing in demand from derivatives and restricted global supplies
supported prices and margins.
Opportunities
RIL foresees large opportunities in elastomers and other diverse chemicals.
It has already announced its plans to set up a facility for manufacturing
100 KT of butyl rubber in partnership with Sibur. This is a significant
step towards the Company's commitment to service India's growing
automotive sector by bringing in complex technologies. A new facility to
produce butene-1 (40 KTA) and Methyl Tertiary Butyl Ether (144 KTA) using
raffinate-1 from the butadiene plant will come on stream in FY-12.
Polyester Fibre and Filament
Textile and clothing exports by major Asian countries witnessed year-on-
year growth amidst revived demand from US and European regions. Textile
and clothing imports into US in 2010 increased 15% over 2009 with textile
imports rising by 22% and clothing by 12% year-on-year. Chinese textile
and clothing exports in 2010 witnessed an impressive growth of 24% over
2009. In case of India, textile and clothing exports witnessed a growth of
11.5% in the first half of FY-11 and are likely to remain healthy in the
near future.
There was a renewed investment in downstream textile industry, especially
in the Asian countries. The global market for spinning machinery and
components posted a strong recovery in 2010, following two years of weak
demand.
The polyester chain delta reached the highest level seen in the last one
decade. In fact, it has sustained the level above $1,000/MT since the last
two quarters of FY-11. For the full year, chain delta were up 33% over last
year.
Another major development during the year was extreme tightness in global
cotton availability. This led to record high price levels and widely
impacted the entire textile industry. Cotton prices started moving upwards
especially since the second half of FY-11. The commodity has witnessed
extreme tightness in availability, which resulted in record prices. Cotton
prices reached the highest level in the past 150 years, last seen during
the American Civil
War way back in 1860s. Both fundamental and market forces played a major
role in taking cotton prices to unprecedented levels. During 2010-11
cotton season, major producers like China, Pakistan and Australia witnessed
rough weather and floods, which impacted the output.
Towards the end of FY-11, cotton prices were 140% higher than those for
polyester as also higher than the historical average of 30%. Garment
manufacturers/designers are likely to find ways to use more polyester than
cotton in their fabric usage. On the demand side, the rising cotton price
will continue to drive substitution demand for polyester. The International
Cotton Advisory Committee (ICAC) forecasts that cotton's share of the
world textile fibre market could decline to 33% by 2015 as compared to
36.5% in 2009.
Global fibre demand
The global fibre demand in 2010 witnessed an impressive growth of 4% over
2009 and reached the level of 74 MMT. The corresponding growth in 2009 was
just half at 2%. China and India accounted for almost all of the
incremental fibre consumption in 2010, with China's share at 83% and India
at 15%. Polyester continues to feed the textile industry, accounting for
83% of the increased fibre demand in 2010. By 2020, global fibre demand is
expected to grow to 99 MMT, at a CAGR of 3%, from the current level of 74
MMT. Polyester usage for textile applications is expected to grow at over
4% and account for around 80% of the incremental fibre demand in the next
decade. Consequently, its share in all fibre demand would grow to 55% from
the current 48%.
Last year, Chinese currency appreciated relative to the Indian rupee which
benefitted the Indian textile industry and its exports became more
competitive.
Global polyester filament and staple fibre markets
The global polyester markets were largely stable in the first half of FY-
11. However, during the second half of the year, higher volatility crept
into the markets on account of various factors. The international PSF
prices increased to $2,047/MT by March 2011, up 52% over FY-11 start.
Similarly, the international POY prices increased to $ 2,040/ MT, by March
2011, up 42% over the beginning of FY-11.
Extreme tightness in global cotton availability, renewed downstream demand,
fundamental tightness in fibre intermediates supply and lesser polyester
capacity addition in the past few years influenced the polyester markets.
Global PFY capacity is expected to grow at a CAGR of 4.4% from the current
27 MMT to 42 MMT by 2020. Global
PSF capacity is expected to grow at a CAGR of 3.4% from the current 16 MMT
to 23 MMT by 2020.
Product prices
Price ($/MT) FY-11 FY-10 % change
POY 1,683 1,287 31%
PSF 1,573 1,177 34%
PET 1,415 1,141 24%
Source: Platts
Global PET scenario
Polyester applications in packaging is another segment which is witnessing
promising growth. Global production in 2010 increased by 8% over 2009 to
15 MMT. Major increases were witnessed in Asia Pacific, Western Europe and
North America. The 2011 global PET production is expected to increase by 1
MMT of which Asia Pacific would account for more than 40%. During the next
decade, global PET capacity is expected to grow at a CAGR of 6% from 19 MMT
in 2010 to 33 MMT by 2020. During the same period, demand is expected to
grow at a CAGR of 7% from 15 MMT in 2010 to 29 MMT by 2020.
PET prices have witnessed significant surge lately, reaching the levels of
$1,895/MT in March 2011, compared to $1,200/MT in early 2010.
Higher prices of Asian PET as well as feedstock reduced the import
penetration from Asia to North America and Europe as import economics
turned less lucrative. Consequently, local sourcing in these two regions
gained pace and local operating rates remained high. A high level of PET
prices led to further implementation of light-weighting of containers in
North America.
Global feedstock scenario (PX, PTA, MEG)
Polyester feedstock witnessed a largely stable trend in the first half of
FY-11, but was subjected to volatile environment in the later part of the
year. Again, the fundamental and market forces played a major role in
creating the volatility. Supply tightened in the second half of FY-11 in
view of increased demand from downstream polyester segment.
In PX, market balances remained tight amidst unplanned outages and strong
demand from PTA segment. During the year, PX prices varied in a wider
range of $840/MT to $ 1792/MT, the level last seen in 2008. Also, PX delta
over naphtha breached $800/MT in Q4 FY-11, which is almost 2.5 times the
level seen in April 2010. In view of no major
capacity addition in 2010 and expectation of limited capacity addition in
FY-12, PX sentiments are expected to remain firm in terms of prices,
margins and utilization rates. The PX operating rate is projected to reach
as high as 87% in 2011 and 2012.
Product prices
Price ($/MT) FY-11 FY-10 % change
PX 1,159 995 17%
PTA 1,080 891 21%
MEG 944 752 26%
Source: Platts
Chinese PTA future markets started to witness extreme volatility in the
second half of FY-11, which sent PTA prices to record levels. Prices
during the year moved in a wider range of $831/MT to $1,527/MT. PTA delta
over PX, almost touched $400/MT in Q4 FY-11. Global PTA capacity is
expected to reach 76 MMT by 2015 from current 49 MMT, at a CAGR of 9%.
MEG markets closely followed the developments in the PTA and polyester
markets. By March 2011, prices and margins reached the high levels which
were last seen at the time of outages in the Middle East plants way back in
late 2007 and early 2008. The prices moved in a range of $690/MT to
$1280/MT. MEG delta over ethylene breached the $450/MT level in Q4 FY-11,
compared to below $100/ MT level seen in early 2010.
Domestic scenario
It is expected that the Indian textile and clothing market has the
potential to reach $ 220 billion by 2020 at a CAGR of 10-11% from the
current level of around $ 70 billion. The domestic market has a potential
to grow to $ 140 billion and exports to $ 80 billion by 2020.
It is believed that India has the potential to increase its export share in
world trade from the current 4.5% to 8% and reach $ 80 billion level by
2020. This high growth in exports can become a reality amidst increased
shift in sourcing from developed countries to Asia and India's strengths
as a suitable alternative to China for global buyers.
During FY-11, domestic demand for polyester products increased by 13% over
the last year. The momentum was led by PET with 24% growth followed by PFY
with 13% growth.
Polyester industry demand growth
(Volume in KT) FY-11 FY-10 % change
PFY 2,134 1,891 13%
PSF 862 783 10%
PET 416 336 24%
PET is the fastest growing product in the polyester product in India. The
current domestic demand is at 0.4 MMT of which RIL's share is over 50%.
Also, considering the fact that India's per capita PET consumption is only
0.29 kg against the world average of 2 kg/capita, there is an immense
scope to increase PET packaging applications in India.
Fibre Intermediates industry demand growth
(Volume in KT) FY-11 FY-10 % change
PX 2,009 1,964 2%
PTA 3,647 3,331 9%
MEG 1,650 1,402 18%
RIL performance
Reliance continues to be the largest polyester player in the world and
maintains leadership position in polyester and feedstock markets;
leveraging on the benefits of chain economics. The total polyester
capacity, including that of Recron Malaysia, is around 2.4 MMT. As per
PCI, RIL is the world's 8th largest producer of PTA and MEG and the 5th
largest producer of PX.
RIL has a significant advantage of integrated operations in the polyester
business. For FY-11, the overall domestic market share in polyester
(including PET) was 41%. In terms of product differentiation, the specialty
product sale in PFY and PSF during the year was around 45% and 57%
respectively.
Polyester production in FY-11 was 1,710 KT, up by 3% over the previous
year. PFY production was 742 KT, up 2%, while PSF and PET production
increased by 3% and 2% respectively.
Polyester production in KT
FY-11 FY-10
PFY 742 724
PSF 615 597
PET 353 345
Total 1,710 1,666
In case of fibre intermediates, total production (PX, PTA and MEG) during
FY-11 is around 4,548 KT, down marginally by 1% over last year.
Fibre Intermediate production in KT
FY-11 FY-10
PX 1,840 1,875
PTA 2,033 2,049
MEG 675 695
Total 4,548 4,619
New developments and initiatives
Reliance has increased volumes in specialty products like flame retardant
fibre, tow and filament which provide flame retardant properties in
fabrics. Recronr LP, with unique low pill properties, was introduced for
use in worsted suiting in poly-wool blends. Other major developments
include RecronrDuratarp for waterproof fabrics, super-micro staple fibre
for spinning ultra-fine yarn counts and spun-dyed fibre for the Indian
armed forces.
Reliance also developed full dull dope dyed yarns mainly for shirting.
Volumes also increased in PBT-based stretch yarns. During the year,
Reliance also developed fully drawn yarn (FDY) spin finish, which replaced
imports and thus helped reduce cost. RIL is also the preferred supplier
for Recron stretch and super coarse yarns for the denim and mink blanket
segment.
Recron Malaysia
Recron Malaysia is an integrated polyester unit with downstream textile
operations like spun yarn and fabric production as well. It has a
polyester capacity of more than 500 KTA and fabric production of 600
million meters per annum. Since its acquisition by RIL, the Company has
undergone significant improvement in terms of operations and profits.
Petrochemicals expansion plans
On the back of strong petrochemicals and fibres demand growth, Reliance has
embarked on a major capacity creation initiative in petrochemicals which
is set to significantly enlarge Reliance's footprints in this business.
At Jamnagar, RIL plans to build:
- 1.8 MMTPA of PX capacity.
- 1.4 MMTPA of ethylene capacity.
- 40,000 TPA of PBR and 150,000 TPA SBR capacity.
RIL has simultaneously commenced implementation of its planned expansions
across the polyester chain. This is RIL's largest capacity expansion in
this sector and is aimed at consolidating its position as the world's
largest integrated polyester producer.
The global supply constraints, substantial price increase and uncertain
outlook for cotton availability is creating considerable substitution
opportunities for polyester products like PFY and PSF.
The demand for PET, which is already India's fastest growing polymer is
also poised for substantial growth due to continued demand growth in the
bottling, packaging and food & beverages sectors.
RIL has planned its capacity expansion in phases over the next few years.
This includes:
- 2.30 MMTPA of PTA capacity with an option of an additional 1.15 MMTPA.
- 395,000 TPA of PFY and 140,000 TPA of PTY capacity.
- 540,000 TPA of PET with the option to add 540,000 TPA.
- 290,000 TPA of PSF capacity.
All the above projects are under various stages of implementation ranging
from technology licensing, basic engineering and obtaining the necessary
regulatory approvals.
OPPORTUNITIES
Growth in the Indian economy and demand creates unprecedented opportunities
for RIL to invest significantly in each of its core businesses, including
those that leverage directly from growth in consumerism and increase in
consumption. RIL is in the process of doubling its petrochemical business
by investing across the value chain and has already commenced project
implementation in the polyester chain.
Reliance is participating in growth in consumer demand for world-class
retailing and digital services by rolling out its modern retailing
business as well as investing significantly in the broadband wireless
business in India.
Large cash balances, robust cash flows and an under leveraged balance sheet
allows it to pursue these and other organic and inorganic growth
opportunities in its core businesses in a broader, global context. It also
continues its quest for conventional and unconventional hydrocarbons in
order to meet its aspirations of creating a global scale oil and gas
business.
RIL operates the largest, most modern, integrated and complex refining
assets in the world. These are also one of the lowest cost refining
operations in the world. With its superior sourcing flexibility and product
slate, it has historically outperformed benchmark margins. Strong light-
heavy crude oil spread will support margin improvement for complex refiners
such as RIL. RIL is also one of the world's leading producers of ultra-
clean fuels and is set to benefit further from increased demand for such
clean fuels.
The wave of global capacity additions in the petrochemicals (ethylene
chain) business over the past two years has only slightly affected the
global margins and prices as well. However, the strong demand growth across
polymer products in India, China and other emerging economies has helped
new supply getting absorbed.
The Indian polymer industry is expected to grow at 1.5 to 2 times the GDP
growth rate.
RIL, as the world's largest producer of polyester, benefits from the on-
going scarcity of cotton. Among its peers, RIL would continue to earn
superior returns on account of its fully-integrated operations and robust
domestic demand.
The domestic gas sector, despite strong demand growth, has remained under-
developed due to inadequate investments in gas infrastructure and low gas
price entailing a lack of interest among investors for exploring and
developing gas blocks. RIL's partnership with BP combines the skills of
both companies and will be focused on discovering more hydrocarbons in
India and contributing to India's energy security as well as sourcing gas
globally for the Indian markets.
CHALLENGES, RISKS AND CONCERNS
In the oil & gas business, deep-water exploration and development
operations presents technological challenges and operating risks. The
challenge for RIL is to ensure optimum level of production, safe and
reliable operations while maintaining the highest level of health, safety
and environment standards.
In as far as its refining and marketing business is concerned, RIL competes
globally with a number of large energy companies some of who also produce
crude oil and are integrated in their refining operations. Global sourcing
involves inventory, logistics and pricing risks and this necessitates the
need for significant risk mitigation strategies. The merchant nature of
its refining business means that RIL faces extensive competition in
international markets for the sale of key transportation fuels.
RIL benefits from the quality of its assets, an unprecedented level of
operational integration as well as an experienced team that has
demonstrated its ability to deliver globally competitive refining margins,
cost competitiveness and consistently high operating rates.
Over the past three years, a large number of new low-cost ethylene
capacities have come on stream in the Middle East region, which has
resulted in margin pressure in the ethylene chain. A gradual tightening
supply-demand scenario is likely, leading to margin growth for
petrochemical products. Feedstock integration, lower operating costs and
high operating rates are critical for profitability in the petrochemicals
business. RIL has successfully maintained high operating rates on the back
of strong domestic demand and a balanced portfolio of liquid and gas-based
crackers.
INTERNAL CONTROLS
RIL's internal control systems are commensurate with the nature of its
business and the size and complexity of its operations. These systems are
designed to ensure that all the assets of the Company are safeguarded and
protected against any loss and that all the transactions are properly
authorized, recorded and reported.
The Company has an internal audit function, which is empowered to examine
the adequacy and compliance with policies, plans and statutory
requirements. It is also responsible for assessing and improving the
effectiveness of risk management, control and governance process. The
internal audit function team comprises of well-qualified, experienced
professionals who conduct regular audits across the Company's operations.
The management duly considers and takes appropriate action on the
recommendations made by the statutory auditors, internal auditors and the
independent Audit Committee of the Board of Directors.
RIL has well established policy towards maintaining the highest standards
of health, safety and environmental norms while maintaining operational
integrity. This policy is strictly adhered by all RIL manufacturing
facilities.
MAJOR SUBSIDIARIES
Reliance Retail Limited (RRL)
Reliance Retail continued to expand presence of its value and specialty
formats. During the year, Reliance Retail opened 90 new stores spanning
across value' and specialty' segments. In-store initiatives, wider
product choice and value merchandising enabled the business to achieve
robust growth during this period.
Reliance Retail also established partnerships with several leading
international brands aimed at meeting consumer aspirations. During the
year, RRL doubled the presence of its partner businesses and operated over
160 stores in various parts of the country. In the fashion and apparel
segment, RRL now operates around 40 stores with leading brands like Marks &
Spencer (19 stores), Diesel (7 stores), Paul & Shark (4 stores),
Ermenegildo Zegna (6 stores) and Timberland (6 stores).
Its presence in the optics business is in partnership with Grand Vision. 51
new stores were added during FY-11 taking the total presence to 100 stores
across key markets in the country. The retail chain offers single brand
optical products including Vision Express frames, lenses, contact lenses,
sunglasses, solutions and accessories.
For the very first time, consumers in India got the opportunity to
experience Hamleys, which is considered to be the world's most wonderful
toy shop. The brand was launched in India with opening up of 2 stores
during the year.
iStore by Reliance Digital is a one-stop-shop for all Apple products and
services. There are 17 such stores currently operational.
Reliance Brands also announced exclusive licensing arrangement with two
leading international brands:
- Steve Madden, a leading designer, wholesaler and retailer of fashion-
forward footwear and accessories for women, men and children.
- Quiksilver, a leading outdoor sports lifestyle company to launch their
core brands Quiksilver' and Roxy'.
Across India, Reliance Retail serves over 2.5 million customers every week.
Its loyalty programme, 'Reliance One', has the patronage of more than 6.75
million customers.
Haryana Special Economic Zone (SEZ)
With a vision to develop industrial infrastructure and support economic
growth, Reliance Haryana SEZ Limited (RHSL), a joint venture between
Reliance Ventures Limited (RVL) (a subsidiary of RIL) and HSIIDC Limited (a
Government of Haryana Company), has received approval from the Government
of Haryana to undertake flexible development of the Reliance Haryana
Project as an integrated industrial enclave with all the required
facilities such as logistics hub and social infrastructure, ensuring
sustainable development of manufacturing and service activities with
sufficient provision for future expansion to cater to the demands in the
SEZ and non-SEZ framework.
RHSL is being demerged to undertake development of model economic township
in Jhajjar and has signed a Shareholder's Agreement to induct
Infrastructure Leasing & Financial Services Limited (IL & FS) into a new
company to be formed. The shareholding pattern of the new company will be
RVL - 45%, IL & FS - 45% and HSIIDC - 10% to be given as sweat equity.
RIL - D. E. Shaw joint venture
RIL and the D. E. Shaw group agreed to establish a joint venture to build a
leading financial services business in India. This JV will incorporate the
D. E. Shaw group's investment and technology expertise with Reliance's
operational knowledge and extensive presence across India to offer a
comprehensive array of financial services to the Indian marketplace. This
JV will draw upon the core competencies of both firms to develop a
platform that can serve the growing needs of Indian companies and
individuals.
RESEARCH & DEVELOPMENT, TECHNOLOGY DEVELOPMENT AND INNOVATION
In order to sustain and enhance profitable growth, RIL aspires to become a
developer of leading edge technologies and continues to be an efficient
user of technology.
RIL intends to create world-class physical and intellectual capabilities,
with some of the leading scientists bolstering its innovation agenda. The
Company focuses its attention to fundamental R&D for sustainability of its
business, advanced technical services, enhancing internal capability to
develop basic engineering packages, and in building capabilities.
In refining, the focus areas include maximising light olefins yields from
the fluidised catalytic cracker (FCC), improving propylene recovery in
FCC; advanced characterisation of crude and evaluation of chemicals for
desalting; increasing efficiency and reliability of refinery processes and
enhancing process capabilities in coking technology to help widen the
crude operating window.
In the petrochemicals area, the focus is on providing technology support to
ensure efficient asset utilisation, development of specialty
grades/materials, development of catalysts /additives for cost reduction,
value addition to by-product streams, and leveraging opportunities at the
chemicals/oil interface.
RIL is involved in some cutting-edge technologies like fuel cells, carbon
fibres, bio-fuels, and gasification of
several types of feedstocks. RIL is the sole industry partner in the New
Millennium Indian Technology Leadership Initiative (NMITLI) project on
indigenous Fuel Cell Technology Development.
Some major ongoing/completed projects include:
- Selection of cost effective FCC catalysts and additives for improved
conversion and yields.
- Propylene yield improvements.
- Benzene reduction in refining to promote clean fuel.
- Upgrading of bottom barrel through initiatives such as carbon black
production, reduced conversion etc.
- De-salter operation improvements.
- Computational fluid dynamics for trouble shooting.
- Molecular compositional blending models.
- Polypropylene quality control.
- Polyolefin inorganic precursor technology development.
- High performance PP homo and copolymers.
- Development of high performance additives for polyolefins.
- Development of clarifiers for PP grades.
- High melt strength PP by post reactor route.
- Superabsorbent polymers.
- Bio-filtration process for effluent water treatment.
- Catalyst for selective dehydrogenation of C11-C14 n-paraffins.
- Inhouse development and utilization of additives for cracker coking
passivation.
- Development of oxygen barrier PET for beer packaging.
- Productivity enhancement through polymer modification.
- New co-catalyst systems for bottle-grade PET productivity enhancement.
- Development of anti-pill polyester, elastic polyester, low melt
polyester, low cost flame retardant polyester, low antimony/antimony free
polyester, and super micro denier polyester staple fiber.
- Development of low cost catalyst, additives and spin finish for
polyester.
- Spinning productivity enhancement.
- Deep cut operation
- Revamption of coker unit and process of pitch.
Creation and protection of intellectual property (IP) for the Company
continues to be an ongoing area of focus. RIL's portfolio for national and
international patents is increasing in existing as well as new technology
areas. As a part of our business transformation, RIL is adopting and
implementing best in class business processes with state-of-the-art
applications to enhance technical excellence.
INNOVATION
RIL aspires to be one of the most innovative companies in the world. The
Reliance Innovation Leadership Centre designs, develops and deploys
programmes in realizing this vision anchored around this agenda.
The Leading Expert Access Programme (LEAP) created a hat trick of Nobel
Laureates' lectures. Prof Venki Ramakrishnane delivered the 13th Reliance
LEAP lecture at the National Chemical Laboratory (NCL). In the past, LEAP
speakers have included Nobel Laureates Prof Jean Marie Lehn and Prof
Robert Grubbs. LEAP has been designed to inspire the RIL family through the
life, work and experience of global innovation leaders.
Sustainable growth of any organisation has one important element-
generation, exploitation and management of its IP. Last year saw a new
energy in this domain through the structuring and institutionalising of the
IP thrust area. The focus of the IP team is to transform the organisation
from being an IP user to an IP creator. RIL's patent portfolio is on the
upswing, both in quality and quantity terms including protection in
overseas markets.
CLEAN DEVELOPMENT MECHANISM
RIL has built in-house capacity to develop Clean Development Mechanism
(CDM) projects and obtain the registration and issuance of the same in the
form of Certified Emission Reductions (CERs) from the United Nations
Framework Convention Climate Change (UNFCCC).
In FY-11, RIL undertook validation of two renewable energy CDM projects
harnessing solar and biomass energy. These projects have received host
country approval from Ministry of Environment and Forest, Government of
India. Biomass based process steam generation project is at the final
stage of registration at UNFCCC. Also, verification audit of one of the
registered projects at Patalganga Manufacturing Division has been
conducted in FY-11. UNFCCC has approved the changes proposed by RIL to the
small scale methodology for 'Recovery and recyling of materials from solid
wastes' to include PET recyle.
As proactive action to phase out Chlorofluorocarbons (CFCs), RIL has
undertaken replacement of CFC based chiller units with new energy
efficient non-CFC chillers.
HUMAN RESOURCES DEVELOPMENT
RIL's talent base, as on March 31, 2011, stands at 22,661 with an average
employee age of 41 years.
In FY-11, the Business Transformation initiative created high engagement
and excitement amongst the workforce across all levels at RIL. Some key
accomplishments on people management front are illustrated below:
Learning & Development
In FY-11, RIL enhanced delivery over the last year by ensuring 1,589,395
man hours of learning activities at its manufacturing divisions. Going
forward, RIL will focus on building specialist skills and multiple cadres
in the organisation to support its goals and aspirations. Additionally,
several thousand man-hours of developmental intervention was undertaken to
train the leadership teams on developing the second-line, compensation and
benefits, executive coaching, rewards and recognition programmes and
interviewing & selection.
Six Sigma deployment in FY-11 was focused on improving process capability &
reliability issues as per the needs of individual manufacturing sites. A
total of 85 projects were executed leading to financial benefit of Rs. 26
Crore for the year 2010-11.
As a part of Six Sigma deployment process, 9 Reliance Certified Black Belts
- Wave 1 (RCBB-1) are working across manufacturing divisions and have, in
turn, developed 305 Six Sigma Green Belts in 2009-11. Total project
execution by this team led by RCBB-1 for a span of two years is 157
leading to financial benefit of Rs. 69 Crore.
Currently, 19 BMGI/ASQ certified Black belts are working in different
sites. Based on the effective deployment of Six Sigma methodology by first
wave, new batch for Reliance Certified Black Belt - Wave 2 (RCBB-2) has
been launched in January, 2011 for which 11 employees have been selected
from manufacturing divisions.
In all 354 Black Belts & Green Belts are associated with Six Sigma projects
at different sites. For the success of various Six Sigma projects, 1892
team members and supervisory personnel are providing active support.
As a part of standardization of training & development of people with
validation of their skill level, web based examination module has been
developed for certification of Six Sigma Green Belts. In FY-11, eight
employees have been certified as Reliance Certified Green Belt (RCGB).
Compensation & Banding
FY-11, saw a significant change in the Company's compensation & banding
management process. On the variable pay front, efforts are afoot to move
towards an accountability and responsibility driven variable pay programmes
designed uniquely for various levels.
Talent Acquisition
The belief in its people has been the foundation and corner stone of RIL's
growth story. It was the youth in their 20s & 30s who brought RIL to this
pedestal over the last 3 decades and going forward the intent is to pass
the baton on to young leaders over the next 2 to 3 years, to further
propel this success story for the next 3 decades. Towards this end there
has been a significant endeavor in re-enforcing the existing talent base
of 22,661.
RIL's campus hiring programme from the engineering, finance and management
institutes has been far more robust, with wider coverage to ensure higher
caliber as well diversity.
RIL has launched a specially tailored programme 'Reliance Accelerated
Leadership Programme', in order to hire high caliber young talent into the
Company and build a talent pipeline for the future.
HR Transformation
RIL is focused on building what would be the best 'To Be' Organisation over
the next 18 to 24 months. In order to achieve this objective, RIL focused
on following initiatives:
- People: Energising and engaging the existing work force, building a
pipeline for the future and creating an exciting work place.
- HR Processes: To ensure that RIL continues to have the world's best
practice and processes, existing processes are being reengineered and new
processes are being introduced.
- Policies: The focus in FY-11 was to make the policies employee friendly
keeping in view employee specific needs. The HR policies are being
reviewed and benchmarked with world class organisations.
- HR Shared Service Centre: The Centre was established last year to ensure
efficient and effective delivery of HR services to RIL employees.
AWARDS AND RECOGNITION
Some of the major awards and recognitions conferred on RIL are as follows:
Leadership
Shri Mukesh Ambani, Chairman & Managing Director, RIL, has been nominated
to a key advocacy group of Millennium Development Goals', whose mandate
includes finding ways to fight socio-economic evils such as poverty, by the
United Nations in 2010. Shri Ambani is the only Indian to be a part of the
MDG Advocacy Group that comprises eminent international personalities.
Shri Mukesh Ambani has been re-elected as Vice Chairman of the Business
Council for Sustainable Development's (WBCSD) Executive Committee for a
second consecutive term in 2010.
The Foundation Board of the World Economic Forum (WEF) elected Shri Mukesh
Ambani on its Board. WEF's mission is to improve the state of the world
and the elected board members make valuable contributions to this mission
through their involvement.
Shri Mukesh Ambani received the prestigious Dwight D Eisenhower Global
Leadership Award' at the Business Council for International
Understanding's Annual Global Awards Gala in 2010.
The Asia Society, New York presented the Global Vision Award' to Shri
Mukesh Ambani, honoring global leaders who help promote understanding
between Asians and Americans in 2010.
Shri Mukesh Ambani received the NDTV Profit Business Leadership Award 2010
from the Finance Minister, Government of India in 2010.
The senior editors of Financial Chronicle unanimously voted Shri Mukesh
Ambani as Businessman of the Year for 2010'.
Shri PMS Prasad was bestowed with the 'Outstanding Achievement - Natural
Gas' Award at the OCEANTEX 2010.
Corporate Rankings and Ratings
RIL continues to be featured, for the sixth consecutive year, in the
Fortune Global 500 list of the World's Largest Corporations, ranking for
2010 is as follows:
- Ranked 175 based on Revenues
- Ranked 100 based on Profits
RIL is ranked 68th in 2010, in the Financial Times' FT Global 500 list of
the world's largest companies (up from previous year's 75th rank).
RIL has been ranked at 20th position, on the basis of sales, in the ICIS
Top 100 Chemicals Companies list. RIL is the only Indian company in the
world's Top 20 chemical companies in the global ranking. RIL has also been
named as the 8th biggest gainer in the list in terms of operating profits.
RIL is the only Indian company to get a perfect score from CLSA Asia-
Pacific Markets (CLSA) in a list of Asia's best companies in terms of CSR
and termed the Company as the region's Corporate Good Guy'. In its
Ethical Asia' 2010 report, CLSA has named RIL among its top picks for
providing very good data and going well beyond required disclosure.
RIL is rated as the 33rd Most Innovative Company in the World' in a survey
conducted by the US financial publication- Business Week in collaboration
with the Boston Consulting Group (BCG). Further, in 2010, BCG has ranked
RIL second amongst the world's 10 biggest, Sustainable Value Creators',
companies for creating the most shareholder value for the period 2000 to
2009.
Project Management
E&P Division received the Petrotech-2010 Special Technical Award in the
Project Management' category for completion of their Krishna Godavari Gas
project ahead of schedule.
Health, Safety & Environment
- Allahabad Manufacturing Division received a rating of 90% for its
environmental initiatives from British Safety Council in 2010.
- Barabanki Manufacturing Division received 5 Star Rating on BSC
Environment' from British Safety Council in 2010.
- Dahej Manufacturing Division received Greentech Environment Excellence
Award 2010 - Gold' for its excellence in environment practices from
Greentech Foundation in 2010.
- Dahej Manufacturing Division received the National Award for the
Prevention of Pollution in Petrochemicals Sector' for its excellence in
environment practices from the Ministry of Environment & Forests,
Government of India, in 2010.
- Dahej Manufacturing Division received 'Our Cup of Joy India's Best
Practices on Water Confederation of Indian Industry (CII) October 2010'
Award for the Best practice of water conservation of 'Utilizing Cooling
Tower Blow Down water for Irrigation Purpose'.
- Dahej Manufacturing Division's Quality Control
- Department (QCD) (Sangchhatvam) and GCU (Uday) plant won the 'Par
Excellent' award and RGSS (Suraksha) won the 'Distinguished' award at the
'24th Annual National Convention on Quality Concepts' (NCQC - 2010).
- Dahej Manufacturing Division's QCD (Sangchhatvam), GCU (Uday) and RGSS
(Suraksha) won Gold Award and EOEG (Drishti) won Silver Award at the '21st
Gujarat State Level Annual Convention on Quality Concepts - 2010'.
- Hazira Manufacturing Division received the DuPont Safety Award for
outstanding initiatives towards workplace safety enhancements and accident
prevention in 2010, thus making RIL the first Indian / Asian company to win
this award.
- Hazira Manufacturing Division received the British Safety Council's
(BSC), Five Star Environment Award for its 'beyond compliance'
initiatives, best environmental practices, innovations and resource
conservation efforts in 2010.
- Hazira Manufacturing Division won the UK Energy Institute's Safety Award
for Road Safety TRUST Programme' in 2010, making RIL the first Indian /
Asian company to win this award.
- Hazira Manufacturing Division won the FGI Award for Excellence in
Environmental Pollution Abatement and Preservation in 2010.
- Hazira Manufacturing Division won CII's Best Environmental Practice Award
under 'Most Innovative Project' and 'Innovative Project' category in
January 2011.
- Hoshiarpur Manufacturing Division, for four consecutive years in a row
won the State Safety Award' from Punjab Industrial Safety Council & Chief
Inspector of Factories, Punjab in 2011.
- Jamnagar Manufacturing Division Domestic Tariff Area (DTA) Refinery
received the Golden Peacock Award for Occupational Health & Safety' for
pace setting performance in OH and Safety in 2010.
- Jamnagar Manufacturing Division DTA Refinery has been conferred with the
Institute of Engineers' Safety Innovation Award' for the year 2010,
organized by the Safety and Quality Forum of the Institute of Engineers.
- Jamnagar Manufacturing Division DTA Refinery received Safety Innovation
Award' from Safety & Quality Forum of Institute of Engineers (India).
- Jamnagar Manufacturing Division DTA Refinery won the 'Greentech Platinum
Award (2010)' Safety Category, in Petroleum Refinery Sector for its
outstanding Achievement in Safety Management.
- Jamnagar Manufacturing Division has been granted by The National
Accreditation Board for Laboratories (NABL), Ministry of Science &
Technology; Government of India, 'NABL accreditation' based on ISO 15189:
2007 for the DAOH & FWC Medical Laboratory.
- Jamnagar Manufacturing Division Special Economic Zone (SEZ) Refinery
received 5 Star Award for Health & Safety' from British Safety Council
for sustained performance in Health & Safety in 2010.
- Jamnagar Manufacturing Division SEZ Refinery has won the prestigious
Greentech Environment Excellence Award 2010' in Gold Category in
Petroleum Refinery Sector for its best practices in Environment Management.
- Jamnagar Manufacturing Division SEZ Refinery has been selected as the
winner of the '10th Annual Greentech Safety Award 2011', in Platinum
Category in the Petroleum Refinery Sector.
- Nagothane Manufacturing Division received the 'Vana Shree Award' from the
State Government of Maharashtra in 2010.
- Nagpur Manufacturing Division received the Sword of Honour' from the
British Safety Council in 2010.
- Vadodara Manufacturing Division received the CII Environmental Best
Practice Award in 2011.
Energy and Water Conservation / Efficiency
- Hazira Manufacturing Division won the Excellent Energy Efficient Unit
Award for FY 2009-10' from CII in 2010.
- Dahej Manufacturing Division bagged the Excellent Energy Efficient Unit
Award 2010' for its energy conservation efforts from CII in 2010.
- Dahej Manufacturing Division received the National Energy Conservation
Award 2010' for its energy conservation initiatives from the Ministry of
Power, Government of India.
- Jamnagar Manufacturing Division received the National Award for
Excellence in Energy Management' for its energy conservation techniques
from CII in 2010.
- Jamnagar Manufacturing Division received the I.C.C. Award for Excellence
in Energy Management' for its energy performance from the Indian Chemical
Council in 2010.
Technology, Patents, R&D and Innovation
- Nagpur Manufacturing Division received the Innovation Quest 2010 Trophy'
instituted by the Indian Institution of Industrial Engineering.
- E&P's KG-D6 won the Innovation for India Awards 2010' instituted by the
Marico Innovation Foundation for their combined synthesis of advanced
technologies, extreme engineering, innovative execution, yielding
unprecedented results and impact on India's energy security.
- Hazira Manufacturing Division won the 'Innovative Project' from the CII
in 2010.
- Hazira Manufacturing Division won the FGI Federation of Gujarat
Industries Award for technology development in 2010.
- Hazira Manufacturing Division won the Indian Chemical Council Award for
chemical plant design and engineering in 2010.
- Reliance Technology Group (RTG) received 'Certificate of Merit' from the
Federation of Gujarat Industries and 'ICC award for excellence in chemical
plant design and engineering' in 2010.
Retail
- Reliance Footprint received the Retailer of the Year Award in the Non
Apparel and Footwear category at Asia Retail Congress 2010.
- Reliance TimeOut received the Retailer of the Year Award in the Leisure
Category at Asia Retail Congress 2010.
- Vision Express was bestowed the Award 2010' for its contribution by the
Netherlands India Chamber of Commerce and Trade in 2010.
- Reliance Trends received the Retail Marketing Campaign of the Year
Award' at the Asia Retail Congress 2010.
- Reliance Trends received the Impactful Retail Design and Visual
Merchandising of the Year Award' at the Asia Retail Congress 2010.
Sustainability
- Jamnagar Manufacturing Division won the Golden Peacock Global Award for
Sustainability for the year 2010'.
Report on Corporate Social Responsibility
RIL embraces responsibility for impact of its operations and actions on all
stakeholders including society and community at large. Management's
commitment, work ethics and business processes at RIL encourages all its
employees and other participants to ensure a positive impact and its
commitment towards corporate social responsibility.
The Company's commitment to excellence in Health and Safety is embedded in
the Company's core values. The Company has a stringent policy of safety
of persons overrides all production targets', which drives all employees to
continuously break new ground in safety management for the benefit of
people, property, environment and the communities where we operate. The
Company is aware of the environmental impacts of its operations and it
continually strives to reduce the impacts.
RIL respects human rights, values its employees, and invests in innovative
technologies and solutions for sustainable energy flow and economic
growth. The Company has supported innumerable social and community
initiatives across India touching the lives of millions of people
positively by supporting environmental and health-care projects and social,
cultural and educational programmes. Besides focusing primarily on the
welfare of economically and socially deprived sections of society, RIL
also aims at developing techno-economically viable and environment-friendly
products and services for the benefit of millions of its consumers, while
at the same time ensuring the highest standards of safety and environment
protection in our operations.
Health, Safety & Environment
Health
RIL focuses on achieving excellence in occupational and personal health of
its employees across locations. The Company has state-of-the-art
Occupational Health Centres (OHC) at its manufacturing divisions and major
offices. These OHCs are equipped with state-of-the-art diagnostic and
therapeutic equipment and are manned by qualified occupational health
specialists.
RIL's medical and occupational health departments are also in the forefront
to prevent lifestyle diseases such as heart problems, hypertension,
diabetes and communicable diseases such as malaria, tuberculosis and HIV /
AIDS through a series of regular health awareness sessions, daily health
tips and personal counseling. Health promotional activities are also
extended to employees' family members staying at Company townships.
RIL has full-fledged modern hospitals at its major townships at Jamnagar,
Vadodara, Nagothane and Patalganga, which cater to curative health
services to employees and their family members. In FY 2010-11, new
facilities were added to the hospitals including a state-of-the-art,
special burns treatment unit, at the Dhirubhai Ambani Hospital in Jamnagar.
Started eight years ago as a pilot project at few manufacturing divisions,
Change Agents for Safety, Health and workplace Environment (CASHe) has
grown and become a movement encompassing the entire enterprise with
thousands of improvement projects. The programme has been instrumental in
creating a culture of implementing health, safety and environment improving
projects at workplace on a priority basis. This programme has also helped
the Company improve its performance on the occupational health and safety
front.
Safety
In FY 2010-11, RIL's HSE Management System (HSE-MS) has been further
strengthened with new initiatives. The HSE-MS have been institutionalised
to establish Company-wide safety management objectives, guiding principles
and processes.
RIL continues to pursue world class operational excellence through the HSE
Management System initiative, in strategic partnership with M/s DuPont
Sustainable Solutions. In FY 2010-11, RIL implemented the operational
discipline framework of 11 characteristics to embed operational discipline
in the organization in 6 major manufacturing sites. RIL's manufacturing
divisions undertook a rigorous self-assessment of operational discipline
and they are in the process of implementing improvement measures with
total employee involvement.
In order to ingrain the safety culture, a set of Life Protection Rules'
(LPR) have been introduced in FY 2010-11. The LPR focuses on 10 high risk
activities. Complying with the LPR is mandatory for all RIL employees, and
for the employees of contractors. LPR complements our Safety Best
Practices' and Safety Procedures' to be followed at all locations.
Process Safety Management (PSM) has been further strengthened in FY 2010-
11, through strategic initiatives for sustenance. One of the focuses was
to conduct self assurance studies for the safety of the community through
Process Hazard Analysis (PHA) and Quantitative Risk Assessment (QRA) in
plants prioritized on risk basis. Implementation of recommendations
emerging from such studies has resulted in evolving inherent safer measures
in operations of such plants.
RIL's Central HSE audit programme is a critical component of the HSE
governance process, which has been specifically designed to ensure that
stakeholder expectations, HSE Policy and HSE Management Standards are being
effectively implemented across the Group. The HSE Audit Protocol is based
on the HSE Management Standards and systems and performance management
principles. The process provides assurance to the Group and the Board that
the HSE Management Standards are being implemented and it identifies best
practices that can be shared across RIL Group.
The Company has further reinforced its ties with global institutions such
as the Centre for Chemical Process Safety, the American Institute of
Chemical Engineers, American Chemical Council and the British Safety
Council, which gives access to industry best practices.
RIL's HSE systems are aligned with recognised management systems and global
best practices. Most manufacturing divisions have been certified to ISO
14001:2004 certification of Environmental Management Systems and OHSAS
18001:2007 certification of Safety Management Systems.
At the E&P operations, RIL has adopted the HSE Management System and uses
Safety Case approach for the onshore and offshore facilities to
demonstrate high levels of safety integrated into the design and operations
through several risk and hazard assessment studies. RIL has established
emergency management systems and is checking and improving the efficacy of
the same through periodic mock drills at various facilities of the entire
KG-D6 assets, drilling and CBM operations.
RIL's KG-D6 asset comprising of Onshore Terminal, Supply Bases and Off-
shore facilities were certified with ISO-9001:2008; ISO 14001:2004 and
OHSAS 18001:2007 by M/s DNV in April 2010. The Company has also labeled the
same as Integrated Management System' for the KG-D6 Asset. Additionally,
M/s DNV successfully completed the first Surveillance Audit' of RIL's KG-
D6 asset in August 2010.
For Coal Bed Methane and Onshore Drilling operations without any Lost Time
Incidents, both internal and regulatory audits (through Oil Industry
Safety Directorate) were conducted to ensure that all statutory
requirements are met in the operations.
RIL's stress on enhancing HSE performance through launching of HSE
management Systems of international Standards continued with further
launching of 18 HSE standards and 41 associated HSE procedures, which will
be implemented across the Company's E&P operations. RIL has a well planned
safety training programme for employees and also contract employees.
Environment
In its pursuit of excellence in environmental management towards
sustainable business development, Reliance continues to be committed to
develop and implement Environmental Management System (EMS) throughout the
Group to measure, control and reduce the environmental impact. In this
context, during FY 2010-11, Gadimoga and Jamnagar SEZ manufacturing
divisions have instituted ISO-14001:2004. With this, the international
environmental accreditation based management system covers Company's all
manufacturing divisions. In majority of cases this has been integrated with
ISO: 9001:2008 Quality Management System and ISO-18001:2007 OSHA
management systems.
RIL has also referred Global Reporting Initiative's guidelines 2006 for
developing its environment performance indicators. This concerted effort
is aimed at developing environmental initiatives to address to RIL's long
term target of becoming water positive, carbon neutral and maximizing
possible recycling and reuse of wastes. A management framework with defined
structures, roles and responsibilities, group standards, audits and
training has been further strengthened.
RIL is fully compliant with various environmental protection and health and
safety laws and regulations. In its constant endeavour to be fully
compliant with all regulatory standards, RIL has instituted a compliance
management system, which ensures that the Company is in full compliance to
all applicable legal requirements. Prior to the implementation of new
projects the potential environmental impacts are assessed. The environment
impact assessment and risk analysis are performed for all new and major
expansion projects and necessary measures are incorporated to mitigate
adverse environmental impacts at the planning stage of project.
Further, in FY 2010-11, RIL has updated its group environmental standards
and second party audit protocols. In an important initiative, in FY 2010-
11, the Company developed RIL- Environmental Management Process' with the
help of international agencies. The processes include work streams, role
and responsibility matrix and performance indicators to monitor the
progress. RIL strongly believes that these actions will be the Change
Agent for further reducing the Company's environmental risks significantly.
In RIL's improvement efforts, audits play an important role. The Company
has developed three-tier audit systems. Trained and qualified internal
auditors perform internal or first party environmental audits of our
environment management system at regular intervals. In FY 2010-11, RIL has
developed an environment second party audit protocol for the RIL-
Environmental Standards. The high level environmental audit by the
external agency or third party is performed for all manufacturing
divisions which include annual audit by Gujarat Pollution Control Board
(GPCB) recognized auditors in the State of Gujarat and ISO-14001:2004
audits by the accreditation agencies at regular frequency.
In FY 2010-11, a five star environment audit by British Safety Council, UK
was performed at Hazira, Barabanki and Allahabad manufacturing divisions.
These manufacturing divisions have achieved more than 90% score. With this,
RIL's nine manufacturing divisions have been audited for its environmental
management by the British Safety Council (BSC) and the remaining
manufacturing divisions are planned to be audited in FY 2011 -12. In line
with the world class organization, RIL reports its externally verified
environmental performance based on Global Reporting Initiative guidelines.
We achieved a trend of continuous reduction in our emissions and
discharges and increase in effluent and waste recycling.
To be in harmony with nature, RIL continues its efforts such as mangrove
plantation and maintenance in the coastal areas with the help of
international agencies, tree plantation, maintenance of green belts and
gardens in and around our manufacturing units, vermi-compost of waste and
its use as manure, recycling of treated water in cooling water system and
in horticulture activities, etc. Further, RIL is partnering with the
Ministry of Environment and Forests, Government of India and Gujarat
Ecological Commission to set up the National Centre for Marine Biodiversity
(NCMB) - India's first Centre of Excellence for the study of India's
coastal biodiversity, at Jamnagar. This is the first such initiative in
India where the
Government and a private sector stakeholder will be partnering to safeguard
the biodiversity of coastal areas.
RIL's continued efforts on reducing environment footprint are aptly
reflected in its E&P business, at domestic and also international
operations. RIL completed its planned exploration operations with all
necessary regulatory approvals and permits in its domestic and
international blocks in Australia, Timor Leste, Yemen, Oman, Kurdistan and
Columbia. RIL completed its drilling campaign in Timor Leste without any
environmental incidents. Apart from internal tracking of environmental
compliance through an in-house portal, external agencies like M/s.
PricewaterhouseCoopers also monitored RIL's regulatory compliance through
its Compliance Monitoring Tools. No adverse notices / reports were received
from the statutory bodies during FY 2010-11.
Site operations in KG-D6 received certification under ISO-14001:2004 under
an Integrated Management System from M/s. DNV. Wastes, effluents and
emissions, at RIL's E&P operations, are in full compliance to the norms and
standards. The treated waste water from sanitary effluents is being reused
in the green belt.
With an objective of imparting awareness on oil spills control at sea
during emergencies, RIL conducted oil spill response mock exercises in the
East Coast with the involvement of all major operators and Indian Coast
Guard in September 2010. To inculcate the spirit of cleaner beaches along
the coast, RIL joined Indian Coast Guard and State Pollution Control
Board's initiative of beach cleaning at Kakinada in October 2010.
RIL regularly conducts environmental monitoring around its facilities at
both onshore and offshore and submits the monitoring reports to the
regulatory bodies without any adverse comments. RIL engaged the services of
national environmental laboratories like National Environmental
Engineering Research Institute (NEERI) and National Institute of
Oceanography (NIO) to conduct the onshore and offshore environmental
monitoring studies. RIL's production facilities in and around Gadimoga
(KG-D6 onshore terminal site) are well developed with green belt. In FY
2010-11, the Company planted more than 10,000 saplings, 43,000 shrub
plants, 37000 sq.mts of lawn and 15,000 sq. mts. of ground covers apart
from about 20,000 seasonal plants. Orchards of coconut, guava,
pomegranate, jack fruit and mangoes are cultivated in the operational site.
Some native animals like ducks, rabbits, love birds and fouls are also
brought in the green belt to enhance biodiversity.
RIL has undertaken a new initiative for conversion of organic waste to
vermi compost. This includes processing of food and paper wastes from its
operations at Gadimoga. RIL continues to support the maintenance of
mangrove plantation undertaken with the help of M/s. MS Swaminathan
Foundation in an area of 10 Hectares at Chollangipeta which is near to the
KG-D6 facility. Further, the Company is undertaking a study of
biodiversity enhancement in this region with M/s. MS Swaminathan Foundation
through project grants.
Social responsibility and community development
RIL's contribution to the community are in areas of health, education,
infrastructure development (drinking water, improving village
infrastructure, construction of schools etc.), environment (effluent
treatment, tree plantation, treatment of hazardous waste), relief and
assistance in the event of a natural disaster, and miscellaneous activities
such as contribution to other social development organisations etc. RIL's
CSR teams across its manufacturing divisions interact with the
neighbouring community on regular basis.
Education
A network of nine schools caters to 13,251 students spread across
geographies in India. CSR teams from RIL's manufacturing divisions and E&P
operations work ardently to support the educational requirements of the
community and schools in the neighbouring region benefiting thousands of
students from the underprivileged section of the society.
RIL plays a pivotal role in supporting Government's initiative towards
education of girl child. In Gujarat, under the project 'Kanya Kelvani',
RIL's Dahej Manufacturing Division has extended financial assistance
towards education of girl child in the state.
RIL has created a platform for computer learning in many villages. Its
manufacturing divisions have provided computers to primary and secondary
schools under the Company's computer literacy initiative.
RIL continues to provide support to school run by Lions Club of Naroda
Charitable Trust. The school renders quality education in English medium
to children of labourers working in GIDC, Naroda area, who are economically
and socially backward. Jamnagar Manufacturing Division constructed a
school building for village Kana Chikari of Lalpur taluka in Gujarat.
Hoshiarpur Manufacturing Division has adopted village Mangrowal-Nari
primary school. Annually free uniforms, books, shoes and school bags are
given to students and also free electricity is provided to the school.
RIL's CSR teams continue to provide uniforms, books etc, to students of
neighbouring villages of manufacturing divisions and E&P operations.
Further, continuous monitoring is being done in local schools for improving
the performance of students. Regular counseling sessions are also being
arranged with experts in personality development and psychology for
motivating the children to achieve better results.
To encourage school children from neighbouring villages in their learning
process, Nagothane Manufacturing Division and the MADER Foundation
provided school uniforms to the tribal and underprivileged students. Eleven
schools were selected for this initiative, out of which seven Zilla
Parishad schools are located on a hilltop near the manufacturing division.
Further, meritorious students were felicitated with an objective of
encouraging them for higher studies.
RIL's Project Jagruti, the project to tackle dyslexia in Surat, is setting
the pace for the community's response to the social dogma of the mentally
underprivileged children. More than 8,800 hours have been spent by 35
trained teachers and more than 1,000 hours by RIL volunteers to uplift and
bring the dyslexic students from the underprivileged segment into the main
stream. RIL employee's spouses are supporting this activity and many
teaching aids have been developed. NIOS registration has been initiated
for Academic Year ('AY') 2011-12.
Partnership with similar associations across the country and UNESCO / BBC
has been initiated to spread awareness and benefit the students with
latest training aids. Awareness stall was put up that attracted thousands
at the national book fair organized by Surat Municipal Corporation (SMC).
Membership of Maharashtra Dyslexia Association and International Dyslexia
Association has been taken to make the project more focused with proven
scientific practices and to get availability of resourceful experts,
sourcing global knowledge / resources and best practices / models in the
LD/Dyslexia space. Focus is on early identification of learning disability
in child and procuring various screening tests for the same.
Reliance Dhirubhai Ambani Protsaham Scheme
The Scheme, launched in AY 2008-09, continues to support
poor meritorious students. Recipient students of Reliance Dhirubhai Ambani
Protsaham Scheme got admissions in junior colleges of their choice. With
admissions of AY 2010-11, the total strength of students receiving support
under the scheme has gone up to 656. The first batch of the Protsaham
students passed out the intermediate examination held in March 2010 with
flying colours and from AY 2010-11 onwards, RIL is providing financial aid
to the toppers for pursuing their higher studies in engineering and
medical streams.
Mumbai Indians Education for All Initiative
Mumbai Indians took on the mandate of education as a primary social issue.
It launched its Education for All Initiative during the Indian Premier
League (IPL) season in 2010 to create a movement to support efforts to
provide quality education to all children. This initiative was the
brainchild of Mrs. Nita Ambani, a passionate advocate for the cause of
education. Through this effort, Mumbai Indians supported five NGOs carting
out outstanding work in the field of education - Akanksha, Nanhi Kali,
Pratham, Teach for India and Ummeed. As part of this initiative, Mumbai
Indians helped create awareness for the cause of education and the work of
these five organizations through official Mumbai Indian videos, TV
commercials that ran through the duration of the IPL, sale of Mumbai
Indians Education for All wristbands as part of the merchandizing and
awareness creation through its radio partners and in-stadium announcements
during games.
In addition, Mumbai Indians also invited 700 children from all the NGOs to
see each of the Mumbai Indians home games. The Mumbai Indians team joined
Mrs. Ambani at the presentation ceremonies and worked with the media to
ensure adequate coverage of the work of such groups. Mumbai Indians also
organized a briefing for the cricket team to interact with children and
staff of all the NGOs.
Through the sale of the wristbands and additional support, Mumbai Indians
was able to gift Rs. 11 lacs to each of the groups at the conclusion of
IPL 3. This collaboration continued through the year with an invitation to
the groups to send children to attend the Mumbai Indians games at the
Champions League matches in South Africa.
Community Health Care
RIL has developed Community Medical Centres near most of its manufacturing
divisions to provide comprehensive health services covering preventive,
promotive and curative health care services to the community from
neighbouring villages.
The manufacturing divisions conduct regular health checkups for children in
schools of their respective neighbouring regions. Doctors advise children
and their parents on various health care issues and personal hygiene.
Medical camps were organized by all sites benefitting patients from nearby
villages and tribal areas. All patients are given medicines free of cost.
As required, all sites have provided ambulance support to roadside
accident victims to shift them to hospitals / nursing homes. Patalganga
site has conducted a series of health awareness programs in local schools
and nearby small scale industries.
Drishti
A unique joint initiative of RIL and National Association of Blind, Project
Drishti has undertaken over 9,000 free corneal graft surgeries for the
visually challenged Indians from the underprivileged segment of the
society. It is the largest corneal grafting surgery project enabled by a
single corporate entity in India.
The initiative to combat TB, HIV / AIDS is a unique public-private
partnership program between the Government, NGOs, several agencies and
RIL. It extends from creating awareness to providing care, support and
treatment including free of cost treatment to those who cannot afford the
same.
Hazira Manufacturing Division's DOTS HIV / AIDS Centre is one of the
largest Anti-Retroviral Treatment Centre (ART Centre) in the country. A 22
bedded hospital for HIV / AIDS patients has been commissioned recently.
Manufacturing divisions at Jamnagar and Patalganga too have ART Centre
facilities. The initiative was expanded to other manufacturing divisions;
activities are largely in the advocacy and awareness area. A special
initiative of awareness campaign on Prevention of HIV/AIDS' targeted at
drivers and cleaners of all product transport vehicles has been undertaken
at various sites. Awareness lectures on prevention are conducted and
condoms have been distributed.
Dahej Manufacturing Division commenced Integrated Counseling and Testing
Centre (ICTC) for HIV/AIDS at Dahej in partnership with Gujarat State AIDS
Control Society (GSACS) in FY 2010-11. This initiative is aimed at
addressing the health of the increasing number of migrant workers in the
region resulting from the industrial growth
planned under Dahej SEZ and PCPIR Zone. Objective of the initiative is to
create necessary awareness amongst workers to prevent HIV/AIDS.
Jamnagar Manufacturing Division runs Project Balkalyan', with an objective
to provide nutritional support to children affected with HIV infection.
Nutritional kit is distributed to all HIV positive children when they visit
the Centre for monthly follow up. Hazira Manufacturing Division, through
Reliance Ladies Club (an association of spouses of RIL employees) has a
similar ongoing child adoption programme - Project Hope', at Hazira to
take care of nutritional requirement of HIV positive children.
The Primary Health Centre (PHC) at Dahej, Bharuch district, adopted by RIL
under the National Rural Health Mission Programme caters to the community
health needs of 23 surrounding villages.
In 2004, RIL established the PHC at Gadimoga. The PHC has six member
medical staff with all the amenities such as two-bed nursing room.
Medicines are offered free of cost. Further, RIL runs two sub-centres of
the PHC at Bhairavapalem and Laxmipathipuram. RIL is also constructing a
new 30-bed PHC and the existing PHC will be shifted to the new building.
Dhirubhai Ambani Hospital at Lodhivali, Maharashtra continues to play a
significant role in improving the quality of life in surrounding
communities. It extends prompt and specialized services to the Mumbai-Pune
highway accident victims. Trauma patients are provided free lifesaving
treatment. Besides taking care of hospitalization requirements, the
hospital provides poor patients and senior citizens subsidized treatment -
both in the outpatient and in-patient departments. ART clinic, a public-
private-partnership initiative between RIL, CII and NACO, offers free of
cost treatment to HIV/AIDs patients. In association with the Lions Club,
the hospital conducts cataract surgery camps annually.
A well-equipped community medical centre with four observation bed facility
at Jamnagar continues to offer free-of-cost, round the clock with
comprehensive health services. Manufacturing divisions offer free medical
services including free medicines to the neighboring villages.
In tribal villages surrounding Nagothane Manufacturing Division, villagers
are deprived of medical facilities in the region because of absence of
proper approach road to the villages as they are located on hilltops. The
manufacturing division realizes the health problems faced by the tribal's
and it took a major step towards providing free OPD (out patient
department) treatment on weekly basis to the tribal people staying at hill
tops. Moreover, the manufacturing division developed the road and even made
it motorable up to village Gangawane. Every week a doctor with medical
team and medicines visits tribal hamlet and provides OPD services to
tribals.
Hazira Manufacturing Division along with an NGO have launched an orthopedic
hospital with ultra-modern facilities and one rehabilitation centre. Both
facilities have become operational in March 2011. Hospital building was
inaugurated by the Chief Minister of the State of Gujarat.
RIL's manufacturing divisions offer free medical, diagnostic and
therapeutic services including free medicines to neighbouring villages.
Mobile Van Clinics - Health-on-Wheels, which are specially designed mobile
dispensaries equipped with doctor accompanied by a nurse, visits
neighbouring villages on a scheduled basis all through the week.
RIL has established an Early Intervention and Rehabilitation Center for
supporting the mentally challenged children living in Tallarevu Mandal and
Yanam Union Territory. This center is being run with the technical support
of NGO Uma Mano Vikasa Kendram, Kakinada. At present, children from the
region having different disabilities have already been enrolled.
Safety initiatives for community
Road Safety System is most cost effective and easy to use tool for
improving public safety and thus offering a life-line to humanity. Hazira
Manufacturing Division has institutionalised road safety training and has
reached out to over 158,000 tanker / truck drivers who visit the plant for
pick-up and dropping feedstock / finished goods. The training focuses on
safe operation of fleet vehicles by eliminating unsafe driver and driving
behaviors and reinforcing aspects of save lives, reduce injuries, prevent
crashes, control driver performance, minimize risk and liability. A centre
dedicated for training truck drivers for transportation of hazardous goods
has been established for round-the-clock training. No driver is allowed
inside complex without training.
To provide emergency and trauma care to victims of highway accidents,
Hazira Manufacturing Division has tied up with an NGO, Life Line
Foundation' and adopted 110 kms stretch on the State Highway in Gujarat
starting from Sachin to Bharuch and the state highway via Hazira Olpad
Hansot Ankleshwar.
Further, for the first time in State of Gujarat, the local RTO has been
supported by installing a multimedia based training facility to render
safety awareness to all license aspirants.
Environment initiatives for the community
A zero garbage campaign has been launched in Reliance Townships to
propagate the concept of solid waste (dry and wet waste) management. This
is a part of cleanliness drive for a disease-free environment at employees'
township, the surrounding villages of Hazira Manufacturing Division and
also Surat city in Gujarat.
To reduce plastic litter, as part of its commitment towards responsible
care and product stewardship intervention, Hazira Manufacturing Division
in partnership with an NGO is working for social and economical security of
woman rag-pickers. Under the programme, direct sale of waste PET bottles
to processing units is facilitated, thus eliminating channel of waste
merchants and promoting, woman rag pickers' group. This program is being
extended to over 350 slums of Surat and also various other RIL locations
in Gujarat and other states.
Further, RIL in partnership with Gujarat Engineering Research Institute
(GERI) and R & B Department constructed a 900 meter road stretch using 5%
plastic waste. RIL's CSR team used unattended / non-recyclable plastic
waste in construction of tar road which reduced construction cost as well
improved road life and reduced road maintenance cost. Unattended and non
recyclable plastic waste sourced from rag pickers' cooperative group also
dead stock seized by Surat Municpal Corporate was used. Awareness and
sensitization programs about the technology and its benefit to community
have been undertaken to benefit the population of neighbouring villages of
Hazira.
RIL's manufacturing divisions continue its green energy drive by making the
rural folks aware of alternate energy, efficient energy usage. An NGO
called GAIA Initiative from Japan is working with Hazira Manufacturing
Division for this project. Some of the projects that have been initiated
are: installation and commissioning of solar-micro-wind combined power
system at HIV DOT Centre, Mora village, Surat, installation and
commissioning of Solar-Micro-wind combined system (2 kW) at J H Ambani
School, Surat, installation and commissioning of solar AC (1.7 TR) at
Orphanage, HIV DOT Centre, Mora Village and training on 'house-hold energy
conservation / efficiency measures' conducted for all village in the
vicinity of the manufacturing division.
To bring out the innovative spirit of young students of Surat / RIL
employees and also to acknowledge / reward the ideas that can contribute
to improving the environment, Hazira Manufacturing Division announced a
Green Idea Award Scheme' in 2010.
RIL organised programmes of industrial, academic, historical and
environmental importance such as Chemical Industry-2020 Vision and Action
at Ankleshwar; Global Bird Watchers Conference at Jamnagar; Van Mahotsav-
2010 at Palitana; International Conference on Global Warming at Gujarat
Vidyapeeth; Conference on Synergy with Energy; Conference on Gujarat's
Maritime History by Darshak Itihas Nidhi. Further, tree plantation
activities were organaised at many locations. Awareness of cleaner,
greener environment and global warming issues are made at schools and also
to villages from the surrounding region.
Community Development
Reliance Rural Development Trust
In FY 2010-11, Reliance Rural Development Trust (RRDT) undertook 797 works
in 760 beneficiary villages of 125 talukas under 24 districts of Gujarat
to create rural infrastructure under the Gokul Gram Yojana (GGY) of the
Government of Gujarat. Total 608 facilities got completed during the year.
The completed facilities include 478 Anganwadi buildings, 58 Cement
Concrete Roads, 61 underground RCC sumps and 05 Check Dams and 06 other
works with the total expenditure of Rs. 24 Crore in FY 2010-11. The Check
Dams completed in FY 2010-11, will have total water storage capacity of 8.7
mcft and would cater to about 1,065 Hectares of rural land. RRDT, since
its inception in 2001 till March 31, 2011, across the State of Gujarat, has
completed 7,306 various rural infrastructure facilities with an expenditure
of more than Rs. 270 crore.
Further, RIL's manufacturing divisions supply free potable water to the
neighbouring villages especially during water shortage periods. They also
contribute to the development of various village infrastructure such as
developing, bus sheds, roads, street lights, installation of solar street
lights in number of villages, free supply of blankets etc.
Livelihood Support Programmes
RIL has always been at the forefront in implementing initiatives especially
for the welfare of rural women and youth of surrounding villages through
various self-help groups (SHG).
Continuing with the services and keeping up the tradition, Hazira, Vadodra,
Nagothane, Gadimoga and many other manufacturing divisions offer training
programmes through various SHGs help the rural women and youth to be 'self
sustaining' and generating income for themselves and supporting their
families. It is a matter of great pride that many of the beneficiaries of
these training programmes are earning a decent amount of livelihood and are
financially supporting their families. For the womenfolk, courses are
offered for dress making and designing, beauty culture and health care,
hospital attendant (Helpers for Hospital and Nursing Homes); while for the
youth of the surrounding communities, courses such as plumbing and hand
pump repairing training, computer hardware repair, motor vehicle driving,
mobile repairing and doormat making etc. Further, training in horticulture
cultivation and fruit saplings are also given to the farmers of the
adjoining villages.
Jamnagar Manufacturing Division continues to serve the villages around the
refinery complex, the city of Jamnagar and the community at large. RIL's
local community welfare cell constantly remains in close touch with the
villagers.
Numerous infrastructure developments in villages adjoining and neighbouring
the Jamangar Manufacturing Division such as development of cement concrete
roads, drainage, crematorium and also supply of water construction of Haja
Dada temple at a neighbouring village, Sikka were undertaken in FY 2010-
11. Fodder for cows of neighbouring villages was supplied by RIL's CSR
team working at Jamnagar.
In FY 2010-11, RIL initiated several village infrastructure development
projects such as construction and renovation of community halls, burial
ground and school compound wall in Gadimoga Panchayat. RIL promoted Organic
Aqua culture with the technical guidance of National Center for
Sustainable Aqua culture (a sister concern of MPEDA).
Around RIL's on-land operations in the Coal Bed Methane project areas in
Madhya Pradesh, the Company continues to give medical support to the
villagers through a mobile medical van.
To help farmers buy the correct and high yield variety of paddy seeds, a
Kisan Mela' was organized by MADER Foundation. Several varieties of paddy
seeds, and fertilizers were made available to farmers. On the purchase of
first bag of paddy seeds, financial assistance was given by MADER Trust as
subsidy. Farmers are also encouraged to cultivate vegetables in the winter
season making them available host of vegetable seeds and a financial
subsidy from MADER Foundation on the purchases.
Improving quality of agricultural produce
RIL conducted several programmes and participated in farming related
exhibitions to propagate advanced technologies in the production,
handling, storage and distribution of agricultural products. Use of Leno
bags made out of polypropylene (PP) was extensively promoted amongst
farmers. Leno bags are immensely beneficial to farmers as it reduces
handling losses in fruits and vegetable products.
RIL demonstrated use of advanced farming techniques by use of plastic in
enhancing producitivity, reducing losses and increase in earnings and
distributed promotional materials. Filling, storing and transportation
trials were conducted with PP leno bags to help remove apprehensions of
users in adopting advanced packaging solutions.
RIL also had a targeted solution for the banana growing farmers, those who
are involved in export of their produce, in the States of Gujarat and
Tamil Nadu. Usage of PP non-woven material as skirting bags for bananas
helps in growing spotless fruits of uniform size. This helps in 10-15%
increased yield and in uniform ripening across the bunch, while allowing
air, water, pesticide to pass through while giving protection from insects
and pests attack. RIL has been working with the farmers and with Krishi
Vigyan Kendra to create awareness of the concept in order to improve the
quality of the produce across the country.
Reuse of well site water to the crops is demonstrated through irrigation in
an experimental farm for enhanced utility of resources available for the
upliftment of quality of life of the living communities around
manufacturing divisions and E&P operations.
Skill Up-gradation for Plumbers
RIL's Polymer team conducted training programmes and workshops for plumbers
on advanced technology in plumbing systems with PPR pipes. Advanced
techniques
of welding to prevent leakage and ensuring hygienic and safe drinking water
to the users were taught at these events. Brochures, training manuals and
installation guides were made available in various vernacular languages.
Plumbing kits were also distributed to plumbers selected by our customers.
Installation of PPR plumbing system takes less time for installation and
reduces physical labour thus leading to higher earnings for the plumbers.
Through these programmes local plumbers are kept abreast with advanced and
modern technologies in plumbing.
Heritage Conservation
Development of Dwarka and other places of religious and spiritual
significance is a passion for RIL. The construction and beautification at
Temple Parisar in Dwarka has been completed.
The newly developed facility at the temple square is ready for dedication
to devotees of Lord Dwarkadheesh. We are now poised to take up
construction of Sudama Setu, a pedestal bridge connecting two banks of
river Gomati.
In FY 2010-11, resurfacing and strengthening of Dhirubhai Ambani Marg, a
by-pass road leading to the temple from the national highway was
completed. Refurbishing of the temple premises such as construction of
ceiling in adjoining area of the main temple premises, reinstallation of
CCTV based camera security system etc. was completed in FY 2010-11.
RIL continues to support social, educational, cultural and spiritual
activities of Shardapeeth of Jagadguru Shankaracharyaji, Dwarka. Also,
financial assistance was extended to Shree Somnath Trust for construction
of Kokila Dhirubhai Ambani Sagar Darshan Dham (a place of accommodation
for pilgrimas and furniture was provided to Dhirajdham at Nathdwara Temple.
RIL also extended support to publication of Shraddha Setu'-a coffee table
book on Gujarat's pilgrimage centres.
Supporting Indian Culture
During the traditional Navratri garba festival, gifts to girls were
distributed individually by RIL. Several institutions organizing Navratri
festival at Jamnagar, Chorwad, Ahmedabad, Gandhinagar, Mumbai, etc. were
given financial assistance. RIL sponsored a state level navratri festival
under the banner of Gujarat Industries Navratri Festival Society. Unlike
other commercial Navratri venues, the entry here is free for all; modern
and classical garba competitions as well as traditional street-garbas are
performed and the whole venue is developed for nine days in such a way that
one gets a total feel of Gujarat's culture, cuisines and crafts at one
place.
Financial assistance and support was given to festivals such as Durga puja,
Utkal dival, Shivratri, 150 years of Swami Vivekanand, Sardar Patel's
birth anniversary, and other cultural/voluntary organisations in FY 2010-
11.
RIL in partnership with a regional magazine sponsored a convention of
Gujarati Poetry and Music during the year. This was one more contribution
to strengthen and consolidate RIL's association with Gujarati community at
large. Also, the activities of the Vishwa Gujarati Samaj; Swarnim Gujarat
celebrations etc. were supported and promoted during the year.
Promoting Sports and Sportsmen
RIL continues to promote and support sports and sportsmen. The Company
extended support to Reliance Inter-Cricket Tournament, G1 Cricket
Tournament, affiliated MPCA's All India Cricket Tournament, Central Board
of Cricket, etc. Financial support was given to International Tournament
for upcoming chess-players; Gujarat State Chess Association for conducting
under-09 chess tournament; as well as to one upcoming chess-player.
Support was also given to Gujarat State Football Association and Jamnagar
District Football Association for players' coaching fees, uniform and their
daily allowances as well as to the publication of a special handbook on
the Football World Cup. Third Gujarat Major Ranking Badminton Tournament at
Ahmedabad, Hockey League Night Tournament at Rajkot, Tennis Tournament of
Government Employees at Ahmedabad, Table Tennis Championship Tournament at
Vadodara, Kabaddi Tournament of Maharashtra Krida Mandal, Shuttle
Tournament at Kochi and Sports Carnival at Bhopal were some of the major
sports-events that were supported during the year.
Mumbai Indians (MI), the Mumbai-based IPL franchise owned by IndiaWin
Sports Pvt. Ltd, a subsidiary company of Reliance Industries Limited is
led by Sachin Tendulkar. MI registered the most number of wins in Season
III of the Indian Premier League, and reached the finals. MI has been the
most followed team in the IPL and enjoys a huge global fan base.
IMG Reliance Private Limited (IMGR), the equal joint venture between IMG
and RIL, forged partnerships with the All India Football Federation (AIFF)
and Basketball Federation of India (BFI). Through its partnership with AIFF
and BFI, IMGR is set to revolutionize the Indian Sports scenario. IMGR
will work with the Federations to improve the standard of game in India by
participating from grassroots to professional levels.
IMGR has initiated 'IMG Reliance Scholarships for India' to identify and
train young athletes in India. The first batch of 'IMG Reliance Scholars',
is undergoing training at IMG Academies, at Bradenton, Florida. IMGR also
operates India's premier lifestyle event, 'Lakme Fashion Week'; 'Aircel
Chennai Open', India's only ATP level Tennis event and 'Avantha Masters',
the professional golf tournament on European and Asian Tour.
Acknowledging and supporting talent
Real Heroes', an initiative of CNN-IBN in partnership with RIL honors the
silent warriors of change. In its fourth year, Real Heroes', acknowledges
the extraordinary contribution from ordinary citizens in the fields ranging
from Women's Welfare' to Social Welfare', from Youth' to Education and
Children' and from Health and Disability' to Sports'. The Real Heroes
are felicitated at a grand event with a trophy and cash prize of Rs. 5 lakh
each.
RIL partnered with the Stanford University and Stanford Graduate School of
Business for creation of the Reliance-Dhirubhai Ambani Undergraduate
Scholarship Fund' as well as Reliance Dhirubhai India Education Fund' with
the aim of identifying and supporting promising Indian students with
financial need for higher education. The Reliance Dhirubhai Fellows'
receive full financial support for education of Stanford.
RIL instituted NASI-Reliance Industries Platinum Jubilee Awards' covering
both Physical and Biological Sciences', in partnership with National
Academy of Sciences, India (NASI). Backed by an endowment from RIL, NASI
recognizes scientists for their significant contribution for application-
oriented innovations and research.
In December 2006, jointly with UDCT Alumni Association (UAA), RIL
instituted UAA-Dhirubhai Ambani Lifetime Achievement Award' for
innovative and outstanding contributions in the field of chemical sciences.
To commemorate the 78th Birth Anniversary of RIL's Founder Chairman
Dhirubhai Ambani, in December 2010, district level quiz competition (RDHA
Quiz 2010) was organised, where more than 500 schools in East Godavari
district participated.
Supporting Institutions
Dahej Manufacturing Division extended financial assistance to Swajaldhara
Scheme' organized by Water and Sanitation Management Organization (WASMO),
Government of Gujarat, for developing drinking water facility by laying
pipeline in the neighbouring villages.
RIL also extended financial support to students and educational
institutions such as: Centre for Environmental Planning and Technology
(CEPT), Consumer Education and Research Council (CERC), Pt. Deendayal
Petroleum University, MP Shah Medical College, Jamnagar, Gramshree Trust,
Patan especially engaged in vocational training of needy women. Premdhara
Shishu Vihar, Gandhinagar was given a special financial support for the
slum-children school run by it. In another such unique assistance,
financial assistance was given to Shri Vidyamrut Varshini, Valsad, a 100
year old school known for its Sanskrit teaching. The School had even
impressed Mahatma Gandhi and Kasturba when they visited it.
Similarly, RIL has extended financial assistance to development of
Dhirubhai Ambani Vanijya Bhavan - the new premise of Jamnagar Chamber of
Commerce and Industry and for repairing and refurbishing Sardar Vallabhbhai
Patel National Memorial at Shahibaug, Ahmedabad.
Reliance Foundation
Reliance Foundation, envisaged to become one of the foremost professional
philanthropic organizations in the world, was incorporated in 2010. The
Foundation focuses on five core pillars: education, health, rural
development, urban renewal, and promotion and protection of India's art
and culture. The Foundation embodies corporate systems and processes driven
organization operating on a not for profit basis, with the overall aim to
create and support meaningful and innovative activities that will address
some of India's most pressing development challenges.
In October 2010, Reliance Foundation launched Mission BIJ, its flagship
program focusing on supporting smallholder farmers. BIJ, which stands for
Bharat India Jodo' (BIJ) aims to bridge the gap between rural and urban
areas. Its overall goal is to make farming a profession of first choice by
empowering smallholder farmers. Starting in over 6 geographic sites spread
across four states, Mission BIJ will provide support to smallholder
farmers along the supply chain through input support, technical assistance,
post harvest and marketing support. Initially envisaged as an agricultural
focused program, Mission BIJ will eventually work with farmers and
communities on a comprehensive rural development strategy, including
education, health, and infrastructure and community development.
Reliance Foundation has also launched an initiative to set up a world-class
multidisciplinary university in Maharashtra as well as revamping and
creating a world class tertiary care hospital in Mumbai. Reliance
Foundation is also planning interventions in the space of education and
health services that aim to address the service delivery challenges on the
ground in rural India.
Dhirubhai Ambani Foundation
Dhirubhai Ambani Foundation (DAF) has Education and Public Healthcare as
its focus areas. The Foundation's 'Dhirubhai Ambani Undergraduate
Scholarship Scheme' has been motivating students excelling at the +2 level
and assisting them to pursue higher education. Similarly, the Foundation's
'Dhirubhai Ambani SSC Merit Reward Scheme' has been recognizing and
rewarding the Board toppers at Std X exams. The Schemes also makes special
provision to reach out to the Physically Challenged Category and the girl
child.
On a district-wise basis for the State Education Boards and state-wise
basis for CBSE, the Schemes are in implementation in several states, viz.
Maharashtra, Goa, Gujarat and the Union territories of Daman, Diu and Dadra
Nagar Haveli.
In the rest of the states and union territories, the scheme rewards the
physically challenged category of the State Boards and the top five
students per state per year are given the Scholarships and the Rewards.
With a sustained follow-up, DAF has now succeeded in taking its Schemes
for the physically challenged to 19 other states which have State Education
Boards. This has benefited additional 232 physically challenged students,
129 rewardees and 103 scholars. Till date the Schemes have benefited 8,153
students, 1,389 of whom are physically challenged.
Sir Hurkisondas Nurrotumdas Hospital and Research Centre
Sir Hurkisondas Nurrotumdas Hospital and Research Centre (HNHRC) is a
renowned institution in South Mumbai, having rendered quality healthcare
to the society for more than 85 years. It is a multi-specialty tertiary
care hospital with some rare specialties like Oro-facial Surgery, Onco-
Surgery, Paediatric Hematology and Paediatric Endocrinology. It is one of
the most renowned institutes for transplant surgeries and eye donations.
Strengthening and renovation work was carried out in the HNHRC building.
Intensive care units and operation theatres have been upgraded. HNHRC has
periodically conducted programmes like free health camps and public
education sessions on prevention of diseases. Free health checkups and
screening programmes for senior citizens and physically challenged were
also organized. HNHRC has started B. Sc. Nursing course which will help to
generate more graduates in the field of nursing. The construction of new
hospital has started and is in full swing.
Sir Hurkisondas Nurrotumdas Medical Research Society
Sir Hurkisondas Nurrotumdas Medical Research Society (HNMRS), a non-profit
research organisation based in Mumbai was established with the sole aim of
undertaking scientific research in the area of biomedical sciences and
allied disciplines. The HNMRS has undertaken over 150 research projects on
a wide range of topics, most of which are of national importance in the
areas of the preventive, diagnostic, therapeutic, and rehabilitative
aspects of health. Several high-budgeted research projects, of
considerable medical and scientific relevance to the community, have been
completed and are also on hand currently at the HNMRS. Most of the studies
done at this institute have the potential for translation into tangible
benefits for humanity, and several of them have already found expression
in terms of new inventions or innovations which have empowered doctors in
the difficult task of decreasing the mortality and morbidity of disease.
Upgrading of scientific knowledge and infrastructure is done incrementally
in HNMRS. It is poised for further paradigm upgradation of its
capabilities in the area of Applied Research.
Dhirubhai Ambani International School
Dhirubhai Ambani International School recognizes the imperative of
imparting an educational experience that is world-class in every respect
and which prepares children for global citizenship. The School's vision is
to provide a learning environment that encourages children to bring out
the best in themselves and which supports their all-round development,
through discovering the joy of learning, awakening and illuminating their
intellect in multidimensional ways and instilling abiding values in
themselves.
Building on the School's excellent track record all these years, across all
its three streams - the ICSE, the IGCSE and the IB Diploma - our students
have achieved impressive results in the examinations held in 2010. As
against the average score of 36 (out of the maximum possible score of 45)
achieved by the first five batches of our IB students, the sixth batch, the
Class of 2010, attained an average score of 37, compared to the world
average of 29.8 points. And 2 of them earned the perfect score of 45
points, a score that was only achieved by 86 children worldwide in the
previous year. For the fourth year in a row, our ICSE children have
achieved excellent results -earning an average score of 94.06%, with 45% of
them scoring 95% and above and the topper scoring 96.80%. 85.3% of all
IGCSE grades achieved were A* and A grades, as compared to the world
average of 35% and the Indian average of 34%. Some of our children have
topped the world in several subjects while some have been national
toppers. For the fifth year in a row, one of our children received the
Best IGCSE Student in India' award from the Cambridge International
Examinations.
The School's performance on the university placement front continues to be
excellent. The IB Class of 2011 has earned admission offers from the
world's top universities. 4 students were accepted at Oxbridge, 15 at
University College London, 7 at Imperial, 9 at King's College, 1 at
University of Edinburgh, 3 at University of Bristol, 8 at University of
Manchester, 19 at Warwick and 6 at London School of Economics, among
others. Amongst the Ivy League and other leading universities, Yale has
accepted 1 student, University of Chicago 5, Princeton 1, Columbia
4, U-Penn 3, Stanford 3, Michigan 2, Cornell 3, Northwestern 1, UC Berkeley
9, Carnegie Mellon 11, University of California LA 19, Brown 1 and New
York University 19. Other reputable universities that have offered
admission to our students include McGill, British Columbia, University of
Toronto and University of Hong Kong. Students who applied to universities
in other countries and those who plan to study in India are expected to do
equally well when their admissions are finalized.
The School's students are involved in several service activities. They work
with NGOs like Advitya, Akanksha, Muktangan and Pratham. Through the
Across the Road' neighbourhood service initiative and education and health
programmes, our students reach out to community members in Bandra-Kurla
Complex, Mumbai. The Empowering Villages Everywhere (EVE) initiative
provides solar lamps to villages where electricity is scarce. Our students
are enthusiastically continuing their work to construct houses and roads
in Hassachipatti (a village near Matheran) and also provide educational
opportunities for children there; through a fete they raised substantial
funds to support this initiative.
In 2010, our School hosted the Round Square South Asia and the Gulf Region
Junior Regional Conference at the School, DAIS Study and Activity Centre
at Matheran, with participation of 20 Schools from Bangladesh, Jordan,
Sultanate of Oman, UAE and India. The theme of this conference was water
conservation. The School celebrated its Annual Day on the theme
Chirstmast'. It consisted of a musical The Gift', showcasing the
School's talent and reinforcing the spirit of giving and the Chirstmas
Carnival, which was organized by our students to raise funds towards
community service. The Annual DAIMUN (Dhirubhai Ambani International
School Model United Nations) Conference 2010 deliberated on the menace of
corruption and how it could be addressed with the urgency it deserves.
Paigaam' Peace Conference, which fosters a harmonious relationship with
people from across the border, was another highlight of the year at the
School. |