1. PROPERTY PLANT AND EQUIPMENT CAPITAL WORK-IN-PROGRESS INTANGIBLEASSETS AND INTANGIBLE ASSETS UNDER DEVELOPMENT
2. INVESTMENTS - NON-CURRENT
3. LOANS - NON-CURRENT (Unsecured and Considered Good)
4. OTHER NON-CURRENT ASSETS (Unsecured and Considered Good)
6. INVESTMENTS - CURRENT
7. TRADE RECEIVABLES (Unsecured and Considered Good)
8. CASH AND CASH EQUIVALENTS
9. LOANS - CURRENT (Unsecured and Considered Good)
10. OTHER FINANCIAL ASSETS - CURRENT
12. OTHER CURRENT ASSETS (Unsecured and Considered Good)
13. SHARE CAPITAL
14. OTHER EQUITY
16. PROVISIONS - NON-CURRENT
17. DEFERRED TAX LIABILITY (NET)
18. OTHER NON-CURRENT LIABILITIES
19. BORROWINGS CURRENT
20. TRADE PAYABLES
21. OTHER FINANCIAL LIABILITIES - CURRENT
22. OTHER CURRENT LIABILITIES
23. PROVISIONS - CURRENT
24. VALUE OF SALES
25. OTHER INCOME
26. CHANGES IN INVENTORIES OF FINISHED GOODS WORK-IN-PROGRESS ANDSTOCK-IN-TRADE
27. EMPLOYEE BENEFITS EXPENSE
28. FINANCE COSTS
29. OTHER EXPENSES
30. EARNINGS PER SHARE (EPS)
31. RELATED PARTIES DISCLOSURES
32.1 Disclosure of the Company's Interest in Oil and Gas JointArrangements (Joint Operation):
33. CONTINGENT LIABILITIES AND COMMITMENTS
34. CAPITAL MANAGEMENT
35. FINANCIAL INSTRUMENTS
37. DETAILS OF LOANS GIVEN INVESTMENTS MADE AND GUARANTEE GIVENCOVERED U/S 186 (4) OF THE COMPANIES ACT 2013.
38. DETAILS OF RESEARCH AND DEVELOPMENT EXPENDITURE
39. EVENTS AFTER THE REPORTING PERIOD
1. PROPERTY PLANT AND EQUIPMENT OTHER INTANGIBLE ASSETS CAPITALWORK-IN-PROGRESS AND INTANGIBLE ASSETS UNDER DEVELOPMENT
2. INVESTMENTS - NON-CURRENT
3. LOANS - NON-CURRENT (Unsecured and Considered Good)
4. DEFERRED TAX
5. OTHER NON-CURRENT ASSETS (Unsecured and Considered Good)
7. INVESTMENTS - CURRENT
8. TRADE RECEIVABLES (Unsecured and Considered Good)
9. CASH AND CASH EQUIVALENTS
10. OTHER FINANCIAL ASSETS - CURRENT
11. OTHER CURRENT ASSETS (Unsecured and Considered Good)
13. SHARE CAPITAL
14. OTHER EQUITY
16. OTHER FINANCIAL LIABILITIES - NON-CURRENT
17. PROVISIONS - NON-CURRENT
18. BORROWINGS - CURRENT
19. OTHER FINANCIAL LIABILITIES - CURRENT
20. OTHER CURRENT LIABILITIES
21. PROVISIONS - CURRENT
22. OTHER INCOME
23. CHANGES IN INVENTORIES OF FINISHED GOODS WORK-IN-PROGRESS ANDSTOCK-IN-TRADE
24. EMPLOYEE BENEFITS EXPENSE
25. FINANCE COSTS
26. OTHER EXPENSES
27. EARNINGS PER SHARE (EPS)
28. RELATED PARTIES DISCLOSURES
29.1 Disclosure of the Company's Interest in Oil and Gas JointArrangements (Joint Operations):
30. CONTINGENT LIABILITIES AND COMMITMENTS
31. CAPITAL MANAGEMENT
32. FINANCIAL INSTRUMENTS
33. SEGMENT INFORMATION
34. ENTERPRISES CONSOLIDATED AS SUBSIDIARY IN ACCORDANCE WITH INDIANACCOUNTING STANDARD 110 - CONSOLIDATED FINANCIAL STATEMENTS
35. SIGNIFICANT ENTERPRISES CONSOLIDATED AS ASSOCIATES AND JOINTVENTURES IN ACCORDANCE WITH INDIAN ACCOUNTING STANDARD 28 - INVESTMENTS IN ASSOCIATES ANDJOINT VENTURES
36. ADDITIONAL INFORMATION AS REQUIRED UNDER SCHEDULE III TO THECOMPANIES ACT 2013 OF ENTERPRISES CONSOLIDATED AS SUBSIDIARY / ASSOCIATES / JOINTVENTURES
37. EVENTS AFTER THE REPORTING PERIOD
Dear Fellow Shareowners
Our motto Growth is Life aptly captures the ever-evolving spirit ofReliance. All our businesses endeavors to deliver superior value to our stakeholders andmake life better for everyone.
Mukesh D. Ambani
Chairman and Managing Director
I am happy to tell you that we have again delivered outstanding performances on bothfinancial and operational parameters across all our business segments. FY 2017-18 turnedout to be a watershed year in the history of Reliance.
Our new-age consumer businesses achieved leadership positions nationally theirgrowth rates outpacing the best in the world. Jio now the world's largest and fastestgrowing mobile data network stunned the world and made us proud by turning profitable inthe very first year of operations.
Reliance Retail is the only Indian retailer to rank among the world's Top 200 globalretail chains. Our energy and materials businesses successfully completed one of theworld's largest most complex and most innovative projects achieving a level ofintegration that is unprecedented globally. Yes we have made a spectacular start to ourGolden Decade. In a world full of volatility uncertainty complexity and ambiguity theseachievements are indeed commendable. I thank and congratulate everyone at Reliance forthis feat. The global economy is now growing at its fastest pace since 2010 with theupturn becoming increasingly synchronised across countries. The world economy is expectedto strengthen further in 2018 and 2019 with economic growth projected to rise to about4% from 3.7% in 2017. Stronger investment the rebound in global trade and higheremployment are helping make the recovery increasingly broad-based. This long-awaited liftsupported by policy stimulus is being accompanied by solid employment gains a moderateupturn in investment and a pick-up in trade growth. The continued rise in global trade wasled by pickup in import demand in developed markets. Growing protectionism impactingtrading relations and geo-political tensions in parts of Asia are a key area of concern.India's economy maintained its strong growth in FY 2017-18 the Gross DomesticProduct growth was 6.7% with a strong 7.7% increase in the last quarter of the year. Withthe One Nation One Tax' GST regime being implemented and gradually stabilising bythe second half of the year the economy witnessed upsurge in investments consumption aswell as government spending. Industrial activity rebounded and services indicators tooshowed positive trends. Thanks to a series of policy initiatives India moved into theworld's Top 100 countries in terms of ease of doing business. The country also retainedits position as a favoured destination for foreign capital with gross foreign directinvestment inflows of $64.6 bn in 2017.
Reliance improved on its last year's record performance to post a 20.6% jump in netprofit to 36075 crore ($5.5 billion). It also became the first Indian company to recordan EBITDA of over $10 billion with our key businesses Refining & MarketingPetrochemicals Retail and Digital Services achieving record earnings performance.The year saw our consumer businesses attain a threshold wherefrom they will startcontributing meaningfully to consolidated profits. From a mere 2% in FY 2016-17 Jio andRetail accounted for 13.1% of RIL's consolidated Segment
EBITDA in FY 2017-18. This was achieved notwithstanding a sharp 33.6% spurt inconsolidated EBITDA to 74184 crore. Our aim is to have the consumer businesses contributeon par with the energy and materials business over the next decade when we celebrate ourGolden Jubilee.
The refining and petrochemical businesses posted record level of profitability owing toexpanded capacities high operating rates and improved cost competitiveness. The refiningbusiness improved upon the preceding year's strong Gross Refining Margins (GRMs). Thepetrochemicals segment posted a significant jump in profits due to higher volumes fromexpanded capacities and better margins.
Refining & Marketing
Globally oil demand grew at the rate of 1.6 mb/d in CY 2017 with Asia aloneaccounting for close to two-thirds of the total growth. Oil demand in India grew 5.3% inFY 2017-18 similar to the 5.4% growth of FY 2016-17. The transportation sector drove theoverall demand in India with gasoline demand rising 10% aviation fuel growing 9% anddiesel 6.6%. LPG demand grew 8% in FY 2017-18 reflecting an increase in householdpenetration. With economic activity picking up across the world the global oil demandoutlook for 2018 continues to remain strong. IEA has forecast that in 2018 the world willconsume an additional 1.4 mb/d of crude oil. The growing global demand and reducinginventories augur well for the refining industry over the next 12-18 months.
The refining and marketing segment reported a 3.2% increase in EBIT climbing to itshighest ever level of 25869 crore ($4.0 billion). The GRMs for the year rose to anine-year high of $11.6/bbl climbing from last year's $11.0/bbl. RIL's GRM outperformedthe Singapore complex margins by $4.4/bbl. In FY 2017-18 the Singapore complex marginaveraged $7.2/bbl compared to $5.8/bbl in FY 2016-17 owing to strong product cracksaided by firm oil demand growth and lagging refining capacity additions.
We have maintained the highest safety standards and relentlessly strived to improveenergy efficiency and minimise operating and maintenance costs. We have ensured adoptionof latest developments in technology to improve asset reliability and avoid unplannedoutages thereby enabling high on-stream factor. Reliance has constructed the world'slargest petcoke gasification unit at Jamnagar one of the most complex projects that hasintegrated as many as 83 process units with refineries and other downstream units. Theseprocess units operate in extreme conditions with temperatures ranging from (-)190C to(+)1480C and pressure fluctuating from vacuum to 120 standard atmosphere. This projectwill bring the full benefit of bottom-of-the-barrel conversion to our refining businessand further boost profitability. The gasification unit linked to the refinery in DTA iscurrently undergoing trial operations to ensure steady and reliable syngas supply to theJamnagar complex. The SEZ is under commissioning. RIL continued to re-commission itsnetwork of retail fuel stations. It now has 1313 operational outlets. Improving qualityof the customer base a swift transition to dynamic pricing and continuing focus onquality have allowed Petro Retail to bolster its performance. Making life better foreveryone.
FY 2017-18 fields saw stabilisation of the ethane import project and commissioning ofthe large projects at Jamnagar refinery fields off-gas cracker PX expansion and otherdownstream capacities. These projects took refinery-petrochemicals integration to anunprecedented level globally. The commissioning of the Jamnagar projects one of theworld's most complex set of projects in significantly lesser time firm and lower costthan comparable projects worldwide further offtake endorsed RIL's world-class projectexecution capability. The petrochemicals segment benefited from expanded capacities asvarious projects commenced operations through the year. The segment's EBIT increasedsharply by 63% to its highest ever 21179 crore ($3.2 billion).
Production increased 23.7% to 30.8 MMT. The EBIT margins increased sharply to a recordlevel of 16.9% from 14.0% of last year owing to favourable product deltas across theintegrated polyester chain PP and PVC.
The refinery off-gas cracker and its downstream PE and MEG units were successfullystabilised in the last quarter of FY 2017-18. With the improved availability of productsenhanced reliability in operations and feedstock flexibility RIL further strengthenedits capability to serve the Indian market one of the fastest growing polymermarkets in the world. In the polyester value chain demand outpaced capacity additions inFY 2017-18 and enabled integrated players like Reliance post healthy operating rates andimproved margins despite the rising costs. China's ban on imports of recycled polyestersupported the demand growth of virgin polyester.
Our Petrochemicals business has progressed further on the expression of Chemistryfor Smiles'. We have created RFElan a portfolio of specialty fabrics a perfectblend of art and smart and launched eco-friendly products based onrecycled PET bottles. Making life better for everyone.
Oil & Gas
Our Oil & Gas business continued to face headwinds owing to declining volumes andsoft prices that improved towards end of the year. Volumes from conventional fields and USShale were lower on account of natural decline and slowdown in development activity. Ourdomestic production was down 16.9% at 78.9 Bcfe whereas the US Shale volume fell 19.7% to139.7 Bcfe.
On the positive side Reliance is poised to become one of the largest non-conventionalgas producers in India with the ramp up of CBM production that crossed 1 MMSCMD. Tosustain production the second phase of development has also commenced.
Reliance and its partner announced plans to invest 40000 crore (~$6 billion) todevelop the already discovered deep-water gas in the KG-D6 Block. Development work forR-Cluster has commenced. Satellite fields and Other Satellite fields will be developed inan integrated manner as a cluster project. With these fields we will venture intoultra-deepwater and High Pressure High Temperature areas a first in India. In ourUS Shale Gas business the natural gas prices were during the year with from LNG andMexican exports.
However the business conditions remained challenging and we continued with thestrategy of fit for purpose' capital expenditure.
Jio's next generation all-IP data network with the latest 4G-LTE technology createdhistory transforming not just the Indian telecom industry but the whole country. Withinmonths of Jio's launch India shot up to World No.1 in mobile data consumption. Jio hasbecome the world's largest and fastest growing mobile data network boasting anunprecedented level of consumer engagement. More subscribers were added to Jio's networkin the last year than all other operators combined. Equally important Jio turnedprofitable in the very first year of operations. Jio earned a net profit of 723 crore onturnover of 23714 crore in its first year of commercial operations. Jio continued withits strong subscriber growth with 186.6 million customers at the end of March 2018 andthe lowest churn in the industry at 0.25% per month. Each Jio subscriber on an averageconsumes 9.7 GB data 716 minutes of voice calls and 13.8 hours of video per month.
Jio's end-to-end all-IP network is the most differentiated network with functionalitiessuch as SDN and NFV and has been consistently rated as the fastest network in India byTRAI's MySpeed application over the last 15 months. Jio's average download speed of 17.9Mbps is more than twice the network speed available on any other network. Jio has alsobeen consistently rated to have the widest LTE coverage in the country. During FY 2017-18it continued expanding the 4G network coverage and further deepening in existing areas toachieve a 99% population coverage. Jio is constantly striving to enrich the digitalexperience of its customers through innovative applications developed in-house or incollaboration with the unique ecosystem of small and large partners. Making life betterfor everyone.
Jio offers its subscribers unique content such as Pyongyang 2018 Olympic Winter GamesJio Cricket Play Along etc.
The MyJio app is the most popular self-care app with over 150 million downloads andsubstantial additional features.
Jio has forged partnerships with the likes of Balaji Telefilms Eros International andSaavn to bring unique content with an intuitive user interface to every Indian. TheCompany continues to make progress on delivering enterprise solutions FTTH and IOT withbeta trials initiated in a few locations. These services are being offered using theexisting integrated network and platforms. During the year Jio was awarded the 1st rankin India and 17th globally in the Fast Company's World's 50 Most
Innovative Companies list for 2018. Jio also won the Best Mobile Operator Servicefor Consumers award at the recent Mobile World Congress 2018. It was awardedThe Disruptors title in the CNBC TV18's India Business Leader Awards 2018.JioTV won the Best Mobile Video Content award at the Global Mobile Awards2018.
Reliance Retail has become the first retailer in India to cross the $10 billion revenuemilestone and enter the world's Top 200 Retail chains. We have the best reach the bestformats and the best customer acceptance in India. Reliance Retail is India's largestretailer by revenue and profitability delivering superior value to its customerssuppliers and other stakeholders. Making life better for everyone.
Over the past five years the business has grown at a massive 45% annually doubling every two years. Reliance Retail ranks among the world's Top 5 fastest-growingretailers.
Last year alone Reliance Retail operationalised 3736 Jio
Points across 3700 cities to enhance its distribution reach for consumer durables andconnectivity solutions an unprecedented feat in India. Reliance Retail whichoperates in four key consumption baskets viz. Grocery Consumer Electronics &Connectivity
Fashion & Lifestyle and Fuel Retail is expanding in every market every formatand every vertical. Today we are present in more than 4400 cities covering 17.7 millionsq. ft of retail space.
Strong Cash Flows and Balance Sheet
Reliance became India's first company to cross $10 billion in EBITDA in FY 2017-18. Asthe Company executed India's largest-ever capital expenditure programme over the past fiveyears the cash profit for the year was up over 31% to 56034 crore setting stage for thenext growth phase of company's earnings cycle. The Company's debt-equity ratio remained ata conservative level. We have retained our domestic credit ratings of CRISIL AAA'from CRISIL and IND AAA' from India Rating. For our international debt we have aninvestment grade Baa2' rating from Moody's and BBB+' from S&P. Wemaintained the ratings even as Reliance went through a large investment cycle over thepast five years.
Reliance is globally acknowledged for its unique and innovative approach infund-raising. It maintains strong relationships with a large number of internationalbanks financial institutions and export credit agencies. This along with our efficientcash flow management and fiscal discipline have helped us raise funds at competitiverates and optimise borrowing costs.
Governance & Safety
RIL differentiates itself as an employer of choice. An integrated wellness programmefor employees has been implemented in the Company through medical services and relatedinitiatives. We are committed to providing a healthy and safe work environment toemployees contractors and all visitors.
We started the Change Agents for Safety Health and Environment (CASHe) programme morethan a decade ago. Ever since the CASHe programme has evolved into a movementencompassing the entire enterprise comprising thousands of improvement projects.
Our ambition is: Reliance shall strive to be a leader in the field of managementof Health Safety and Environment.
The Jamnagar expansion project has achieved better than international benchmarks inquality safety cost and schedule. Further new records for start-ups and commissioninghave been established. RIL is globally certified as a Healthy Workplace' for theperiod 2017-2019 by the Global Centre for Healthy Workplaces Tucson USA. Making lifebetter for everyone.
Sustainable Growth and Societal Responsibility
The Reliance DNA ensures businesses solve problems and also create societal value forall Indians. In the 40 years of our journey since listing we have strived to conductbusinesses in a manner that is sustainable and inclusive. When we started with textileswe provided the best-in-quality fabrics to every Indian. Our petrochemical products have arole to play in almost every aspect of modern life. When we entered the refining businesswe provided high spec fuels for Indian and global markets. When we entered telecom westrived to provide mobile phones in the hand of every Indian at an affordable rate.Through Reliance Retail we have made the best-in-class global brands available to everysection of our society. And now with Jio with the backdrop of inclusivity we have madeavailable high-speed data to every Indian at the most affordable rates with zero callcharge forever.
Making life better for everyone.
Our operational framework has been to integrate the six capitals Natural HumanManufactured Intellectual Financial and Social & Relationship throughout theorganisation and create value for our stakeholders. An integral part of Reliance'sphilosophy is its commitment to empower and enhance the quality of lives of millions ofpeople. Sustainability at Reliance embraces environmental and social responsibility whilecreating value for its stakeholders. On the operations side we are working to maximiseuse of clean energy and minimise the carbon footprint in collaboration with the bestavailable technology licensors. Reliance Foundation is deeply involved in the areas ofrural transformation health education sports for development disaster response urbanrenewal and arts culture and heritage. The initiatives of Reliance Foundation havepositively impacted 20 million lives across the nation and we work incessantly to includeall stakeholders in our growth story. Making life better for everyone.
Investment in Emerging Technologies
Reliance believes that new technologies and data power will help unleash the potentialof India's human capital. Making life better for everyone.
RIL is piloting the use of Virtual Reality (VR) to increase safety and reliabilitythrough a virtual walkthrough plant environment for interactive training testing andprocess simulation for all crucial personnel.
RIL is implementing a world-class analytics platform and a data lake using thebest-in-breed technologies for its Big Data initiatives. Multiple advanced-stage pilotsare being undertaken to establish extensive use of machine learning and artificialintelligence with a view of long-term adoption and institutionalisation.
Over the last four decades Reliance has continued to grow and evolve creating valueby building competitive global-scale businesses and delivering increasing shareholdervalue.
Over the past 3-4 years we made significant investments in new plants thus creatingorganic growth platforms for our energy and materials businesses. Our new-age businesseshave shown strong resilience and sustainable growth potential for 1.3 billion Indians aswell as for Reliance and will surely script a glorious chapter in our Golden Decade. Iwould like to thank all my colleagues for their dedication innovation and hard work. Bycreating new benchmarks in the businesses we operate in our team is delivering on ourmission to generate sustainable value for our stakeholders and India. These efforts alsohelp us to deliver inclusive growth and make life better for everyone. I would like toplace on record my sincere appreciation to the Board of Directors for their guidance. Iwould like to express my gratitude to all our stakeholders for their continuing faith inReliance.
With best wishes Sincerely
Mukesh D. Ambani
Chairman and Managing Director
May 21 2018