Reliance Petroleum

Reliance Petroleum Limited(RPL) Mission Statement: Refining Life Redefining Growth.

Goal: To harness an emerging value creation opportunity in the global refining sector.

About the Company: 1991, Reliance industries set up a new subsidiary, Reliance Refineries Private Ltd. The subsidiary later changed its name to Reliance Petroleum Limited, and in 1993 launched a public offering, which at that time was India's largest ever IPO. Reliance continued to pioneer financing channels in India. In 1993, for example, the company became the first Indian company to raise capital on the foreign market, through a Global Depositary Receipt (GDR) issue in Luxembourg. The company completed a second successful GDR issue in 1994. The company used the new capital in part to expand its petrochemicals wing, w ing, building the world's largest multi-feed cracker at cracker at the Hazira site. The company also added production plants for monoethylene glycol, glycol, polyethylene, and purified terephthalic acid. acid. The new units launched production in 1998. Reliance's opportunity for entry into petroleum refining came in 1997, when the Indian oil industry reached a state of near collapse. Unable to fund further exploration operations, and lacking the capital to expand its existing production, the government was forced to liberalize the sector. In that year, Reliance announced a plan to build one of the world's largest and most modern petroleum refining complexes in Jamnagar, Gujarat, at a cost of some $6 billion. The government agreed to the plan, and granted the company the right to import petroleum directly, rather than going through Indian Oil, which helped Reliance greatly drive down operating costs. Constructed in record time, the Jamnagar site was commissioned in 1999. The site's production capacity was double that of any other Indian refinery and ranked among the top five in the world. The addition of the new facility also placed Reliance at the top rank of the country's private-sector companies. In 2002, Reliance Petroleum was merged into Reliance Industries, which then became one of the country's co untry's top three companies, including state-owned entities. Breaking Up in 2006:

Dhirubhai Ambani died in 2002, and the Ambani brothers took over as heads of the company. In that year, the company increased its dominance of the country's petrochemicals sector through its acquisition of main private-sector rival Indian Petrochemicals Corporation. Also in 2002, Reliance launched a diversification effort,

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targeting the telecommunications sector, especially the fast-growing cellular phone market. Reliance set up its own phone service, Reliance Infocomm, in that year. Yet the petroleum industry remained the company's major growth focus. In 1999, the Indian government auctioned off 25 blocks for exploration; bids were given in the form of royalty of royalty percentage offers. Reliance won 12 of the blocks and promptly set in place its own team of exploration experts, backed by oilfield services from Halliburton and Schlumberger. Reliance's investment quickly paid off with the discovery of natural gas reserves estimated at some 14 trillion cubic feet, the largest natural gas field discovered in India in decades, in the Krishna-Godavari Basin in the Bay of Bengal. In 2004, the company struck again, locating a new gas field in the Bay of Bengal, off the Orissa Coast. Buoyed by its successful exploration efforts, Reliance unveiled an ambitious expansion program for the second half of the 2000s. The company's plans included a $6 billion extension of the Jamnagar site, doubling it in size and making it the world's largest ans complex refinery by 2009. The company also announced that it intended to spend $10 billion on further oil exploration efforts, targeting the international market. In this way, the company hoped to increase its production tenfold by the end of the century. c entury. At the other end of the petroleum market, the company launched a $1.5 billion expansion of its Reliance gas station chain, with the goal of 6,000 stations. The company also expanded internationally, becoming the world's leading manufacturer of polyester yarn with the acquisition of Germany's Trevira. In addition, the company boosted its telecommunications wing, acquiring U.K.-based FLAG Telecom, an operator of a 50,000-kilometer underwater fiber-optic cable network. In the meantime, rising tensions between Mukesh and Anil Ambani came to a head in late 2005, when a long-simmering disagreement over company strategy broke out into an open and highly publicized feud. In the end, a truce was brokered by the brothers' mother, who proposed a breakup of Reliance Industries into two roughly equal components. Mukesh Ambani remained as head of the company's petroleum, petrochemical, petrochemical, and textiles operations, and Anil Ambani regrouped the company's telecommunications, energy, capital finance, and other operations into a new company. The breakup of the company took place in 2006. As a result, Reliance Industries emerged as a focused and highly integrated petroleum and petrochemicals challenger to the global heavyweights.

Employees: 12,540(in 2006-07) Employee growth: 3.5%







Principal Subsidiaries: Subsidiaries: Reliance Industrial Investments and Holdings Ltd.; Reliance Infrastructure Limited; Reliance Middle East DMCC (U.A.E.); Reliance Netherlands B.V.; Reliance Petroleum Limited; Reliance Retail Limited; Reliance Strategic Investments Limited; Reliance UK Ltd. (50%); Reliance Ventures Ltd.

Principal Competitors: Competitors: Indian Oil Corporation Ltd.; Hindustan Petroleum Corporation Ltd.; Bharat Petroleum Corporation Ltd.; Indian Petrochemicals Corporation Ltd.; Mangalore Refinery and Petrochemicals Ltd.; Kochi Refineries Ltd.; Chennai Petroleum Corporation Ltd.; Parker Agrochem Exports Ltd.

Management: It is headed by Dhirubhai Ambani’s son, Chairman Mukesh Ambani. Ambani.

Promoters: Reliance Industries Limited(RIL) owns 70.38% & Chevron India owns 5% of the equity share capital.An offer in 2008 made to Chevron to increase its share in equity share capital further by 5%.

Corporate rankings: •

• • • •

It featured in the Fortune Global 500 list of ‘World's Largest Corporations' for the fourth consecutive year. Ranked 269th in 2007 having moved up 73 places from last year. Featured as one of the world's Top 200 companies in terms of Profits. Featured among top 50 companies with the biggest increase in Revenues. In September,2008 it was the only Indian Company which was featured in forbes top 100 list.

RELIANCE AND THE INDIAN PETROCHEMICAL PETROCHEMICAL MARKET Reliance Industries is one of India's biggest industrial groupings and the largest private sector company. Reliance built its first polymer cracker in 1992 because although natural gas is cleaner and cheaper, ch eaper, India has a very limited supply. Reliance, which is pursuing an aggressive investment strategy in Jamnager, is also one of the prime contenders to take over part of the state-owned Indian Petrochemicals Corporation Ltd (IPCL) when it is privatised. Reliance could exploit major synergies







As a result of the new plant at Jamnager, the Indian market has surplus capacity. cap acity. It is expected to continue exporting similar quantities for several months. The recent commissioning of a 210,000t/yr polypropylene facility, brought on stream at Haldia by Haldia Petrochemicals, will further oversupply the Indian market and force more exports. The overcapacity of the Asian market has led to project cancellations in Indonesia, South Korea and Thailand. However, according to Reliance, the compound annual growth rate of the Indian polypropylene market is about 20%. This would, if continued, soak up some of the extra capacity of Reliance and other companies. Nevertheless, the company must hope for an upturn in Far Eastern markets in order to revive demand. The immediate future of the market points to significant overcapacity.

Production: With an annual crude processing capacity of 580,000 barrels (92,000 m3) per stream day (BPSD), RPL will be the sixth largest refinery in the world. It will have a complexity of 14.0, using the Nelson the Nelson Complexity Index, Index, ranking it amongst the highest in the sector. The polypropylene The polypropylene plant will have a capacity to produce 0.9 million metric tonnes per annum.

Opportunities: By 2050, the world vehicle traffic is expected to triple and in two decades d ecades the air traffic is expected to double. With this expected increase in demand by 80% for petroleum and other products, the company is entering into the global market to prove itself. The present plant under completion in Jamnagar is located in a SEZ, the plant is 100% export oriented.

Growth Strategy: The major elements of RPL's growth strategy for the future will be maximising production from existing assets, enhancing global competitiveness, entering the business of retail marketing of petroleum products in India, investing in pipeline distribution infrastructure and accessing global markets. RPL is the first Indian company to offer an opportunity to all shareholders for participating in an international offering of its shares. Capital cost per barrel produced is USD 10,000. When compared to the capital cost of other companies which is at USD 25,000 is very less and is promising for the investors to give better returns.







Locations of Manufacturing Facilities The Company is setting up a Petroleum Refinery and Polypropylene Plant at: Special Economic Zone, Taluka Lalpur, Dist. Jamnagar - 361 140 Gujarat, India.

EXPANSION

In October 2005 plans were put in action to build a new refinery at the Jamnagar site adjacent to the existing refinery, which is costing $6b n. Part of the finance, $500m, $500 m, has been guaranteed by the US Export-Import bank (Ex-Im Bank). The Ex-Im Bank guarantee is necessary to aid the refinery developer /owner Reliance Petroleum Ltd (RPL) to acquire the required US equipment, technology and services to build the new facility. The new refinery will be the world's sixth largest and most complex. The two refineries will now comprise the largest refining complex in the wo rld. Bechtel Corporation in Houston, Texas has provided design, procurement, project management and other services. Other US suppliers include: Black & Veatch International Co., Kansas City, Mo, for sulphur recovery and gas treatment units; Dow Global Technologies, Inc., Midland, Mich, for licensing and services for the polypropylene plant process; Foster Wheeler Corp., Clinton, NJ, for fired heaters for the refinery's coker; and UOP LLC, Des Plaines, P laines, Ill, for the catalytic converter reactor section and PSA (pressure swing absorption) packages. Citibank NA, NY, is the guaranteed lender on the transaction. In October 2008 the project was declared 97% complete with a projected on-stream date of December 2008. The second refinery will have a capacity of 580,000 barrels per day, along with a 600MW power plant and enhanced port facilities.

Environmental Record In 2005 Reliance Industries was found to be one of the top five consumers of toluene in the world. These five companies account for 30% of the total consumption. Toluene produces a toxic chemical that is released into the air when it is burned. Under the 1990 Clean Air Act Amendments, the U.S. EPA is required to regulate emissions of listed toxic air pollutants. Cleaner replacements for toluene may be used. Reliance Industry is the worlds largest polyester producer and as a result, the biggest producer of polyester waste. In order to deal with this large amount of waste they had to create a way to recycle the waste. They operate the largest polyester recycling center that uses the polyester waste as a filling and stuffing. They use this process to develop a strong recycling process which won them a reward in the Team Excellence







Maharashtra Pollution Control Board. The conference was to help bring about new ideas and articles on various aspects of environmental protection in the region. Maharashtra Pollution Control Board invited various industries complied with the pollution control norms to take active part in the conference and to support as a sponsor. The conference proved effective as a way to promote environmental concern in the area. The Company is committed to ensuring the highest standards of environment management and strict compliance with regulatory requirements at all times. The Company has taken utmost care at various stages of project implementation viz. planning, design, construction towards compliance with applicable laws. The refinery project is being set up as a zero effluent refinery, which is the best in class. NSE: NSE: RELIANCE is India's India's largest private largest private sector conglomerate sector conglomerate (and second largest overall) with an annual turnover of US$ of US$ 35.9 billion and profit of US$ of US$ 4.85 billion for the fiscal year ending in March 2008 making it one of India's private sector Fortune sector Fortune Global 500 companies, being ranked at 206th position (2008). It was founded by the Indian industrialist Dhirubhai Ambani in 1966. 1966. Though the company's oil-related operations form the core co re of its business, it has diversified its operations in recent years. After severe differences between the founder's two sons, Mukesh Ambani and Anil Ambani, Ambani, the group was divided between them in 2006. In September 2008, Reliance Industries was the only Indian firm featured in the Forbes's Forbes's list of "world's 100 most respected companies".

Financial State: Equity Share Capital: 450,00,00,000 shares of Rs10 each, fully paid. Secured loans Rs 1,28,27,52,92,858 1,28,27,52,92,858 when compared to previous year of Rs 54,67,00,00,000. 54,67,00,00,000. This means the company as an increasing risk factor of paying interest of Rs 5,52,86,31,172. 5,52,86,31,172. This will increase the cost of capital of the company over the capital proportion employed.

Investments made by the company Rs 24,38,32,00,000. 24,38,32,00,000. Cash balance of Rs 2,24,16,348- this shows the liquidity ratio of the company is very less. Inventories Rs 7,48,17,70,4307,48,17,70,430- this shows how money or liquidity is blocked in the form on inventory.









Social Responsibility & Community Development Community education and enhancing youth employability

We work in earnest towards nation building. By providing an opportunity to college students to visit our plants, we ensure that they relate their theoretical inputs with industrial practice. We also provide opportunities to engineering students to undergo inplant training/projects as part of their academic curriculum. Ongoing efforts are made to enhance the employability / skill development of local youth by giving them opportunities to work in operating plants to improve their job prospects. We also operate schools for employees’ and the neighborhood neighborhoo d children. Promoting female education

As a part of the Government of Gujarat’s drive to promote girl education, school kits k its were distributed to girl students in the surrounding 32 villages of Jamnagar and Lalpur talukas. This was done in tune with the state government’s education department. Rewards and Scholarship

Dhirubhai Ambani SSC – Merit Reward Scheme and Dhirubhai Ambani Undergraduate Scholarship Scheme The Dhirubhai Ambani Foundation instituted SSC Merit Reward Scheme and the Undergraduate Scholarship Scheme in 1996. The objective of the schemes has been to encourage and assist district level meritorious students to pursue higher education in different vocations to help enhance the Human Resource potential of the country. Both the schemes are currently applicable in the states of Maharashtra, Gujarat, Goa and the Union Territory of Daman, Diu, Dadra Nagar Haveli. The first three in overall merit and one physically challenged student securing the highest marks in each of the 64 districts at the annual SSC and HSC examinations of the State Boards, as well as the first ten CBSE students from Maharashtra and Gujarat and three from Goa, in the merit







The Foundation has presented 5,344 SSC rewards and undergraduate scholarships during the past eleven years of which 581 have been presented to physically challenged students. 282 meritorious students received the SSC Merit Rewards during 2006 while 320 received the Scholarships at eight felicitation functions held in Maharashtra, four in Gujarat and one at Goa. To offer equal opportunities to the physically ph ysically challenged meritorious students, the Foundation has extended the Rewards and Scholarship Schemes for the first five physically challenged students from all the states and Union Territories of India that provide DAF the list of such meritorious students. A total of 20 physically challenged meritorious students from the state of Rajasthan received the SSC Merit Rewards and the Undergraduate scholarships for the year 2005 and 2006. Reliance Kargil Scholarship Scheme

As a tribute to the martyrs/disabled in the Kargil war in 1999, our employees contributed Rs. 1.55 crore to form a corpus fund for the welfare of the dependant children of the martyrs/disabled; 43 children of families of martyrs/disabled soldiers of the Kargil war received financial support for their education educ ation from Std. V to XII under the scheme during 2006. Dhirubhai Ambani Scholars Scheme for meritorious children of Reliance shareholders

The Scheme was announced in 2003 as a one-time measure to commemorate the silver jubilee of our listing on the Bombay Stock S tock Exchange. In the first year, 900 meritorious children of our shareholders received the scholarship. A total of 695 scholars having secured more than 60% mark at university examination of their undergraduate studies, continue to receive the scholarship for the third year for their education leading to a Degree/Diploma course. Of these, 593 scholars are pursuing degree courses in Engineering, Medicine and allied subjects while the rest 102 completed their degree courses in commerce, arts and law faculties.







school’s mission of offering worldclass education, the school’s students who took the ICSE, IGCSE and the IB examinations in 2007 have achieved extremely commendable results. The 29 students from the school who appeared in the ICSE examinations held in March 2007 have achieved remarkable results. These students represent the second batch of ICSE Class 10 - the Class of 2007. 2007 . • • • • • •

10 students scored above 90%; 9 students scored between 90 and 85%; 7 students scored between 85 and 80%; 3 students scored between 80 and 75%; The topper from the school scored 96.43%; The average score achieved by our students is 88%.

This commendable performance builds on what wh at the first batch of our ICSE students the Class of 2006, accomplished - an average score of 87%. The IB Diploma Program is a rigorous two-year pre-university course and is well recognized by the world’s leading universities. The IB offers its programs to approximately 554,000 students in 125 countries. co untries. Candidates can opt for either the IB Diploma or the IB Certificate. World-wide, typically 80% of the students are awarded the Diploma, and the rest of them the IB Certificate.







The IB Class of 2007 received admission offers from leading universities, which include Harvard, Stanford, Princeton, Yale, U Penn-Wharton, Cornell, Carnegie Mellon, the University of Michigan, New York University-Stern, Duke, LSE, Imperial, Warwick, McGill, and the University of Melbourne. Students have also gained admissions to universities in India. Several leading universities have offered scholarships to the school’s students. Universities that have given full scholarships to students from the Class of 2007 are Harvard, Stanford, Princeton and the University of Southern California, among others. A number of universities have also offered partial p artial scholarships. Students earning IB certificates are being admitted to US universities like the University of Illinois at Urbana Champaign, the University of Michigan, and the University of Sydney in Australia. The school’s IGCSE students have done exceptionally well this year as well. The IGCSE Program, administered by the University of Cambridge International Examinations, is taken by about 400,000 400 ,000 students from 125 countries. All the 58 students, representing the second batch of IGCSE Class 10, have achieved impressive results: •

52% of all grades earned were A*’s (the highest possible level of achievement); globally, around 5% of all candidates entered for a given subject earn an A*;







Their brilliant performance as a group is encapsulated in the fact that 84% of all grades achieved were A’s and above. Of the 58 students, 80% of them have achieved a ‘Distinction’, which is awarded to students who score five A’s or better (85 - 100%). The remaining 20% of the students earned a ‘Merit’, which is awarded to students who have five B’s (75 - 84%) or more. From the school, none of the students have performed below the ‘Merit’ category, which is a mark of the students’ excellent accomplishments as a class. The school’s students are above the world average, by a huge margin, in all the 16 subjects they entered. 21% of the students achieved A*’s in all the subjects they entered (either 9 or 10 subjects per candidate). This admirable performance underscores how some of these students have stood out as exemplary individual achievers. The Class of 2007, which represents the school’s second batch, has truly surpassed their predecessors’ otherwise distinguished and world-class performance by all parameters. The school complements its core curriculum with a strong emphasis on co-curricular programs and an eclectic mix of events and activities. In 2006, the school hosted the Inaugural International Sports & Cultural Fest, with participation of students from Bangladesh, China, Nepal, Sri Lanka and Thailand. Created around the theme‘The Eternal Flame of Peace & Friendship’, it presented a wonderful opportunity for nearly 1000 students from the school and about 110 students from schools from these countries to establish lasting bonds of friendship, and to compete in a variety of









Community welfare

Several community welfare activities have been taken up on a sustainable and continuous basis as part of our commitment as a responsible corporate citizen. During the year 2006-07, our Jamnagar complex continued to serve the urban and village communities in the area of health, education, cultural activities, improvement in infrastructure, fodder supply, supply of drinking water, academic events and sports and many other welfare activities. Reliance Rural Development Trust has undertaken a unique corporate initiative to create infrastructure facilities in rural areas. The projects undertaken in rural areas are construction of roads, anganwadis (kindergarten school), panchayat offices and community halls. These are some basic development priorities of rural areas. In order to give focused attention to the needs of surrounding rural communities, Vadodara Complex, initiated a collective action programme by setting up a voluntary society SVADES (Society for Village Development in Petrochemicals Area) with the co-operation of all the neighbouring industries in Vadodara. Vad odara. SVADES is a collective endeavour that binds industry and rural community together towards socio-economic development in the rural areas surrounding the industry. SVADES works in 40 villages covering a population of nearly 200,000. Making water available

During the year under report, drinking water was provided to the Moti Khavdi village and Sikka town during the summer months. Kanalus and Setalus villages located close







Dhirubhai Ambani Foundation (DAF), with financial and technical services support from Reliance Group, has joined (1997) (1997 ) the Management of Sir Hurkisondas Nurrotumdas Hospital and Research Centre (HNHRC), a tertiary care charitable hospital offering facilities to all strata of society with provisions for free and subsidized services to the poor and indignant patients availing various diagnostic and treatment facilities, with a view to rejuvenate and modernize the hospital to provide state-of-theart facilities, amongst the best in the world. During the year 2006-07, 9105 indoor patients received treatment in various Wards and specialized care areas. 54319 patients availed of the OPD services at P.T. Clinic, the popular Diagnostic Centre of the Hospital. Three of the Operation Theatres underwent major upgradations and renovations during the year to offer improved services to the patients. The Hospital continues its age-old tradition of rendering free service in the casualty ward. Consistent growth from year to year is witnessed in the number of OPD patients during the past few years. The rise in attendance during the current year has been significantly higher, the addition of new Clinics and the increasing popularity of several of the existing Clinics. Non-availability of some of the Operation Theatres for some part of the year resulted in reduction in number of surgeries and consequently indoor cases. Out of the 4115 surgeries performed during the year, major share was of special and supra-major surgeries. The updation of the facilities is underway and is an ongoing process in a Public Health Care facility. Cadaveric Organ Donation Programme is catching up. The Hospital did several Cadaver Transplants in the recent past. Eye Donation drive is witnessing







M.Sc. (by research) and Ph.D. degrees deg rees in Microbiology, Biochemistry and Applied Biology. Sir Hurkisondas Nurrotumdas Medical Research Society, Mumbai

Dhirubhai Ambani Foundation through the Reliance group supports the scientific research activities of Sir Hurkisondas Nurrotumdas Medical Research Society (HNMRS). The Society commenced scientific research activities since 1974 -75 and has completed more than120 research projects. The scientists from the Society presented 169 papers at the National and International Conferences. More than 120 papers have been published pu blished over the years in scientific journals, about half of them in prestigious international journals. Topics of national health priorities constitute a major share of the research projects undertaken here. The researchers are motivated to move out of the four walls of the Laboratories and the hospital to carry out epidemiological studies and community based surveys. Population in the neighbourhood of Sir H.N.Hospital, children in the nearby schools, and susceptible sections of the population were screened from time to time by teams of medical / paramedical professionals, as part of various research projects. S elected cases are offered special attention and treatment at the Institution free of cost. The studies carried out on hospital infections and on the newly identified Transfusion Transmitted Virus were among the popular research projects that attracted the attention of professionals and won awards at national conferences. co nferences. A study on Calcium and Vitamin D deficiency among exclusively breast fed infants, was used as the dissertation topic for DNB by a Senior Resident in Pediatrics at HNH, and was adjudged the Best







We take it on ourselves to play an active role in protecting the lives, environment and property of the neighboring communities. This is done through active support of the Fire & Safety departments for various incidents. Calls pertaining to road accidents, spillage or leakages of chemicals, fire, etc. and even e ven household calls like LPG leakages / kitchen or hutment fire are attended to. Through this initiative, our resources and infrastructure in fire fighting, chemical neutralisation or safe disposal are utilised for social causes in the neighboring area (industry or domestic) wherein similar facilities are frequently un available. Other Community Initiatives

Furthering our commitment to Corporate Social Responsibility, we manufactured large quantities of polythene pouches for air dropping water during the Surat floods. All our surplus laboratory instruments were donated to educational institutions. At our Vadodara complex, training for self-employment in trades such as tailoring, plumbing, auto-mechanic, driving, nursing, etc. is imparted to local villagers. Distribution of tricycles to the handicapped, tool kits for self-entrepreneurship, support for construction of classrooms, wasteland development & farming, bucket drip irrigation, planting tree saplings, renovation of crematorium in Vadodara city, etc. are some of the activities undertaken during the year. Rising to the need of the hour, our Vadodara complex participated in providing relief

Reliance Petroleum

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