Highlights of Mukesh Ambani's Speech at Reliance AGM
Reliance Industries plans to invest more than Rs 1.8 lakh crore or $30 billion across its businesses, including telecoms and oil and gas, over three years, Chairman Mukesh Ambani said on Wednesday. Here are the highlights of Mr Ambani's speech at the company's 40th annual general meeting:
Strategic Perspective
In this current three-year investment cycle, Reliance will be investing over Rs 180,000 crore. Currently, Reliance is at the mid-point of the largest investment programme in Reliance's history - it hopes to accomplish as much in the next three years as it has been achieved in the past 37 years.
The Economy and Reliance
Reliance reaffirmed its belief in India by committing to investing when public and private investments have been at a decadal low.
Business and Financial Performance
Reliance became the first company in the private sector to record revenues of over Rs 400,000 crore. Reliance achieved its highest-ever exports of Rs 275,825 crore, accounting for 69 per cent of our turnover. Reliance continues to be India's largest exporter, accounting for 14.7 per cent of the total exports from India. We continue the tradition of Reliance being the highest tax payer in the private sector in the country. Reliance accounts for 4.7% of India's total indirect tax revenues, largest income tax payer amongst private sector companies.
Petrochemicals
Petrochemicals business will benefit from the highest allocation of capital among our three energy businesses.
Petroleum Refining and Marketing
Refining and marketing business achieved record levels of earnings despite a volatile and challenging environment. Throughput and refining margins were amongst the highest for any large international refiner. RIL continues to be the largest refiner in India and operates the largest refinery in the world at a single location.
Oil and Gas Exploration and Production
The KGD6 fields have completed over five years of uninterrupted and safe operations
Since inception, the fields have supplied > 2.3 tcf of natural gas & about 25 million barrels of crude oil to consumers in the country
They have substituted over $33 billion of energy imports - saving the country precious foreign exchange
Almost 3 years have passed since RIL and BP entered into partnership focused on delivering growth & adding value to India's energy sector
The JV sought to gain better understanding of complex geology of Indian offshore & commenced our exploration campaign in the East Coast
In this it has met with success with further discoveries in KGD6 and CYD5 blocks
Reliance now in the process of carrying out appraisal of the discoveries to assess their potential
The company with it partners BP & NIKO has initiated arbitration process seeking implementation of Domestic Natural Gas Pricing Guideline 2014
It has an ongoing arbitration with Government on the issue of disallowance of cost recovery
Last year, Reliance saw several false allegations, outright lies and half-truths against this business
It addressed all of the allegations with the truth and facts pro-actively
The company is proceeding with the development of two coal bed methane blocks in Sohagpur, Madhya Pradesh
It has received authorization for building natural gas pipeline from Shahdol (MP) to Phulpur (UP) to transport gas from their CBM blocks
This pipeline will connect to major pipeline grid of the country for immediate utilization of this gas by various consumers
With the development of CBM blocks, Reliance will become the largest player in the unconventional energy sector in India
Company's domestic oil and gas portfolio is of strategic importance to India, to Reliance and to its stakeholders
The company will work in partnership with the government and all authorities to create an atmosphere of trust amongst all stakeholders to achieve the goal of enhanced production towards ensuring India's energy security
International Oil and Gas
The company's JVs with Chevron, Pioneer and Carrizo has positioned it as one of the leading players in the Marcellus and Eagle Ford basins
The materiality of the business improved further with Reliance share of revenues increasing by 45% and EBITDA by 37%
RIL recently won two blocks in the offshore competitive bidding rounds of Myanmar
It is progressing with evaluation of opportunities in Venezuela to further strengthen our existing relationship
Fiscal regime changes, opening up of oil sector in some of the most petroliferous regions worldwide are creating exciting opportunities
Reliance, in its pursuit of growth and long term value creation will continue to look at such global opportunities
The company's vision and mission to propel Reliance into the league of world's leading global independent E&P players
Organised Retail
Reliance Industries' business grew by 34% to reach revenues of Rs 14,496 crore and PBDIT of Rs 363 crore
This year, Reliance Retail has the distinction of being India's largest retailer by revenues
The business now operates 1,691 stores covering an area of 11.7 million square feet across 146 cities
During the year 367 new stores were added - effectively one store every day
The business has established market leadership in all of the focus areas of Digital, Lifestyle and Value formats during this period
In the coming years, retail will emerge as a major growth engine for our consumer business and for Reliance by creating significant societal value and by providing even greater choice and value to consumers and small enterprises
Reliance Jio
The company shared the vision of (Jio) last year and of the unique opportunity it has to maximise the benefits of the digital age.
Limited field trials with initial set of services for the broad band services are already underway
Expanded trials will commence in August across multiple cities. These trials would continue through the end of 2014 and early 2015
The objective is to ensure that everything that we offer is future-proof and world-class
The year 2015 will see the phased launch of Reliance Jio across India
The fruits of the tremendous value created by this Rs 70,000 crore initiative would start to flow
This value creation would be on a base of 1.25 billion Indians with an opportunity to include all sections of our society in the exciting promise of the digital economy
Engaged in this massive endeavour are over 10,000 full time Jio employees working alongside nearly 30,000 professionals from our partners and vendors from all parts of the world
In addition, there are over 100,000 people working across the country in creating the digital infrastructure backbone for this network
They are passionate about building the largest broadband network that the world has ever seen
Reliance Jio will be one of the largest job-creating and wealth-creating business initiatives in India
The network and broadband services will be ubiquitous - initially covering all states, all the 5000 towns and cities...
...accounting for over 90% of urban India and over 215,000 villages in India
Eventually, the network will encompass each of our over 600,000 villages
All these efforts would help India become a leader in the digital era
Digital infrastructure and digital services have the potential to add significantly to India's GDP growth
Millions of new entrepreneurs and jobs can be expected to spring up in secondary and tertiary sectors in innovative digital enterprises
The boundaries of these start-ups and services are only limited by our imagination
Indian enterprises would be able to run more efficiently and become more globally competitive
They would be able to do transactions quicker, access information faster and, in turn, provide faster service to their customers
Media
Acquisition of Network 18 Media & Investments Ltd and its subsidiary TV18 Broadcast Ltd is one aspect of the digital services play
This will differentiate and strengthen the company's 4G business at the unique intersects of telecom, web and digital commerce, and the media through a suite of premier digital properties
Reliance Foundation
"I take this opportunity to thank Smt Nita Ambani for her outstanding leadership and to the highly committed team at Reliance Foundation" Mr Mukesh Ambani said.
"We are delighted to welcome her to the board of Reliance as an accomplished individual and the founder-chairperson of Reliance Foundation" he added.
Last year, the company's expenditure on CSR was Rs 712 crore
During the year, the Foundation has reached out to an additional million people through its various initiatives
The Foundation has impacted over 2 million people cumulatively in just a short timeframe
It was one of the first organizations to reach thousands of people in in Uttarakhand affected by massive floods in June 2013
Reliance Foundation's Information Services Programme is currently operational in 7 states and Union Territory of Puducherry
It has been successful in providing information on livelihoods & health, through the use of technology to communities in 5,000 villages
The programme was widely used by the marine police to deliver alerts during the recent cyclones in Andhra Pradesh
The health outreach programme has reached out to 350,000 people in Mumbai offering them quality primary & preventive healthcare
In tertiary healthcare, the Sir HN Reliance Foundation Hospital and Research Centre will be operational later this year
Its Bharat India Jodo (BIJ) programme has scaled up and is actively engaged with over 40,000 households across 12 states
In the education space, over 10,000 children have cumulatively benefited through the Dhirubhai Ambani Scholarship programme
Reliance always believed that business and philanthropy are two sides of the same coin
Value Creation Roadmap
"I see unprecedented levels of aspiration and ambition in our society, especially among the Indian youth" Mr Ambani said.
Every Indian wants to be included in India's growth story, and every Indian wants to contribute to India's growth story
The entrepreneurial energy in India is waiting to be unlocked
Reliance has been a role model for all Indians who dare to dream, and will continue to be an even bigger role model in years to come
Over next three years, the commissioning of each of large projects in petrochemicals and refining, strengthening of retail business and launch of Jio business will propel Reliance closer to being a Fortune 50 company as we complete 40 years of our journey
It is strengthening each of our existing businesses to maintain their competitive positions in performance and in operating margins
In organised retailing, we are confident of doubling our business every 3-4 years and build India's pre-eminent retailing company
Through Jio, it hopes to deliver a differentiated range of services that will provide an unparalleled experience to our subscribers
