RELIANCE INDUSTRIES LIMITED

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A Project Report On Reliance Industries Limited

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Acknowledgement
Words are indeed inadequate to convey my deep sense of gratitude to all those who have helped me in completing this project to the best of my ability. Being a part of this project has certainly been a unique and a very productive experience on my part. I would also like to thank my professor Mr. Nishant fofariya for assigning me a project of such a great learning experience and acquainting me with real life project of Reliance Industries limited. I am very grateful to Mrs. Bonisha Dave Bhandari, Director of Param Institute of Management Who has given me the opportunity to do this project in the Reliance Industries Ltd. and very thankful to all lecturers of Param for their useful guidance and advise. This project would not have been successful without the help of My Friends who are directly or indirectly help me to complete this project. Last but not least I would like to thank the entire Faculty member and my friends Param Institute, who have directly or
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indirectly helped me with their moral support for the completion of my project.

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Table of Content
Sr.No
1 2 3 4

Particular
Introduction Group Profile History Management Of Reliance Industries Organization Structure Of Reliance Management Control System Vision & mission Award & Honour Swot Analysis Conclusion Bibliography

6 7 8 9 10 11

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Reliance Industries

GROWTH IS LIFE

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Introduction

The Reliance Industries India group is India's largest private sector conglomerate. The Reliance Industries Limited was started by the legendary Late Dhirubhai H. Ambani. After a humble start in the late 1970's as a textile company its success skyrocketed and now covers almost all industry verticals. Today, Reliance Industries generates revenues in excess of USD 44 billion and exports products worth USD 7 billion to more than 100 countries. The Reliance Industries Limited is a 'Fortune Global 500 company' and employs more than 25,000 professionals across the world. Reliance enjoys leadership in polyester yarn & fiber produce and is among the top 5 players in the world in major petrochemical products. Reliance Industries Limited holds largest Oil & Gas exploration area in India and has achieved 74 % success rate in terms of discoveries. Reliance enjoys a preeminent position in terms of its contribution to the Indian economy with revenues equal to 2.6% of India's GDP. It also contributes 7.7% of India's total exports, 7.9% of the Government of India's indirect tax revenues and close to Backward vertical integration has been the cornerstone of the evolution and growth of Reliance. Starting with textiles in the late seventies, Reliance pursued a strategy of backward vertical integration - in polyester, fibre intermediates, plastics, petrochemicals, petroleum refining and oil and gas exploration and production - to be fully integrated along the

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materials and energy value chain. The Group's activities span exploration and production of oil and gas, petroleum refining and marketing, petrochemicals (polyester, fibre intermediates, plastics and chemicals), textiles, retail and special economic zones. Reliance enjoys global leadership in its businesses, being the largest polyester yarn and fibre producer in the world and among the top five to ten producers in the world in major petrochemical products. Major Group Companies are Reliance Industries Limited (including main subsidiary Reliance Retail Limited) and Reliance Industrial Infrastructure Limited. Reliance Industries India has been a pioneer in the equity culture cult and is highly respected for its corporate transparency, deep market penetration ability, innovations and above all for its ability to generate 'products & services' for all sections of the society.

Its guardianship for India Inc. stupendous growth has been felicitated with no of awards in areas like Quality, Energy Management, Health Safety & Environment, Exports and Retail & Franchising. It also bagged 'Golden Peacock Award' for Corporate Management in 2005-2006 and enjoys high corporate ranking in Fortune Global 500 Company. THE LEGENDARY DHIRUBHAI .H. AMBANI Dhirajlal Hirachand Ambani, also known as Dhirubhai (28 December 1932, - 6 July 2002) was an Indian rags-to-riches business tycoon who founded Reliance Industries in Mumbai. Ambani took his company (Reliance) public in 1977, and by 2007 the combined fortune of the family (sons Anil& Mukesh and daughters Dipti & Nina) was 60 billion dollars, making the Ambanis the richest family in the world. He moved to Aden, Yemen, when he was 16 to work with A. Besse & Co. and eventually returned

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to India and started "Majin", which was to import polyester yarn and export spices, in partnership with his cousin, Champak Lal Damani. Dhirubhai was a known risk taker and he believed in building inventories, anticipating a price rise, and making profits. Ambani's net worth was estimated at about Rs. 10 lakh by late 1970s. He is credited with starting the equity cult in India. More than 58,000 investors from various parts of India subscribed to Reliance's IPO in 1977. In 1986 The Annual General Meeting of Reliance Industries was held in Cross Maidan, Mumbai and was attended by more than 350,000 shareholders and the Reliance family. In 1982, Reliance Industries came up against a rights issue regarding partly convertible debentures. It was rumoured that company was making all efforts to ensure that their stock prices did not slide an inch. Sensing an opportunity, a bear cartel which was a group of stock brokers from Calcutta started to short sell the shares of Reliance. To counter this, a group of stock brokers till recently referred to as "Friends of Reliance" started to buy the short sold shares of Reliance Industries on the Bombay Stock Exchange. After this incident, many questions were raised by his detractors and the press. In response, the then finance minister, Pranab Mukherjee informed the house that a Non-Resident Indian had invested up to Rs. 22 Crores in Reliance during 198283. The interesting factor was that all the promoters or owners of these companies had a common surname Shah. An investigation by the Reserve Bank of India in the incident did not find any unethical or illegal acts or transactions committed by Reliance or its promoters

Over time, Dhirubhai diversified his business with the core specialisation being in petrochemicals and additional interests in

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telecommunications, information technology, energy, power, retail, textiles, infrastructure services, capital markets, and logistics.

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He has been accused of acting unethically; having manipulated government policies to suit his own needs, and has been known to be a king-maker in government elections. Although most media sources tend to speak out about business-politics nexus, the Ambani house has always enjoyed more protection and shelter from the media storms that sweep across the country. A film, Guru (2007) directed by Mani Ratnam, alleged to be inspired by the life of Dhirubhai Ambani was released on 12 January 2007. Reliance after Dhirubhai The Reliance Empire was split between the Ambani brothers, Mukesh Ambani getting RIL and IPCL & his younger sibling Anil Ambani heading Reliance Capital, Reliance Energy and Reliance Infocomm. The entity headed by Mukesh Ambani is referred to as the Reliance Industries Limited whereas Anil's Group has been renamed Anil Dhirubhai Ambani Group (ADAG).His daughter Nina Kothri along with her husband B H Kothari started Java green in 2004, a coffee retail chain along with Reliances Web World stores. MUKESH AMBANIS GROUP OF BUSINESSES Mukesh Ambani owns two main industries namely:

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Group profile
Major Subsidiaries Reliance Petroleum Limited Reliance Netherlands BV (including Trevira) Reliance Retail Limited Ranger Farms Private Limited Retail Concepts and Services Private Limited

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 Reliance Retail Insurance Broking Limited Reliance Dairy Foods Limited Reliance Retail Finance Limited Reliance Jamnagar Infrastructure Limited Reliance Haryana SEZ Limited Reliance Industrial Investment & Holdings Limited Reliance Ventures Limited Reliance Strategic Investments Limited Reliance Exploration & Production - DMCC Reliance Industries (Middle East) DMCC Reliance Global Management Services (P) Limited Major Associates Indian Petrochemicals Corporation Limited Reliance Industrial Infrastructure Limited

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History
From a humble textile company to Fortune 500 Company

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The Reliance Group, founded by Dhirubhai H. Ambani (1932-2002), is India's largest private sector enterprise, with businesses in the energy and materials value chain. Group's annual revenues are in excess of US$ 28 billion. The flagship company, Reliance Industries Limited, is a Fortune Global 500 company and is the largest private sector company in India.

Backward vertical integration has been the cornerstone of the evolution and growth of Reliance. Starting with textiles in the late seventies, Reliance pursued a strategy of backward vertical integration - in polyester, fibre intermediates, plastics, petrochemicals, petroleum refining and oil and gas exploration and production - to be fully integrated along the materials and energy value chain.

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Reliance enjoys global leadership in its businesses, being the largest polyester yarn and fibre producer in the world and among the top five to ten producers in the world in major petrochemical products.

2008
Reliance Industries makes Another Gas Discovery in Shallow Water Block in the Krishna Basin.

RIL wins a Deep Water block in NELP VII

Reliance Industries Strikes Eighth Gas Discovery in Block NEC - 25 in the Mahanadi Basin

2009
Reliance Industries has discovered natural gas reserves in a well drilled on its NEC-25 block in Mahanadi basin, off the Orissa coast.

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 Reliance Industries has raised around Rs 3,188 crore through sale of 1.50 crore equity shares of the company.

2010
Haryana Special Economic Zone (SEZ), Reliance Industries (RIL) has roped in a partner, in a bid to re-energize its dormant.

RIL has bought around 3 mn barrels of spot crude from Brazilian company Petrobras. The delivery is expected in the next two months. The purchase was fuelled by lower freight rates and weaker US crude prices as compared to Europe. Reliance has bought a VLCC of Roncador Heavy and Albacora crudes to be loaded this month, and a Suezmax of October-loading Marlin.

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Management of Reliance Industries

Name
Mukesh D Ambani Hital R Meswani Pawan Kumar Kapil Mansingh L Bhakta Dharam Vir Kapur Ashok Misra Raghunath A Mashelkar Nikhil R Meswani P M S Prasad Ramniklal H Ambani Yogendra P Trivedi Mahesh P Modi Dipak C Jain

Designation
Chairman and Managing director Executive Director Executive Director Non Executive Director Non Executive Director Non Executive Director Non Executive Director Executive Director Executive Director Non Executive Director Non Executive Director Non Executive Director Non Executive Director

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Organizational Structure of Reliance

RelianceIndustries Limited
Reliance Petroleum Limited Reliance Industrial Infrastructure Limited(RIIL) Reliance Logistics Reliance Life Sciences Reliance Retail Limited

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Management Control Systems

RIL has a comprehensive system of internal controls to safeguard the Companys assets against loss from unauthorized use and ensure proper authorization of financial transactions. The Company has an exhaustive budgetary control system to monitor all expenditures against approved budgets on an ongoing basis. The Companys accounting process is based on uniform accounting guideline that sets out accounting policies and significant processes and deadlines on a company wide basis. There are binding directives for internal reconciliations and other accounting operations. The Company maintains a system of internal controls designed to provide a high degree of assurance regarding the effectiveness and efficiency of operations, the reliability of financial controls, and compliance with laws and regulations. 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 to all RIL manufacturing facilities. 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

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governance process. 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.

Vision & Mission

Mukesh Ambani, chairman of Reliance Industries Ltd, Indias largest private company, laid down a road map for business transformation and value creation for the company at its 35th annual general meeting. This has been a truly transformational year at Reliance Industries (RIL). The successful commissioning of the KG-D6 oil and gas production fields and the safe start-up of the world-class, complex refinery in the Special Economic Zone at Jamnagar catapults RIL into the league of integrated energy companies globally. RIL is now among the ten largest non-state owned refining companies and one of the largest deep water oil and gas operators in the world. Through these path-breaking initiatives, RIL is set to radically change Indias energy landscape. Gas production from KG-D6 will double Indias indigenous

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production while the new refinery will make India a major supplier of greenfuels to the world. Over the years, our initiatives have enabled the enrichment of millions of lives in India. We focused on improving efficiency, leveraging on the quality of our assets and remaining nimble. This reflects the strength of our business model, robustness of our systems and processes, farsighted planning, meticulous execution and above all, our indomitable will to succeed. While staying focused on our long-term strategy, we have remained committed to protecting our employees, ensuring their safety, supporting local communities and safeguarding the environment. Looking forward, we see exciting opportunities for growth in the energy sector. At RIL, we have always invested aggressively into businesses of the future. Our recent investments in the oil and gas and refining businesses have created a strong growth platform. RIL is on its way to becoming a competitive, integrated, global energy company.

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Awards & honours

Shri Mukesh Ambani was awarded the Defense India Excellence Award 2007. The Award is a salute to those who have made the country proud. Shri Mukesh Ambani was conferred the Leadership Award for Global Vision by the United States India Business Council. Shri Mukesh Ambani was elected to be a member of the Honorary Fellows of The Institution of Chemical Engineers, UK. Dr. R. A. Mashelkar received 'Foreign Fellow' from Australian Academy of Technological Sciences and Engineering (ATSE) in 2008. RIL continues to be featured, for the fifth consecutive year, in the Fortune Global 500 list of 'World's largest corporations'; ranking for 2009 is as follows: o Ranked 264th in terms of sales o Ranked 117th in terms of profits

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 RIL won the Golden Peacock Global Award for Excellence in Corporate Governance for the year 2008. Jamnagar Manufacturing Division bagged the 'Refinery of the Year Award for 2008', for second successive year from 'Petroleum Federation of India'. Shri Mukesh Ambani received the American India Foundation's (AIF), USA, 'The 2008 Annual Spring Gala Award' in 2008. Shri Mukesh Ambani was conferred the Leadership Award for Global Vision by the United States India Business Council.

Swot Analysis
Strengths
Technological Skills Distribution channels Production Quality High resource & surplus Unique growth visibility

Weakness
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 Failure in Forward Integration Un-utlised high resource & surplus

Opportunities
Increase in demand in Chinese & Indian market Gas from KG basin Local Indian market visibility & growth

Threats
Possibility of 100 % FDI Windfall taxes Competition Government

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RIL Product Mix

Oil &Ga s 3 % F ibreInt. 2% 9 Polyester 2% 2

Chem ls ica 1% 1

Pla stics&Int. 3% 4

F brics a 1 %

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Competative Analysis
Market Compa capitalization nies (in mn.) RIL IOC Essar Oil HPCL Chenna i petro 3292097.95 1015004.5 180268.06 173732.71 38248.3 P/E P/B Div( V %) ROA RONW( (%) %) ROCE( %)

18. 2.3 9.5 11.80 13.30 92 3 70% 0% % % 32. 1.4 130 3.70 23 2 % % 5.80% 9.60% 47. 5.6 2.90 54 7 0 % 12.50% 4.50% 14. 1.8 120 5.40 1 2 % % 5.40% 8.80% 15. 1.4 120 73 7 % -8% 13.20% -9.90%

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Conclusion
Indian economy is growing at an impressive rate of over 8% and is likely to continue growing at this rate in the coming years. The growth has also accelerated the energy demand of the country, which has created new opportunities for the company in the Refining and Marketing and Exploration and Production segments. Further, with the Indian Retail industry expected to grow at a CAGR of 40%, RILs foray into retail is likely to provide huge addition to sales volume. Currently, the company derives close to 98% of its sales revenue from refining and petrochemical segment, but E&P and Retail segments share is expected to increase at a tremendous pace. Reliances efficient business model, strong market share across all operating segments, strong execution capabilities, presence in high growth business areas, and strong fundamentals, all indicate towards potential gains in investor net worth. Based on Seat of the Plant and relative valuation I value RIL at Rs. 2,035 per share for

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FY10. From the given financial analysis it show that company is will grow its retail and refining tremendously because Mukesh Ambani is more focus on the Backward Vertical Integration by remove the middle man from the business which give higher return in the future, because this two sector are interrelated with its whole business.

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Bibliography
1.Google 2. www.ril.com

3. www.moneycontrol.com

4.

http://www.moneycontrol.com/india/stockpricequote/refineries/reliance-

industries/RI3rdjanuary, 2011

5. www.bseindia.com 3rd January,2011

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