reliance industries limited by chirag

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RELIANCEINDUSTRIES

LIMITED

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A Project Report OnReliance Industries

Limited

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Acknowledgement

Words are indeed inadequate to convey mydeep sense of gratitude to all those who

have helped me in completing this projectto the best of my ability. Being a part of thisproject has certainly been a unique and avery productive experience on my part. Iwould also like to thank my professor Mr.

Nishant fofariya for assigning me a projectof such a great learning experience and

acquainting me with real life project ofReliance 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 thisproject in the Reliance Industries Ltd. and

very thankful to all lecturers of Param fortheir useful guidance and advise. Thisproject would not have been successfulwithout the help of My Friends who are

directly or indirectly help me to completethis 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 moralsupport for the completion of my project.

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Table of Content

Sr.No Particular

1 Introduction2 Group Profile3 History4 Management Of

Reliance

Industries5 Organization

Structure Of

Reliance6 Management

Control System7 Vision & mission8 Award & Honour9 Swot Analysis

10 Conclusion11 Bibliography

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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 andproduction 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 exportspices, 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 1982-

83. 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 governmentpolicies 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 polyesteryarn 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 1.50crore 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 ofReliance Industries

Name Designation Mukesh D Ambani Chairman and Managing

director

Hital R Meswani Executive Director

Pawan Kumar Kapil Executive Director

Mansingh L Bhakta Non Executive Director

Dharam Vir Kapur Non Executive Director

Ashok Misra Non Executive Director Raghunath A

Mashelkar

Non Executive Director

Nikhil R Meswani Executive Director

P M S Prasad Executive Director

Ramniklal H Ambani Non Executive Director

Yogendra P Trivedi Non Executive Director

Mahesh P Modi Non Executive Director

Dipak C Jain Non Executive Director

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OrganizationalStructure 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 ControlSystems

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 appropriateaction 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 ofReliance 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 green-

fuels 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, meticulousexecution 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

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Chemicals11%

Plastics & Int.

34%

Fabrics1%

Polyester22%

Fibre Int.

29%

Oil & Gas3%


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Competative Analysis

Companies

Marketcapitalization(in mn.) P/E

P/BV

Div(%)

ROA(%)

RONW(%)

ROCE(%)

RIL 3292097.9518.92

2.33 70%

9.50%

11.80%

13.30%

IOC 1015004.532.23

1.42

130%

3.70% 5.80% 9.60%

EssarOil 180268.06

-47.54

5.67 0

2.90%

-12.50% 4.50%

HPCL 173732.71

-

14.1

1.82

120%

5.40% 5.40% 8.80%

Chennai petro 38248.3

15.73

1.47

120% -8%

-13.20% -9.90%

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Conclusion

Indian economy is growing at an impressive rate of over8% 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 itsretail 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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Bibliography1.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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