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  • 8/23/2019 mcs of rel.












  • 8/23/2019 mcs of rel.



    Sr. no. particular page no.1. Company Profile 3

    2. Organizational Structure Of Reliance 3

    3. Functional Structure 4

    4. Management Style And Culture At Reliance

    Industries Limited


    5. Management Control Systems 6

    6. Recommendation 7

    7. Rewards And Recognition 88. Communication And Coordination 9

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    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 startin 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 achieved74 % 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. 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.

    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.

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    Figure 1 Reliance Major Subsidiaries

    Reliance Petroleum Limited (RPL) was a subsidiary of Reliance Industries Limited (RIL)

    and was created to exploit the emerging opportunities, creating value in the refining sector

    worldwide. Currently, RPL stands amalgamated with RIL.

    Reliance Life Sciences is a research-driven, biotechnology-led, life sciences organization that

    participates in medical, plant and industrial biotechnology opportunities. Specifically, these

    relate to Biopharmaceuticals, Pharmaceuticals, Clinical Research Services, Regenerative

    Medicine, Molecular Medicine, Novel Therapeutics, Biofuels, Plant Biotechnology and

    Industrial Biotechnology.

    Reliance Industrial Infrastructure Limited (RIIL) is engaged in the business of setting up /

    operating Industrial Infrastructure that also involves leasing and providing services connected

    with computer software and data processing.









    Limited (RIIL)








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    Reliance Logistics (P) Limited is a single window solutions provider for transportation,

    distribution, warehousing, logistics, and supply chain needs, supported by in house state of

    art telemetric and telemetry solutions.

    Reliance Clinical Research Services (RCRS), a contract research organization (CRO) and

    wholly owned subsidiary of Reliance Life Sciences, has been set up to provide clinical

    research services to pharmaceutical, biotechnology and medical device companies.

    As far as Board structure of RIL is concerned there are 8 Non executive directors and four

    executive directors, hence RIL is strictly following suggestions given by Kumar mangalam Birla

    committee regarding corporate governance.

    Figure 2 Reliance Board Structure
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    Figure 3 Reliance Reporting Hierarchy


    Employees within the functional divisions of an organization tend to perform a specialized set of

    tasks, for instance the engineering department would be staffed only with production engineers.

    This leads to operational efficiencies within that group. However it could also lead to a lack of

    communication between the functional groups within an organization, making the organization

    slow and inflexible.

    As a whole, a functional organization is best suited as a producer of standardized goods and

    services at large volume and low cost. Coordination and specialization of tasks are centralized in

    a functional structure, which makes producing a limited amount of products or services efficient

    and predictable. Moreover, efficiencies can further be realized as functional organizations

    integrate their activities vertically so that products are sold and distributed quickly and at low

    cost. For instance, a small business could start making the components it requires for production

    of its products instead of procuring it from an external organization. But not only beneficial for

    organization but also for employees faiths. Hence Reliance is Having Highest Operational

    efficiency as compared to competitors.

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    Reliance Industries Limited (RIL) has emerged as India's largest private-sector enterprise and

    carved out a distinct place for itself in global Fortune 500 companies. Reliance's business success

    and competitive position reflect the leadership provided by its founder, Mr. Dhirubhai Ambani

    who said, "Growth has no limit at Reliance. I keep revising my vision. Only when you dream it

    do you get it." The leadership system defined by Ambani is based on value creation towards both

    its customers and stakeholders. The same vision has been taken up and forwarded by his son Mr.

    Mukesh Ambani, current Chairman and Managing Director of RIL. Reliance believes that any

    business conduct can be ethical only when it rests on the nine core values of Honesty, Integrity,

    Respect, Fairness, Purposefulness, Trust, Responsibility, Citizenship and Caring.

    The existence of the culture in RIL is driven towards achievement of excellence in systems,

    processes, technology and people and also toward the fulfillment of their corporate vision i.e.

    "To become a globally competitive enterprise, driven by the market, creating and maintaining a

    lead over competition through quality products and establishing itself to be the preferred supplier

    of its customers." With the vertical integration of chain from refinery to textiles, RIL has unique

    fully integrated structure. Basically it is a process centric organization that maximized synergies

    across all interfaces, leverage core competencies of various disciplines to maximize value from

    current assets and create growth opportunities while allowing people to develop and contribute to

    their full capabilities. When we talk about the organization culture, specifically RIL focuses on

    high performance work culture which fosters innovation, entrepreneurship, inclusiveness,

    teamwork and continuous improvements. Among all RIL basically focuses on innovation and

    has a innovative council for promoting the same. The company believes that it is the innovation

    in thinking and execution that has made RIL reach where it is today. The firm belief of

    innovation being the differentiator for future and the source of competitive advantage shows the

    importance that is given to it. RIL in the early 1990s did suffer from low employee participation

    in improvement activities and low customer satisfaction. The introduction of various quality

    improvement tools in the facilities like the Total Quality Management (TQM), Kaizen Activities

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    and customer focus approach led to the improvement in quality, productivity improvement and

    customer satisfaction in the organization. RIL realizing the importance of human and intellectual

    capital for business success, has given more importance to the use of its human potential and the

    creation of Learning organization to help in continued success in future.

    RIL in its importance to the health and safety also has also initiated Safety, Health and

    Workplace Environment Program (CASHe) which is an initiative to promote healthy

    workplace and reducing health and safety risk has been instrumental in creating a culture of

    implementing health, safety and environment project on a priority basis. This program has also

    been able to improve the performance of the company on the occupational health and safety

    front. The Health and Safety Principles that were put forward in this regards to articulate the

    stakeholders expectation along with the existing values of the company underpin both thecorporate culture and cooperation across the company. The growing importance of Corporate

    Governance by RIL shows its priority towards a transparent and accountable organization thus

    being able to meet the needs of all the concerned stakeholders. The publication of annual

    corporate governance report is one important aspect showing its growing inclination towards it

    and its aim to have fair and equitable treatment of its employees, shareholders, customers and

    investors. They aim to provide timely and balanced disclosure of all material information

    concerned towards stakeholders. Moreover they aim to have a sound system of risk management

    and internal control. The existence of code for board of directors and board committees, code of

    business conduct and ethics for director/management personnel signifies the existence of the

    culture driving the whole organization towards effective corporate governance.

    RIL has a long and strong tradition of supporting the larger communities that it connects with -

    from education, health, drinking water, large-scale development of employable skills, to

    assistance during natural calamities such as earthquakes and cyclones. The Reliance Foundation

    would address social development imperatives of India, specifically quality, formal and

    vocational education, affordable high-quality health care, meaningful rural development and

    urban renewal, and protection and promotion of India's priceless heritage of arts and culture.

    Management in simple words are characteristic ways of making decisions and relating to

    subordinates. Different management styles and employed by different organizations depending

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    on the prevailing culture, the nature of the business, the nature of the task and the personality and

    skills of the leaders. RIL is an organization which is operation in multiple facets. They have

    multiple manufacturing facilities at multiple locations where by dealing in different product

    ranges. The supreme authority of the company is Board of Directors. But they have given much

    more independence to the individual units at different level to take decisions at their level. There

    is a good mix of corporate level strategy (taking RIL as a whole which is set up by the BOD) as

    well as appropriate business level and operational strategies at each segment as well as business

    units to accomplish the corporate level strategy.

    Every unit which is a part of RIL has its own hierarchy, headed by the CEO or the President, but

    a more of a democratic style of leadership is seen. Since they promote innovation and value their

    human capital they promote participative environment at different levels of management to be

    able to make a better and informed decision. Empowering the employees in RIL is relevant.

    However the level of decisions and intensity of problems are defined whereby decisions can be

    taken at particular level of management.


    1. INTERNAL CONTROLSRIL has a comprehensive system of internal controls to safeguard the Companys assets against

    loss from unauthorised use and ensure proper authorisation 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

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    maintaining operational integrity. This policy is strictly adhered to all RIL manufacturing


    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 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


    2. INTERNAL CHECKS AND BALANCESAt the heart of our processes is the wide use of technology that ensures robustness and integrity

    of financial reporting. Reliance deploys a robust system of internal controls to allow optimal use

    and protection of assets, facilitate accurate and timely compilation of financial statements and

    management reports and ensure compliance with statutory laws, regulations and company


    3.AUDIT COMMITTEEPowers of the Audit Committee:

    1. To investigate any activity within its terms of reference.

    2. To seek information from any employee.

    3. To obtain outside legal or other professional advice.

    4. To secure attendance of outsiders with relevant expertise, if it considers necessary

    The role of the Audit Committee includes:

    1. Oversight of the Companys financial reporting process and the disclosure of its financial

    information to ensure that the financial statements are correct, sufficient and credible.

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    2. Recommending to the Board, the appointment, reappointment and, if required, the

    replacement or removal of Statutory Auditors and fixation of audit fees.

    3. Approval of payment to Statutory Auditors for any other services rendered by the

    Statutory Auditors.

    4. Reviewing with the management, the annual financial statements before submission to

    the Board for approval, with particular reference to:

    Matters required to be included in the Directors Responsibility Statement to be

    included in the Directors Report in terms of sub- section (2AA) of Section 217 of

    the Companies Act, 1956.

    Changes, if any, in accounting policies and practices and reasons for the same.

    Major accounting entries involving estimates based on the exercise of judgement

    by the management.

    Significant adjustments made in the financial statements arising out of audit


    Compliance with listing and other legal requirements relating to financialstatements.

    Disclosure of related party transactions.

    Qualifications in draft audit report.

    5. Reviewing with the management, the quarterly financial statements before submission to

    the Board for approval.

    6. Reviewing with the management, the performance of Statutory and Internal Auditors,

    adequacy of internal control systems.

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    7. Reviewing the adequacy of internal audit function, if any, including the structure of the

    internal audit department, staffing and seniority of the official heading the department,

    reporting structure, coverage and frequency of internal audit.


    Discussion with Internal Auditors any significant findings and follow up thereon.

    9. Reviewing the findings of any internal investigations by the Internal Auditors into

    matters where there is suspected fraud or irregularity or a failure of internal control

    systems of a material nature and reporting the matter to the Board.

    10.Discussion with Statutory Auditors before the audit commences, about the nature and

    scope of audit as well as post audit discussion to ascertain any area of concern.

    11.To look into the reasons for substantial defaults, if any, in the payment to the depositors,

    debenture holders, shareholders (in case of nonpayment of declared dividends) and


    12.To review the functioning of the Whistle Blower Mechanism.

    13.Carrying out such other functions as may be specifically referred to the Committee by the

    Board of Directors and / or other Committees of Directors of the Company.

    14.To review the following information :

    The management discussion and analysis of financial condition and results of


    Statement of significant related party transactions (as defined by the Audit

    Committee), submitted by management;

    Management letters / letters of internal control weaknesses issued by the Statutory


    Internal audit reports relating to internal control weaknesses; and

    The appointment, removal and terms of remuneration of Internal Auditors.

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    15.Reviewing the financial statements and in particular the investments made by the unlisted

    subsidiaries of Company.

    16.Review of uses / application of funds raised through an issue (public issue, rights issue,

    preferential issue, etc.)


    In my opinion and according to the information and explanations given to us, there is an

    adequate internal control system commensurate with the size of the Company and the nature of

    its business for the purchases of inventory and fixed assets and for the sale of goods and services.

    During the course of our audit, we have not observed any continuing failure to correct majorweaknesses in internal control system.


    Many types of rewards and recognition have been given by Reliance to its employees, such as

    cash bonuses and stock awards, and a wide variety of company-paid perks, like car allowances,

    paid parking, and gift certificates. Other types of rewards and recognition may be less tangible,

    but still very effective. These "non-monetary" rewards include formal and informal

    acknowledgement, assignment of more enjoyable job duties, opportunities for training, and an

    increased role in decision-making.

    Reliance believes Growth is Life for Reliance and for all Reliance people. A large in-house

    pool ofintellectual capital is the driving force behind Reliances accelerated growth, and is one

    of its fundamental competitive strengths. To enable consistent growth, Reliance puts a great deal

    of effort behind creating a workplace where every Reliance employee can reach their full

    potential and achieve maximum personal fulfillment.

    RIL's talent base, as on March 31, 2010, stands at 23,365 with the average employee age of 41

    years. The aim is to lower the average employee age and invigorate the youth to take the

    organization forward over the next few decades as indeed the current leaders have done over the

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    last 30 years by starting early in their 20s and 30s. The entrepreneurial spirit has been a hallmark

    of the organization. The Company continues to nurture this as it grows exponentially

    Breakup of professional workforce

    Ph.D- 2%

    MBAs- 9%

    Engineers- 83%

    CA/ ICWAs- 6%

    Age Profile

    Upto 25 years- 5%

    26 - 35 years -44%

    36 - 45 years -34%

    46 - 55 years -15%

    56 + years -2%

    Reliance offers world of opportunities to employees by giving them more freedom and

    responsibility to chart their own course within the company. The company offers comprehensive

    world-class training and development resources. Networking, coaching and mentoring provide

    additional opportunities for people to grow personally and professionally throughout their

    careers. Reliances appraisal and reward system is aimed at increasing employee involvement in

    the goals and objectives of the organization, and encouraging individuals to go beyond their

    scope of work, undertake voluntary projects that enable them to learn, and contribute innovative

    ideas in meeting the targets of the company. The company has moved to a Key Result Area

    oriented performance appraisal system and will soon move to performance linked incentive

    scheme, wherein the employees will share the risk and the rewards of companys performance,

    business performance, team performance and their individual performance.

    As an ongoing exercise, RIL has continued to look at, identify, create and execute seamlessly,

    initiatives which enhance productivity and efficiency. Towards this end, the Company has put

    into place a central shared services organization for HR, wherein Global Best Practices for HR

    Shared Services are integrated. The objective of this centre, apart from leveraging on the

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    economies of scale, is to provide a world class experience to the employees on all the matters

    that they have to deal with on a day-to-day basis including all transactions.

    RIL continues to invest in people through various Learning & Development initiatives, which

    has seen 3,092,403 man hours of Learning & Development activities at manufacturing divisions.

    E-learning as a medium is much sought after by the employees for upgrading skills and

    competencies since people can learn when needed at their own convenience and from where they

    may be. The Company has continued to invest in this area through newer and state-of-the-art

    modules both in the Technical and Management domains.


    Coordination and communication is central to the very existence of organizations. Specific

    management communication within the organization is necessary for coordination. Reliance

    focuses on building life-long relationships with its stakeholders and believes it is important to

    understand their concerns and perception. For this it has initiated a sharper and more focused

    dialogue with key stakeholders, which involved shareholders, customers, suppliers, employees,

    regulatory authorities, local community, trade unions, NGOs and contractors. Acting upon the

    feedback, it has restructured the processes to address their concerns better and design

    programmers that would enhance their quality of life.

    The Board of Directors determines strategic business imperatives and mentors the achievement

    of reliance corporate goals. It executes its role in corporate governance through regular reviews

    of Reliances financial performance and critical business issues. The quarterly and yearly

    financial results are sent to the Stock Exchanges immediately after the Board approves the same.

    These results are also published in various magazines, newspapers etc. In order to provide better

    communication and coordination Reliance organizes different meetings for the following:


    Annual General Meetings (AGMs)

    Shareholders grievance meetings

    One-to-one meeting

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    Open forum


    Market Research

    External Customer Satisfaction Survey


    Feedback mechanism- 'Employees Suggestion Scheme'

    Awards for 'best Case studies' for Internal Learning- 'QUEST', 'Peer Group


    HSE Committees

    'Toolbox Talks'

    Self Development Modules ILNA (Individual Learning Needs Assessment)

    Career progression / job rotation / role diversification

    Business Dialogue- 'shop floor communication meet'

    In-house newsletters


    Separate Contractors' Cell

    Monthly Contractors' Safety Meetings

    Regulatory Authorities

    Maintaining and updating all records

    Support to local authorities in times of crisis

    Supporting neighboring industries through local associations