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FINAL PROJECT REPORT
ON
“A STUDY OF FINANCIAL POSITION OF RELIANCE INDUSTRY USING RATIO
ANALYSIS”
I.K.GUJRAL. PUNJAB TECHNICAL UNIVERSITY
KAPURTHALA
IN PARTIAL FULFILLMENT OF THE REQUIREMENT FOR THE AWARD OF THE
DEGREE OF MASTERS OF BUSINESS ADMINISTRATION
Submitted by: Supervisor: Mohit Rikhi Seema Saini 2017426 Professor Department of Management
Chandigarh Business School of Administration,
Landran, Mohali
DECLARATION BY STUDENT
I, Mohit Rikhi hereby declare that I have completed a research project titled “ A STUDY OF FINANCIAL POSITION OF RELIANCE INDUSTRY USING RATIO ANALYSIS ” under the guidance of “Ms. Seema Saini”. Further I hereby confirm that the work presented herein is genuine and original and has not been published elsewhere. Signature: Mohit Rikhi 2017426
ACKNOWLEDGEMENT
It gives me an immense pleasure to express my sincere gratitude to all the helping hands who have guided me in the completion of this project. It was great experience learning for me to work on my project. As student of Chandigarh Group Of Colleges, I Mohit Rikhi got an opportunity of doing work on project. The project done by me is about A STUDY OF FINANCIAL POSITION OF RELIANCE INDUSTRY USING RATIO ANALYSIS and this project could not have been completed without the help of my faculty guide Ms Seema Saini.
CONTENT
- Introduction to the Study 6- Chapter No. PARTICULAR PAGE NO.
- Company Profile 8-
- Review of Literature 18-
- Objective of Study 21-
- Research Methodology 23-
- Data analysis and Interpretation 30-
- Findings of the Study 59-
- Suggestion and Recommendations 61-
- Conclusion 63-
- References 65-
INTRODUCTION TO THE STUDY:
Financial Management is that managerial activity which is concerned with the planning and controlling of the firm’s financial resources. Though it was a branch of economics till 1890 as a separate or discipline it is of recent origin. Financial Management is concerned with the duties of the finance manager in a business firm. He performs such varied tasks as budgeting, financial forecasting, cash management, credit administration, investment analysis and funds procurement. The recent trend towards globalization of business activity has created new demands and opportunities in managerial finance. Financial statements are prepared and presented for the external users of accounting information. As these statements are used by investors and financial analysts to examine the firm’s performance in order to make investment decisions, they should be prepared very carefully and contain as much investment decisions, they should be prepared very carefully and contain as much information as possible. Preparation of the financial statement is the responsibility of top management. The financial statements are generally prepared from the accounting records maintained by the firm. Financial performance is an important aspect which influences the long-term stability, profitability and liquidity of an organization. Usually, financial ratios are said to be the parameters of the financial performance. The Evaluation of financial performance had been taken up for the study. Analysis of Financial performances are of greater assistance in locating the weak spots of Reliance industry and even though the overall performance may be satisfactory. This further helps in Financial forecasting and planning. Communicate the strength and financial standing of Reliance limited. For effective control of business.
COMPANY PROFILE
by seven times. In 1979, a textiles company Sidhpur Mills was amalgamated with the company. In 1980, the company expanded its polyester yarn business by setting up a Polyester Filament Yarn Plant in Patalganga, Raigad, Maharashtra with financial and technical collaboration with E. I. du Pont de Nemours & Co., U.S. In 1985, the name of the company was changed from Reliance Textiles Industries Ltd. to Reliance Industries Ltd. During the years 1985 to 1992, the company expanded its installed capacity for producing polyester yarn by over 145,000 tonnes per annum. The Hazira petrochemical plant was commissioned in 1991–92. In 1993, Reliance turned to the overseas capital markets for funds through a global depositary issue of Reliance Petroleum. In 1996, it became the first private sector company in India to be rated by international credit rating agencies. S&P rated Reliance "BB+, stable outlook, constrained by the sovereign ceiling". Moody's rated "Baa3, Investment grade, constrained by the sovereign ceiling". In 1995/96, the company entered the telecom industry through a joint venture with NYNEX, USA and promoted Reliance Telecom Private Limited in India. In 1998/99, RIL introduced packaged LPG in 15 kg cylinders under the brand name Reliance Gas. The years 1998–2000 saw the construction of the integrated petrochemical complex at Jamnagar in Gujarat, the largest refinery in the world. In 2001, Reliance Industries Ltd. and Reliance Petroleum Ltd. became India's two largest companies in terms of all major financial parameters. In 2001–02, Reliance Petroleum was merged with Reliance Industries. In 2002, Reliance announced India's biggest gas discovery (at the Krishna Godavari basin) in nearly three decades and one of the largest gas discoveries in the world during 2002. The in- place volume of natural gas was in excess of 7 trillion cubic feet, equivalent to about 1.2 billion barrels of crude oil. This was the first ever discovery by an Indian private sector company. In 2002–03, RIL purchased a majority stake in Indian Petrochemicals Corporation Ltd. (IPCL), India's second largest petrochemicals company, from the government of India. IPCL was later merged with RIL in 2008. In 2005 and 2006, the company reorganized its business by demerging its investments in power generation and distribution, financial services and telecommunication services into four separate entities. In 2006, Reliance entered the organised retail market in India with the launch of its retail store format under the brand name of 'Reliance Fresh'. By the end of 2008, Reliance retail had close to
600 stores across 57 cities in India. In November 2009, Reliance Industries issued 1:1 bonus shares to its shareholders. In 2010, Reliance entered the broadband services market with acquisition of Infotel Broadband Services Limited, which was the only successful bidder for pan- India fourth-generation (4G) spectrum auction held by the government of India. In the same year, Reliance and BP announced a partnership in the oil and gas business. BP took a 30 per cent stake in 23 oil and gas production sharing contracts that Reliance operates in India, including the KG- D6 block for $7.2 billion. Reliance also formed a 50:50 joint venture with BP for sourcing and marketing of gas in India. In 2017, RIL set up a joint venture with Russian Company Sibur for setting up a Butyl rubber plant in Jamnagar, Gujarat, to be operational by 2018. Business Diversification of ITC Reliance in Exploration & Production Reliance entered the Exploration and Production (E&P) business by becoming a 30% partner in an unincorporated joint venture with Shell (erstwhile BG) and ONGC in the Panna Mukta and Mid and South Tapti blocks. As of Jan 1st, 2020, our domestic portfolio comprises of conventional oil and gas blocks in Krishna Godavari and Mahanadi basins and two Coal Bed Methane (CBM) blocks, Sohagpur (East) and Sohagpur (West) in Madhya Pradesh. Oil and gas is currently being produced from our CBM blocks in India and Shale JVs in the US. Partnering for Growth Partnerships represent an important dimension of the E&P business. Reliance and BP entered into transformational partnership with focus on delivering growth and adding value to India’s energy sector. The partnership is a perfect blend of BP’s deepwater and development expertise with Reliance’s project management skills. We have also forged strategic partnerships with Chevron and Ensign Natural Resources for development of shale gas resources in US. RIL and its partners in domestic and Shale Business work closely together and channelize expertise to target high quality prospects and optimise existing and future development plans. Reliance Petroleum Refining & Marketing The Jamnagar manufacturing division is the world's largest refining hub. The entire refining complex was built in a record time at globally competitive capital costs – in fact, at costs much lower than comparable refineries around the world. Its scale, design, flexibility, level of
- Sulphur Feedstock for fertilizers and pharmaceuticals
- Petroleum Coke Fuel for power plants and cement plants Reliance Textiles Our manufacturing division at Naroda houses one of the largest and most modern textile complexes in the world, an achievement recognised by The World Bank. Through Vimal, we brought in a new era in fabrics. Vimal became not only a flagship brand of Reliance, but also one of the most trusted in brands the country. It is also the first major retail chain in the country. Products Our textile division continues to maintain its technological edge in catering to the requirements of the ever-evolving fashion industry. Our automotive furnishing consisting of jacquard weaving, knitting and finishing line is one of the most sought after by auto manufacturers. 1. FABRICS: - With over 20,000 design-shade combinations produced each year in light wool, polyester wool & woolen, polyester viscose, and polyester cotton fabrics under the VIMAL brand, Reliance's strength lies in constant and continuous research in both products and designs. 2. APPAREL: - Reliance’s Vimal apparel range caters to the taste of the modern Indian and sets the tone for wardrobe collection in many households – be it business formals or casuals, sport, or after hours dressing. Vimal regularly brings out stylish shirts, t-shirts, trousers, cardigans, suits, jackets and blazers, and linen wear to offer a truly luxurious collection. 3. AUTO FURNISHING: - Reliance has been a pioneer in the field of branded upholstery and textiles since 1988. It produces a variety of woven and knitted fabrics with moisture control, fire retardant, and anti-microbial properties, which are popular among some of the leading automotive and sportswear manufacturers. Reliance Retail: Reliance Retail is the retail initiative of the group and an epicentre of our consumer facing businesses. It has in a short time forged strong and enduring bonds with millions of consumers by providing them unlimited choice, outstanding value proposition, superior quality and unmatched experience across all its retail stores. Since its inception in 2006,
Reliance Retail has grown to cater to millions of customers, and thousands of farmers and vendors. Reliance Retail serves over 100,000 customers every hour, and has the patronage of more than 117 million registered customers. Our nationwide network of retail outlets delivers a world-class shopping environment and unmatched customer experience powered by our state-of- the-art technology and seamless supply-chain infrastructure. Reliance Retail has adopted a multi- prong strategy and operates neighborhood stores, supermarkets, hypermarkets, wholesale cash & carry stores, specialty stores and online stores and has democratized access to all types of products and services across all segments for all Indian consumers. Brands in Retail
- Reliance Fresh
- Reliance Smart
- Reliance Market
- Reliance Digital Reliance Jio: Home to the world’s second largest population of 1.2 billion, India is a young nation with 63% of its population under the age of 35 years. It has a fast growing digital audience with 800 million mobile connections and over 200 million internet users. Reliance thoroughly believes in India’s potential to lead the world with its capabilities in innovation. Towards that end, Reliance envisages creation of a digital revolution in India. Reliance Jio aims to enable this transformation by creating not just a cutting-edge voice and broadband network, but also a powerful ecosystem on which a range of rich digital services will be enabled – a unique green-field opportunity. The three-pronged focus on broadband networks, affordable smartphones and the availability of rich content and applications has enabled Jio to create an integrated business strategy from the very beginning, and today, Jio is capable of offering a unique combination of telecom, high speed data, digital commerce, media and payment services. Subsidiaries of Reliance Limited Reliance Netherlands B.V.
- Foreign Institutions 1517995217 23.95%
- Central Govt. 12020356 0.19%
- Others 170552921 2.69%
- N-Banks Mutual Funds 324912737 5.13%
- General Public 540781971 8.53%
- Financial Institutions 527964590 8.33%
- GDR 146890770 2.32% Employees: As on 31 March 2018, the company had 29,533 permanent employees of which 1,521 were women and 70 were employees with disabilities. It also had 158,196 temporary employees on the same date which makes a total of 187,729 employees. As per its Sustainability Report for 2011– 12, the attrition rate was 7.5%. But currently, the same attrition rate has gone up to 23.4% in March 2015 as per latest report released by the organization. In its 39th Annual General Meeting, its chairman informed the shareholders of the investment plans of the company of about Rs.1,500 billion (US$21 billion) in the next three years. This would be accompanied by increasing the staff strength in Retail division from existing strength of 35,000 to 120,000 in next 3 years and increasing employees in Telecom division from existing 3,000 to 10,000 in 12 months Recent Awards International Refiner of the year in 2017 at Global Refining and Petrochemicals Congress
International Refiner of the Year in 2013 at the HART Energy's 27th World Refining & Fuel Conference. This is the second time that RIL has received this Award for its Jamnagar Refinery, the first being in 2005.
According to survey conducted by Brand Finance in 2013, Reliance is the second most valuable brand in India. The Brand Trust Report ranked Reliance Industries as the 7th most trusted brand in India in 2013 and 9th in 2014. RIL was certified as 'Responsible Care Company' by the American Chemistry Council in March, 2012. RIL was ranked at 25th position across the world, on the basis of sales, in the ICIS Top 100 Chemicals Companies list in 2012. RIL was awarded the National Golden Peacock Award 2011 for its contribution in the field of corporate sustainability. In 2009, Boston Consulting Group (BCG) named Reliance Industries as the world's fifth biggest 'sustainable value creator' in a list of 25 top companies globally in terms of investor returns over a decade. The company was selected as one of the world's 100 best managed companies for the year 2000 by Industry Week magazine. From 1994 to 1997, the company won National Energy Conservation Award in the petrochemical sector.
REVIEW OF LITERATURE:
Tips to improve your financial health. Author: Bill Hudley Spend less money, or save more money or do both. If the annual income does nothing more than remain constant, your financial condition will improve. The above statement may sound come across as flippant, but it’s a fact of life, regardless. Needless to say, we all have different personalities and different responses to needs and desires in life. A very important yardstick, in my view, is the growth rate of personal assets. If you sit down to all of the savings accounts, investment accounts and properly values and the total value is greater than the same time of the previous year, it stands to improve that the financial health intact and possibly improved. Steps to Improve Financial Performance Author: Terry Peltes Given the challenges facing physicians, successful practices must take proactive steps to combat negative trends and improve their overall financial performance. To improve practice operations, processes can be streamlined to reduce costs; productivity improvements can be implemented by physicians and employees to increase revenue; a reporting structure can be created that allows for better decision making by physicians and employees; and a rewards system can be implemented to recognize hard-working employees. To determine how you can improve your medical practice's performance, consider the following management procedures. 1) Internal Cost Reduction Strategies Cost reduction strategies focus on reducing the internal costs generated by medical services provided to the marketplace. 2) External Cost Reduction Strategies These strategies include the cost of services purchased from outside consultants or vendors 3) Asset and Credit Management Strategies These strategies ensure that you are getting the most value from the resources invested in your practice.
4) Personnel Resources When managed properly, personnel costs and productivity can have a substantial impact on practice profitability. 5) Management Reporting The use of timely, relevant, properly formatted reports to manage your practice cannot be overstated. This is a crucial link between setting financial and operational goals and managing the practice to achieve them. 6) Revenue Enhancement Physicians can improve their financial performance by improving their ability to negotiate favorable managed care contracts and reducing practice expenses as a percentage of revenue. Excellence in Financial Management Author: Matt H. Evans Ratio analysis can be used to determine the time required to pay accounts payable invoices. If the average number of days is close to the average credit terms, this may indicate aggressive working capital management; i.e. using spontaneous sources of financing. However, if the number of days is well beyond the average credit terms, this could indicate difficulty in making payments to creditors. Analyze Investments Quickly with Ratios Author: Jonas Elmerraji The information you need to calculate ratios is easy to come by: Every single number or figure you need can be found in a company's financial statements. Once you have the raw data, you can plug in right into your financial analysis and put those numbers to work for you. Everyone wants an edge in investing but one of the best tools out there frequently is frequently misunderstood and avoided by new investors. When you understand what ratios tell you, as well as where to find all the information you need to compute them, there's no reason why you shouldn't be able to make the numbers work in your favor.
