Relicance MCS Presentation

7/29/2019 Relicance MCS Presentation

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GOURAV TIWARIYASHIKA DUBEY

JASKARANGAZAL GUPTAGHANSHYAM

HARIJITESH

HARSH SINHA

Presented By:

IBS Hyderabad

Management Control System


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LOGO


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ADAGAnil Dheerubhai Ambani

Group

RILReliance Industries

Ltd.


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Organizational Structure

Reliance Petroleum Limited (RPL) Reliance Life Sciences

Reliance Industrial Infrastructure

Limited (RIIL)

Reliance Logistics

Reliance Clinical Research Services

(RCRS)


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Reliance Board StructureNon- executive Director

Non- executive Director







CEO Mr. Mukesh Ambani

Executive Director

Executive Director

Executive Director

Executive Director


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Reliance Reporting Hierarchy


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FUNCTIONAL STRUCTURE

Employees within the functional divisions of an

organization tend to perform a specialized set of tasks.Lack of communication between the functional groups .

Best suited as a producer of standardized goods andservices at large volume and low cost.

Coordination and decision making within each function iscentralized.

Specialization increases as all the components aremanufactured within the organization and are not

outsourced.


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MANAGEMENT STYLE AND CULTURE

RIL believes in ethical business, which rests on nine moral

values.Believe in creating value for both its customers and

stakeholders.

High performance work culture rests on innovation,

entrepreneurship, inclusiveness, teamwork andcontinuous improvements.

Introduced TQM and Kaizen activities to improve the lowproductivity.

Focuses on Corporate Governance to prioritize thetransparency and accountability of the organization.

Code of conduct for the BoD and board committees.

Decision making authority given to individual units.

Every unit in RIL has its own hierarchy.


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Management Control Systems

Internal ControlRIL 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 maintains a system of internal

controls designed to provide a high degree of

assurance regarding the effectiveness and

efficiency of operations, the reliability of financialcontrols, and compliance with laws and

regulations.


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Accounting Process

It is based on uniform accounting guideline that sets outaccounting policies and significant processes and

deadlines on a company wide basis.

Budgetary control system

The Company has a budgetary control system to monitor

all expenditures against approved budgets on an ongoing

basis.

Healthy StandardsRIL manufacturing facilities follows the policy of

maintaining the highest standards of health, safety and

environmental norms while maintaining operational

integrity.


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Internal audit functionThe Company has an internal audit function, which isempowered :

to examine the adequacy and compliance with policies,

plans and statutory requirements. 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 Directors.


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Powers 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

Audit committee


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Role of Audit Committee

3

1. Oversight of the Companys financial reporting

process

2. Recommending to the board

3. Reviewing with the management, the annual

financial statement before submission to board

4. Reviewing the adequacy of internal audit function

5. Reviewing the findings of any internal investigations

6. To look into the reasons for substantial defaults

IBS Hyderabad


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Roles of Audit Committee

7. Review the functioning of the Whistle Blower

Mechanism

8.Review of uses /application of funds raised through an

issue

9.To review the following information:

Management discussion and analysis of financial

Statement of significant related party transaction

Management letters of internal control weakness The appointment, removal and terms of remuneration

of internal auditors

IBS Hyderabad


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Recommendation

In our opinion and according to the information andexplanations 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

IBS Hyderabad


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FINANCIAL ANALYSIS

Satisfactory

Current Ratio 2:1

Quick Ratio 1:1

IBS Hyderabad


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Current Ratio is less than satisfactory means short term financial

position of the firm is not good.

Quick Ratio of the firm is also less than satisfactory means

company is not in the position to pay its debts instantly.

IBS Hyderabad


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Over the years the Gross profit ratio of the company has

decreased which states that company is not well.

IBS Hyderabad


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Over the years the Net profit ratio has decreased means expenses of

the company like cost of sales, administration costs etc have increased.

IBS Hyderabad


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Over the years operating margin of the company is decreased

which is not a good sign. It means that profit per Rupee of sales

has decreased.

IBS Hyderabad


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EPS of the company has come down over the years. Especially

in 2010 EPS is almost half, but that is because of Bonus issue at

1:1 ratio.

IBS Hyderabad


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Dividend per share initially increased till 2009 but decreased in

2010, this decrease is also because of the Bonus issue.

IBS Hyderabad


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CASH FLOW STATEMENT


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KEY EVENTS INFLUENCING CASH FLOW

2006

Reliance Fresh Rs 25000 crore investment retail initiative

2007

acquire assets in Malaysia Consolidating global polyester

2008

Gas Discovery in Krishna basin and wins a Deep Water block in NELP

VII2009

Discovered natural gas reserves in a well drilled in Mahanadi basin,off the Orissa coast and raised around Rs 3,188 crore.

2010Haryana Special Economic Zone (SEZ)

Bought around 3 mn. barrels of spot crude from Brazilian companyPetrobras

Reliance Infocomm 4G spectrum


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ACCOUNTING SYSTEMS

The financial systems at reliance are sap oriented

The financials are prepared under historical cost conventions as per GAAP

1956

Fixed Assets are stated at cost , less accumulated depreciation

Straight line method used to calculate depreciation

Long term investments are stated at cost

Items in inventories are measured at lower of cost or net realizable value

IBS Hyderabad


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ACCOUNTING SYSTEMS

Premium on redemption of bonds / debentures are adjusted against the

Securities Premium Account.

An impairment loss is charged to the Profit and Loss Account in the year

All the account handling, payment, budget all the items are recorded in

SAP program and evaluated.

IBS Hyderabad


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COORDINATION & COMMUNICATIONS

Reliance focuses on building life-long relationships with its stakeholders

The Board of Directors determines strategic business imperatives and mentors the

achievement of reliance corporate goals.

The board executes its role in corporate governance through regular reviews of

Reliances financial performance and critical business issues

Better Coordination and communication is maintained in the organization with respect

to partners involved in accounting system through different meeting.

Annual General Meetings (AGMs)

Shareholders grievance meetings

One-to-one meeting

Open forum

Share Holders

IBS Hyderabad


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hh

Market research

External Customer satisfaction

survey

Customers Employees

Employees Suggestion Scheme

Awards for Best case study

learning

Toolbox talks

Self Development Modules

Career progression / job rotation

/ role diversification

In-house newsletters

shop floor communication meet'

COORDINATION & COMMUNICATION

IBS Hyderabad


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hh

Separate Contractors' Cell

Monthly Contractors'

Safety Meetings

Suppliers Regulatory Authorities(sebi and stock exchanges)

Maintaining and updating all

records

Support to local authorities

in times of crisis

Supporting neighboring

industries through local

associations

IBS Hyderabad

COORDINATION & COMMUNICATIONS

COORDINATION & COMUNICATION


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LOGO

IBS Hyderabad

Relicance MCS Presentation

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