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Wednesday, August 10, 2011

Reliance Industries



Reliance Industries Limited
TypePublic
BSE: 500325
NSE: RELIANCE
Traded asLSE: RIGD
IndustryConglomerate
Founded1966 As Reliance Commercial Corporation
Founder(s)Dhirubhai Ambani
HeadquartersMumbai, Maharashtra, India
Area servedWorldwide
Key peopleMukesh Ambani 
(Chairman & MD)
ProductsOil and Gas
Petroleum
Petrochemicals
Polyester
Textiles
Retail
Insurance
SEZ
Telecom
Revenueincrease US$ 58.55 billion (2011)[1]
Net incomedecrease US$ 4.24 billion (2011)[1]
Total assetsincrease US$ 67.74 billion (2011)[1]
Total equityincrease US$ 34.12 billion (2011)[1]
Employees23,365 (2010)[1]
SubsidiariesReliance Life Sciences
Reliance Industrial Infrastructure Limited
Reliance Logistics
Reliance Clinical Research Services
Reliance Solar
Relicord
Infotel Broadband
WebsiteRIL.com

Reliance Industries Limited (RIL) (BSE: 500325, NSE: RELIANCE, LSE: RIGD) is the largest private sector conglomerate company headquartered at Mumbai, India. The company is largest by annual turnover of US$58.5 billion and market capitalization of US$78.2 billion for the fiscal year ending in March 2011 making it one of the largest India's private sector companies, being ranked at 264th position in the Fortune Global 500 (2009[2]) and at the 126th position in the Forbes Global 2000 list (2010).[3]
Reliance was founded by the Indian industrialist Dhirubhai Ambani in 1966. Ambani has been a pioneer in introducing financial instruments like fully convertible debentures to the Indian stock markets. Ambani was one of the first entrepreneurs to draw retail investors to the stock markets. Critics allege that the rise of Reliance Industries to the top slot in terms of market capitalization is largely due to Dhirubhai's ability to manipulate the levers of a controlled economy to his advantage.
Though the company's petrochemicals, refining, and oil and gas-related operations form the core of its business, however, other segment of the company includes textile, retail business, telecommunications and special economic zone (SEZ) development. After severe differences between the founder's two sons, Mukesh Ambani and Anil Ambani, the group was divided between them in 2006. In September 2008, Reliance Industries was the only Indian firm featured in the Forbes's list of "world's 100 most respected companies".[4] In 2010, it stood at 13th position in the Platts Top 250 Global Energy Company Rankings.[5]

Contents

 [hide]

[edit]Stock

According to the company website "1 out of every 4 investors in India is a Reliance shareholder.". Reliance has more than 3 million shareholders, making it one of the world's most widely held stocks. Reliance Industries Ltd, subsequent to its split in January 2006 has continued to grow. Reliance companies have been among the best performing in the Indian stock market.
The alleged irregularities by RIL in the KG-D6 gas controversy, along with the observations in the CAG Draft Report severely impacted RIL's shares. Until 23rd of June 2011, the stock had fallen 10.5% since the report was leaked in the week beginning 13th of June 2011 - it fell in seven out of eight trading sessions, making RIL the worst performer among Sensex stocks, Bloombergdata showed.[6]
On the 1st of July, 2011, Reliance Industries Ltd. fell 4% after the Press Trust of India reported that a federal probe agency (CBI) had registered a case against V.K. Sibal, a former Director General of Hydrocarbons, for allegedly favoring "leading private players and foreign consultants involved in oil and gas explorations." Although the agency didn't name any private-sector companies, dealers said that Reliance dropped sharply because of concerns that the company could be one of those allegedly involved. [7]

[edit]Products

Reliance Industries Limited has a wide range of products from petroleum products, petrochemicals, to garments (under the brand name of Vimal), Reliance Retail has entered into the fresh foods market as Reliance Fresh and launched a non-veg chain called Delight Reliance Retail and NOVA Chemicals have signed a letter of intent to make energy-efficient structures.

[edit]Businesses

[edit]Major subsidiaries and associates

  • 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.[8]
  • 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.[9]
  • Reliance Institute of Life Sciences (Rils), established by Dhirubhai Ambani Foundation, is an institution of higher education in various fields of life sciences and related technologies.[10]
  • 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 telematics and telemetry solutions.[11]
  • 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.[12]
  • Reliance Solar, The solar energy initiative of Reliance aims to bring solar energy systems and solutions primarily to remote and rural areas and bring about a transformation in the quality of life.[13]
  • Relicord is the first and one of the most dependable stem-cell banking services of South East Asia offered by Mukesh Ambani controlled by Reliance Industries.[14]
  • Infotel Broadband is a broadband service provider, it is wholly owned by RIL for Indian Rupee symbol.svg4,800 crore (US$1.07 billion).[15]

[edit]Reliance retail

Reliance Retail is the retail business wing of the Reliance business. Many brands like Reliance Fresh, Reliance Footprint, Reliance Time Out, Reliance Digital, Reliance Wellness, Reliance Trendz, Reliance Autozone, Reliance Super, Reliance Mart, Reliance iStore, Reliance Home Kitchens, and Reliance Jewel come under the Reliance Retail brand

[edit]Environmental record

Unbalanced scales.svg
The neutrality of this article is disputed. Please see the discussion on the talk page. Please do not remove this message until the dispute is resolved. (June 2011)
Reliance Industry is the worlds largest polyester producer and as a result one of the largest producers of polyester waste in the world. In order to deal with this large amount of waste they had to create a way to recycle the waste. They operate the largest polyester recycling center that uses the polyester waste as a filling and stuffing. They use this process to develop a strong recycling process which won them a reward in the Team Excellence competition.[16]
Reliance Industries backed a conference on environmental awareness in New Delhi in 2006. The conference was run by the Asia Pacific Jurist Association in partnership with the Ministry of Environment & Forests, Govt. of India and the Maharashtra Pollution Control Board. The conference was to help bring about new ideas and articles on various aspects of environmental protection in the region. Maharashtra Pollution Control Board invited various industries complied with the pollution control norms to take active part in the conference and to support as a sponsor. The conference proved effective as a way to promote environmental concern in the area.[17]

[edit]KG-D6 Gas Controversy

In its leaked[18] Draft Report (2010-2011), the Comptroller and Auditor General of India's (CAG) first ever audit of oil and gas companies operating in India, said that the Government of India unduly favoured private oil and natural gas explorers including the Mukesh Ambani-ledReliance Industries Ltd incurring a huge loss to the exchequer. The CAG report mentioned that the Ministry of Petroleum and Natural Gas(MOP&NG) and its regulatory arm - the Directorate General of Hydrocarbons (DGH) - allegedly favoured at least three private oil and natural gas explorers. The report alleges that the government allowed Ambani's Reliance Industries Ltd (RIL) to violate terms of its contract with the government for exploration in the Krishna-Godavari basin (KG-D6). The CAG report also stated that the Directorate General of Hydrocarbons had allowed RIL to violate norms.The violation of terms, in turn, helped Reliance Industries Ltd increase its capital expenditure plan to start production from the Krisha-Godavari basin. Allegedly, 70% of the draft Comptroller and Auditor General of India report is devoted to Reliance Industries Ltd alone.[19]
Prime Minister Manmohan Singh's government has been accused of providing “huge” and “undue benefit” to Reliance Industries Ltd — the Comptroller and Auditor General has indicted the Ministry of Petroleum and Natural Gas for allowing “irregularities and bending rules” to “oblige” RIL in the Krishna Godavari basin gas fields, leading to a massive and as yet “unquantifiable” loss to the national exchequer. In its 193-page Draft Report on production sharing contracts (PSCs) in the oil and gas field , the CAG exposes the “close nexus” between RIL and the “bureaucrats” working in the Petroleum Ministry as well as its Directorate General of Hydrocarbons. This allowed RIL to retain its entire offshore acreage, rather than surrendering those areas where it had not found oil or gas so that the government could invite fresh bids from other companies.[20]
The CAG sent its Draft Report to the Ministry of Petroleum and Natural Gas (MOP&NG) on June 8, 2011. The CAG report also noted that former Directorate General of Hydrocarbons (DGH) permitted Reliance Industries Ltd (RIL) to inflate its development costs on extracting the gas in the D6 block to the KG basin (KG-D6) from USD $2.47 billion to a huge USD $ 8.84 billion. The CAG also cited a joint venture of RIL with British Gas(BG) and Oil and Natural Gas Corporation(ONGC) for hiking development costs in the Panna-Mukta and Tapti gas fields. It has been earlier been alleged that an Empowered Group of Ministers (EGoM) had allowed Reliance Industries Ltd to sell per unit of the gas at a price of INR Rs. 4.20 even as the government companies were selling the same for just INR Rs. 1.20.[21]
The alleged modus operandi was to submit a bid which shows a certain capital cost and during the operation of the contract, inflate the capital cost by a huge amount with the connivance of the Directorate General of Hydrocarbons (DGH) and the Ministry of Petroleum and Natural Gas (MOP&NG).[22]
On 24 June 2011, Reliance Industries Ltd (RIL) chairman Mukesh Ambani met Prime Minister Manmohan Singh amid accusations of his company increasing capital expenditure and violating terms of contracts with the Government of India. Ambani met the PM in the wake of the Draft Report from the Comptroller and Auditor General (CAG) that had alleged that RIL received favours from the Ministry of Petroleum and Directorate General of Hydrocarbons, the regulator for oil hunting companies. RIL had also obtained portions of the CAG Draft Report after it made a request to the Ministry of Petroleum.[23]
On 3 July 2011, the CBI proposed that the Ministry of Petroleum and Natural Gas appoint an expert to assist the CBI in understanding transactions surrounding Reliance Industries Ltd's KG-D6 fields, where the company had shown a phenomenal increase in the cost of producing gas. The CBI wanted to understand the arguments offered by Mukesh Ambani's company when it raised the cost of developing Dhirubhai 1 and 3 gas fields in the KG-D6 block from USD $ 2.39 billion proposed in 2004 to USD $ 5.196 billion in Phase-1 and another USD $ 3.3 billion in Phase-II. [24]

[edit]Awards and recognition

  • International Refiner of the Year in 2005 at the 23rd Annual Hart's World Refining and Fuels Conference [25]
  • According to survey conducted by Brand Finance and The Economic Times in 2010, Reliance is the second most valuable brand in India.[26]

[edit]Awards for managers

  • Mukesh D. Ambani received the United States of America-India Business Council (USIBC) leadership award for "Global Vision" 2007 in Washington in July 2007.
  • Mukesh D. Ambani was conferred the Asia Society Leadership Award by the Asia Society, Washington, USA, May 2004.
  • Mukesh D. Ambani ranked 13th in Asia's Power 25 list of The Most Powerful People in Business published by Fortune magazine, August 2004.
  • Mukesh D. Ambani is The Economic Times Business Leader of the Year
  • Mukesh Ambani was ranked as the 74th Most Trusted Individual in India in an early 2010 survey conducted by the Indian edition of Readers' Digest magazine.

[edit]See also

Factory 1b.svgCompanies portal

[edit]External links

[edit]References

  1. ^ a b c d e "2010 Form 10-K, Reliance Industries Limited". RIL Financial Highlights.
  2. ^ "Global 500 2009: Global 500 201-300 - FORTUNE on CNNMoney.com". Money.cnn.com. 2009-07-20. Retrieved 2010-07-16.
  3. ^ "The Global 2000". Forbes.com. 2010-03-01. Retrieved 2010-08-20.
  4. ^ PTI, Sep 6, 2008, 10.02pm IST (2008-09-06). "The Times of India". Timesofindia.indiatimes.com. Retrieved 2010-08-20.
  5. ^ Platts, Nov 2, 2010. "Platts Top 250 Global Energy Company Rankings". Retrieved 2010-11-03.
  6. ^ "Reliance Industries hits out at CAG over KG-D6 capital spending remarks". The Economic Times. 24 June 2011. Retrieved 24 June 2011.
  7. ^ "Reliance Drags India Shares Lower". The Wall Street Journal. 01 July 2011. Retrieved 01 July 2011.
  8. ^ "About us, Reliance Life Sciences". Retrieved 2010-03-03.
  9. ^ "About us, Reliance Industrial Infrastructure". Retrieved 2010-03-03.
  10. ^ "About us, Reliance Institute of Life Sciences". Retrieved 2010-03-03.[dead link]
  11. ^ "About us, Reliance Logistics". Retrieved 2010-03-03.
  12. ^ "About us, Reliance Clinical Research Services". Retrieved 2010-03-03.[dead link]
  13. ^ "About us, Reliance Solar". Retrieved 2010-03-03.
  14. ^ "About us, Relicord". Retrieved 2010-03-03.
  15. ^ "Reliance Industries buys 95% stake in Infotel Broadband for Rs 4,800 cr". The Times Of India. Retrieved 11 Jun 2010.
  16. ^ Bhatt, Hari (2006). "Reliance Industries award". Findarticles.com. Retrieved 2010-08-20.[dead link]
  17. ^ "Conference on "Environment-Awareness-Enforcement" New Delhi."
  18. ^ "Congress surprised at leak of CAG report on RIL". The Hindu. 15 June 2011. Retrieved 19 June 2011.
  19. ^ "Govt favoured RIL in K-G deal: CAG report". CNBC TV18. 13 June 2011. Retrieved 19 June 2011.
  20. ^ "Fresh scam rocks UPA Govt: Mukesh Ambani got “special favours”". The Asian Tribune. 21 June 2011. Retrieved 22 June 2011.
  21. ^ "KG basin contract: RIL under scanner again". Zee News. 18 June 2011. Retrieved 19 June 2011.
  22. ^ "The Reliance KG Gas Scam". NewsClick. 16 June 2011. Retrieved 19 June 2011.
  23. ^ "Mukesh Ambani meets PM on CAG draft". The Times of India. 25 June 2011. Retrieved 25 June 2011.
  24. ^ "CBI wants Oil Ministry to appoint expert to help in Reliance case". The Economic Times. 04 July 2011. Retrieved 04 July 2011.
  25. ^ http://www.ril.com/rportal/jsp/eportal/media/PressRelease.jsp?id=332
  26. ^ "India's top 10 brands". business.rediff.com. Retrieved 26 Oct 2010.
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