Home > Corporate Update > Full Story

Reliance is India’s ‘Best Managed Company’ says a BT/A T Kearney study

E-Tex Staff - Mumbai

Reliance Industries has emerged as the ‘Best Managed Company’ in India in a study by Business Today and A T Kearney. The results of the study have been published in the latest edition of Business Today.

Mr Jaswant Singh, Union minister for finance, presented the award of ‘Best Managed Company’ to Mr Mukesh D Ambani, chairman & managing director and Mr Anil D Ambani, vice chairman & managing director, Reliance Industries.

While accepting the award, both Mukesh and Anil Ambani, dedicated the award to the vision of their father and Reliance’s founder chairman Mr Dhirubhai Ambani. The award is also a recognition of the joint efforts of the members of the Reliance family, over 3 million shareholders, all employees, and our business associates, they observed.

The study, conducted over a period of nearly 18 months, was carried out with A T Kearney’s proprietary Value-Building Growth Model analysing the performance over a time period covering the last five years. The value growth matrix maps market value growth adjusted for changes in equity against revenue growth. This tool was also used to assess a company’s strategic direction and the suitability of its current position for maximising future value creating potential.

Recently, Reliance Industries was included in the Financial Times Global 500 list of world’s largest companies. Reliance also featured in the list of the world’s most respected companies published by Financial Times based on a global survey and research conducted by PricewaterhouseCoopers in January 2003. Reliance was ranked number one in ‘Financial Soundness’ and ‘Long Term Vision’ in a survey carried out by the Far Eastern Economic Review in December 2002 and also ranked number one in India’s ‘Best Financial Management’ in March 2003 Finance Asia poll.

Methodology

In the first step of the exercise, from the universe of listed companies, over 250 companies across 9 industries were selected based on the criteria of public listing before 1996, minimum revenue of Rs 100 crore, minimum market capitalisation of Rs 50 crore and declared a net profit in at least two of the past four years.

These companies were plotted on the Value-Building Matrix framework and a total of 23 companies were short-listed. In the next step, a qualitative evaluation of 16 companies, which agreed to participate in the process, was done based on the interviews and the responses. The evaluation was based on the parameters of: strategy, financial performance, leadership and management philosophy, systems and processes, employee skills and HR effectiveness, organisation structure, corporate governance, and social responsibility.

The results were then discussed by a panel comprising two CEOs, a senior professor of Management, the Editor and Deputy Editor of BT and an investment banker besides Kearney’s own representatives. The panel after a few rounds of short-listing arrived at the winner: Reliance Industries as India’s Best Managed Company.

Reliance Industries (RIL) is India’s largest private sector company on all major financial parameters with gross turnover of Rs 65,061 crore (US$ 13.7 billion), cash profit of Rs 7,565 crore (US$ 1.6 billion), net profit of Rs 4,104 crore (US$ 864 million), net worth of Rs 30,327 crore (US$ 6.4 billion) and total assets of Rs 63,737 crore (US$ 13.4 billion). RIL has emerged as India’s first private sector company in the reckoning for a place in the Fortune Global 500 list of the world’s largest corporations.

RIL also features in the Forbes Global list of world’s 400 best big companies and in FT Global 500 list of world’s largest companies. RIL emerged as the most respected among Indian companies and amongst the 10 most respected energy and chemical companies in the world in the list published by Financial Times based on a global survey and research conducted by PricewaterhouseCoopers.