Summer Internship Program Report

Internal Financial Control at Reliance Retail

(GRCA Quality Assurance Review)

Submitted by
Abhishek Sharma
PGDM 2022-24
22A1HP136

Institute of Management Technology Hyderabad

08 May 2023
 Summer Internship Program Report

Internal Financial Control at Reliance Retail

(GRCA Quality Assurance Review)

Submitted by
Abhishek Sharma
PGDM 2022-24
22A1HP136

A report submitted in partial fulfilment of the requirements for the PGDM

2022-24 program of the
INSTITUTE OF MANAGEMENT TECHNOLOGY HYDERABAD
8 May 2023

Prof. (Dr.) Manoj Nair Mr. Abhinay Nayak

Associate Professor & Area Team Lead
Chair - Marketing Department Internal Financial Control
IMT Hyderabad Reliance Retail
 TABLE OF CONTENTS

1. EXECUTIVE SUMMARY ................................................................................................ 1

2. INTRODUCTION .............................................................................................................. 2

3. OVERVIEW OF THE COMPANY & INDUSTRY ........................................................... 3

4. TASKS UNDERTAKEN .................................................................................................... 4

5. KEY LEARNINGS ............................................................................................................ 8

 1. EXECUTIVE SUMMARY

The following Internship Interim Report pertains to the activities undertaken and critical
learnings derived from those activities as a part of the Summer Internship Programme (SIP)
pursued at

Reliance Retail, Mumbai, for the role of Risk Assurance Manager, assisting with the
Company’s Internal Financial Control. This report is prepared in accordance with the
guidelines issued by the Management of IMT Hyderabad.

Reliance Retail is the retail initiative of Reliance Industries Limited and is central to
the group’s consumer-facing businesses. Reliance Retail has been at the forefront of bringing
about the Organized Retail revolution in India.

Reliance Retail has been ranked as the fastest-growing retailer in the world. It is ranked
56th in the list of Top Global Retailers and is the only Indian Retailer to feature in the Top 100.
It is the largest and the most profitable retailer in India, with the widest reach.
It was founded by Mr Mukesh Ambani in 2006. It is headquartered in Mumbai, Maharashtra.
Reliance Retail is the largest retailer in India in terms of revenue.

The nature of internship work is performing day-to-day activities relating to Internal

Financial Control. The significant tasks undertaken to date are summarised as follows:
Presentation on Risk Management & Compliance (Internal Financial Control); Addressing
Internal Control, Internal Financial Control and ICFR as per the Companies Act 2013;
Applicability, Objectives and ICFR Guidelines—the difference between Sarbanes-Oxley Act
and IFC.

Preparation of Risk Description and updation of descriptions in CET document; Review

of Descriptions; Performing standardisation of Risks across formats; Finding discrepancies in
GRCA (SAP) and Offline maintained records.

The learning was a continuous process, and every task performed gave some value
addition, be it new knowledge or enhancement of existing knowledge, technical or
nontechnical, etc. The key learnings have been detailed in the latter section of this report.

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 2. INTRODUCTION

“The Expert at anything was once a beginner.” - Helen Hayes

As the quote rightly says, Internships are the stepping stones to Corporate experience and
hence, play a vital role in the learning process of an individual.

Reliance Retail is an Indian retail company and a subsidiary of Reliance Industries.

Founded in 2006, it is the largest retailer in India in terms of revenue. Its retail outlets offer
foods, groceries, apparel, footwear, toys, home improvement products, electronic goods, and
farm implements and inputs. In the Fortune Global 500 List 2022, Reliance Industries Limited
(RIL) ranked at 104th position and is India's second-highest-ranked company.

The two main objectives of the internship are, Finding discrepancies in the GRCA
Portal (SAP) and offline records of the Internal Financial Department and Identification of
standard common risks across all formats. The conclusions of the work are nothing but the
successful completion of these objectives, and hence, the nature of the work is to perform day-
to-day activities in order to achieve these objectives.

The following report presents the details of the various tasks undertaken during the
internship period and the key learnings derived from the tasks performed.

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 3. OVERVIEW OF THE COMPANY & INDUSTRY

Reliance Retail is India's most significant, fastest-growing, and most profitable retailer, with a
diversified Omni-channel presence via integrated store concepts and digital and new commerce
platforms. It provides consumers with an outstanding value proposition, superior quality
products, and an unmatched shopping experience.

Founded in 2006 with a view to revolutionizing retail in India, It has, over the years,
developed and perfected capabilities across people, processes, and technology to meet end
objectives of creating a win-win proposition for our stakeholders across the value chain, viz.
Customers, Manufacturers/Farmers, Merchants, and Brand Partners, as well as enhancing
financial income and job security for tens of millions of Indians. It is the largest retailer in India
in terms of revenue. Its retail outlets offer foods, groceries, apparel, footwear, toys, home
improvement products, electronic goods, and farm implements and inputs. Apart from physical
outlets, the company also sells products on its e-commerce channels. It has 280,000 employees
at 16,700 store locations.

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 4. TASKS UNDERTAKEN

Presentation on Risk Management and Compliance

In the first week of the internship, after acquiring the prerequisite knowledge about Risk
Management and Compliance regulations, I presented my understanding of the domain to the
IFC (Internal Financial Control) team. The presentation was my first task, and I utilised the
time taken to get approvals for all the required tools and applications for the seamless working
of my project. Some glimpses of the presentation are in Figure 1.

Figure 1: Presentation on Risk Management & Compliance

The presentation comprised Section 134 of the Companies Act 2013, which states the
Internal Control covering the IFC and ICFR (Internal Financial Control Over Financial
Reporting). The regulations’ applicability and the exemption to specified Private Limited
Companies from IFC. Sarbanes-Oxley Act (SOX), a US equivalent to the IFC, was covered
and differentiated from the gold standard IFC based on scope, purpose, applicability, oversight,
location, and requirements concluding with the guidelines published by ICFAI (Institute of
Chartered Financial Analysts of India) which provides recommendations for organisations to
establish and maintain effective internal control systems.

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Classification of diverse risks of each format into standardised risk categories
The next task addressed the diversity of risks persisting in different formats in the Control
Evaluation Templet (CET). The approach was to understand the controls in each format with
existing risk descriptions and controls and then identify the controls that can be put under a
broader category catering to related issues. The new descriptions created are all-inclusive and
pervasive, where they mentioned changes from formatting issues to adding/ modifying specific
notes, as required to place them under a broader umbrella. This categorisation was done to
visualise sectors where risks are concentrated and plan mitigation accordingly.

Figure 2:Example of Control Evaluation Template of Reliance Retail

Initially, I was provided with a reference file where the new descriptions were created
for Reliance Trends; by careful observation and understanding of the divisions created in
operational areas of Reliance Trends, other formats viz. Reliance Footprints, Zivame, Reliance
Digital, Digital PGB, E-Commerce Digital, Facility Management, Gab, IDT, Jewels, Jio Device
and Recharges, JMD, MDM, Milk Basket, New Commerce, Pharma, Private Label, Private
Label PCS- Sourcing, RESQ, Sahakari Bhandar, SSO, SSO-Insurance and Value. Figure 2
depicted an example of CET and created New Risk Descriptions.

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Identification of Discrepancies in the GRCA portal and IFC Records
The Risk Management Organization embeds a Group Risk Management Framework (RMF)
within the businesses and functions for identifying, evaluating, managing and reporting
enterprise-level risks arising from the group's activities to the Executive Committee and Board.
The RMF covers risk management activities at three levels:
• Risk oversight and governance (Executive and Board level)
• Business and Strategic Risk Management (Segment level)
• Day to Day risk management (internal control at the Operational level)
Reliance Retail uses The GRC Risk & Control Portal, the group-wide (SAP-based) platform
for capturing risks and controls and enables continuous monitoring through self-verification
and functional assurance. The portal provided unmatched facilities for real-time risk
assessments and Visualisation using Tableau. Figure 3 shows the dashboard of the GRCA
Portal that is customised for Reliance Retail.

Figure 3: Dashboard of GRCA Portal of Reliance Retail

Risks and controls in the GRCA portal are continuously updated and will be referred to
as the GRCA dump for ease of understanding in this report. Records are also maintained in
Control Evaluation Template (CET) on which the IFC teams work continuously. Since Reliance
Retail has acquired multiple companies in the last few years, discrepancies in the GRCA dump
and the CET are possible. I was assigned the project to identify and address those discrepancies
by informing the respective units.

The approach is to compare both records in MS EXCEL by using functions. Firstly, controls
are compared in both records; therefore, to apply VLOOKUP, unique codes are created using
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CONCATENATE of control IDs and Control Owner Name in both Records. This helped
identify Common controls in both files and those controls that persist in the GRCA Dump but
not in the CET and vice versa. Figure 4.1, 4.2 and 4.3 shows an example of the same.

Figure 4: Concatenate of Control ID and Control Owner name in the CET record

Figure 5: Concatenate of Control ID and Control Owner name in the GRCA Dump

Figure 6: Matching against the same controls in both files using VLOOKUP

Results are then manually reconciled to ensure the difference is not due to any variable
values in a cell’s formula. Further work will be completed in the subsequent days.

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 5. KEY LEARNINGS
The learning was a continuous process, and every task performed gave some value addition, be
it new knowledge or enhancement of existing knowledge, technical or non-technical, etc.

The following are the key learnings/ takeaways from the various tasks undertaken.

❖ Financial Controls–
I learned many schedules, notes, and disclosures as part of reporting requirements,
particularly the ones related to IFC (Article 134), etc., which were quite robust and
exhaustive.

❖ Risk Assessment Methodology–

I learnt the Risk assessment requirements and the format to be followed by companies
to safeguard the assets of their shareholders.

❖ Mitigation of Risks–
I learnt the importance of mitigation plans and their contents, which kind of controls
deliver the company’s overall performance in a year, right from business updates to
financial performance and highlights, by ensuring safety in operations.

❖ Operations of a Retail Company–

I gained insights on the overall functioning of Reliance Retail; briefing by the
management; the operational process; all the risks and controls implemented by the IFC
team related to various aspects of the company; the spontaneous responses given by the
management for each of them—the Role of vertical integration in the Success of
Reliance.

❖ Technical Knowledge–
I learnt the essential functions useful in MS Office and how they are used in real-life
business scenarios to deliver desired outcomes.