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Directors Report of Reliance Capital Ltd.

Mar 31, 2015

Dear Shareowners,

The Directors have pleasure in presenting the 29th Annual Report and the audited financial statement for the financial year ended March 31, 2015.

Financial Results

The standalone performance of the Company for the financial year ended March 31, 2015 is summarised below:

Particulars Financial Year ended *Financial Year ended March 31, 2015 March 31, 2014

(Rs. in crore) (US$ in million**) (Rs. in crore) (US$ in million**)

Total revenue 3988 637 3254 541

Profit before exceptional items 844 135 464 77

Profit before tax 844 135 464 77

Tax expense 87 14 55 9

Profit after tax 757 121 409 68

Add: Opening surplus in statement of profit and loss 1309 209 1248 208

Profit available for appropriation 2066 330 1657 276

Proposed dividend including tax on proposed dividend 257 41 225 37

Tax on proposed dividend for earlier years (16) (3) - -

Transfer to statutory reserve fund 151 24 82 14

Transfer to general reserve 76 12 41 7

* Figures of previous year have been regrouped and reclassified, wherever required.

** Exchange Rate Rs. 62.5908 = US$ 1 as on March 31, 2015 (Rs. 60.10 = US$1 as on March 31, 2014).

Financial Performance

The Company''s gross income for the financial year ended March 31, 2015 increased to Rs. 3,988 crore, from Rs. 3,254 crore in the previous year, increase of 23 per cent. The operating profit (PBDIT) of the Company increased by 16 per cent to Rs. 3,232 crore during the year, from Rs. 2,777 crore, in the previous year. Interest expenses for the year increased by 3 per cent to Rs. 2,357 crore from Rs. 2,279 crore, in the previous year. Depreciation was at Rs. 31 crore as against Rs. 34 crore in the previous year. The net profit for the year increased by 85 per cent to Rs. 757 crore from Rs. 409 crore, in the previous year. An amount of Rs. 151 crore was transferred to the Statutory Reserve Fund pursuant to Section 45-IC of the Reserve Bank of India Act, 1934, and a net amount of Rs. 76 crore was transferred to the General Reserve during the year under review.

Dividend

Your Directors have recommended a dividend of Rs. 9.00 (90 per cent) per equity share each of Rs. 10 aggregating to Rs. 257 crore (inclusive of dividend tax) for the financial year ended March 31, 2015, which, if approved at the ensuing 29th Annual General Meeting (AGM), will be paid to (i) all those equity shareholders whose names appear in the Register of Members as on September 18, 2015, and (ii) to those whose names appear as beneficial owners, as on September 18, 2015 as furnished by the National Securities Depository Limited and Central Depository Services (India) Limited for the purpose.

The Dividend payout as proposed is in accordance with the Company''s policy of paying sustainable dividend linked to long term performance, keeping in view of the capital needs of the Company''s growth plans and desire to achieve optimal financing of such plans through internal accruals.

Management Discussion and Analysis

Management Discussion and Analysis Report for the year under review as stipulated under Clause 49 of the Listing Agreement with the Stock Exchanges in India is presented in a separate section forming part of this Annual Report.

Strategic Alliance and Preferential Allotment of Shares

Your Company and Sumitomo Mitsui Trust Bank (the "SMTB ") have been evaluating a strategic alliance for the establishment of a Universal Bank. SMTB is a company incorporated and registered in Tokyo, Japan, with business operations in Japan, Singapore and the United States. SMTB offers a broad range of banking and financial services and consulting services. The central focus of SMTB''s business is on various banking services outside India. Sumitomo Mitsui Trust Bank is core part of Sumitomo Mitsui Trust Group of Japan which is the fourth largest bank in Japan. The Company and SMTB have agreed to explore and engage on collaborating in a variety of areas of potential synergies and mutual benefits in respect of the current lines of business operations and specifically for the establishment of the Universal Bank.

The Company has as a part of strategic alliance with SMTB and in accordance with the provisions of the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009, allotted on a Preferential basis 70,00,000 equity shares of face value of Rs. 10 each at a premium of Rs. 520 per share aggregating to Rs. 371 crore to SMTB.

Resources and Liquidity

The Company''s Net Worth as on March 31, 2015, stood at Rs. 12,387 crore. The Company has raised Rs. 24,490 crore during the financial year 2014-15 by issuance of Commercial Paper, Non-Convertible Debentures (NCDs) and other money market instruments. The Company has also raised Rs. 250 crore by way of Unsecured Subordinated Non Convertible Debentures (Tier II Bonds) to augment the Capital Adequacy Ratio. The funds were deployed in providing commercial finance and other business requirement. RCL''s debt equity ratio as on March 31, 2015 stood at 1.76:1.

-Capital Adequacy Ratio

Your Company''s Capital to Risk Assets Ratio (CRAR) calculated in line with the Systemically Important Non-Banking Financial (Non-Deposit Accepting or Holding) Companies Prudential Norms (Reserve Bank) Directions, 2015 ("RBI Directions ") stood at 23.87 per cent, well above the regulatory minimum of 15 per cent. Your Company''s asset size is Rs. 35,702 crore. The Company has received a certificate from the Auditors of the Company, M/s. Chaturvedi & Shah, Chartered Accountants and M/s. B S R & Co. LLP, Chartered Accountants, pursuant to Non-Banking Financial Companies Auditors'' Report (Reserve Bank) Directions, 2008, confirming compliance of the conditions with respect to Systemically Important Non-Deposit taking Non-Banking Financial Companies.

Deposits

The Company has neither accepted nor renewed any fixed deposits during the year. There are no unclaimed deposits, unclaimed / unpaid interest, refunds due to the deposit holders or to be deposited to the Investor Education and Protection Fund as on March 31, 2015.

Particulars of Loans, Guarantees or Investments

Pursuant to Section 186(11) of the Companies Act, 2013 loans made, and acquisition of securities by a Non-Banking Financial Company in the ordinary course of its business are exempted from disclosure in the Annual Report.

Subsidiary and Associate companies

During the year under review, Reliance Alternative Investments Services Private Limited, Reliance Asset Management (Malaysia) Sdn. Bhd., Reliance Composite Insurance Broking Limited, Reliance Consultants (Mauritius) Limited, Reliance Equity Advisors (India) Limited, Quant Capital Advisors Private Limited, Quant Commodities Private Limited and Indian Agri Services Private Limited ceased to be subsidiaries of the Company.

The performance and financial position of the major subsidiary companies are presented in Management Discussion and Analysis Report forming part of this Annual Report. Also, a report on the performance and financial position of each of the subsidiary companies and associate companies as per the Act is provided in the consolidated financial statement. The Policy for determining material subsidiary companies may be accessed on the Company''s website at http://www.reliancecapital.co.in/pdf/Policy_for_ Determining_Material_Subsidiary.pdf.

Consolidated Financial Statement

The Audited Consolidated Financial Statement for the financial year ended March 31, 2015, based on the financial statement received from subsidiary companies and associate companies, as approved by their respective Board of Directors have been prepared in accordance with Accounting Standard (AS) - 21 on ''Consolidated Financial Statements'' read with AS-23 on ''Accounting for Investments in Associates'', notified under the Act, read with the Accounting Standards Rules as applicable.

Directors

During the year under review, in terms of the provisions of Act, the Company appointed Shri Rajendra P. Chitale, Shri V. N. Kaul and Dr. Bidhubhusan Samal as Independent Directors of the Company for a period of 5 years w.e.f. September 30, 2014.

The Company has received declarations from all the Independent Directors of the Company confirming that they meet the criteria of independence as prescribed under the Act and Clause 49 of the Listing Agreement with the Stock Exchanges.

The details of programme for familiarization of Independent Directors with the Company, nature of the industry in which the Company operates and related matters are put up on the website of the Company at the link http://www.reliancecapital.co.in/cg_ policies.html.

Smt. Chhaya Virani was appointed as a Women Director, liable to retire by rotation w.e.f. September 30, 2014 and designated as an Independent Director of the Company for a period of 5 years w.e.f. May 29, 2015.

In terms of the provisions of the Companies Act, 2013, Shri Amitabh Jhunjhunwala, Director of the Company, retires by rotation and being eligible, offers himself for re-appointment at the ensuing AGM.

Shri Soumen Ghosh, CEO was appointed as an Executive Director & Group CEO for a period of 5 years commencing from May 29, 2015.

A brief resume of Shri Amitabh Jhunjhunwala, Smt. Chhaya Virani and Shri Soumen Ghosh, Directors, nature of expertise in specifc functional areas and names of the companies in which they holds directorship and / or membership / chairmanships of Committees of the respective Boards, shareholding and relationship between directors inter se as stipulated under Clause 49 of the Listing Agreement with the Stock Exchanges in India, is given in the section on Corporate Governance Report forming part of this Annual Report.

Key Managerial Personnel

During the year, Shri Soumen Ghosh, Chief Executive Officer, Shri Amit Bapna, Chief Financial Officer and Shri V. R. Mohan, President & Company Secretary were designated as the Key Managerial Personnel of the Company as per requirements of the Act.

Shri Soumen Ghosh, CEO to the Board of the Company has been appointed as an Executive Director & Group CEO, with effect from May 29, 2015 and upon his appointment Shri V. R. Mohan ceased to hold the office of Manager.

Evaluation of Directors, Board and Committees

The Company has devised a policy for performance evaluation of the individual directors, Board and its Committees, which includes criteria for performance evaluation.

Pursuant to the provisions of the Act and Clause 49 of the Listing Agreement, the Board has carried out an annual performance evaluation of its own performance, the directors individually as well as the evaluation of the working of the Committees of the Board. The Board performance was evaluated based on inputs received from all the Directors after considering criteria such as Board composition and structure, effectiveness of Board / Committee processes, and information provided to the Board, etc. A separate meeting of the Independent Directors was also held during the year for the evaluation of the performance of non-independent Directors, performance of the Board as a whole and that of the Chairman.

The Nomination and Remuneration Committee has also reviewed the performance of the individual directors based on their knowledge, level of preparation and effective participation in Meetings, understanding of their roles as directors, etc.

-Policy on appointment and remuneration for directors, key managerial personnel and senior management employees

The Nomination and Remuneration Committee of the Board has devised a policy for selection and appointment of Directors, Key Managerial Personnel and Senior Management Employees and their Remuneration. The Committee has formulated the criteria for determining qualifications, positive attributes and independence of a Director, which has been put up on the Company''s website. The policy on the above is attached as Annexure - A.

Directors'' Responsibility Statement

Pursuant to the requirements under Section 134(5) of the Act with respect to Directors'' Responsibility Statement, it is hereby confirmed that:

i. In the preparation of the annual financial statements for the financial year ended March 31, 2015, the applicable Accounting Standards had been followed along with proper explanation relating to material departures, if any;

ii. The Directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2015 and of the profit of the Company for the year ended on that date;

iii. The Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

iv. The Directors had prepared the annual financial statements for the financial year ended March 31, 2015 on a ''going concern'' basis;

v. The Directors had laid down proper internal financial controls to be followed by the Company and such financial controls are adequate and are operating effectively; and

vi. The Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.

Contracts and Arrangements with Related Parties

All contracts/ arrangements/ transactions entered into/ by the Company during the financial year under review with related parties were on an arm''s length basis and in the ordinary course of business. There were no materially significant related party transactions made by the Company with Promoters, Directors, Key Managerial Personnel or other designated persons, which may have a potential conflict with the interest of the Company at large.

All Related Party Transactions were placed before the Audit Committee as also the Board for approval. Prior omnibus approval of the Audit Committee was obtained for the transactions which were of a repetitive nature. The transactions entered into pursuant to the omnibus approval so granted were reviewed and statements giving details of all related party transactions were placed before the Audit Committee and the Board of Directors for their approval on a quarterly basis. The policy on Related Party Transactions as approved by the Board is uploaded on the Company''s website at the link http://www.reliancecapital.co.in/pdf/Policy_for_Related_ Party_Transaction.pdf. None of the Directors has any pecuniary relationships or transactions vis-à-vis the Company.

Material Changes and Commitments if any, affecting the financial position of the Company

There was no material change and commitment which materially affect the financial position of the Company occurred between the financial year ended on March 31, 2015 and the date of this report.

Meetings of the Board

A calendar of Meetings is prepared and circulated in advance to the Directors. During the year, eight Board Meetings were held, details of which are given in the Corporate Governance Report.

Audit Committee

The Audit Committee of the Board consists of Independent Directors namely Shri Rajendra P. Chitale, Chairman, Dr. Bidhubhusan Samal, Shri V. N. Kaul and Non Independent Director Shri Amitabh Jhunjhunwala as members. During the year, all the recommendations made by the Audit Committee were accepted by the Board.

Auditors and Auditors'' Report

M/s. Chaturvedi & Shah, Chartered Accountants and M/s. B S R & Co. LLP, Chartered Accountants, the Auditors of the Company hold office until the conclusion of the ensuing AGM and are eligible for re-appointment.

The Company has received letters from M/s. Chaturvedi & Shah, Chartered Accountants and M/s. B S R & Co. LLP, Chartered Accountants; to the effect that their appointment, if made, would be within the prescribed limits under Section 141(3) of the Act and that they are not disqualified from appointment as statutory auditors of the Company.

The observations and comments given by the Auditors in their report read together with notes on financial statements are self explanatory and hence do not call for any fur their comments under Section 134 of the Act.

Secretarial Audit

Pursuant to the provisions of Section 204 of the Act and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board of Directors had appointed M/s Aashish K. Bhatt & Associates, Practicing Company Secretaries, to undertake the Secretarial Audit of the Company. There is no qualification, reservation or adverse remark made in their Secretarial Audit Report. The Audit Report of the Secretarial Auditor is attached as Annexure – B.

Extract of Annual Return

Extract of the Annual Return of the Company in form MGT-9 is attached as Annexure - C.

Employees Stock Option Scheme

During the year under review, the Company has not granted any Options to the employees of the Company. Employees Stock Option Scheme (ESOS) was approved and implemented by the Company and Options were granted to the employees under ESOS Plan A and Plan B in accordance with earlier guidelines applicable to ESOS.

The ESOS Compensation Committee of the Board monitors the Scheme. The existing ESOS Scheme and Plans are in compliance with the Securities and Exchange Board of India (Share based employee benefits) Regulations, 2014 (SEBI Regulations).

-The applicable disclosures as stipulated under the Companies (Share Capital and Debentures) Rules, 2014 as on March 31, 2015 are given below:

Particulars ESOS Plan A ESOS Plan B

a) Total Options granted 399900 Options 397000 Options

b) Number of Options surrendered 131160 Options 60040 Options

c) Options vested 125320 Options 217500 Options

d) Options exercised Nil Nil

e) Total number of equity shares arising as a result of exercise of Nil Nil Option

f) Options lapsed 143420 Options 119460 Options

g) Exercise Price The options were granted at The options were granted at the market price i.e. Rs. 800 the market price i.e. Rs. 800

h) Variation of terms of Options Nil Nil

i) Money realized by exercise of Options Nil Nil

j) Total number of Options in force at the end of the year 125320 Options 217500 Options

k) Employee wise details of Options granted to:

i. key managerial personnel 12000 Nil

Shri Amit Bapna - Chief Financial Officer

ii. any other employee who receives a grant of options in any Nil Nil one year of option amounting to five per cent or more of options granted during the year

iii. identified employees who were granted option, during any Nil Nil one year, equal to or exceeding one per cent of the issued capital (excluding outstanding warrants and conversions) of the Company at the time of grant

The Company has received a certificate from the statutory auditors of the Company that the ESOS Plan A and B have been implemented in accordance with the SEBI Regulations and as per the resolution passed through Postal Ballot on January 8, 2007.

Particulars of Employees and related disclosures

In terms of the provisions of Section 197 of the Act read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, a statement showing the names and other particulars of the employees drawing remuneration in excess of the limits set out in the said rules are provided in the Annexure to the Directors'' Report. However, having regard to the provisions of Section 136 of the Act, the Annual Report excluding the aforesaid information is being sent to all the members of the Company and others entitled thereto. The said information is available for inspection at the registered office of the Company on all working days, except Saturdays between 11:00 A.M. and 1:00 P.M. up to the date of the meeting and any member interested in obtaining the same may write to the Company Secretary. Upon such request the information shall be furnished.

Disclosures relating to the remuneration and other details as required under Section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are provided in Annexure - D.

Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo

As the Company is a non-banking financial company and does not involve in any manufacturing activity, most of the information as required under Section 134(3)(m) of the Act read with Rule 8 of the Companies (Accounts) Rules, 2014 are not applicable. However, the information as applicable has been given in Annexure – E forming part of this Report.

Corporate Governance

The Company has adopted "Reliance Group-Corporate Governance Policies and Code of Conduct " which sets out the systems, process and policies conforming to the international standards. The report on Corporate Governance as stipulated under Clause 49 of the Listing Agreement with the Stock Exchanges, forms part of this Annual Report.

A Certificate from the auditors of the Company M/s. Chaturvedi & Shah, Chartered Accountants and M/s. B S R & Co. LLP, Chartered Accountants conforming compliance to the conditions of Corporate Governance as stipulated under Clause 49 of the Listing Agreement, is enclosed to this Report.

Vigil Mechanism

In accordance with Section 177 of the Act and the Listing Agreement, the Company has formulated a Vigil Mechanism to address the genuine concerns, if any of the directors and employees. The details of the same have been stated in the Report on Corporate Governance and the policy can also be accessed on the Company''s website.

Risk Management

The Company has laid down a robust Risk Management Policy, defining Risk profiles involving Strategic, Technological, Operational, Financial, Organisational, Legal and Regulatory risks within a well defined framework. The Risk management Policy acts as an enabler of growth for the Company by helping its businesses to identify the inherent risks, assess, evaluate and monitor these risks continuously and undertake effective steps to manage these risks.

-A Risk Management Committee (RMC) consisting of Shri V. N. Kaul, Chairman and Smt. Chhaya Virani and Shri Soumen Ghosh as members, periodically reviews the robustness of the Risk Management Policy. The periodical update on the risk management practices and mitigation plan of the Company and subsidiaries are presented to the Audit Committee and Board of Directors. The Audit Committee and Board periodically review such updates and findings and suggest areas where internal controls and risk management practices can be improved.

Asset Liability Committee (ALCO) consisting of senior management executives, monitors liquidity and interest rate risks of the Company. The functioning of ALCO is reviewed by the RMC which meets on quarterly basis and reports to the Board of Directors.

Compliance with provisions of Sexual Harassment of Women at workplace (Prevention, Prohibition and Redressal) Act, 2013

The Company is committed to uphold and maintain the dignity of woman employees and it has in place a policy which provides for protection against sexual harassment of women at work place and for prevention and redressal of such complaints. During the year no such complaints were received.

Corporate Social Responsibility

The Company has constituted Corporate Social Responsibility Committee in compliance with the provisions of Section 135 of the Act read with the Companies (Corporate Social Responsibility Policy) Rules 2014. The Corporate Social Responsibility Committee has formulated a Corporate Social Responsibility Policy (CSR policy) indicating the activities to be undertaken by the Company. The CSR policy may be accessed on the Company''s website at the link; http://www.reliancecapital.co.in/pdf/Group_CSR_Policy_ Document.pdf.

The CSR Committee consists of Dr. Bidhubhusan Samal as Chairman, Shri Amitabh Jhunjhunwala and Shri V. N. Kaul, Directors as members.

The disclosures with respect to CSR activities is given in Annexure - F.

Order, if any, passed by regulator or courts or tribunals

No orders have been passed by the regulators or courts or tribunals impacting the going concern status and the Company''s operations.

Internal Financial Controls and their adequacy

The Company has in place adequate internal financial controls across the organization. The same is subject to review periodically by the internal audit cell for its effectiveness. During the year, such controls were tested and no reportable material weakness in the design or operation were observed.

Business Responsibility Statement

SEBI vide its Circular CIR/CFD/DIL/8/2012 dated August 13, 2012, has mandated the top 100 listed entities, based on market capitalisation on BSE Limited and National Stock Exchange of India Limited at March 31, 2012, to include Business Responsibility Report ("BRR ") as part of the Annual Report. In view of FAQ''s issued by SEBI, the BRR has been uploaded on the website of the Company at www.reliancecapital.co.in. Any shareholder interested in obtaining physical copy of BRR may write to the Company Secretary at the Registered Office of the Company.

Acknowledgement

Your Directors would like to express their sincere appreciation for the co-operation and assistance received from shareholders, debenture holders, debenture trustee, bankers, financial institutions, regulatory bodies and other business constituents during the year under review. Your Directors also wish to place on record their deep sense of appreciation for the commitment displayed by all executives, officers and staff, resulting in the successful performance of the Company during the year.



For and on behalf of the Board of Directors



Anil Dhirubhai Ambani

Chairman

Mumbai May 29, 2015


Mar 31, 2014

Dear Shareowners,

The Directors have pleasure in presenting the 28th Annual Report and the audited accounts for the financial year ended March 31, 2014.

Financial Results

The standalone performance of the Company for the financial year ended March 31, 2014 is summarised below:

Particulars Financial Year ended Financial Year ended March 31, 2014 March 31, 2013# (Rs.in crore) (US$ in million*) (Rs. in crore) (US$ in million**)

Total revenue 3254 541 3 868 707

Profit before exceptional items 464 77 704 129

Exceptional Items:

- Investment written off due to merger - - 680 125

- Transfer / (Withdrawal) from General Reserve - - (680) (125)

Profit before tax 464 77 704 129

Tax expense 55 9 42 8

Profit after tax 409 68 662 122

Add: Opening surplus in statement of profit and loss 1 248 208 1 144 210

profit available for appropriation 1 657 276 1 806 332

Proposed dividend including tax on proposed dividend 225 37 211 39

Interim dividend (including tax) - - 144 26

Tax on proposed dividend for earlier years - - 5 1

Transfer to statutory reserve fund 82 14 132 24

Transfer to general reserve 41 7 66 12

* 1 US$ = Rs. 60.10 ** 1 US$ = Rs. 54.39

# Figures of Previous year have been regrouped and reclassifed, wherever required.

Financial Performance

The Company''s gross income for the financial year ended March 31, 2014 decreased to Rs. 3,254 crore, from Rs. 3,868 crore in the previous year, decrease of 15.87 per cent. The operating profit (PBDIT) of the Company decreased by 4.64 per cent to Rs. 2,777 crore during the year, from Rs. 2,912 crore, in the previous year. Interest expenses for the year increased by 4.59 per cent to Rs. 2,279 crore, from Rs. 2,179 crore, in the previous year. Depreciation was at Rs. 34 crore as against Rs. 29 crore in the previous year. The net profit for the year decreased by 38.21 per cent to Rs. 409 crore from Rs. 662 crore, in the previous year. An amount of Rs. 82 crore was transferred to the Statutory Reserve Fund pursuant to Section 45-IC of the Reserve Bank of India Act, 1934, and a net amount of Rs. 41 crore was transferred to the General Reserve during the year under review.

Dividend

Your Directors have recommended a dividend of Rs. 8.50 (85 per cent) per equity share each of Rs. 10 aggregating to Rs. 225 crore (inclusive of dividend tax) for the financial year ended March 31, 2014, which, if approved at the ensuing 28th Annual General Meeting, will be paid to (i) all those equity shareholders whose names appear in the Register of Members as on September 19, 2014, and (ii) to those whose names appear as benefcial owners, as on September 19, 2014 as furnished by the National Securities Depository Limited and Central Depository Services (India) Limited for the purpose.

The Dividend payout as proposed is in accordance with the Company''s policy of paying sustainable dividend linked to long term performance, keeping in view of the capital needs of the Company''s growth plans and desire to achieve optimal fnancing of such plans through internal accruals.

Management Discussion and Analysis

Management Discussion and Analysis Report for the year under review as stipulated under Clause 49 of the Listing Agreement with the Stock Exchanges in India, is presented in a separate section forming part of this Annual Report.

Resources and Liquidity

The Company''s Net Worth as on March 31, 2014, stood at Rs. 11,458 crore. The Company has raised Rs. 18,879 crore during the financial year 2013-14 by issuance of Commercial Paper, Non Convertible Debentures (NCDs) and other money market instruments. The Company has also raised Rs. 174 crore by way of Unsecured Subordinated Non Convertible Debentures (Tier II Bonds) to augment the Capital Adequacy Ratio. The funds were deployed in providing commercial finance and other business requirement. RCL''s debt equity ratio as on March 31, 2014 stood at 2:1.

Capital Adequacy Ratio

Your Company''s Capital to Risk Assets Ratio (CRAR) calculated in line with the Non-Banking Financial (Non-Deposit Accepting or Holding) Companies Prudential Norms (Reserve Bank) Directions, 2007 ("RBI Directions") stood at 16.31 per cent, well above the regulatory minimum of 15 per cent. Your Company''s asset size is Rs. 36,515 crore. The Company has received a certificate from the Auditors of the Company, M/s. Chaturvedi & Shah, Chartered Accountants and M/s. B S R & Co. LLP, Chartered Accountants, pursuant to Non Banking Financial Companies Auditors'' Report (Reserve Bank) Directions, 2008, confrming compliance of the conditions with respect to Systemically Important Non-Deposit taking Non-Banking Financial Companies.

Subsidiaries

During the year under review, Reliance Money Solutions Private Limited, Reliance AIF Management Company Limited and Reliance Capital AIF Trustee Company Private Limited became subsidiaries of the Company and Reliance Venture Asset Management Private Limited, Reliance Capital (Singapore) Pte. Limited, Reliance Financial Advisory Services Limited (formerly Reliance Investment Banking Services Limited), QOPPA Trading Private Limited, QCAP Trade Private Limited, Quant Alternative Asset Management Private Limited and QCAP Securities Private Limited ceased to be subsidiaries of the Company. Quant Capital Securities Private Limited has become and ceased to be a subsidiary during the year.

In accordance with the general circular issued by the Ministry of Corporate Affairs (MCA), Government of India (GoI), Balance Sheet, Statement of profit and Loss and other documents of the subsidiary companies are not attached with the Balance Sheet of the Company. The Company shall make available the copies of annual accounts of the subsidiary companies and related detailed information to the shareholders of the Company seeking the same. The annual accounts of the subsidiary companies will also be kept for inspection by any shareholder at the Registered Office of the Company and that of respective subsidiary companies. Further, pursuant to Accounting Standard (AS-21) prescribed under the Companies (Accounting Standards) Rules, 2006 (Accounting Standards Rules) and the Listing Agreement, Consolidated Financial Statements presented herein by the Company include financial results of subsidiary companies, which forms part of this Annual Report.

Fixed Deposits

The Company has neither accepted nor renewed any fixed deposits during the year. There are no unclaimed deposits, unclaimed / unpaid interest, refunds due to the deposit holders or to be deposited to the Investor Education and Protection Fund as on March 31, 2014.

Directors

In terms of the provisions of the Companies Act, 1956, Shri Amitabh Jhunjhunwala, Director of the Company retires by rotation and being eligible, offers himself for re-appointment at the ensuing Annual General Meeting (AGM). Pursuant to the provisions of the Companies Act, 2013 Shri Rajendra P. Chitale, Dr. Bidhubhusan Samal and Shri V. N. Kaul, Independent Directors of the Company are proposed to be appointed at the ensuing AGM to hold Office for a term of five consecutive years from the date of their appointment at the ensuing Annual General Meeting and that they shall not be liable to retire by rotation.

The Company has received declarations from all the Independent Directors of the Company confrming that they meet with the criteria of independence as prescribed both under sub-section (6) of Section 149 of the Companies Act, 2013 and under Clause 49 of the Listing Agreement with the Stock Exchanges. A brief resume of the Directors being appointed at the ensuing AGM, nature of expertise in Specific functional areas and names of the companies in which they hold directorship and / or membership / chairmanships of Committees of the respective Boards, shareholding and relationship between directors inter se as stipulated under Clause 49 of the Listing Agreement with the Stock Exchanges in India, is given in the section on Corporate Governance Report forming part of this Annual Report.

Directors'' Responsibility Statement

Pursuant to the requirements under Section 217(2AA) of the Companies Act, 1956 with respect to Directors'' Responsibility Statement, it is hereby confrmed that:

(i) in the preparation of the annual accounts for the financial year ended March 31, 2014, the applicable Accounting Standards had been followed alongwith proper explanation relating to material departures, if any;

(ii) the Directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as on March 31, 2014, and of the profit of the Company for the year ended on that date;

(iii) the Directors had taken proper and suffcient care for the maintenance of adequate accounting records in accordance

with the provisions of the Companies Act, 1956, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; and (iv) the Directors had prepared the annual accounts for the financial year ended March 31, 2014 on a ''going concern'' basis.

Consolidated Financial Statement

The Audited Consolidated Financial Statement based on the Financial Statement received from subsidiaries and associates, as approved by their respective Board of Directors have been prepared in accordance with AS-21 on ''Consolidated Financial Statements'' read with AS-23 on ''Accounting for Investments in Associates'' notifed under Section 211 (3C) of the Companies Act, 1956 read with the Accounting Standards Rules as applicable.

Auditors and Auditors'' Report

M/s. Chaturvedi & Shah, Chartered Accountants and M/s. B S R & Co. LLP, Chartered Accountants, the Auditors of the Company hold Office until the conclusion of the ensuing Annual General Meeting and are eligible for re-appointment. The Company has received letters from M/s. Chaturvedi & Shah, Chartered Accountants and M/s. B S R & Co. LLP, Chartered Accountants, to the effect that their appointment, if made, would be within the prescribed limits under Section 141(3)(g) of the Companies Act, 2013, and that they are not disqualifed for re-appointment.

The observations and comments given by Auditors in their report read together with notes to Accounts are self explanatory and hence do not call for any further comments under Section 217 of the Companies Act, 1956.

Particulars of Employees

In terms of the provisions of Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 as amended, the names and other particulars of employees are set out in the Annexure to the Directors'' Report. However, having regard to the provisions of Section 219(1)(b) (iv) of the Companies Act, 1956, the Annual Report excluding the aforesaid information is being sent to all the members of the Company and others entitled thereto. Any member interested in obtaining such particulars may write to the Company Secretary at the Registered Office of the Company.

Corporate Governance

The Company has adopted "Reliance Group – Corporate Governance Policies and Code of Conduct" which has set out the systems, processes and policies conforming to the International Standards and corporate governance guidelines issued by Reserve Bank of India for Non Banking Financial Companies. The report on Corporate Governance as stipulated under Clause 49 of the Listing Agreement with the Stock Exchanges, forms part of this Annual Report. A certificate from the Auditors of the Company M/s. Chaturvedi & Shah, Chartered Accountants and M/s. B S R & Co. LLP, Chartered Accountants, confrming compliance with conditions of Corporate Governance as stipulated under Clause 49 of the Listing Agreement, is enclosed to this Report.

Employees Stock Option Scheme

During the year under review, the Company has not granted any Options to the employees of the Company. Employees Stock Option Scheme (ESOS) was approved and implemented by the Company and Options were granted to employees under ESOS Plan A and Plan B in accordance with the Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 (''the SEBI Guidelines''). The ESOS Compensation Committee, constituted in accordance with the SEBI Guidelines, administers and monitors the Scheme.

The Company has received a certificate from the auditors of the Company that the ESOS Plan A and B have been implemented in accordance with the Guidelines and as per the resolution passed through Postal Ballot on January 8, 2007.

Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo

The particulars as required to be disclosed pursuant to Section 217(1)(e) of the Companies Act, 1956, read with the Companies (Disclosures of Particulars in the Report of Board of Directors) Rules, 1988, are as under:

(1) Part A and B pertaining to conservation of energy and technology absorption are not applicable to the Company.

(2) Foreign exchange earnings and outgo Earnings – Rs. Nil Outgo - Rs. 2 crore

Business Responsibility Statement

SEBI vide its Circular CIR/CFD/DIL/8/2012 dated August 13, 2012, has mandated the top 100 listed entities, based on market capitalisation on BSE Limited and National Stock Exchange of India Limited at March 31, 2012, to include Business Responsibility Report ("BRR") as part of the Annual Report. In view of FAQ''s dated May 10, 2013 issued by SEBI, the BRR has been uploaded on the website of the Company www.reliancecapital.co.in. Any shareholder interested in obtaining physical copy of BRR may write to the Company Secretary at the registered Office of the Company.

Acknowledgements

Your Directors would like to express their sincere appreciation of the co-operation and assistance received from shareholders, debenture holders, debenture trustee, bankers, regulatory bodies and other business constituents during the year under review. Your Directors also wish to place on record their deep sense of appreciation for the commitment displayed by all executives, Officers and staff, resulting in the successful performance of the Company during the year.

For and on behalf of the Board of Directors

Anil Dhirubhai Ambani Chairman

Mumbai

August 21, 2014


Mar 31, 2013

Dear Shareowners,

The Directors have pleasure in presenting the 27th Annual Report and the audited accounts for the financial year ended March 31, 2013.

Financial Results

The standalone performance of the Company for the financial year ended March 31, 2013 is summarised below:

Particulars Financial Year ended Financial Year ended March 31, 2013 March 31, 2012# (Rs. in crore) (US$ in million*) (Rs. in crore) (US$ in million**)

Total revenue 3 868 707 3 317 648

Profit before exceptional items 704 129 621 121

Exceptional Items:

- Investment written off due to merger 680 125 - -

- Loss on sale on investments - - 149 3

- Transfer/(Withdrawal) from General Reserve (680) (125) (149) (3)

Profit before tax 704 129 621 121

Tax expense 42 8 102 20

Profit after tax 662 122 519 101

Add: Opening surplus in statement of profit and loss 1 144 210 1 972 385

Profit available for appropriation 1 806 332 2 491 487

Proposed dividend including tax on proposed dividend 211 39 191 37

Interim Dividend (including tax) 144 26 - -

Tax on proposed dividend for earlier years 5 1 - -

Transfer to statutory reserve fund 132 24 104 20

Transfer to general reserve 66 12 1 052 206

* 1 US$ = Rs. 54.39 ** 1 US$ = Rs. 51.16 (Source: Reserve Bank of India website).

# Figures of Previous year have been regrouped and reclassified, wherever required.

The assets and liabilities of Reliance Equities International Private Limited (REIPL) and Emerging Money Mall Limited (EMML) and its operating results have been incorporated in the Company''s books pursuant to the merger of REIPL and EMML with the Company with effect from March 31, 2013 i.e., the Appointed Date. Accordingly, financial results for the financial year 2012-13 may not be comparable with that of financial year 2011-12.

Financial Performance

The Company''s gross income for the financial year ended March 31, 2013 increased to Rs. 3,868 crore, from Rs. 3,317 crore in the previous year, an increase of 16.62 per cent. The operating profit (PBDIT) of the Company increased by 7.37 per cent to Rs. 2,912 crore during the year, from Rs. 2,712 crore, in the previous year. Interest expenses for the year increased by 5.52 per cent to Rs. 2,179 crore, from Rs. 2,065 crore, in the previous year. Depreciation was at Rs. 29 crore as against Rs. 26 crore in the previous year. The net profit for the year increased by 27.55 per cent to Rs. 662 crore from Rs. 519 crore, in the previous year. An amount of Rs. 132 crore was transferred to the Statutory Reserve Fund pursuant to Section 45-IC of the Reserve Bank of India Act, 1934, and a net amount of Rs. 66 crore was transferred to the General Reserve during the year under review.

Dividend

Your Directors have declared and paid a Special Interim Dividend of Rs. 5 (50 per cent) per Equity Share each of Rs. 10, aggregating to Rs. 144 crore (inclusive of dividend tax).

In addition to the above Special Interim Dividend your Directors have also recommended a Final dividend of Rs. 8 (80 per cent) per equity share each of Rs. 10 aggregating to Rs. 212 crore (inclusive of dividend tax) for the financial year ended March 31, 2013, which, if approved at the ensuing 27th Annual General Meeting, will be paid to (i) all those equity shareholders whose names appear in the Register of Members as on August 16, 2013, and (ii) to those whose names appear as beneficial owners, as on August 16, 2013 as furnished by the National Securities Depository Limited and Central Depository Services (India) Limited for the purpose.

The Dividend payout as proposed is in accordance with the Company''s policy of paying sustainable dividend linked to long term performance, keeping in view of the capital needs of the Company''s growth plans and desire to achieve optimal financing of such plans through internal accruals.

Scheme of Amalgamation

Reliance Equities International Private Limited and Emerging Money Mall Limited have been amalgamated with the Company with effect from March 31, 2013 in terms of the Scheme of Amalgamation sanctioned by the Hon''ble High Court of Judicature at Bombay vide order dated March 22, 2013.

Management Discussion and Analysis

Management Discussion and Analysis Report for the year under review as stipulated under Clause 49 of the Listing Agreement with the Stock Exchanges in India, is presented in a separate section forming part of this Annual Report.

Resources and Liquidity

The Company''s Net worth as on March 31, 2013, stood at Rs. 11,512 crore. The Company has raised Rs. 15,594 crore during the financial year 2012-13 by issuance of Commercial Paper, Non Convertible Debentures (NCDs) and other money market instruments. The Company has also raised Rs. 491 crore by way of Unsecured Subordinated Non Convertible Debentures (Tier II Bonds) to augment the Capital Adequacy Ratio. The funds were deployed in providing commercial finance and other business requirement. RCL''s debt equity ratio as on March 31, 2013 stood at 1.84:1.

Capital Adequacy Ratio

Your Company''s Capital to Risk Assets Ratio (CRAR) calculated in line with the Non-Banking Financial (Non-Deposit Accepting or Holding) Companies Prudential Norms (Reserve Bank) Directions, 2007 ("RBI Directions") stood at 16.99 per cent, well above the regulatory minimum of 15 per cent. Your Company''s asset size is Rs. 33,557 crore. The Company has received a certificate from the Auditors of the Company, M/s. Chaturvedi & Shah, Chartered Accountants and M/s. B S R & Co., Chartered Accountants, pursuant to Non Banking Financial Companies Auditors'' Report (Reserve Bank) Directions, 2008, confirming compliance of the conditions with respect to Systemically Important Non-Deposit taking Non-Banking Financial Companies.

Subsidiaries

During the year under review, Indian Agri Services Private Limited, Emerging Money Mall Limited and Quant Alternative Asset Management Private Limited became subsidiaries of the Company. Reliance Equities International Private Limited and Emerging Money Mall Limited ceased to be subsidiaries on their amalgamation with the Company

In accordance with the general circular issued by the Ministry of Corporate Affairs (MCA), Government of India (GoI), Balance Sheet, Statement of Profit and Loss and other documents of the subsidiary companies are not attached with the Balance Sheet of the Company. The Company shall make available the copies of annual accounts of the subsidiary companies and related detailed information to the shareholders of the Company seeking the same. The annual accounts of the subsidiary companies will also be kept for inspection by any shareholder at the Registered Office of the Company and that of respective subsidiary companies. Further, pursuant to Accounting Standard (AS)-21 prescribed under the Companies (Accounting Standards) Rules, 2006 (Accounting Standards Rules) and the Listing Agreement, Consolidated Financial Statements presented herein by the Company include financial results of subsidiary companies, which forms part of this Annual Report.

Fixed Deposits

The Company has neither accepted nor renewed any fixed deposits during the year. There are no unclaimed deposits, unclaimed / unpaid interest, refunds due to the deposit holders or to be deposited to the Investor Education and Protection Fund as on March 31, 2013.

Directors

In terms of the provisions of the Companies Act, 1956, Shri Rajendra P. Chitale, Director of the Company retires by rotation and being eligible, offers himself for re-appointment at the ensuing Annual General Meeting (AGM).

A brief resume of the Director retiring by rotation at the ensuing AGM, nature of expertise in specific functional areas and names of the companies in which he holds directorship and/ or membership/ chairmanships of Committees of the respective Boards, shareholding and relationship between directors inter se as stipulated under Clause 49 of the Listing Agreement with the Stock Exchanges in India, is given in the section on Corporate Governance Report forming part of this Annual Report.

Shri C. P. Jain ceased to be a Director with effect from September 10, 2012. The Board place on record its deep sense of appreciation for the invaluable contribution made by Shri C. P. Jain during his tenure as director of the Company

Directors'' Responsibility Statement

Pursuant to the requirements under Section 217(2AA) of the Companies Act, 1956 with respect to Directors'' Responsibility Statement, it is hereby confirmed that:

(i) in the preparation of the annual accounts for the financial year ended March 31, 2013, the applicable Accounting Standards had been followed alongwith proper explanation relating to material departures, if any;

(ii) the Directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as on March 31, 2013, and of the profit of the Company for the year ended on that date;

(iii) the Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; and

(iv) the Directors had prepared the annual accounts for the financial year ended March 31, 2013 on a ''going concern'' basis.

Auditors and Auditors'' Report

M/s. Chaturvedi & Shah, Chartered Accountants and M/s. B S R & Co., Chartered Accountants, the Auditors of the Company hold office until the conclusion of the ensuing Annual General Meeting and are eligible for re-appointment.

The Company has received letters from M/s. Chaturvedi & Shah, Chartered Accountants and M/s. B S R & Co., Chartered Accountants, to the effect that their appointment, if made, would be within the prescribed limits under Section 224(1 B) of the Companies Act, 1956, and that they are not disqualified from such appointment within the meaning of Section 226 of the Companies Act, 1 956.

The observations and comments given by Auditors in their report read together with notes to Accounts are self explanatory and hence do not call for any further comments under Section 217 of the Companies Act, 1956.

Consolidated Financial Statements

The Audited Consolidated Financial Statements based on the Financial Statements received from subsidiaries and associates, as approved by their respective Board of Directors have been prepared in accordance with AS-21 on ''Consolidated Financial Statements'' read with AS-23 on ''Accounting for Investments in Associates'' notified under Section 211 (3C) of the Companies Act, 1956 read with the Accounting Standards Rules as applicable.

Particulars of Employees

In terms of the provisions of Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 as amended, the names and other particulars of employees are set out in the Annexure to the Directors'' Report. However, having regard to the provisions of Section 219(1)(b)(iv) of the Companies Act, 1 956, the Annual Report excluding the aforesaid information is being sent to all the members of the Company and others entitled thereto. Any member interested in obtaining such particulars may write to the Company Secretary at the Registered Office of the Company

Employees Stock Option Scheme

During the year under review, the Company has not granted any Options to the employees of the Company. Employees Stock Option Scheme (ESOS) was approved and implemented by the Company and Options were granted to employees under ESOS Plan A and Plan B in accordance with the Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1 999 (''the SEBI Guidelines''). The ESOS Compensation Committee, constituted in accordance with the SEBI Guidelines, administers and monitors the Scheme.

The Company has received a certificate from the auditors of the Company that the ESOS Plan A and B have been implemented in accordance with the Guidelines and as per the resolution passed through Postal Ballot on January 8, 2007.

Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo

The particulars as required to be disclosed pursuant to Section 217(1)(e) of the Companies Act, 1 956, read with the Companies (Disclosures of Particulars in the Report of Board of Directors) Rules, 1988, are as under:

(1) Part A and B pertaining to conservation of energy and technology absorption are not applicable to the Company,

(2) Foreign exchange earnings and outgo Earnings - Rs. Nil Outgo - Rs. 3 crore

Corporate Governance

The Company has adopted "Reliance Group - Corporate Governance Policies and Code of Conduct" which has set out the systems, processes and policies conforming to the International Standards and corporate governance guidelines issued by Reserve Bank of India for Non Banking Financial Companies.

The report on Corporate Governance as stipulated under Clause 49 of the Listing Agreement with the Stock Exchanges, forms part of this Annual Report. A Certificate from the Auditors of the Company M/s. Chaturvedi & Shah, Chartered Accountants and M/s. B S R & Co., Chartered Accountants, confirming compliance with conditions of Corporate Governance as stipulated under Clause 49 of the Listing Agreement, is enclosed to this Report. Acknowledgements

Your Directors would like to express their sincere appreciation of the co-operation and assistance received from shareholders, debenture holders, debenture trustee, bankers, regulatory bodies and other business constituents during the year under review, Your Directors also wish to place on record their deep sense of appreciation for the commitment displayed by all executives, officers and staff, resulting in the successful performance of the Company during the year.

For and on behalf of the Board of Directors

Anil Dhirubhai Ambani Chairman

Mumbai

May 16, 2013


Mar 31, 2011

Dear Shareowners,

The Directors present the 25th Annual Report together with the audited statement of accounts of the Company for financial year ended March 31, 2011.

Financial Results

The standalone performance of the Company for the financial year ended March 31, 2011 is summarised below:

Particulars Financial Year ended Financial Year ended March 31, 2011 March 31, 2010#

(Rs. in crore) (US$ in million*)
Gross Income 1934.01 433.152 389.88 529.39

Gross profit 215.09 48.17 446.49 98.91

Less: Depreciation 14.33 3.21 18.16 4.02

profit before Tax 200.76 44.96 428.33 94.89

Provision for Taxation (28.51) (6.39) 88.91 19.70

Net profit 229.27 51.35 339.42 75.19

Add: profit brought forward from the Previous Year 1971.32 441.51 1,920.52 425.46

profit available for Appropriation 2,200.59 492.85 2,259.94 500.65

Dividend including Dividend Tax 160.65 35.98 186.80 41.38

Transfer to General Reserve 22.93 5.14 33.94 7.52

Transfer to Statutory Reserve Fund 45.85 10.27 67.88 15.04

Balance carried forward 1,971.16 441.47 1,971.32 436.71

*1 US$ = Rs. 44.65 ** 1 US$ = Rs. 45.14 (Source: Reserve Bank of India website). #Figures of Previous Year have been regrouped and reclassified, wherever required.

The assets and liabilities of Reliance Commercial Finance Pvt. Ltd. (RCFPL), a wholly owned subsidiary of the Company and its operating results have been incorporated in the Company's books pursuant to the merger of RCFPL with the Company with effect from April 1, 2010 i.e., the Appointed Date. Accordingly, financial results for the year 2010-11 may not be comparable with that of financial year 2009-10.

Financial Performance

The Company's gross income for the financial year ended March 31, 2011 decreased to Rs. 1,934.01 crore, from Rs. 2,389.88 crore in the previous year, a decline of 24 per cent. The operating profit (PBDIT) of the Company decreased by 17 per cent to Rs. 1,471.70 crore during the year, from Rs. 1,723.69 crore, in the previous year. Interest expenses for the year decreased by 2 per cent to Rs. 1,256.61 crore, from Rs. 1,277.40 crore, in the previous year. Depreciation was at Rs. 14.33 crore as against Rs. 18.16 crore in the previous year. The net provision written back for taxation during the year was Rs. 28.51 crore. The net profit for the year decreased by 48 per cent to Rs. 229.27 crore from Rs. 339.42 crore, in the previous year. An amount of Rs. 45.85 crore was transferred to the Statutory Reserve Fund pursuant to Section 45-IC of the Reserve Bank of India Act, 1934, and an amount of Rs. 22.93 crore was transferred to the General Reserve during the year under review.

Dividend

Your Directors have recommended a dividend of Rs. 6.50 (65 per cent) per equity share aggregating to Rs. 160.65 crore (inclusive of dividend tax) for the financial year ended March 31, 2011, which, if approved at the ensuing Annual General Meeting, will be paid to (i) all those equity shareholders whose names appear in the Register of Members as on September 18, 2011, and (ii) to those whose names appear as beneficial owners, as on September 18, 2011 as furnished by the National Securities

Depository Ltd. and Central Depository Services (India) Ltd. for the purpose.

The Dividend payout as proposed is in accordance with the Company's policy of paying sustainable dividend linked to long term performance, keeping in view of the capital needs of the Company's growth plans and desire to achieve optimal financing of such plans through internal accruals.

Schemes of Arrangement

(a) Amalgamation of Reliance Commercial Finance Pvt. Ltd. with the Company

Reliance Commercial Finance Pvt. Ltd. ('RCFPL'), a wholly owned subsidiary of the Company, has been amalgamated with the Company with effect from April 1, 2010.

(b) Reorganisation of Subsidiaries

i) Infrastructure Division of Reliance Money Infrastructure Pvt. Ltd. has been demerged into Reliance Capital Asset Management Company Ltd. vide Order dated January 13, 2011 of the Hon'ble High Court of Gujarat. The Appointed date was February 17, 2011.

ii) Brokerage and Financial Services Business of Reliance Equities International Pvt. Ltd. has been demerged into Quant Broking Pvt. Ltd. vide Order dated June 14, 2010 of the Hon'ble High Court of Gujarat. The Appointed date was April 1, 2009.

Management Discussion and Analysis Report

The Management Discussion and Analysis Report for the year under review as stipulated under Clause 49 of the listing agreement with the stock exchanges in India, is presented in a separate section forming part of the Annual Report. The Company has entered into various contracts in the areas of financial services business. While benefits from such contracts will accrue in the future years, their progress is periodically reviewed.

Resources and Liquidity

The Company's Net worth as on March 31, 2011, stood at Rs. 6,958.27 crore. The Company has raised Rs. 6,692 crore (net) during the financial year 2010-11 by issuance of Commercial Paper, Non Convertible Debentures (NCDs) and other money market instruments. The Company's NCDs amounting to Rs. 5,092 crore are listed on Bombay Stock Exchange Ltd. as on March 31, 2011. The funds were mainly deployed in providing consumer finance. RCL's debt equity ratio as on March 31, 2011 stood at 2.66:1.

Subsidiaries

During the year, Reliance Exchangenext Limited, Reliance Spot Exchange Infrastructure Limited, Quant Capital Pvt. Ltd., Quant Broking Pvt. Ltd., Quant Securities Pvt. Ltd., Quant Commodities Pvt. Ltd., Quant Commodity Broking Pvt. Ltd., Quant Capital Advisors Pvt. Ltd., Quant Capital Finance and Investments Pvt. Ltd., Reliance Wealth Management Limited, Quant Investment Services Pvt. Ltd., Qoppa Trading Pvt. Ltd. and Valankulam Investments & Trading Pvt. Ltd. became subsidiaries of the Company. Medybiz Pvt. Ltd., Net Logistics Pvt. Ltd. and Reliance Capital Services Pvt. Ltd. ceased to be subsidiaries of the Company.

As per approval granted by the Ministry of Corporate Affairs vide Circular No. 02/2011 dated February 8, 2011, copies of the Balance Sheet, profit and Loss Account, Report of the Board of Directors and Auditors of the subsidiary companies are not being attached to the Balance Sheet of the Company. The financial information of the subsidiary companies as required by the above circular is disclosed under 'Financial Information of Subsidiary Companies', which forms part of the Annual Report.

The Company will make available hard copy of Annual Accounts of the subsidiary companies and the related detailed information to the shareholder of the Company seeking the same.

The annual accounts of the subsidiary companies will also be kept for inspection by any shareholders at the Registered office the Company and that of the respective subsidiary companies.

Further, pursuant to the provisions of Accounting Standard - 21 (AS-21) prescribed under the Companies (Accounting Standards) Rules, 2006 and Listing Agreement as prescribed by the Securities and Exchange Board of India, Consolidated Financial Statements presented by the Company includes financial information of subsidiary companies, which forms part of the Annual Report.

Fixed Deposits

The Company has neither accepted nor renewed any fixed deposits during the year. There are no unclaimed deposits, unclaimed / unpaid interest, refunds due to the deposit holders or to be deposited to the Investor Education and Protection Fund as on March 31, 2011.

Capital Adequacy Ratio

Your Company's Capital to Risk Assets Ratio (CRAR) calculated in line with the Non-Banking Financial (Non-Deposit Accepting or Holding) Companies Prudential Norms (Reserve Bank) Directions, 2007 ("RBI Directions") stood at 17.82 per cent, well above the regulatory minimum of 15 per cent. Your Company's asset size is Rs. 26,538.98 crore. The Company has received a certificate from the Auditors of the Company, M/s. Chaturvedi & Shah, Chartered Accountants and M/s. B S R & Co., Chartered Accountants, pursuant to Non Banking Financial Companies Auditors' Report (Reserve Bank) Directions, 2008, confirming compliance of the conditions with respect to Systemically Important Non-Deposit taking Non-Banking Financial Companies.

Directors

In terms of the provision of the Companies Act, 1956 Shri Amitabh Jhunjhunwala and Shri C. P. Jain, Directors of the Company, retire by rotation and being eligible offer themselves for re-appointment at the ensuing Annual General Meeting.

A brief resume of the Directors retiring by rotation at the ensuing Annual General Meeting, nature of their expertise in specific functional areas and names of companies in which they hold directorship and/or membership/ chairmanship of committees of the board, as stipulated under Clause 49 of the listing agreement with the Stock Exchanges, is given in the section on Corporate Governance elsewhere in the Annual Report.

Directors' Responsibility Statement

Pursuant to the requirement under Section 217(2AA) of the Companies Act, 1956 with respect to Directors' Responsibility Statement, it is hereby confrmed that:

(i) in the preparation of the annual accounts for the financial year ended March 31, 2011, the applicable accounting standards have been followed alongwith proper explanation relating to material departures;

(ii) the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that were reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2011, and of the profit of the Company for the year ended on that date;

(iii) the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; and

(iv) the Directors have prepared the annual accounts for the financial year ended March 31, 2011 on a 'going concern' basis.

Group

Pursuant to intimation received from the Promoters, the names of the Promoters and entities comprising 'Group' as defined under the Monopolies and Restrictive Trade Practices (MRTP) Act, 1969 are disclosed in the Annual Report for the purpose of the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 1997.

The Company had received a certificate from the Auditors of the Company M/s. Chaturvedi & Shah, Chartered Accountants and M/s. B S R & Co., Chartered Accountants, that the Scheme and ESOS Plan A and B have been implemented in accordance with the SEBI Guidelines and as per the resolution passed through Postal Ballot on January 8, 2007.

Consolidated Financial Statements

The Audited Consolidated Financial Statements based on the Financial Statements received from subsidiaries, joint ventures and associates, as approved by their respective Board of Directors and management committee have been prepared in accordance with the Accounting Standard-21 (AS-21) on 'Consolidated Financial Statements' read with Accounting Standard-23 (AS-23) on 'Accounting for Investments in Associates' notified under Section 211 (3C) of the Companies Act, 1956 read with the Companies (Accounting Standards) Rules, 2006, as applicable.

Auditors and Auditors' Report

M/s. Chaturvedi & Shah, Chartered Accountants and M/s. B S R & Co., Chartered Accountants, as Auditors of the Company, hold office until the conclusion of the ensuing Annual General Meeting and are eligible for re-appointment.

The Company has received letters from M/s. Chaturvedi & Shah, Chartered Accountants and M/s. B S R & Co., Chartered Accountants, to the effect that their appointment, if made, would be within the prescribed limits under Section 224(1B) of the Companies Act, 1956, and that they are not disQualified for such appointment within the meaning of Section 226 of the Companies Act, 1956.

The observations and comments given by Auditors in their report read together with notes to Accounts are self explanatory and hence do not call for any further comments under Section 217 of the Companies Act, 1956.

Particulars of Employees

In terms of the provisions of Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 and the Companies (Particular of Employees) Amendment Rules, 2011, the names and other particulars of employees are set out in the Annexure to the Directors' Report. However, having regard to the provisions of Section 219(1)(b) (iv) of the Companies Act, 1956, the Annual Report excluding the aforesaid information is being sent to all the members of the Company and others entitled thereto. Any member interested in obtaining such particulars may write to the Company Secretary at the Registered office of the Company.

Energy Conservation, Technology Absorption and Foreign Exchange Earnings and Outgo

Particulars required to be furnished under the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988, are as under:

(1) Part A and B pertaining to conservation of energy and technology absorption are not applicable to the Company.

Transfer of unclaimed dividend to Investor Education and Protection Fund (IEPF)

Pursuant to the provisions of Section 205(A) of the Companies Act, 1956, the declared dividend which remained unclaimed for a period of 7 years has been transferred by the Company to the Investor Education and Protection Fund established by the Central Government pursuant to Section 205C of the said Act.

Corporate Governance

The Company has adopted the "Reliance Group - Corporate Governance Policies and Code of Conduct" which has set out the systems, processes and policies conforming to International Standards and corporate governance guidelines issued by Reserve Bank of India for Non Banking Financial Companies. The corporate governance framework in the Company is based on an effective independent Board, the separation of the Board's supervisory role from the executive management and the constitution of Board Committees, generally comprising a majority of independent Directors and chaired by an independent Director, to oversee critical areas. This Code is also available on the website of the Company www.reliancecapital.co.in.

In terms of Clause 49 of the Listing Agreement, a confirmation from the Company Secretary & Manager of the Company regarding compliance with the Code by all the Directors and senior management forms part of this Annual Report.

The report on Corporate Governance as stipulated under Clause 49 of the listing agreement with the Stock Exchanges, forms part of the Annual Report. A certificate from the Auditors of the Company M/s. Chaturvedi & Shah, Chartered Accountants and M/s. B S R & Co., Chartered Accountants, confirming compliance with conditions of Corporate Governance as stipulated under the aforesaid Clause 49 is attached to this Report.

Acknowledgements

Your Directors would like to express their sincere appreciation of the co-operation and assistance received from shareholders, debentureholders, bankers, regulatory bodies and other business constituents during the year under review. Your Directors also wish to place on record their deep sense of appreciation for the commitment displayed by all executives, officers and staff, resulting in the successful performance of the Company during the year.

For and on behalf of the Board of Directors

Anil Dhirubhai Ambani Chairman

Mumbai May 30, 2011



 
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