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Notes to Accounts of Reliance Capital Ltd.

Mar 31, 2015

1. Background

Reliance Capital Limited (''the Company'') is registered as a Non-Banking Financial Company (''NBFC'') as defined under Section 45-IA of the Reserve Bank of India Act, 1934. The Company is principally engaged in lending and investing activities.

2. During the year, Reliance Land Private Limited and Reliance Share and Stock Brokers Private Limited ceased to be associate of the company.

3. The Company has been allotted Warrants without paying any consideration at the time of allotment.

4. The Company has entered into a joint venture with KGS Developers Limited in respect of real estate project development. The Company has invested Rs. 85 crore and is entitled to share the Profit / Loss equally. However assets, liabilities, revenue and expenses related to the project are not included in the financial statements of the Company as it does not meet the definition criteria of a Joint Venture under AS 27 ''''Financial Reporting of Interests in Joint Ventures ".

5. Investments includes Rs. 61 crore (Previous year Rs. 9 crore) of equity shares given as collateral/pledge towards margin with brokers.

6. Investments in 22,90,393 equity shares of TV18 Broadcast Limited amounting to Rs. 5 crore (Previous year Rs. Nil) and 33197 equity shares of Jindal Saw Limited amounting to Rs. 29,96,693 (Previous Year Rs. Nil) are given to comply with the margin requirements thus these securities are not held in the name of Company.

7. During the year, Nippon Life Insurance Company (NLIC), has acquired 9% equity shareholding in Reliance Capital Asset Management Limited (subsidiary of the Company).

8 Security clause / maturity profiles in respect to Secured Loans from banks / debentures

(i) Non convertible debentures (NCDs) are redeemable at par, in one or more instalments, on various dates:

(a) NCDs amounting to Rs. 4,686 crore (Previous year Rs. 5,447 crore) are secured by way of first pari passu legal mortgage and charge over the premises situated at Avdesh House, near Pritam Nagar, Ellisbridge, Ahmedabad and additional first pari passu charge by way of hypothecation on present and future book debts / business receivables of the Company. Business receivables includes Fixed Asset, Current Assets, Investments and any other assets, against security not exceeding Rs. 4,935 crore (Previous year Rs. 5,697 crore).

(b) NCDs amounting to Rs. 5,184 crore (Previous year Rs. 2,453 crore) are secured by way of first pari passu legal mortgage and charge over the premises situated at Avdesh House, near Pritam Nagar, Ellisbridge, Ahmedabad and additional first pari passu charge by way of hypothecation on present and future book debts / business receivables of the Company (except security towards securing Outstanding Term Loan and Cash Credit Limits). Business receivables includes Current Assets and Investments, against security not exceeding Rs. 5,509 crore (Previous year Rs. 2,778 crore).

(c) Unsecured NCDs amounting to Rs. 1,423 crore(Previous year Rs. 1,173 crore) are in respect to Tier II subordinate debts.

(d) Maturity profile and Rate of interest of Long Term NCDs are as set out below:

9 Tax on Proposed Dividend

In view of Section 115- O of the Income Ta x Act, 1961, the Company has reduced its dividend tax liabilities to the extent dividend received / receivable from its subsidiary company. During the year Company has received the following dividend from Reliance Capital Asset Management Limited (RCAM) :

10 Employees Stock Option Plans

The Company operates two Employee Stock Option Plans; ESOS Plan A and ESOS Plan B introduced in the financial year 2009-10, which cover eligible employees of the Company, the Holding Company and its subsidiaries. The vesting of the options is from expiry of one year and ranges till four to five years as per Plan under the respective ESOS(s). Each Option entitles the holder thereof to apply for and be allotted / transferred one Equity Share of the Company of Rs. 10 each upon payment of the exercise price during the exercise period. The Company implements and manages the ESOS plan through a trust. Advance of Rs. 62 crore (net of diminution Rs. 64 crore) [Previous year Rs. 64 crore (net of diminution Rs. 64 crore)] has been granted to Trust. Out of the said advance Trust has purchased 16,00,000 (Previous year 16,00,000) Equity Shares for the above purpose. Details of scheme of Employee Stock Option Plans are as under :

-Notes:

i) The above figures are shown in rupees in crore with two decimals to be more representative.

ii) The estimates of future salary increases considered in actuarial valuation takes into account inflation, seniority, promotion and other relevant factors.

iii) General Descriptions of significant defined plans:

a) Gratuity plan

Gratuity is payable to all eligible employees of the Company on superannuation, death and permanent disablement, in terms of the provisions of the Payment of Gratuity Act 1972 or as per the Company''s Scheme whichever is more beneficial.

b) Leave plan

Encashment of leave can be availed by the employee for balance in the earned account as on January 1, 2009. All carry forward earned leaves with a maximum limit of 10 Days, are available for a ailment but not for encashment.

11 Segment reporting

As per paragraph 4 of Accounting Standard (AS-17), on "Segment Reporting " notified by the Companies (Accounting Standards) Rules 2006, where a single financial report contains both consolidated financial statements and the separate financial statements of the holding company, segment reporting needs to be presented only on the basis of consolidated financial statements. In view of this, segment information has been presented at Note No. 40 of the consolidated financial statements..

12 Related party disclosures

A. List of Related Parties and their relationship:

i) Holding Company Reliance Innovators Private Limited (ceased w.e.f. March 27, 2015)

ii) Subsidiary of Holding Company*

Reliance Inceptum Private Limited (Formerly AAA Enterprises Private Limited)

*ceased w.e.f. March 27, 2015, thereafter Major Investing Party.

-Notes :

i) Figures in bracket indicate previous year figures.

ii) Expenses incurred towards public utilities services such as telephone and electricity charges have not been considered for related party transaction.

iii) The above discloses transactions entered during the period of existence of related party relationship. The balances and transactions are not disclosed before existence of related party relationship and after cessation of related party relationship.

iv) In addition to the above Director Sitting Fees of Rs. 2 60 000 (Previous year Rs. 80 000) has been paid to Shri Anil D. Ambani, an individual having control.

v) The Company has, during the previous year, sold part of its holding in unlisted equity shares of: Reliance Land Private Limited representing 45% stake (No. of shares 45 00 000, carrying value Rs. 4 crore) and Reliance Share & Stock Brokers Private Limited representing 45% stake (No. of shares 45 00 000, carrying value Rs. 4 crore).

Considering that these shares were sold to Company''s wholly owned subsidiaries and do not impact the economic interests of the Company''s shareholders, the consideration for the sale were fixed at a price equal to or slightly above their cost and not at their fair values (not ascertained) which are significantly higher.

13 Leases

The Company has given assets on Operating lease (refer Note No. 14). Disclosure as per Accounting Standard (AS-19), on "Leases " notified by the Companies (Accounting Standards) Rules 2006:


Mar 31, 2014

1. Background

Reliance Capital Limited (''the Company'') is registered as a Non-Banking Financial Company (''NBFC'') as Defined under Section 45-IA of the Reserve Bank of India Act, 1934. The Company is principally engaged in lending and investing activities.

2. Investments includes Rs. 9 crore (Previous year Rs. 63 crore) of equity shares given as collateral towards margin with brokers.

3. The Company has been allotted Warrants without paying any consideration at the time of allotment.

4. The Company has entered into a joint venture with KGS Developers Limited in respect of real estate project development. The Company has invested Rs. 85 crore and is entitled to share the profit / Loss equally. However assets, liabilities, revenue and expenses related to the project are not included in the financial statements of the Company as it does not meet the defnition criteria of a Joint Venture under AS 27 ''''Financial Reporting of Interests in Joint Ventures".

5. Investment in 38,85,24,405 (Previous year 38,85,24,405) equity shares of Reliance Life Insurance Company Limited, 9,000 (Previous year 9,000) equity shares of Reliance CWT India Limited and 30,000 (Previous year 30,000) equity shares of Viscount Management Services Limited are carried at fair value i.e. at amount transferred under the scheme of amalgamation..

6. During the year the Company has alloted 794,478 equity shares and 236,917 preference shares of Grover Vineyards Limited as per Scheme of Amalgamation of Grover Vineyards Limited and Vallee De Vine Private Limited. After the Amalgamation, Grover Vineyards Limited has change its name to Grover Zampa Vineyards Limited.

7. During the year Reliance Venture Asset Management Private Limited, Reliance Capital (Singapore) Pte. Limited and Reliance Financial Advisory Services Limited (Formerly Reliance Investment Banking Services Limited) ceased to be subsidiaries of the Company.

8. Reliance Broadcast Network Limited got delisted from stock exchanges during the year, hence disclosed under the unquoted investments.

9. Ventura Textiles Limited has been suspended from stock exchanges during the year.

10 Security clause / maturity profles in respect to Secured Loans from banks / debentures

(i) Non convertible debentures (NCDs) are redeemable at par, in one or more installments, on various dates:

(a) NCDs amounting to Rs. 5,447 crore (Previous year Rs. 2,922 crore) are secured by way of first pari passu legal mortgage and charge over the premises situated at Avdesh House, near Pritam Nagar, Ellisbridge, Ahmedabad and additional first pari passu charge by way of hypothecation on present and future book debts / business receivables of the Company. Business receivables includes Fixed Asset, Current Assets, Investments and any other assets, against security not exceeding Rs. 5,697 crore (Previous year Rs. 2,480 crore).

(b) NCDs amounting to Rs. 2,453 crore (Previous year Rs. 3,494 crore) are secured by way of first pari passu legal mortgage and charge over the premises situated at Avdesh House, near Pritam Nagar, Ellisbridge, Ahmedabad and additional first pari passu charge by way of hypothecation on present and future book debts / business receivables of the Company (except security towards securing Outstanding Term Loan and Cash Credit Limits). Business receivables includes Current Assets and Investments, against security not exceeding Rs. 2,778 crore (Previous year Rs. 3,760 crore).

(c) The Company is in the process of creating security on the remaining NCDs amounting to Rs. Nil (Previous year Rs. 567 crore).

11 Amalgamation

Scheme of Amalgamation between Company, Reliance Equities International Private Limited (REIPL) and Emerging Money Mall Limited (EMML)

The Scheme of Amalgamation ("the Scheme") under Sections 391 to 394 of the Companies Act, 1956 between Company, REIPL and EMML has been sanctioned by the Hon''ble High Court of Judicature at Bombay vide Order dated March 22, 2013. The scheme became effective on April 17, 2013 on fling with the Registrar of Companies (RoC) with effect from March 31, 2013 i.e. Appointed Date.

REIPL was incorporated with the main object of providing broking services to institutional investors and EMML was incorporated with the main object of e-commerce. The amalgamation has been accounted for under the "Purchase method" as prescribed by Accounting Standard (AS-14) on "Accounting for Amalgamation" notifed under the Companies (Accounting Standards) Rules, 2006. The Company has carried out the accounting treatment prescribed in the Scheme as sanctioned by the Hon''ble High Court of Judicature at Bombay. The required disclosures as per paragraph 42 of Accounting Standard (AS-14) ''Accounting for Amalgamations'' as prescribed under the Companies (Accounting Standards) Rules, 2006 has been provided. Hence, in accordance with the Scheme:- (i) As entire issued, subscribed and paid up share capital of REIPL and EMML was held by the Company, no shares of the Company have been allotted in lieu or exchange of its holding in REIPL and EMML. Consequent to the Scheme the share capital of REIPL and EMML stands cancelled.

(iii) All Inter-company balances including liabilities on account of loans and advances amounting to Rs. 186 crore on Appointed Date also stand cancelled. Consequent upon the above Scheme of Amalgamation, there has been a reduction of Rs. 69 crore in the value of investments in Viscount Management Services Limited which has been debited to Capital Reserve.

(iv) Difference aggregating to Rs. 846 crore after recording both above said items being the excess arising on transfer under the Scheme of assets and liabilities has been credited to Capital Reserve. The reserve created pursuant to the Scheme shall for all regulatory and accounting purposes be considered to be part of the owned funds / net worth of the Company.

(v) In accordance with the provisions of the Scheme of Amalgamation of Reliance Commercial Finance Private Limited (RCFPL) with the Company ("the 2011 Scheme") sanctioned by the Hon''ble High Court of Judicature at Bombay vide order dated April 29,2011, an equivalent amount, equivalent to the investments written off amounting to Rs. 680 crore determined as an exceptional item by the Board of Directors of the Company, has been withdrawn from General Reserve to offset the same and credited to the Statement of profit and Loss so that there is no impact on profit before tax for the year.

Had both the Schemes not prescribed the above accounting treatment and Company has followed accounting treatment prescribed under Accounting Standard (AS - 14), the General reserve would have been higher by Rs. 680 crore and the balance in the statement of profit and loss would have been lower by Rs. 680 crore for the year ended March 31, 2013.

12 Business Transfer Agreement

In terms of Business Transfer Agreement (BTA) dated April 26, 2010 further amended on January 31, 2011 with its subsidiary company i.e. Reliance Home Finance Limited the Company hold loan assets of Rs. 8 crore (Previous year Rs. 11 crore) related to Reliance Home Finance Limited in the trust capacity as on March 31, 2014.

13 The Company is a partner in Reliance Capital Partners

a) The frm consists of following partners and their balances:

14 Employees Stock Option Plans

The Company operates two Employees Stock Option Plans; ESOS Plan A and ESOS Plan B introduced in the financial year 2009-10, which cover eligible employees of the Company, the Holding Company and its subsidiaries. The vesting of the options is from expiry of one year and ranges till four to five years as per Plan under the respective ESOS(s). Each Option entitles the holder thereof to apply for and be allotted / transferred one Equity Share of the Company of Rs. 10 each upon payment of the exercise price during the exercise period. The Company implements and manages the ESOS plan through a trust. Advance of Rs. 64 crore (net of diminution Rs. 64 crore) [Previous year Rs. 64 crore (net of diminution Rs. 64 crore)] has been granted to Trust. Out of the said advance Trust has purchased 16,00,000 (Previous year 16,00,000) Equity Shares for the above purpose.

b) Defined benefit plans

The following tables summarise the components of the net employee benefit expenses recognised in the Statement of profit and Loss, the fund status and amount recognised in the balance sheet for the gratuity benefit plan and leave encashment plan.

15 Segment reporting

As per paragraph 4 of Accounting Standard (AS - 17), on "Segment Reporting" notifed by the Companies (Accounting Standards) Rules 2006, where a single financial report contains both consolidated financial statements and the separate financial statements of the holding company, segment reporting needs to be presented only on the basis of consolidated financial statements. In view of this, segment information has been presented at Note No. 41 of the consolidated financial statements.

16 Related party disclosures

A. List of Related Parties and their relationship: i) Holding Company

Reliance Innoventures Private Limited

ii) Subsidiary of Holding Company

AAA Enterprises Private Limited

iii) Individual Promoter

Shri Anil D. Ambani, the person having control during the year

iv) Subsidiaries

1 Reliance Capital Asset Management Limited

2 Reliance Capital Asset Management (UK) Plc

3 Reliance Asset Management (Malaysia) SDN BHD

4 Reliance Asset Management (Mauritius) Limited

5 Reliance Asset Management (Singapore) Pte. Limited

6 Reliance Capital Pension Fund Limited

7 Reliance AIF Management Company Limited (w.e.f. September 30, 2013)

8 Reliance Capital Trustee Co. Limited

9 Reliance General Insurance Company Limited

10 Reliance Gilts Limited

11 Reliance Home Finance Limited

12 Reliance Equity Advisors (India) Limited

13 Reliance Consultants (Mauritius) Limited

14 Reliance Alternative Investments Services Private Limited

15 Reliance Exchangenext Limited

16 Reliance Spot Exchange Infrastructure Limited

17 Indian Agri Services Private Limited

18 Reliance Securities Limited

19 Reliance Composite Insurance Broking Limited

20 Reliance Commodities Limited

21 Reliance Financial Limited

22 Reliance Financial Advisory Services Limited (formerly Reliance Investment Banking Services Limited) (ceased w.e.f. March 29, 2014)

23 Reliance Wealth Management Limited

24 Reliance Money Express Limited

25 Reliance Money Precious Metals Private Limited

26 Reliance Money Solutions Private Limited (w.e.f. December 2, 2013)

27 Reliance Venture Asset Management Private Limited (ceased w.e.f March 29, 2014)

28 Reliance Capital (Singapore) Pte Limited (ceased w.e.f March 26, 2014)

29 Reliance Capital AIF Trustee Company Private Limited (w.e.f. April 11, 2013)

30 Quant Capital Private Limited

31 Quant Broking Private Limited

32 Quant Capital Advisors Private Limited

33 Quant Securities Private Limited

34 Quant Commodity Broking Private Limited

35 Quant Commodities Private Limited

36 Quant Investments Services Private Limited

37 QOPPA Trading Private Limited (ceased w.e.f. March 26, 2014)

38 QCAP Trade Private Limited (ceased w.e.f. March 26, 2014)

39 Quant Alternative Asset Management Private Limited (ceased w.e.f. March 26, 2014)

40 Quant Capital Finance and Investments Private Limited

41 Quant Capital Securities Private Limited (w.e.f. August 22, 2013)

(ceased w.e.f. March 26, 2014)

42 QCAP Securities Private Limited (w.e.f. August 22, 2013) (ceased w.e.f. March 26, 2014)

v) Partnership frm

Reliance Capital Partners vi) Associates

1 Ammolite Holdings Limited

2 Indian Commodity Exchange Limited

3 Reliance Asset Reconstruction Company Limited

4 Reliance Land Private Limited

5 Reliance Life Insurance Company Limited

6 Reliance Share & Stock Brokers Private Limited

vii) Fellow subsidiaries

1 AAA Entertainment Private Limited

2 Big Flicks Private Limited

3 Zapak Mobile Games Private Limited (formerly Jump Games Private Limited)

4 Reliance Big Entertainment Private Limited

5 Reliance Communications Infrastructure Limited

6 Reliance Infratel Limited

7 Reliance Globalcom Limited

8 Reliance Communications Limited

9 Reliance Infocomm Infrastructure Limited

10 Reliance Webstore Limited

11 Zapak Digital Entertainment Limited

viii) Key management personnel

Shri V. R. Mohan - President & Company Secretary

B. Other related parties with whom transactions have taken place during the year

i) Enterprise over which individual described in clause A (iii) above has control Reliance Power Limited Reliance Cleangen Limited Jharkhand Integrated Power Limited

iv) In addition to the above, Commission of Rs. Nil (Previous year Rs. Nil) and Director Sitting Fees of Rs. 80 000 (Previous year Rs. 1 20 000) has been paid to Shri Anil D. Ambani, an individual having control. v) The Company has, during the year, sold part of its holding in unlisted equity shares of: Reliance Land Private Limited representing 45% stake (No. of shares 45 00 000, carrying value Rs. 4 crore) and Reliance Share & Stock Brokers Private Limited representing 45% stake (No. of shares 45 00 000, carrying value Rs. 4 crore).

Considering that these shares were sold to Company''s wholly owned subsidiaries and do not impact the economic interests of the Company''s shareholders, the consideration for the sale were fixed at a price equal to or slightly above their cost and not at their fair values (not ascertained) which are significantly higher.

17 During the previous year Nippon Life Insurance Company (NLIC) has acquired 26% equity shareholding in Reliance Capital Asset Management Company Limited (RCAM). The Company has waived its entitlement of bonus shares issued by RCAM.

18 Contingent Liabilities and Commitments (As certified by the Management)

(Rs. in crore)

Particulars March 31, 2014 March 31, 2013

Contingent Liabilities

i) Guarantees to Banks and Financial Institutions on behalf of third parties 2 416 1 281

ii) Claims against the Company not acknowledged as debt 12 20 Commitments

iii) Estimated amount of contracts remaining to be executed on capital account 85 38 (net of advances)

iv) Undrawn Committed Credit lines 678 434

v) Uncalled amount of Investments 7 56

19 In the opinion of management, all the assets other than fixed assets and non current investments are approximately of the value stated if realised in the ordinary course of business.


Mar 31, 2013

1. Background

Reliance Capital Limited (''the Company'') is registered as a Non-Banking Financial Company (''NBFC'') as defined under Section 45-IA of the Reserve Bank of India Act, 1934. The Company is principally engaged in lending and investing activities.

2 Security clause / maturity profiles in respect to Secured Loans from banks / debentures

(i) Non convertible debentures (NCDs) are redeemable at par, in one or more installments, on various dates.

(a) NCDs amounting to Rs. Nil (Previous year Rs. 5 crore) are secured by way of first pari passu legal mortgage and charge over the premises situated at Avdesh House near Pritam Nagar, Ellisbridge, Ahmedabad and additional first pari passu charge by way of hypothecation on business receivables and loan assets of the commercial finance division, against security not exceeding Rs. Nil (Previous year Rs. 6 crore).

(b) NCDs amounting to Rs. 5,849 crore (Previous year Rs. 5,686 crore) are secured by way of first pari passu legal mortgage and charge over the premises situated at Avdesh House near Pritam Nagar, Ellisbridge, Ahmedabad and additional first pari passu charge by way of hypothecation on present and future book debts / business receivables of the Company. Business receivables includes Fixed Asset, Current Assets, Investments and any other assets, against security not exceeding Rs. 6,341 crore (Previous year Rs. 6,111 crore).

(c) The Company is in the process of creating security on the remaining NCDs amounting to Rs. 567 crore (Previous year Rs. 75 crore).

(d) Maturity profile and Rate of interest of Long Term NCDs are as set out below:

3 Amalgamation

I Scheme of Amalgamation between Company, Reliance Equities International Private Limited (REIPL) and Emerging Money Mall Limited (EMML)

The Scheme of Amalgamation ("the Scheme") under Sections 391 to 394 of the Companies Act, 1956 between Company, REIPL and EMML has been sanctioned by the Hon''ble High Court of Judicature at Bombay vide Order dated March 22, 2013. The scheme became effective on April 17, 2013 on filing with the Registrar of Companies (RoC) with effect from March 31, 2013 i.e. Appointed Date.

REIPL was incorporated with the main object of providing broking services to institutional investors and EMML was incorporated with the main object of e-commerce. The amalgamation has been accounted for under the "Purchase method" as prescribed by Accounting Standard (AS-14) on "Accounting for Amalgamation" notified under the Companies (Accounting Standards) Rules, 2006. The Company has carried out the accounting treatment prescribed in the Scheme as sanctioned by the Hon''ble High Court of Judicature at Bombay. The required disclosures as per paragraph 42 of Accounting Standard (AS-14) ''Accounting for Amalgamations'' as prescribed under the Companies (Accounting Standards) Rules, 2006 has been provided.

Hence, in accordance with the Scheme:-

(i) As entire issued, subscribed and paid up share capital of REIPL and EMML was held by the Company, no shares of the Company have been allotted in lieu or exchange of its holding in REIPL and EMML. Consequent to the Scheme the share capital of REIPL and EMML stands cancelled.

(ii) On Scheme becoming effective with effect from Appointed Date, the Company has written off its cancelled investments amounting to Rs. 680 crore in REIPL and EMML to the Statement of Profit and Loss of the Company for the year and recorded all the assets aggregating to Rs. 1,103 crore and liabilities aggregating to Rs. 188 crore as appearing in the books of REIPL and EMML at their respective fair value as decided by the Board of Directors of the Company. The net assets taken over include:

(iii) All Inter-company balances including liabilities on account of loans and advances amounting to Rs. 186 crore on Appointed Date also stand cancelled. Consequent upon the above Scheme of Amalgamation, there has been a reduction of Rs. 69 crore in the value of investments in Viscount Management Services Limited which has been debited to Capital Reserve.

(iv) Difference aggregating to Rs. 846 crore after recording both above said items being the excess arising on transfer under the Scheme of assets and liabilities has been credited to Capital Reserve. The reserve created pursuant to the Scheme shall for all regulatory and accounting purposes be considered to be part of the owned funds / net worth of the Company

(v) In accordance with the provisions of the Scheme of Amalgamation of Reliance Commercial Finance Private Limited (RCFPL) with the Company ("the 2011 Scheme") sanctioned by the Hon''ble High Court of Judicature at Bombay vide order dated April 29,201 1, an equivalent amount, equivalent to the investments written off amounting to Rs. 680 crore determined as an exceptional item by the Board of Directors of the Company, has been withdrawn from General Reserve to offset the same and credited to the Statement of Profit and Loss so that there is no impact on profit before tax for the year.

Had both the Schemes not prescribed the above accounting treatment and Company has followed accounting treatment prescribed under Accounting Standard (AS - 14), the General reserve would have been higher by Rs. 680 crore and the balance in the statement of profit and loss would have been lower by Rs.680 crore.

II Scheme of Amalgamation between Company and Viscount Management Services (Alpha) Limited (VMSAL)

The Scheme of Amalgamation ("the Scheme") under Sections 391 to 394 of the Companies Act, 1956 between Company and VMSAL was sanctioned by the Hon''ble High Court of Judicature at Bombay vide Order dated January 20, 201 2. The scheme became effective on March 12, 2012 on filing with the Registrar of Companies (RoC) with effect from October 1, 2011 i.e. Appointed Date.

VMSAL was incorporated with the main object of business consultancy service. The amalgamation has been accounted for under the "Purchase method" as prescribed by Accounting Standard (AS-14) on "Accounting for Amalgamation" notified under the Companies (Accounting Standards) Rules, 2006. The Company has carried out the accounting treatment prescribed in the Scheme as sanctioned by the Hon''ble High Court of Judicature at Bombay. The required disclosures as per paragraph 42 of Accounting Standard (AS-14) ''Accounting for Amalgamations'' as prescribed under the Companies (Accounting Standards) Rules, 2006 has been provided.

Hence, in accordance with the Scheme:-

(i) Before Scheme becomes effective the entire issued, subscribed and paid up share capital was held by the Company No shares of the Company have been allotted in lieu or exchange of its holding in VMSAL and share capital of VMSAL stands cancelled.

(ii) On Scheme becoming effective with effect from Appointed Date, the Company has recorded all the assets aggregating to Rs. 5,839 crore and liabilities aggregating to Rs. 1,385 crore as appearing in the books of VMSAL at their respective fair value as decided by the Board of Directors of the Company. The net assets taken over include:

(iii) All inter-company balances including liabilities on account of debentures and inter-company investments amounting to Rs. 1,385 crore on appointed date stands cancelled. The excess amount of investments amounting to Rs. 679 crore has been debited to general reserve toward inter-company investments cancellation.

(iv) Difference aggregating to Rs. 3,774 crore after recording both above said items being the excess arising on transfer of assets and liabilities has been credited to General Reserve.

(v) Difference in accounting method between the Company and VMSAL amounitng to Rs. 62 crore has been credited to General Reserve pursuant to the Scheme.

Had the Scheme not prescribed the above accounting treatments, the difference of Rs. 3,837 crore would have been credited to Capital Reserve instead of General Reserve and General Reserve would have been lower by equivalent amount.

III In accordance with the provisions of the Scheme of Amalgamation of Reliance Commercial Finance Private Limited (RCFPL) with the Company ("the Scheme") sanctioned by the Hon''ble High Court of Judicature at Bombay vide order dated April 29, 201 1, the loss on sale of long term investments amounting to Rs. 149 crore determined as an exceptional item by the Board of Directors of the Company has been debited in the statement of profit and loss for the previous year ended March 31, 2012. As per the Scheme and legal opinion obtained by the Company equivalent amount has been withdrawn from General Reserve to adjust the same, which has been disclosed accordingly. Had such losses not been met from General Reserve, the Company would have reflected a profit before tax of Rs. 472 crore and Profit after tax for the year would have been Rs. 370 crore.

4 Business Transfer Agreement

In terms of Business Transfer Agreement (BTA) dated April 26, 2010 further amended on January 31, 2011 with its subsidiary company i.e. Reliance Home Finance Limited, the Company hold loan assets of Rs. 11 crore (Previous year Rs. 42 crore) related to Reliance Home Finance Limited in a trust capacity as on March 31, 2013.

5 Employee Stock Option Plans

The Company operates two Employee Stock Option Plans; ESOS Plan A and ESOS Plan B introduced in the financial year 2009-10, which cover eligible employees of the Company, the Holding Company and its subsidiaries. The vesting of the options is from expiry of one year and ranges till four to five years as per Plan under the respective ESOS(s). Each Option entitles the holder thereof to apply for and be allotted / transferred one Equity Share of the Company of Rs. 10 each upon payment of the exercise price during the exercise period. The Company implements and manages the ESOS plan through a trust. Advance of Rs. 64 crore (net of diminution Rs. 64 crore) [Previous year Rs. 130 crore (net of diminution Rs. Nil)] has been granted to Trust. Out of the said advance Trust has purchased 16,00,000 (Previous year 16,00,000) Equity Shares for the above purpose.

6 Segment reporting

As per paragraph 4 of Accounting Standard (AS-17), on "Segment Reporting" notified by the Companies (Accounting Standards) Rules 2006, where a single financial report contains both consolidated financial statements and the separate financial statements of the holding company, segment reporting needs to be presented only on the basis of consolidated financial statements. In view of this, segment information has been presented at Note No. 40 of the consolidated financial statements.

7 Related party disclosures

A. List of Related Parties and their relationship:

i) Holding Company

Reliance Innoventures Private Limited

ii) Subsidiary of Holding Company

AAA Enterprises Private Limited

iii) Individual Promoter

Shri Anil D. Ambani, the person having control during the year

iv) Subsidiaries

Reliance Capital Asset Management Limited

Reliance Capital Asset Management (UK) Plc

Reliance Asset Management (Malaysia) SDN BHD

Reliance Asset Management (Mauritius) Limited

Reliance Asset Management (Singapore) Pte. Limited

Reliance Capital Pension Fund Limited

Reliance Capital Trustee Company Limited

Reliance General Insurance Company Limited

Reliance Gilts Limited

Reliance Home Finance Limited

Reliance Equity Advisors (India) Limited

Reliance Consultants (Mauritius) Limited

Reliance Exchangenext Limited

Reliance Spot Exchange Infrastructure Limited

Indian Agri Services Private Limited (w.e.f April 30, 2012)

Reliance Securities Limited

Reliance Wealth Management Limited

Reliance Financial Limited

Reliance Money Precious Metals Private Limited

Reliance Commodities Limited

Reliance Investment Banking Services Limited

Reliance Money Express Limited

Reliance Composite Insurance Broking Limited

Reliance Alternative Investments Services Private Limited

Reliance Capital (Singapore) Pte Limited

Reliance Venture Asset Management Private Limited

Reliance Equities International Private Limited

(merged with the company w.e.f. March 31, 2013)

Emerging Money Mall Limited (w.e.f. February 20, 2013)

(merged with the company w.e.f. March 31, 2013)

QOPPA Trading Private Limited

Quant Broking Private Limited

Quant Capital Advisors Private Limited

Quant Capital Finance And Investments Private Limited

Quant Capital Private Limited

Quant Commodities Private Limited

Quant Commodity Broking Private Limited

Quant Investments Services Private Limited

Quant Securities Private Limited

QCAP Trade Private Limited

Quant Alternative Asset Management Private Limited (w.e.f. October 12, 2012)

v) Partnership firm

Reliance Capital Partners

Reliance Capital Infrastructure Partners (dissolved w.e.f. December 31, 2012)

vi) Associates

Ammolite Holdings Limited

Indian Commodity Exchange Limited

Reliance Asset Reconstruction Company Limited

Reliance Land Private Limited

Reliance Life Insurance Company Limited

Reliance Share & Stock Brokers Private Limited

vii) Fellow subsidiaries

AAA Entertainment Private Limited

Big Flicks Private Limited

Jump Games Private Limited

Reliance Big Entertainment Private Limited

Reliance Communications Infrastructure Limited

Reliance Communications Limited

Reliance Infocomm Infrastructure Private Limited

Reliance Webstore Limited

Zapak Digital Entertainment Limited

viii) Key management personnel

Shri V. R. Mohan - President & Company Secretary

B. Other related parties with whom transactions have taken place during the year:

i) Enterprise over which individual described in clause A (iii) above has control Reliance Power Limited

8 During the year Nippon Life Insurance Company (NLIC) has acquired 26% equity shareholding in Reliance Capital Asset Management Company Limited (RCAM). The Company has waived its entitlement of bonus shares issued by RCAM.

9 The gold loans outstanding as at March 31, 2013 as a percentage of total assets is at 0.22% (previous year 0.19%).

10 During the year, the Company reported to Reserve Bank of India (RBI) fraud in disbursal of commercial vehicle loans amounting to Rs. 6 crore, as on March 31, 2013, Rs. 2 crore was recovered and write-off / provision was made for the balance amount of Rs. 4 crore.

11 Contingent Liabilities and Commitments (As Certified by the Management)

(Rs. in crore)

Particulars March 31, 2013 March 31, 2012

Contingent Liabilities

i) Guarantees to Banks and Financial Institutions on behalf of third parties 1 281 983

ii) Claims against the Company not acknowledge as debt 20 22

Commitments

iii) Estimated amount of contracts remaining to be executed on capital account (net 38 81 of advances)

iv) Undrawn Committed Credit lines 434 253

v) Uncalled amount of Investments 56 79

12 In the opinion of management, all the assets other than fixed assets and non current investments are approximately of the value stated if realised in the ordinary course of business.


Mar 31, 2012

1 Background

Reliance Capital Limited ('the Company') is registered as a Non-Banking Financial Company ('NBFC') as defned under Section 45-IA of the Reserve Bank of India Act, 1934. The Company is principally engaged in lending and investing activities.

2 The financial statements for the year ended March 31, 2011 had been prepared as per the then applicable, Schedule VI to the Companies Act, 1956. Consequent to the notifcation of Revised Schedule VI under the Companies Act, 1956, the financial statements for the year ended March 31, 2012 have been prepared as per Revised Schedule VI. Accordingly, the previous year's fgures have also been reclassifed to conform to this year's classifcation. The adoption of the Revised Schedule VI for the previous year's fgures does not impact recognition and measurement principles followed for preparation of financial statements.

The figures for current year includes fgures of Viscount Management Services (Alpha) Limited (VMSAL) which is amalgamated with the Company with effect from October 1, 2011 i.e. the Appointed Date and therefore to that extent not strictly comparable to that of Previous year's Figures.

3 Amalagamation

I Scheme of Amalgamation between Company and Viscount Management Services (Alpha) Limited (VMSAL)

The Scheme of Amalgamation ("the Scheme") under Sections 391 to 394 of the Companies Act, 1956 between Company and Viscount Management Services (Alpha) Limited (VMSAL) has been sanctioned by the Hon'ble High Court of judicature at Bombay vide Order dated January 20, 2012. The scheme has become effective on March 12, 2012 on fling with the Registrar of Companies (RoC) with effect from October 1, 2011 i.e. Appointed Date.

VMSAL was incorporated with the main object of business consultancy service. The amalgamation has been accounted for under the "Purchase method" as prescribed by Accounting Standard (AS-14) on "Accounting for Amalgamation" notifed under the Companies (Accounting Standards) Rules, 2006. The Company has carried out the accounting treatment prescribed in the Scheme as sanctioned by the Hon'ble High Court of Judicature at Bombay. The required disclosures as per paragraph 42 of Accounting Standard 14 (AS-14) 'Accounting for Amalgamations' as prescribed under the Companies (Accounting Standards) Rules, 2006 has been provided.

Hence, in accordance with the Scheme:- (i) Before Scheme becomes effective the entire issued, subscribed and paid up share capital was held by the Company.

No shares of the Company have been allotted in lieu or exchange of its holding in VMSAL and share capital of VMSAL stand cancelled.

(ii) On Scheme becoming effective with effect from Appointed Date, the Company has recorded all the assets aggregating to Rs. 5,839 crore and liabilities aggregating to Rs. 1,385 crore as appearing in the books of VMSAL at their respective fair value as decided by the Board of Directors of the Company. The net assets taken over include:

(iii) All Inter-company balances including liabilities on account of debentures and inter- company investments amounting to Rs. 1,385 crore on appointed date stand cancelled. The excess amount of investments amounting to Rs. 679 crore has been debited to general reserve toward inter- company investments cancellation.

(iv) Difference aggregating to Rs. 3,774 crore after recording both above said items being the excess arising on transfer of assets and liabilities has been credited to General Reserve.

(v) Difference in accounting method between the Company and VMSAL amounting to Rs. 62 crore has been credited to General Reserve pursuant to the Scheme.

Had the Scheme not prescribed the above accounting treatments, the difference of Rs. 3,837 crore would have been credited to Capital Reserve instead of General Reserve and General Reserve would have been lower by equivalent amount.

II During the year, Nippon Life Insurance Company (NLIC) has acquired 26 per cent equity shareholding in Reliance Life Insurance Company Limited, in terms of share subscription & share purchase agreement entered into between the Company, Viscount Management Services (Alpha) Limited (VMSAL), Viscount management Services Limited (VMSA), Reliance Life Insurance Company Limited (RLIC) and Nippon Life Insurance Company (NLIC).

III During the previous year, pursuant to the Scheme of Amalgamation ("the Scheme") under Sections 391 to 394 of the Companies Act, 1956 sanctioned by the Hon'ble High Court of judicature at Bombay vide order dated April 29, 2011, fled with the Registrar of Companies on May 18, 2011, Reliance Commercial Finance Pvt. Ltd., wholly owned subsidiary of the Company, was amalgamated into the Company with effect from April 1, 2010 i.e., the Appointed Date and in accordance with the provisions of the said Scheme:

a) The Company has written off Rs. 329 crore in the Statement of profit and loss and an equivalent amount is withdrawn from general reserve. The Company has recorded all necessary accounting effects in the previous year, along with the requisite disclosure in the notes to the accounts and created General Reserve amounting to Rs. 1,04,484.

b) During the year, the loss on sale of long term investments amounting to Rs. 149 crore determined as an exceptional item by the Board of Directors of the Company, has been debited in the Statement of profit and Loss for the year ended March 31, 2012. As per the Scheme and legal opinion obtained by the Company an equivalent amount has been withdrawn from General Reserve to adjust the same and credited to the Statement of profit and Loss, which has been disclosed accordingly and is in compliance with Revised Schedule VI of the Companies Act, 1956. Had such losses not been met from General Reserve, the Company would have refected a profit before tax of Rs. 472 crore and profit after tax for the year would have been Rs. 370 crore.

4 Business Transfer Agreement

In terms of Business Transfer Agreement (BTA) dated April 26, 2010 further amended on January 31, 2011 with its subsidiary company i.e. Reliance Home Finance Limited the Company hold loan assets of Rs. 42 crore (Previous year Rs. 135 crore), and liabilities Rs. Nil (Previous year Rs. 1 crore), related to Reliance Home Finance Limited in a trust capacity as on March 31, 2012 .

5 Employee Stock Option Plans

The Company operates two Employee Stock Option Plans; ESOS Plan A and ESOS Plan B introduced in the financial year 2009-10, which cover eligible employees of the Company, the Holding Company and its subsidiaries. The vesting of the options is from expiry of one year and ranges till four to five years as per Plan under the respective ESOS(s). Each Option entitles the holder thereof to apply for and be allotted / transferred one Equity Share of the Company of Rs. 10 each upon payment of the exercise price during the exercise period. The Company implements and manages the ESOS plan through a trust. Advance of Rs. 130 crore (Previous year Rs. 130 crore) has been granted to Trust. Out of the said advance Trust has purchased 16,00,000 (Previous year 16,00,000) Equity Shares for the above purpose till March 31, 2012.

6 Segment reporting:

As per paragraph 4 of Accounting Standard (AS) 17, on "Segment Reporting" notifed by the Companies (Accounting Standards) Rules 2006, where a single financial report contains both consolidated financial statements and the separate financial statements of the holding company, segment reporting needs to be presented only on the basis of consolidated financial statements. In view of this, segment information has been presented at Note No. 38 of the consolidated financial statements.

(Rs. in crore)

Fellow Partnership Particulars Subsidiaries Assoc -iates Total Subsi -diaries Firm

Contingent Liability

a) Guarantees to Banks and Financial

i) Reliance Money Express Limited - - - - -

(40) (-) (-) (-) (40)

ii) Ammolite Holdings Limited - - 77 - 77

(-) (-) (80) (-) (80)

Key Managerial Personnel

a) Shri V. R. Mohan

- Employee beneft expenses Rs. 68 54 397 (Previous year Rs. 42 00 000)

- Loan given balance as at March 31, 2012 Rs. 4 49 751 (Previous year Rs. 4 64 151)

Enterprise over which individual described in clause A (iii) above has control

Reliance Power Limited

- Commercial Paper subscribed & redeemed Rs. 224 crore (Previous year Nil)

- Investment balance as at March 31, 2012 Rs. 3 crore Notes :

i) Figures in bracket indicate previous year fgures.

ii) Expenses incurred towards public utilities services such as telephone and electricity charges have not been considered for related party transaction.

iii) The above disclosed transactions entered during the period of existence of related party relationship. The balances and transactions are not disclosed before existence of related party relationship and after cessation of related party relationship.

iv) In addition to the above, Commission of Rs. Nil (Previous year Rs. 6 crore) and Director sitting fees of Rs. 1,00,000 (Previous year Rs. 80,000) has been paid to Shri Anil D. Ambani, an individual having control.

v) Investments in Unilazer Media Limited though in excess of 20%, the investment has been made with an intention to sell in near future. In terms of the provisions of Accounting Standard (AS) 18 on "Related Party Disclosures" as per Companies (Accounting Standard) Rules 2006 on aforesaid Company, the company does not exercise any "significant Infuence" hence the transactions with these parties as not considered for related party disclosures.

vi) Pursuant to the Scheme of Amalgamation ("the Scheme") between Company and Viscount Management Services (Alpha) Limited (VMSAL) [Refer Note No. 29 (I) (a) (iii)] entire issued, subscribed and paid up share capital of VMSAL was held by the Company and was cancelled. Therefore, for the purpose of above disclosures the same has not been considered.

7 Contingent Liabilities and Commitments (As certified by the Management)

(Rs. in crore)

Particulars March 31, 2012 March 31, 2011

Contingent Liabilities

i) Guarantees to Banks and Financial Institutions on behalf of Third parties 983 1 142

ii) Claims against the Company not acknowledged as debt 22 13

Commitments

iii) Estimated amount of contracts remaining to be executed on capital account 81 71 (net of advances)

iv) Undrawn Committed Credit lines 253 421

v) Uncalled amount of Investments 79 355

8 In the opinion of management, all the assets other than fixed assets and non current investments are approximately of the value stated if realised in the ordinary course of business.


Mar 31, 2011

A. Background

Reliance Capital Limited. ('the Company') is registered as a Non-Banking Financial Company ('NBFC') as defined under Section 45-IA of the Reserve Bank of India Act, 1934. The Company is principally engaged in lending and investment activities.

1. a) Previous Year's figures have been reworked, regrouped and reclassified wherever necessary.

b) The figures for the current year includes figures of Reliance Commercial Finance Pvt. Ltd. (Formerly Reliance Consumer Finance Pvt. Ltd.) (RCFPL) which is amalgamated with the Company with effect from April 1, 2010 and therefore to that extent not comparable to the Previous Year's figures.

2. a) Pursuant to the Scheme of Amalgamation ("the Scheme") under Sections 391 to 394 of the Companies Act, 1956 as sanctioned by the Hon'ble High Court of judicature at Bombay vide Order dated April 29, 2011 and fled with the Registrar of Companies (RoC) Maharashtra on May 18, 2011, Reliance Commercial Finance Pvt. Ltd. (RCFPL) - (wholly owned subsidiary of the Company whose core business was commercial finance business) has been amalgamated with the Company with effect from April 1, 2010 i.e., the Appointed Date.

b) The Amalgamation has been accounted for under the "Purchase Method" as prescribed by Accounting Standard (AS) 14 "Accounting for Amalgamation" prescribed by Companies (Accounting Standards) Rules, 2006.

c) In accordance with the said Scheme : i) All the assets, debts, liabilities, duties and obligations of RCFPL have been vested in the Company with effect from

April 1, 2010 and have been recorded at their respective book values under the purchase method of accounting for Amalgamation. All Intercompany balances and transactions during the year has been cancelled. There were no difference in the accounting policies of RCFPL and the Company.

ii) In accordance with the said Scheme, any excess / (shortfall) arising on transfer of assets over liabilities have been credited / (debited) to the General Reserve.

iv) As per Scheme of Amalgamation, investments in the shares of RCFPL of Rs. 329 crore is written off in the profit & Loss Account and an equivalent amount is withdrawn from the General Reserve. Had the scheme not provided for the treatment the difference of Rs. 0.01 crore would have been credited to Capital Reserve and General Reserve would have been lower by Rs. 0.01 crore.

b) The Company invests in Pass Through certificates (PTCs) and purchases loans through the direct assignment route. In some of the securitisation transactions, the Company also has invested in the assets securitised by it, which, however, is restricted to the maximum limit prescribed by RBI from time to time.

c) During the year, Company has entered into an agreement with Reliance Home Finance Pvt. Ltd., a subsidiary of the Company (Previous Year with AU Financiers (India) Pvt. Ltd.) for loan assignment. As per deed of assignment, for loans aggregating to Rs. 492.88 crore (Previous Year Rs. 8.16 crore), the Company has been assigned the right for future receivables along with a power of attorney authorising the Company, inter-alia, to obtain possession of the assets in case of default. The above loans are secured against hypothecation of underlying assets.

3. The Company had entered into business transfer agreements (BTA) on April 26, 2010 with its subsidiaries i.e. Reliance Home Finance Pvt. Ltd. (RHFPL) and Reliance Commercial Finance Pvt. Ltd. (RCFPL) to transfer the business of Commercial Finance Division (RCF) at book value, such that the entire economic risk and reward of the RCF segment passes to the purchasers from the commencement of business on the value date i.e. April 1, 2010.

4. Owing to the amalgamation of Reliance Commercial Finance Pvt. Ltd. (Formerly Reliance Consumer Finance Pvt. Ltd.) wholly owned subsidiary, with the Company with effect from April 1, 2010, the business transfer agreements (BTA) entered on April 26. 2010 stand cancelled.

The Company has amended the BTA with Reliance Home Finance Pvt. Ltd. on January 31, 2011. As per the amended BTA with RHFPL :

a) The Company holds loan assets of Rs. 134.88 crore and liabilities of Rs. 1.14 crore of RHFPL in the capacity of trustee as on March 31, 2011.

b) During the year, the Company has transferred the following assets, income and expenses : i) unamortized DSA Commission of Rs. 1.91 crore ii) interest & other income of Rs. 46.68 crore iii) interest & other expenses of Rs. 31.25 crore iv) DSA commission expenses of Rs. 1.87 crore

5. The Company operates two Employee Stock Option Plans; ESOS Plan A and ESOS Plan B introduced in the financial year 2009- 10, which cover eligible employees of the Holding Company, the Company and its subsidiaries. The vesting of the options is from expiry of one year and ranges till four to five years as per Plan under the respective ESOS(s). Each Option entitles the holder thereof to apply for and be allotted / transferred one Equity Share of the Company of Rs. 10 each upon payment of the exercise price during the exercise period. The Company implements and manages the ESOS plan through a trust. Advance of Rs. 130.41 crore (Previous Year Rs. 96.41crore) has been granted to Trust. Out of the said advance, Trust has purchased 16,00,000 (Previous Year 11,00,000) Equity Shares on account of ESOS upto March 31, 2011.

The Company has chosen to account for the Plan by the Intrinsic Value Method. The total expense recognised for the period arising from stock option plan as per Intrinsic Value Method is Rs. Nil (Previous Year Rs. Nil). Had the company adopted fair value method the net results for the year would have been lower by Rs. 14.20 crore (Previous Year Rs. 2.53 crore) [net of tax saving Rs. 14.20 crore (Previous Year Rs. 2.11 crore) and accordingly EPS (both Basic and Diluted) would have been lower by Rs. 0.57 (Previous Year Rs. 0.09).

6. Micro, small and medium enterprises :

During the current year, the management has carried out the process of identification of enterprises, which have provided goods and services to the Company and which qualify under the definition of medium and small enterprises, as defined under Micro, Small and Medium Enterprises Development Act, 2006. Based on the inputs received on above, there have been no reporting cases of delays in payments to micro and small enterprises or of interest payments due to delays in such payments.

7. The Company is a partner in the following firms: i) Reliance Capital Partners:

a) The firm consists of following partners:

i) Reliance Capital Limited ii) Reliance Land Pvt. Ltd.

b) profit sharing ratio:

The profit is distributed between the partners on the basis of the weighted average capital.

c) The profit of Rs. 39.58 crore is considered as profit of the current financial year (Previous Year Loss of Rs. 1.04 crore). ii) Reliance Capital Infrastructure Partners:

a) The firm consists of following partners:

i) Reliance Capital Limited ii) Reliance Infocomm Infrastructure Pvt. Ltd. iii) Reliance Infraprojects Ltd.

b) profit sharing ratio:

The profit is distributed between the partners on the basis of the weighted average capital.

c) The firm has not commenced operations as at March 31, 2011 and there has been no contribution of capital upto March 31, 2011.

8. Tax on Proposed Dividend

As on April 27, 2011, the Reliance Capital Assets Management Ltd. (RCAM), a subsidiary of the Company has proposed dividend of Rs. 161.40 crore (Dividend distribution tax thereon Rs. 26.18 crore) which is subsequently approved by its shareholders in their general meeting held on May 23, 2011. As on May 26, 2011 the Company has received dividend of Rs. 149.99 crore from RCAM. In view of Section 115- O of the Income Tax Act, 1961, the Company has reduced its dividend tax liabilities to that extent.

9. Segment reporting:

As per paragraph 4 of Accounting Standard -17 (AS-17), on "Segment Reporting" notified by the Companies (Accounting Standard) Rules 2006, where a single financial report contains both consolidated financial statements and the separate financial statements of the holding company, segment reporting needs to be presented only on the basis of consolidated financial statements. In view of this, segment information has been presented at Note No. 17 of the abridged consolidated financial statements.

10. Related party disclosures: (A) List of Related Parties: i) Holding Company

Reliance Innoventures Pvt. Ltd. ii) Individual Promoter

Shri Anil D. Ambani, the person having control during the year

11. a) Accrued Premium / Interest on Investments includes Rs. 61.08 crore due from Associates (Previous Year Rs. 24.95 crore).

b) Accrued Premium / Interest on Investments amounting to Rs. 126.36 crore are due within 1 Year. (Previous Year Rs. 45.31 crore).

12. In the financial year 2008-09, the Company has entered into a joint venture with KGS Developers Ltd. in respect of real estate project development. The Company has invested Rs. 85 crore and is entitled to share the profit / Loss equally.

13. Contingent Liabilities and Commitments (As certified by the Management)

(Rs. in crore)

Particulars March 31, 2011 March 31, 2010

Contingent Liabilities

i) Guarantees to Banks and Financial Institutions on behalf of subsidiaries and 1,142.48 235.00 Associates

ii) Claims against the Company not acknowledged as debt 12.71 11.95 Commitments

iii) Estimated amount of contracts remaining to be executed on capital account 70.58 27.11 (net of advances)

iv) Uncalled amount of Investments 354.68 371.66


Mar 31, 2010

A. Background

Reliance Capital Limited. (the Company) is registered as a Non-Banking Financial Company (NBFC) as defined under section 45-IA of the Reserve Bank of India Act, 1934. The Company is principally engaged in lending and investing activities.

1 Previous years figures have been reworked, regrouped and reclassified wherever necessary.

2 During the year the Company has entered into a agreement with AU Financiers (India) Pvt. Ltd. for loan assignment. As per deed of assignment, for loans aggregating to Rs.8.16 crore (Previous year Rs.Nil) the Company has been assigned the right to future receivables along with a power of attorney authorizing the Company, inter-alia, to obtain possession of the property in case of default. The above loans are secured against hypothecation of underlying assets.

3 During the year, the company has sold the assets amounting to Rs.4.05 crore (Previous Year Rs.Nil) at cost. The same has been been accquired in accordance with the requirement of RBI Circular: DBOD.NO.BP.BC.16/21.04.048/05-06 dated July 13, 2005 on Guidelines on Puchase / Sale of Non Performing Assets.

4 Subsequent to the Balance sheet date, on April 26, 2010, the Company entered into business transfer agreement with its subsidiaries i.e. Reliance Home Finance Private Limited (RHFPL) and Reliance Consumer Finance Private Limited (RCFPL) (together referred to as the purchasers) to transfer the business of Consumer Finance Division (RCF) segment at book value such that the entire economic risk and reward of the RCF segment passes to the purchasers from the commencement of business on the value date i.e. April 1, 2010. Pursuant to the provisions of Section 293(1)(a) and Section 192A of the Act, the Company is in the process of obtaining shareholders approval.

As per the business transfer agreement entered into with the purchasers, the Company has agreed to hold in trust for the benefit of the purchasers any part of the assets and liabilities that has not been transferred to the purchasers on the value date.

The assets and liabilities transferred to the purchasers as at April 1, 2010 are as follows : Total Assets Rs.6,239.83 crore Total Liabilities Rs.5,986.75 crore

5 During the year the Company has introduced Employee Stock Option Plan, under which it has granted 7,96,900 options (3,99,900 options under Plan A and 3,97,000 options under Plan B) to the eligible employees of the Company as well as employees of its Subsidiary Companies on the basis of their performance and other eligibility criteria. ESOS Plans are administered through an ESOS Trust. The vesting of the options is on the expiry of one year and so on from the date of grant as per Plan under the respective ESOS(s). In respect of Options granted, the accounting value of Options (based on market price of the share on the date of the grant of the option) is accounted as deferred employee compensation, which is amortised on a straight line basis over the vesting period. Each Option entitles the holder thereof to apply for and be allotted/ transferred one Equity Share of the Company of Rs.10 each upon payment of the exercise price during the exercise period. The Company has established a Trust for the implementation and management of ESOS for the benefit of its present and future employees. Advance of Rs.96.41 crore (Previous year Rs.Nil) has been granted to the Trust. Rs.96.40 (Previous year Rs.Nil) has been utilised by the Trust for purchasing 11,00,000 (Previous year Nil) Equity Shares during the period upto March 31, 2010.

6 Micro, small and medium enterprises

During the current year, the management has carried out the process of identification of enterprises, which have provided goods and services to the Company and which qualify under the definition of medium and small enterprises, as defined under Micro, Small and Medium Enterprises Development Act, 2006. Based on the inputs received on above, there have been no reporting cases of delays in payments to micro and small enterprises or of interest payments due to delays in such payments.

7 The Company is a partner in the following firms i) Reliance Capital Partners

a) The firm consists of following partners i) Reliance Capital Limited

ii) Reliance Land Pvt. Ltd. iii) Shri Surendra Pipara

b) Profit Sharing Ratio:

The profit is distributed between the partners on the basis of the weighted average capital .

The Loss of Rs.1.04 crore is considered as Loss of the current financial year (Previous Year Loss of Rs.4.40 crore).

ii) Reliance Capital Infrastructure Partners:

a) The firm consists of following partners: i) Reliance Capital Limited

ii) Reliance Infocomm Infrastructure Pvt. Ltd.

iii) Reliance Infraprojects Ltd.

b) Profit Sharing Ratio:

The profit is distributed between the partners on the basis of the weighted average capital.

The firm has not commenced operations during the year ended March 31, 2010 and there has been no contribution of capital upto March 31, 2010.

8. Employee benefits

a) Defined Contribution Plan

Amount of Rs.4.22 crore (Previous Year : Rs.5.61 crore) is recognised as expense and included in "Employee costs" referred to in Schedule L in the Profit and Loss Account.

b) Defined Benefit Plan

The following tables summarise the components of the net employee benefit expenses recognised in the Profit and Loss account, the fund status and amount recognised in the balance sheet for the gratuity benefit plan and leave encashment plan.

9. Segment reporting:

As per paragraph 4 of Accounting Standard (AS-17), on "Segment Reporting" notified by the Companies (Accounting Standard) Rules 2006, where a single financial report contains both consolidated financial statements and the separate financial statements of the holding company, segment reporting needs to be presented only on the basis of consolidated financial statements. In view of this, segment information has been presented at Note No.15 of Schedule O of the consolidated financial statements.

10. Related party disclosures:

i) Holding Company

Reliance Innoventures Pvt. Ltd. (Holding Company w.e.f. June 26, 2009)

AAA Enterprises Pvt. Ltd. (Ceased to be Holding Company w.e.f. June 26, 2009)

ii) Individual Promoter

Shri Anil D. Ambani, the person having control during the year.

iii) Subsidiaries

Reliance Capital Asset Management Ltd.

Reliance Capital Trustee Company Ltd.

Reliance General Insurance Company Ltd.

Reliance Gilts Ltd.

Reliance Capital Research Pvt. Ltd.

Reliance Money Express Ltd.

Medybiz Pvt. Ltd.

Net Logistics Pvt. Ltd.

Reliance Venture Asset Management Pvt. Ltd. (formerly Reliance Technology Ventures Pvt. Ltd.)

Reliance Capital Markets Pvt. Ltd.

Reliance Asset Management (Mauritius) Ltd.

Reliance Asset Management (Malaysia) SDN BHD w.e.f. April 19, 2009.

Reliance Asset Management (Singapore) Pte. Ltd.

Reliance Capital Asset Management (UK) Plc.

Reliance Equity Advisors (India) Ltd.

Reliance Consultants (Mauritius) Ltd.

Reliance Equities International Pvt. Ltd.

Reliance Home Finance Pvt. Ltd.

Reliance Capital Services Pvt. Ltd.

Reliance Capital (Singapore) Pte. Ltd.

Reliance Consumer Finance Pvt. Ltd.

Reliance Securities Ltd.

Reliance Commodities Ltd.

Reliance Financial Ltd.

Reliance Alternative Investments Services Pvt. Ltd.

Reliance Prime International Ltd.

Reliance Capital Pension Fund Ltd.

iv) Partnership firm

Reliance Capital Partners

Reliance Capital Infrastructure Partners

v) Associates

Reliance Land Pvt. Ltd.

Reliance Share & Stock Brokers Pvt. Ltd.

Ammolite Holdings Ltd.

Reliance Asset Reconstruction Co. Ltd.

vi) Fellow subsidiaries

Reliance Communications Ltd.

Reliance Communications Infrastructure Ltd.

Reliance Telecom Ltd.

Matrix Innovations Ltd.

Reliance Natural Resources Ltd.

Reliance WiMax Ltd.

Reliance Webstore Ltd.

Reliance Infocomm Infrastructure Pvt. Ltd.

vii) Key management personnel

Shri V. R. Mohan - Company Secretary & Manager

11 a) Accrued Premium / Interest on Investments includes Rs.24.95 crore due from Associates (Previous Year Rs.2.90 crore) b) Accrued Premium / Interest on Investments amounting to Rs.45.31 crore are due within 1 Year. (Previous Year Rs.Nil)

12 In the financial year 2008-09, the Company has entered into a joint venture with KGS Developers Ltd in respect of certain real estate project devlopment, The Company has invested Rs.85 crore and is entitled to share the Profit / Loss equally. The joint venture has not commenced operations during the year ended March 31, 2010.

13. Contingent Liabilities and Commitments (As Certified by the Management)

(Rs. in crore) As at As at March 31, 2010 March 31, 2009

Contingent Liabilities

i) Guarantees to Banks and Financial Institutions 235.00 366.43 on behalf of Subsidiaries and Associates.

ii) Claims against the Company not acknowledged as debt 11.95 0.09 Commitments

iii) Estimated amount of contracts remaining to be executed on capital account (net of advances) 27.11 23.09

iv) Uncalled amount on Investment 371.66 265.17

 
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