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Directors Report of Reliance Communications Ltd.

Mar 31, 2015

Dear Shareowners,

The Directors present the 11th Annual Report and the audited financial statement for the financial year ended March 31, 2015.

Financial Results

The financial performance of the Company for the 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 income 11,136 1782 12,445 2,079

Gross profit before depreciation, amortisation and exceptional 311 50 1,290 215 items Less:

Depreciation and amortisation 1,940 310 2,048 342

Profit/ (Loss) before Exceptional items, Tax and (1,629) (260) (758) (127) Adjustments Exceptional Items

Lease Rent Equalisa tion written back 4,328 692 - -

Yield on Redeemable Preference Share rece ivables reversed (1,359) (217) - -

Profit/ (Loss) before Tax 1,340 215 (758) (127)

Less: Provision for:

Current tax / Excess provision for Tax of earlier years 1,494 239 (1,488) (248)

Profit/(Loss) after tax (154) (24) 730 121

Add : Balance brought forward from previous year 881 141 322 54

Profit available for appropriation 727 117 1,052 175

Appropriations:

Transfer to Debenture Redemption Reserve - - 171 28

Balance carried to Balance Sheet 727 117 881 147

* Figures of previous year have been regrouped and reclassified, wherever required. ** Exchange Rate Rs. 62.500 = US$ 1 as on March 31, 2015 (Rs.59.915 = US$1 as on March 31, 2014).

Financial Performance

During the year under review, your Company has earned income of Rs. 11,136 crore against Rs. 12,445 crore in the previous year. The Company has incurred a loss of Rs. 154 crore for the year as compared to profit of Rs. 730 crore in the previous year.

The performance and financial position of the subsidiary companies and associate companies are included in the consolidated financial statement of the Company and presented in the Management Discussion and Analysis forming part of this Annual Report.

Dividend

During the year under review, the Board of Directors has not recommended any dividend on the equity shares of the Company.

Business Operations

The Company together with its subsidiary companies operates on a pan-India basis offers full value chain of wireless (CDMA and GSM including 3G services), wireline, national long distance, international, voice, data, video, Direct-To-Home (DTH) and internet based communications services under various business units organised into strategic geographical business units: India Operations and Global Operations.

These strategic business units are supported by passive infrastructure connected to nationwide backbone of Optic Fibre Network as well as fully integrated network operation system and by the largest retail distribution and customer services facilities. The Company also owns through its subsidiary company, a global submarine cable network infrastructure and offers managed services, managed Ethernet and application delivery services.

Spectrum Auction

The Department of Telecommunications (DoT) conducted auction for the 800, 900, 1800 and 2100 MHz spectrum in March 2015. The Company successfully bid for its requirements in the 10 service areas and won additional/top up spectrum in 1800 MHz in Haryana, Karnataka and Punjab and in 800 MHz in Gujarat, Haryana, Himachal Pradesh, Jammu & Kashmir, Kolkata, Odisha, Punjab, Uttat Pradesh (West) and West Bengal service areas. The validity of the above spectrum will be for a fresh 20 year period starting from the effective date as mentioned in the Letter of Intent (LOI), which in case of spectrum blocks currently held by the existing licensees, is the date of expiry of existing licenses. The LOIs have been issued on 27/28 May, 2015. As per the payment options available, the Company has chosen the deferred payment option.

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.

Share Capital / Fund Raising Programme

During the year under review, the Company allotted 33,82,86,197 equity shares of Rs. 5/- each at a offer price of Rs. 142.14 per equity share (including a Share premium of Rs. 137.14 per equity share) under Qualified Institutional Placement (QIP) to Qualified Institutional Buyers on July 2, 2014 and received an amount aggregating to Rs. 4,808.40 crore. The Company had also allotted 8,66,66,667 Warrants entitling the subscribers to subscribe to equivalent number of Equity Shares of Rs. 5/- each at a price of Rs. 150/- per Warrant (including Share premium of Rs. 145/- per Equity Share) aggregating to Rs. 1,300 crore under preferential allotment to the Promoter Group entity and allotted 8,66,66,667 equity shares to the Promoter Group entity, against said Warrants on January 20, 2015. The fund raised were utilised as per the object/purpose for which it was raised. The Paid up share capital of the Company was increased from Rs. 1032.01 crore to Rs. 1244.49 crore. This was the maiden QIP and Preferential Issue of the Company.

During the current financial year 2015-16, the Company issued and allotted foreign currency Senior Secured Notes on May 6, 2015 amounting to US$ 300 mn (Rs. 1,909 crore). The Notes have a tenor of 5 ½ years due in November, 2020 and carry a coupon rate of 6.5 per cent per annum, payable semi annually. The Notes are listed on the Singapore Stock Exchange.

Non Convertible Debentures

During the year under review, the Company has not issued or redeemed any Non-Convertible Debentures.

Deposits

The Company has not accepted deposit from the public falling within the ambit of Section 73 of the Companies Act, 2013 ("the Act") and the Companies (Acceptance of Deposits) Rules, 2014.

Particulars of Investments

Pursuant to the provisions of Section 186 of the Act, the details of the Investments made are provided in the unabridged standalone financial statement under Notes No.2.11 and 2.15.

Subsidiary and Associate companies

During the year under review, Reliance Infra Realty Limited and Reliance Infra Projects Limited became the 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 the link http://www.rcom.co.in/Rcom/aboutus/ir/ 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, joint ventures and associate companies, as approved by their respective Board of Directors have been prepared in accordance with Accounting Standard (AS) - 21 on 'Consolidated Financial Statement' read with AS-23 on 'Accounting for Investments in Associates' and AS-27 on 'Financial Reporting of Interests in Joint Ventures', 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 Prof. J. Ramachandran, Shri Deepak Shourie, Shri A. K. Purwar and Shri R. N. Bhardwaj as Independent Directors of the Company for a period of 5 years and Smt. Manjari Kacker as a Woman Director, liable to retire by rotation w.e.f. September 16, 2014.

The Company has received declarations from all the Independent Directors of the Company confrming 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.rcom.co.in/ Rcom/aboutus/ir/pdf/Directors_familiarisation.pdf.

In terms of the provisions of the Companies Act, 2013, Smt. Manjari Kacker, Woman Director of the Company, retires by rotation and being eligible, offers herself for re-appointment at the ensuing Annual General Meeting (AGM). A brief resume of Smt. Manjari Kacker, Woman Director, nature of expertise in specific functional areas and names of the companies in which she holds directorship and / or membership / chairmanship 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 Vinod Sawhny, Chief Executive Officer, Shri Manikantan V., Chief Financial Officer and Shri Prakash Shenoy, Company Secretary and Manager were designated as the Key Managerial Personnel (KMP) of the Company as per requirements of the Act.

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 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. Further, the Committee has also devised a policy relating to remuneration for Key Managerial Personnel and senior management employees, as the Company does not have any Whole-time Director/ Managing Director on its Board. 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 statement 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 loss 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 statement for the financial year ended March 31, 2015 on a 'going concern' basis;

v. The Directors had laid down 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 for approval. 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 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. rcom.co.in/Rcom/aboutus/ir/pdf/Related-Party-Transactions- Policy.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, six 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 Prof. J. Ramachandran, Chairman, Shri A. K. Purwar, Shri R. N. Bhardwaj, Shri Deepak Shourie and Non Independent Director Smt. Manjari Kacker 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 Statutory Auditors of the Company hold office until the conclusion of the ensuing Annual General Meeting (AGM) and are eligible for re-appointment. The Company has received letters from M/s. Chaturvedi & Shah, Chartered Accountants and M/s. BSR & 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 Statutory Auditors in their report read together with notes on financial statement are self explanatory and hence do not call for any further comments under Section 134 of the Act.

Cost Auditors

Pursuant to the provisions of the Act and Companies (Cost Records and Audit) Rules, 2014, the Board of Directors have appointed M/s. V. J. Talati & Co., Cost Accountants, as the Cost Auditors for conducting cost audit for the telecommunications businesses of the Company for the financial year ending March 31, 2016, subject to the remuneration being ratifed by the members at the ensuing AGM of the Company.

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. Kaushik M. Jhaveri & Co., Company Secretaries in Practice 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 herewith as Annexure – B.

Extract of Annual Return

Extract of the Annual Return of the Company in form MGT-9 is attached herewith 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 2008 and Plan 2009 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 2008 ESOS Plan 2009

a) Total Options granted : 1,49,91,185 Options 1,32,17,975 Options

b) No of Options surrendered : 1,32,17,975 Options -

c) Options vested : Nil Nil

d) Options exercised : Nil Nil

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

f) Options lapsed/ forfeited during the year : 2,76,141 Options 5,37,632 Options

g) Exercise Price : Market Price or such other Average of the weekly high price as Board/Committee and low of the closi -ng price may determine. Different of the equity share of the Exercise price may apply to Company at National Stock different Plan(s). Exchange of India Limited during two weeks preceding the date of Grant i.e. January 16, 2009.

h) Variation of terms of Options : None None

i) Money realised by exercise of Options during the year : Nil Nil

j) Total number of Options in force at the end of the year : 62,274 Options 12,75,358 Options

k) Employee wise details of Options granted to:

i. Key managerial personnel : Nil 29400 Shri Manikantan V. Chief Financial Officer

ii. Employee who rece ives grant in any one year of : Nil Nil Option amounting to 5 per cent or more of Option granted during the year

iii.Identifed employ ees who were granted options, : Nil Nil during any one year equal to or exceeding 1 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 auditors of the Company that the ESOS Plan 2008 and 2009 have been implemented in accordance with the SEBI Regulation and as per the resolution passed by the members of the Company authorising issuance of the said Options.

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 AGM 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 Personal) Rules, 2014 are provided in Annexure - D.

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

As the Company does not carry on any manufacturing activity, being a telecommunications service provider, most of the information of the Company 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 the 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 is presented in separate section forming part of this Annual Report.

A Certifcate from the auditors of the Company M/s. Chaturvedi & Shah, Chartered Accountants and M/s. BSR & 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 concern, 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

Pursuant to the requirement of Clause 49 of the Listing Agreement, during the year, the Company has constituted a Risk Management Committee consisting of majority of directors and senior managerial personnel. The details of the Committee and its terms of reference etc. are set out in the Corporate Governance Report forming part of this Report.

The Company has a robust Business Risk Management framework to identify, evaluate business risks and opportunities. This framework seeks to create transparency, minimize adverse impact on the business objectives and enhance Company's competitive advantage. The business risk framework defines the risk management approach across the enterprise at various levels including documentation and reporting. The framework has different risk models which help in identifying risks trend, exposure and potential impact analysis at a Company level as also separately for business segments.

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.rcom.co.in/Rcom/ aboutus/ir/pdf/CSR-Policy.pdf.

The CSR Committee consists of Smt. Manjari Kacker as Chairperson, Shri Anil D. Ambani, Prof J. Ramachandran, Shri Deepak Shourie, Shri A. K. Purwar and Shri R. N. Bhardwaj, Directors as members.

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

Orders, if any, passed by Regulators 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 operation.

Internal Financial Controls and their adequacy

The Company has in place adequate internal financial controls across the organisation. 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 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.rcom.co.ininvestor relationsFinancial Results. 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

Mumbai Anil Dhirubhai Ambani

May 29, 2015 Chairman


Mar 31, 2014

Dear Shareowners,

The Directors have pleasure in presenting the 10th 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 income 12,445 2,079 12,820 2,362

Gross profit before depreciation, amortisation and exceptional 1,290 215 2,305 425

items Less:

Depreciation and amortisation 2,048 342 1,681 310

Profit / (Loss)before tax (758) (127) 624 115

Less: Provision for:

Current tax / Excess provision for Tax of earlier years 1,488 248 - -

Profit / (Loss) after tax 730 121 624 115

Add : Balance brought forward from previous year - - - -

Profit available for appropriation 730 121 624 115 Appropriations:

Proposed Dividend on equity shares - - 52 10

Dividend Tax - - 9 2

Transfer (from) / to General Reserve - - - -

Transfer to Debenture Redemption Reserve 171 29 246 45

Balance carried to Balance Sheet 559 92 317 58

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

** Exchange Rate Rs. 59.915 = US$ 1 as on March 31, 2014 (Rs. 54.285 = US$1 as on March 31, 2013).

Financial Performance

During the year under review, your Company has earned income of Rs. 12,445 crore against Rs. 12,820 crore for the previous year. The Company has earned profit of Rs. 730 crore for the year as compared to profit of Rs. 624 crore in the previous year.

Dividend

During the year under review, the Board of Directors has not recommended any dividend on the equity shares of the Company.

Business Operations

The Company together with its subsidiaries operates on a pan- India basis and offers the full value chain of wireless (CDMA and GSM including 3G services), wireline, national long distance, international, voice, data, video, Direct-To-Home (DTH) and internet based communications services under various business units organised into strategic geographical business units: India and Global Operations. From the second quarter of the financial year under review, the functions of business operations of the Company have been re-organised with intent to provide financial reporting system for better performance evaluation and decision making. The change in segment reporting will improve visibility and disclosures of the financial performance of business operations and assist in better understanding of the performance of the telecom operations of the Company in the domestic i.e. Indian telecom market and the global business operations ranging from carrier business to voice calling cards in the international markets.

These strategic business units are supported by passive infrastructure connected to nationwide backbone of Optic Fibre Network as well as fully integrated network operation system and by the largest retail distribution and customer services facilities. The Company also owns through its subsidiaries, a global submarine cable network infrastructure and offers managed services, managed Ethernet and application delivery services.

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.

Fund Raising Programme

During the current financial year 2014-15, the Company has allotted 33,82,86,197 equity shares of Rs. 5 each at a offer price of Rs. 142.14 per equity share of Rs. 5 each (including a share premium of Rs. 137.14 per equity share) under Qualified Institutional Placement (QIP) and received an amount aggregating to Rs. 4808.40 crore.

The Company on August 7, 2014 has also allotted 8,66,66,667 Warrants entitling for subscription of equivalent number of Equity Shares of Rs. 5/- each at a price of Rs. 150/- per Warrant (including share premium of Rs 145 per Equity Share) aggregating Rs. 1,300 crore under preferential allotment, to the Promoter Group entity. 50 per cent of the issue price has been received on the date of allotment of the said Warrants and the balance 50 per cent will be receivable on or before March 31, 2015. GCX Limited, a subsidiary of the Company has, on August 1, 2014 issued Senior Secured Bonds of USD 350 million bearing 7 per cent p.a. interest, with a maturity of 5 years.

Subsidiaries

During the year under review, Reliance Communications Tamil Nadu Private Limited, Global Cloud Xchange Limited and GCX Limited became the subsidiary of the Company and Kerala Communication Network Private Limited, M. P. Network Private Limited and Vanco EpE ceased to be subsidiaries of 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 information of subsidiary companies, which forms part of this Annual Report.

Demerger of Real Estate

During the year under review, the Board of Directors had in- principle decided on a demerger of the real estate held by the Company into a separate unit to unlock substantial value for the benefit of stakeholders of the Company. The proposed separation of real estate into a separate unit is part of Company''s strategic plan to divest non-core assets, and focus on its core wireless and enterprise business.

Directors

In terms of the provisions of the Companies Act, 2013, Shri Anil D. Ambani, Chairman 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 Shri Anil D. Ambani, Chairman being appointed 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.

In terms of provisions of the Companies Act, 2013, the Board has proposed appointment of Prof. J. Ramachandran, Shri Deepak Shourie and Shri A. K. Purwar, who have been Independent Directors of the Company as per the requirements of the Listing Agreement with the Stock Exchanges, as Independent Directors, not liable to retire by rotation for a term of five consecutive years effective from the date of passing of the resolution by the members through Postal Ballot for which separate notice has been sent to the Members of the Company.

Shri R. N. Bhardwaj was appointed as an Additional Director on August 29, 2013 under Section 260 of the Companies Act, 1956. Pursuant to the provisions of Section 161 of the Companies Act, 2013, which corresponds to Section 260 in the Companies Act, 1956, Shri R. N. Bhardwaj holds Office till the date of the ensuing Annual General Meeting of the members of the Company. It has been proposed to appoint him as an Independent Director not liable to retire by rotation for a consecutive term of five years effective from the date of passing of resolution by the members through Postal Ballot which has been sent to the Members of the Company.

The Company has received declarations from all the Independent Directors of the Company confirming 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. As per the provisions of Section 149 of the Companies Act, 2013, the Company should have at least one woman director.

In view of above, the Board of Directors has proposed the appointment of Smt. Manjari Kacker as a Director, liable to retire by rotation to the members through Postal Ballot.

Shri S. P. Talwar, Director passed away on August 9, 2013. The Board placed on record the deep sense of appreciation of the services rendered by Shri S. P. Talwar as a 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 financial year ended March 31, 2014, 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, 2014 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;

iv. the Directors had prepared the annual accounts for the financial year ended March 31, 2014 on a ''going concern'' basis.

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 have been prepared in accordance with AS-21 on ''Consolidated Financial Statements'' read with AS-23 on ''Accounting for Investments in Associates'' and AS-27 on ''Financial Reporting of Interests in Joint Venture'', notified 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 AGM and are eligible for re-appointment.

The Company has received letters from M/s. Chaturvedi & Shah, Chartered Accountants and M/s. BSR & Co. LLP, Chartered Accountants; to the effect that their appointment, if made, would be within the prescribed limits under Section 143(3) of the Companies Act, 2013 and that they are not disQualified for appointment.

The observations and comments given by the 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.

Cost Auditors

Pursuant to the direction of the Central Government that the cost accounts maintained by the Company be audited by a Cost Auditor, the Company has appointed M/s. V. J. Talati & Co., Cost Accountants, as Cost Auditors for conducting the cost audit for the telecommunications businesses of the Company for the financial year ending March 31, 2015.

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.

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 2008 and Plan 2009 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 administrate and monitors the Scheme.

The Company has received a certificate from the auditors of the Company that the ESOS Plan 2008 and 2009 have been implemented in accordance with the SEBI Guidelines and as per the resolution passed by the members of the Company authorising issuance of the said ESOS.

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

As the Company is being a telecommunications service provider, most of the information of the Company as required under 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 is not applicable. However, the information as applicable has been given in the Annexure – A forming part of this Report.

Corporate Governance

The Company has adopted "Reliance Group-Corporate Governance Policies and Code of Conduct" which has set 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. BSR & Co. LLP, Chartered Accountants conforming compliance with conditions of Corporate Governance as stipulated under Clause 49 of the Listing Agreement, is enclosed to this Report.

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.rcom.co.ininvestor relationsshareholders. Any shareholder nterested 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 for the co-operation and assistance received from shareholders, debentureholders, debenture trustee, bankers, financial nstitutions, 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

Mumbai Anil Dhirubhai Ambani

August 14, 2014 Chairman


Mar 31, 2013

Dear Shareowners,

The Directors have pleasure in presenting the 9th 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 USS in million** Rs. in crore USS in million**

Total income 12,820 2,362 11,863 2,332

Gross profit before depreciation, amortisation and 2,305 425 1,896 373 exceptional items

Less:

Depreciation and amortisation 1,681 310 1,741 342

Profit/(Loss)before tax 624 115 155 31

Less: Provision for:

Current tax/Excess provision for Tax of earlier years - - (1) -

Profit/f Loss) after tax 624 115 156 31

Add : Balance brought forward from previous year - - - -

Profit available for appropriation 624 115 156 31

Appropriations:

Proposed Dividend on equity shares 52 10 52 10

Dividend Tax 9 2 8 2

Transfer (from) /to General Reserve - - - -

Transfer to Debenture Redemption Reserve 246 45 91 18

Balance carried to Balance Sheet 317 58 5 1

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

** Exchange Rate Rs. 54.285 = USS 1 as on March 31, 2013 [Rs. 50.875 = US$1 as on March 31, 2012).

Financial Performance

During the year under review, your Company has earned income of Rs. 1 2,820 crore against Rs. 11,863 crore for the previous year. The Company has earned Profit of Rs. 624 crore for the year as compared to profit of Rs. 1 56 crore in the previous year.

Dividend

Your Directors have recommended a dividend of Rs. 0.25 (5 per cent) per equity share each of t 5 for the financial year ended March 31, 201 3, which, if approved at the ensuing 9"1 Annual General Meeting (AGM), will be paid to (i) all those equity shareholders whose names appear in the Register of Members as on close of the day on August 16, 2013, and (ii) those equity shareholders whose names appear as beneficial owners as on close of the day on August 1 6, 201 3, as furnished by the National Securities Depository Limited and Centra! Depository Services (India) Limited for the purpose.

Business Operations

The Company together with its subsidiaries operates on a pan- India basis and offers the full value chain of wireless (CDMA and GSM including 3G services), wireline, national long distance, international, voice, data, video, Direct-To-Home (DTH) and internet based communications services under various business units organised into strategic customer facing business segments:

Wireless, Global and Broadband. These strategic business uni are supported by passive infrastructure connected to nationwic backbone of Optic Fibre Network as well as fully integral network operation system and by the largest retail distribute and customer services facilities. The Company also owns throw its subsidiaries, a global submarine cable network infrastructi and offers managed services, managed Ethernet and applicati delivery services.

Schemes of Arrangements

Re-organisation of subsidiary companies.

1. Scheme of Arrangement between Reliance BPO Priv Limited and Reliance Communications Infrastruct Limited:

During the year under review, the Flon''ble High Cc of Judicature at Bombay sanctioned the Scheme Arrangement by way of demerging BPO Division Retiance BPO Private Limited into Reliance Communicat Infrastructure Limited, a wholly owned subsidiary of Company vide order dated December 20, 201 2 effec from February 18, 2013, The appointed date of Sch was April 1, 201 2.

2, Scheme of Amalgamation between Netizen Rajas Limited and Reliance Infratel Limited:

As reported in the annual report of the previous year, Netizen Rajasthan Limited, a wholly owned subsidiary of Reliance Infratel Limited (RITL), a subsidiary of the Company, amalgamated with RITL in terms of the Scheme of Amalgamation sanctioned by the Hon''ble High Court of Judicature at Bombay vide order dated April 20, 2012 effective from May 1 5, 201 2. The appointed date was March 1, 2012.

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.

Subsidiary Companies

During the year under review, Reliance BPO Private Limited, MP Network Private Limited, Kerala Communication Network Private Limited and Reliance Globalcom Limited became the subsidiaries of the Company. During the year under review, Reliance Wimax World Limited and its 1 8 subsidiaries ceased to be subsidiaries of 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 and the Listing Agreement, Consolidated Financial Statements presented herein by the Company include financial information of subsidiary companies, which forms part of this Annual Report.

Directors

In terms of the provisions of the Companies Act, 1956, Shri S. P. Talwar, 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.

Directors'' Responsibility Statement

Pursuant to the requirements under Section 217(2AA) of the Companies Act, 1 956 with respect to Directors'' Responsibility Statement, it is hereby confirmed that:

i. in the preparation of the annual accounts for financial year ended March 31, 2013, the applicable Accounting Standards had been followed along with proper explanation relating to material departures;

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, 201 3 and of the Profit of the Company for the year under review;

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 financial year ended March 31, 201 3 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 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., 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, 1 956, and that they are not disqualified for such appointment within the meaning of Section 226 of the Companies Act, 1 956.

The observations and comments given by the Auditors in their report read together with notes to Accounts are self explanatory and hence do not call for any further comments under Section 21 7 of the Companies Act, 1 956.

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 have been prepared in accordance with AS-21 on ''Consolidated Financial Statements'' read with AS-23 on ''Accounting for Investments in Associates'' and AS-27 on ''Financial Reporting of Interests in Joint Venture'', notified under Section 211 (3C) of the Companies Act, 1 956 read with the Accounting Standards Rules as applicable.

Cost Auditors

Pursuant to the direction of the Central Government that the cost accounts maintained by the Company be audited by a cost auditor, the Company has appointed M/s. V J Talati & Company, Cost Accountants, as Cost Auditors for conducting the cost audit for the telecommunications businesses of the Company for the financial year ending March 31, 2014.

Particulars of Employees

In terms of the provisions of Section 21 7(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 21 9(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.

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 2008 and Plan 2009 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''),

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

The particulars as required to be disclosed pursuant to Section 21 7(1 He) of the Companies Act, 1 956, read with the Companies (Disclosures of Particulars in the Report of Board of Directors) Rules, 1 988, are given in the Annexure - A forming part of this Report.

Corporate Governance

The Company has adopted "Reliance Group-Corporate Governance Policies and Code of Conduct" which has set 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. BSR & Co., Chartered Accountants conforming compliance with conditions of Corporate Governance as stipulated under Clause 49 of the Listing Agreement, is enclosed to this Report.

Business Responsibility Reporting

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 Bombay Stock Exchange and National Stock Exchange at March 31, 2012, to include Business Responsibility Report ("BRR") as part of the Annual Report. In view of FAQ''s dated May 1 0, 201 3 issued by SEBI, the BRR has been uploaded on the website of the Company www.rcom.co.ininvestor relationsshareholders. 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 for the co-operation and assistance received from shareholders, debentureholders, 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

Mumbai Anil Dhirubhai Ambani

May 10, 2013 Chairman


Mar 31, 2012

The Directors have pleasure in presenting the 8th Annual Report and the audited accounts for the financial year ended March 31, 2012.

Financial Results

The standalone performance of the Company for the financial year ended March 31, 2012 is summarised below:

Particulars Financial Year ended * Financial Year ended March 31, 2012 March 31, 2011

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

Total income 11,863 2,332 13,282 2,978

Gross profit before depreciation, 1,896 373 735 165 amortisation and exceptional items

Less:

a. Depreciation and amortisation 1,741 342 1,595 358

b. Exceptional items and other adjustments - - - -

Profit/(Loss) before tax 155 31 (860) (193)

Less: Provision for:

Current tax/ Excess provision for Tax of earlier years (1) - (102) (23)

Profit/(Loss) after tax 156 31 (758) (170)

Add : Balance brought forward from previous year - - 662 149

Profit available for appropriation 156 31 (96) (21)

Appropriations:

Proposed Dividend on equity shares 52 10 103 23

Dividend Tax 8 2 17 4

Transfer (from) /to General Reserve - - (216) (48)

Transfer to Debenture Redemption Reserve 91 18 - -

Balance carried to Balance Sheet 5 1 - -

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

** Exchange Rate Rs. 50.875 = US$ 1 as on March 31, 2012 (Rs.44.595 = US$1 as on March 31, 2011).

Financial Performance

During the year under review, your Company has earned income of Rs. 1 1,863 Crore against Rs. 13,282 crore for the pervious year. The Company has earned Profit of Rs. 156 crore for the year as compared to loss of Rs. 758 crore in the previous year.

Dividend

Your Directors have recommended a dividend of Rs. 0.25, (5 per cent) per equity share each of Rs. 5 for the financial year ended March 31, 2012, which, if approved at the ensuing 8th Annual General Meeting (AGM), will be paid to (i) those equity shareholders whose names appear in the Register of Members as on close of the day on August 24, 201 2, and (ii) to those equity shareholders whose names appear as beneficial owners as on close of the day on August 24, 2012, as furnished by the National Securities Depository Limited and Central Depository Services (India) Limited for the purpose.

Business Operations

The Company together with its subsidiaries operates on a pan-India basis and offers the full value chain of wireless (CDMA and GSM including 3G services), wireline, national long distance, international, voice, data, video, Direct-To-Home (DTH) and internet based communications services under various business units organised into strategic customer facing business segments; Wireless, Global and Broadband. These strategic business units are supported by passive infrastructure connected to nationwide backbone of Optic Fibre Network as well as fully integrated network operation system and by the largest retail distribution and customer services facilities. The Company also owns through its subsidiaries, a global submarine cable network infrastructure and offers managed services, managed Ethernet and application delivery services.

During the year under review, the Company had crossed 153 million wireless customers as on March 31, 2012. The Company ranks among the top two wireless operators in the country.

Redemption of Zero Coupon Foreign Currency Convertible Bonds (FCCBs) of US$ 500 Million and US$ 1000 Million

On May 10, 2011, being the due date, the Company redeemed outstanding FCCBs as per terms and conditions of US$ 500 million. In view of this redemption, the Company would not be required to allot 2,74,1 3,085 equity shares of Rs. 5 each arising out of conversion of the said FCCBs.

On March 1, 201 2, being the due date, the Company also redeemed outstanding FCCBs as per terms and conditions of US$ 1,000 million. In view of this redemption, the Company would not be required to allot 6,17,25,849 equity shares of Rs. 5 each arising out of conversion of the said FCCBs.

Facility Agreement with Banks

During the year under review, the Company has availed drawdown of second and third tranches of disbursements of the loan sanctioned; aggregating to Rs. 2,980 crore (US$ 666 Million) for refinancing 3G spectrum fee paid by the Company and Rs. 715 crore (US$ 141 Million) for equipment imports by the Company and Reliance Telecom Limited (RTL), a wholly owned subsidiary

During the year under review, Company has also successfully completed refinancing of redemption value of its outstanding FCCBs of Rs. 6,000 crore (US$ 1,182 million) on maturity thereof by availing funds from consortium consist of Industrial and Commercial Bank of China Ltd (ICBC), China Development Bank Corporation (CDB) and Export Import Bank of China (EXIM).

Schemes of Arrangements

(a) Scheme of Arrangement with Global Innovative Solutions Private Limited (GISPL).

As reported in the annual report of the previous year, GISPL, a wholly owned subsidiary of the Company, amalgamated with the Company in terms of the Scheme of Amalgamation sanctioned by the Hon'ble High Court of Judicature at Bombay vide order dated April 29, 2011 and effective from May 25, 2011.

(b) Re-organisation of subsidiary companies.

1. As reported in the annual report of the previous year, the Hon'ble High Court of Judicature at Bombay sanctioned the following Schemes of Arrangement vide orders dated May 6, 2011.

i. Reliance Communications Maharashtra Private Limited, a wholly owned subsidiary of Reliance Telecom Limited (RTL) merged into RTL.

ii. Matrix Innovations Limited, a wholly owned subsidiary of Reliance Communications Infrastructure Limited (RCIL) merged into RCIL.

iii. Reliance Global IDC Limited, a wholly owned subsidiary of Reliance Infratel Limited (RITL) merged into RITL.

The above mentioned Schemes were effective from May 25, 2011.

2. Scheme of Arrangement between Netizen Rajasthan Limited and Reliance Infratel Limited.

During the year under review, Netizen Rajasthan Limited, a wholly owned subsidiary of RITL, a subsidiary of the Company, amalgamated with RITL in terms of the Scheme of Amalgamation sanctioned by the Hon'ble High Court of Judicature at Bombay vide order dated April 20, 2012 effective from May 15, 2012. The appointed date was March 1, 2012.

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.

The Company has during the year, entered into various contracts in the areas of telecom and value added service businesses. While benefits from such contracts will accrue in the future years, their progress is periodically reviewed.

Subsidiary Companies

During the year under review, Vanco Euronet Sro, Vanco Net Direct Limited, WANcom Gmbh ceased to be subsidiaries of 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 and the Listing Agreement, Consolidated Financial Statements presented herein by the Company include financial information of subsidiary companies, which forms part of this Annual Report.

Directors

In terms of the provisions of the Companies Act, 1956, Shri A. K. Purwar, 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.

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 financial year ended March 31, 2012, the applicable Accounting Standards had been followed along with proper explanation relating to material departures;

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, 2012 and of the Profit of the Company for the year under review;

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 financial year ended March 31, 2012 on a 'going concern' basis.

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 have been prepared in accordance with AS-21 on 'Consolidated Financial Statements' read with AS-23 on 'Accounting for Investments in Associates' and AS-27 on 'Financial Reporting of Interests in Joint Venture', notified 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., 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., 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, 1 956, 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 the 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.

Cost Auditors

Pursuant to the direction of the Central Government that the cost accounts maintained by the Company be audited by a cost auditor, the Company has appointed M/s. V J Talati & Company, Cost Accountants, as Cost Auditors for conducting the cost audit for the telecommunications businesses of the Company for the financial year ending March 31, 2013.

Initial Public Offering of Subsea telecommunication infrastructure network business

The Company is evaluating potential initial public offering and listing in Singapore of Reliance Globalcom Limited, a subsidiary company which has subsea telecommunications infrastructure network business, through a business trust in Singapore, subject to all necessary permissions, sanctions and approvals. The cornerstone of the Company's strategy for consistent growth in future will always be sustainable value creation for all stakeholders of the Company,

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.

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 2008 and Plan 2009 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 particulars as required under Clause 12 of the SEBI Guidelines are as follows:

Particulars ESOS Plan 2008 ESOS Plan 2009

a) Total Options granted 1,49,91,185 Options 1,32,1 7,975 Options

b) No of Options surrendered 1,32,17,975 Options 2,44,000 Options

c) Pricing formula decided by ESOS Compensation Market Price or such other price Average of the weekly high and low of the Committee as Board / Committee may closing price of the equity share of the determine. Different Exercise Company at National Stock Exchange of price may apply to different India Limited during two weeks preceding Plan(s). the date of Grant i.e. January 16, 2009.

d) Options vested 8,75,253 Options 63,34,253 Options

e) Options exercised Nil Nil

f) Total number of equity shares arising as a result Subject to Option(s) exercised by Subject to Option(s) exercised by the of exercise of Options the employees, not exceeding employees, not exceeding 63,34,253 8,75,253 Equity Shares. Equity Shares.

g) Options lapsed/ forfeited during the year 3,06,059 Options 24,22,039 Options

h) Variation of terms of Options None None

i) Money realised by exercise of Options during Nil Nil the year

j) Total number of Options in force at the end of 5,69,194 Options 39,12,214 Options the year

k) Employee wise details of Options granted to:

i. Senior managerial personnel (i.e. Managing Nil Nil Director/Whole-time Director/Manager)

ii. Employee who receives grant in any one Nil Nil year of Option amounting to 5 per cent or more of Option granted during the year

iii. Identified employees who were granted Nil Nil options, during any one year equal to or exceeding 1 per cent of the issued capital (excluding outstanding warrants and conversions) of the Company at the time of grant

l) Diluted Earnings Per Share (EPS) pursuant to N.A. N.A. issue of shares on exercise of Options calculated There would not be any fresh There would not be any fresh issue of in accordance with Accounting Standard (AS) issue of equity shares of the equity shares of the Company upon 20 Company upon exercise of exercise of Options by employees. Options by employees.

m) The difference between employee compensation cost using intrinsic value method and fair value of the Options and impact of this difference on

Profits Rs. 5 crore Rs. 12 crore

EPS of the Company Rs. 0.65 Rs. 0.65

n) Weighted- average exercise prices of Options Nil Nil granted during the year where exercise price is less than market price.

o) Weighted- average fair values of Options Nil Nil granted during the year where exercise price is less than market price.

p) Significant assumptions made in computation base: Black Scholes model of fair value

(i) risk-free interest rate, 8.05 per cent p.a. 8.05 per cent p.a.

(ii) expected life, 6 years 7 years

(iii) expected volatility, 52.04 per cent 52.04 per cent

(iv) expected dividends (yield), and 0.02 per cent 0.07 per cent

(v) the price of the underlying share in market Rs. 541.15 per shareRs. 174.00 per share at the time of option grant.

The Company has received a certificate from the auditors of the Company that the ESOS Plan 2008 and 2009 have been implemented in accordance with the SEBI Guidelines and as per the resolution passed by the members of the Company authorising issuance of the said ESOS.

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 given in the Annexure - A forming part of this Report.

Corporate Governance

The Company has adopted "Reliance Group-Corporate Governance Policies and Code of Conduct" which has set 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., Chartered Accountants conforming 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 for the co-operation and assistance received from shareholders, debentureholders, 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

Mumbai Anil Dhirubhai Ambani

June 2, 2012 Chairman

 
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