Dhirubhai H. Ambani (28th December, th July, 2002) Reliance Group - Founder and Visionary

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2 Dhirubhai H. Ambani (28th December, th July, 2002) Reliance Group - Founder and Visionary

3 Profile Reliance Capital Ltd. is a part of the Reliance Anil Dhirubhai Ambani Group, India s third largest business house. Reliance Capital, incorporated in 1986, is one of India s leading and fastest growing private sector financial services companies, and ranks among the top 3 private sector financial services and banking companies, in terms of networth. Reliance Capital has interests in asset management, mutual funds, pension funds, life and general insurance, private equity and proprietary investments, stock broking and depository services, investment banking, wealth management, home and consumer finance, financial products distribution, venture capital, exchanges, asset reconstruction and other activities in financial services. Mission: Excel ellenc ence e in financial ser ervic vices To attain global best practices and become a world-class financial services enterprise guided by its purpose to move towards greater degree of sophistication and maturity. To work with vigour, dedication and innovation to achieve excellence in service, quality, reliability, safety and customer care as the ultimate goal. To earn the trust and confidence of all stakeholders, exceeding their expectations and make the Company a respected household name. To consistently achieve high growth with the highest levels of productivity. To be a technology driven, efficient and financially sound organisation. To contribute towards community development and nation building. To be a responsible corporate citizen nurturing human values and concern for society, the environment and above all the people. To promote a work culture that fosters individual growth, team spirit and creativity to overcome challenges and attain goals. To encourage ideas, talent and value systems. To uphold the guiding principles of trust, integrity and transparency in all aspects of interactions and dealings. This Report is printed on environmental friendly paper.

4 Business mix ASSET MANAGEMENT Mutual Fund Offshore Fund Pension Fund INSURANCE Life Insurance General Insurance Reliance Capital BROKING& DISTRIBUTION CONSUMER FINANCE Stock Broking & Depository Services Mortgages Third ty Distribution Loans for Construction Equipment Wealth Management products Commercial Vehicle & Auto Loans Investment Banking Business Loans OTHER BUSINESSES Proprietary Investments Exchanges Private Equity Institutional Broking Asset Reconstruction Creating India s leading financial superstore 4

5 Board of Directors Cont ontent ents Reliance Capital Limited Pag age No.(s) Shri Anil Dhirubhai Ambani Shri Amitabh Jhunjhunwala Shri Rajendra P. Chitale Shri C. P. Jain Dr. Bidhubhusan Samal Shri V. N. Kaul* *Appointed w.e.f. April 30, Chairman - Vice Chairman Letter to Shareowners... 6 Highlights at a glance... 8 Notice of Annual General Meeting Directors Report Compan ompany Secret etar ary and Manag anager Shri V. R. Mohan Auditors M/s. Chaturvedi & Shah M/s. B S R & Co. Registered Office H Block, 1st Floor, Dhirubhai Ambani Knowledge City Navi Mumbai Maharashtra, India Registr egistrar & Transf ansfer Agent Karvy Comput omputer ershar share Priv rivat ate Limited Madhura Estates Municipal No. 1-9/13/C Plot No. 13 & 13C Madhapur Village Hyderabad Andhra Pradesh, India website: Investor Helpdesk Toll free no.(india) : Telephone : Fax No. : rclinvestor@karvy.com Post your request: Management Discussion and Analysis Auditors Certificate on Corporate Governance Report Corporate Governance Report Investor Information Auditors Report Balance Sheet Profit and Loss Account Schedules forming part of the Balance Sheet & Profit & Loss Account Notes to the Financial Statements Cashflow Statement Financial Information of Subsidiary Companies Auditors Report on Consolidated Financial Statements Consolidated Balance Sheet Consolidated Profit and Loss Account Schedules forming part of the Consolidated Balance Sheet & Profit & Loss Account Notes to the Consolidated Financial Statements Consolidated Cashflow Statement Twent enty four ourth Annual General Meeting on Tuesd uesday,, September ember 28, 2010 at noon or soon after concl onclusion of the annual gener eneral meeting of Relianc eliance e Power Limited con onvene ened on the same day,, whiche hichever er is lat ater er, at Birla Mat atushri Sabhagar ar,, 19, Sir Vithald ithaldas as Thacker ersey Marg arg,, New Marine Lines, Mumbai The Annual Repor eport t can be access essed at eliancec ecapit apital.c al.co.in 5

6 Letter to Shareowners We are not just about scale and size we are also about the pursuit of excellence, the integrity of our values and the quality of our services. - Anil Dhirubhai Ambani My Dear fel ellow Shareo eowner wners, It gives me great pleasure to share with you the highlights of our Company's performance during the year It was our founder, late Shri Dhirubhai Ambani's lifelong dream to bring the fruits of financial empowerment to millions of ordinary Indians, and, in the process, enable Reliance Capital to emerge as one of India's leading financial services players. Today, we are well on our way to translating that dream into reality. Reliance Capital is now India's fastest-growing financial services company, serving over 20 million customers. Our Company is amongst the leading private sector banking and finance companies on all major parameters. We have interests in asset management, mutual funds, pension funds, life and general insurance, private equity, venture capital, stock broking and depository services, investment banking, wealth management, home and consumer finance, financial products distribution, exchanges, asset reconstruction and other activities in financial services. Our customer base, amongst the largest in India in financial services, is spread across five thousand towns and cities, served by over six thousand distribution outlets and half a million business partners. Reliance Mutual Fund is the country's largest mutual fund for the third year in a row. We continue to be amongst the fastest growing private sector players in the insurance industry. We have emerged as the third largest private sector life insurer and are amongst the leading private sector general insurers in the country. Per erformanc ormance Revie view The key financial highlights on a consolidated basis are: Total income of Rs.6,141 cror ore (US $ 1.4 billion), against Rs.6,019 crore (US $ 1.2 billion) in the corresponding previous period, an increase of two per cent Net profit of Rs.435 crore (US $ 96.4 million), against Rs.1,016 crore (US $ million) in the corresponding previous period Earnings per share (EPS) of Rs (US $ 0.39), against Rs (US $ 0.81) in the corresponding previous period Total Ass sset ets of the Company stood at Rs.26,033 cror ore (US $ 5.8 billion), against Rs.24,081 crore (US $ 4.7 billion) in the corresponding previous period, an increase of eight per cent Total net wor orth was Rs.7,712 cror ore (US $ 1.7 billion) as against Rs.7,424 crore (US $ 1.5 billion) in the corresponding previous period, an increas ase of four per cent You will be happy to learn that during the year, our Company achieved significant improvement in its financial and operational performance across its businesses. The businesses of asset management and consumer finance have increased their contribution towards revenues and profitability. In the financial year ended 2010, the decrease in absolute profits was on account of lower capital gains realized, as the thrust is on increasing contribution in profitability from the operating businesses. Over time, there will also be substantial gains for Reliance Capital from planned unlocking of value by way of partial stake sales in some of our businesses. The year saw the emergence of a new set of regulatory changes in some financial services sectors that affected industry growth. We used these changing times to swiftly move towards leaner cost structures, stringent risk management practices and improved operating efficiencies. Our earlier strategy of being amongst the top players in each of our operating businesses was judiciously calibrated to align with a renewed focus on profitability. I am very happy to inform you that our efforts in this direction have paid off. Our asset management and consumer finance businesses have increased their profitability while our life insurance business has brought down its capital requirement by a substantial 81 per cent, and is well on course to break even in the current financial year. Highest credit ratings Our Company's short term borrowing program is assigned a rating of "A1+" by ICRA, the highest credit rating given by ICRA. Another credit rating agency, Fitch, assigned the borrowing program a rating of "F1+", which stands for the highest credit quality and indicates the strongest capacity for timely payment of "financial commitment" - a resounding re-affirmation of our unwavering and long-standing commitment to financial prudence and conservatism. A third agency, CARE. assigned the long term debt program a rating of "CARE AAA". Instruments with this rating are considered to be of the best credit quality, offering highest safety for timely servicing of debt obligations. Such instruments carry minimal credit risk. These robust financial numbers have enabled us to maintain, subject to confirmation at the AGM, the dividend at Rs.6.50 a share. 6

7 Letter to Shareowners Achievements during the year across some of our key operating businesses: The year under review has seen our operating businesses grow from strength to strength despite the continual regulatory changes in some financial services' sectors. Reliance Capital Asset Management (RCAM) managed nearly Rs.1,50,000 crore (US $ 33.2 billion) across its mutual fund, pension funds, managed accounts and hedge funds, a year on year increase of 32 per cent. RCAM's profit after tax increased by 46 per cent at Rs.184 crore (US $ 40.8 million) as against Rs.126 crore (US $ 24.7 million) in the corresponding previous period. RMF continued to be India's No.1 Mutual Fund with a market share of 14.8 per cent. The average assets under management (AAUM) for Reliance Mutual Fund (RMF) increased from Rs.80,963 crore (US$ 15.9 billion) to Rs.1,10,412 crore (US $ 24.5 billion), an increase of 36 per cent. The number of investor folios have remained steady at 75 lakh despite recent changes in the regulatory environment. RCAM was appointed as one of the fund managers by the Employees Provident Fund Organization (EPFO). A highly prestigious account, EPFO has entrusted Rs.34,837 crore (US $ 7.7 billion) to RCAM, for investment management. Reliance Capital Pension Fund Ltd., a wholly owned subsidiary of RCAM was also appointed as one of the six asset managers by the Pension Fund Regulatory and Development Authority (PFRDA) to manage money under the New Pension Scheme (NPS). Reliance Asset Management (Singapore) Pte. Ltd. is a wholly owned subsidiary of Reliance Capital Asset Management Ltd. It currently manages six India dedicated funds. The AUMs as on March 31, 2010 end stood at US $ 202 million as against US $ 127 million as on March 31, 2009, a growth of 59 per cent. Relianc eliance e Life Insuranc ance (RLI) emerged as the third largest private sector life insurer (in terms of weighted received premium) at Rs.3,660 crore (US $ million), a year on year increase of 17 per cent, as against the industry average in the private sector of 13 per cent. RLI has maintained its position amongst the top four (in terms of monthly new business premium) private sector life insurance companies in India with a market share of 10.2 per cent. RLI garnered new business premium of Rs.3,921 crore (US $ million) for the year as compared to Rs.3,514 crore (US $ million) in the previous year, an increase of 12 per cent - in line with private sector industry growth. The total funds under management increased by 117 per cent to Rs.13,661 crore (US $ 3.0 billion). Reliance General Insurance has maintained its position amongst the top three (in terms of monthly gross written premium) private sector general insurance companies in India with a market share of 14 per cent. Reliance General Insurance's gross written premium for the year ended March 31, 2010 was up by 3 per cent at Rs.1,980 crore (US $ million) as against Rs.1,915 crore (US $ million) in the corresponding previous period. Relianc eliance e Consumer Financ inance offers a wide range of products which include Home loans, Loans against property, SME loans, Commercial Vehicle loans, loans for Construction equipment, etc Reliance Consumer Finance has emerged as one of the leading lenders in the Indian non banking space with 47 per cent increase in disbursements at Rs.5,776 crore (US $ 1.3 billion). Backed by our long-standing conservative approach, Reliance Consumer Finance has developed stringent in-house credit risk management systems to ensure the highest quality of credit. The outstanding loan book grew by 7 per cent to Rs.9,170 crore (US $ 2.0 billion) as on March 31, 2010, compared to Rs.8,576 crore (US $ 1.7 billion) as on March 31, This loan book is spread across 1,17,955 customers from top 16 Indian metros. The profit before tax grew 48 per cent at Rs.135 crore (US $ 29.9 million) as against Rs.92 crore (US $ 18.1 million) for the corresponding previous period. Fut utur ure Plans We have drawn up exciting growth plans for the next three to five years: Increase our customer base - from twenty million to fifty million. Increase the distribution reach - from five thousand to twenty thousand cities and towns. Increase number of business partners - from half a million to one million. Evaluate opportunities to enter the banking sector, in accordance with the evolving regulatory framework. Together, these initiatives will further accelerate our growth and lead to substantial value creation for each of us. Corpor orporat ate Governanc ernance We have adopted the Reliance Anil Dhirubhai Ambani Group Corporate Governance Policies and Code of Conduct, which has prescribed a set of systems, processes and principles conforming to the best international standards and aimed at promoting the interests of all our stakeholders. Social Commitment ommitments The Company continued to contribute actively to community welfare activities and took up several initiatives and measures related to education and healthcare. Our Commitment Our founder, the legendary Shri Dhirubhai Ambani, gave us a simple mantra: to aspire to the highest global standards of quality, efficiency, operational performance and customer care. We remain committed to upholding that vision. Dhirubhai exhorted us to think big. With your continued support, we will think bigger. Indeed not just bigger but better, creating ever greater value for all our stakeholders. Anil Dhirubhai Ambani Chairman 7

8 Highlights at a glance (Standalone) Year ended d Mar arch Turnover Earnings Before Depreciation, Interest & Tax (EBDIT) Depreciation Profit after Tax Equity Dividend % Dividend Payout Equity Share Capital Reserves and Surplus Net Worth Total Assets , Market Capitalisation Number of Employees KEY INDICATORS Year ended d Mar arch EBDIT/Gross Turnover % Net Profit Margin % Earnings Per Share (Rs.) Book Value Per Share (Rs.) Debt : Equity Ratio 1.57:1 2:1 1.5:1 0.28:1 0.06:1 0.05:1 0.42:1 0.33:1 1.91: :1 8

9 Highlights at a glance (Standalone) Net Wor orth (Rs. Rs.in cror ore) Book Val alue Per Share (Rs. Rs.) Dividend Payout (Rs. Rs.in in cror ore) e) Total al Asset ssets s (Rs. Rs.in in cror ore) e)

10 Notice Notice is hereby given that the twenty fourth Annual General Meeting of the Members of Reliance Capital Limited will be held on Tuesday, September 28, 2010 at noon or soon after conclusion of the annual general meeting of Reliance Power Limited convened on the same day, whichever is later, at Birla Matushri Sabhagar, 19, Sir Vithaldas Thackersey Marg, New Marine Lines, Mumbai , to transact the following business: Ordinary Business 1. To consider and adopt the audited Balance Sheet as at March 31, 2010, Profit and Loss Account for the year ended on that date and the Reports of the Board of Directors and Auditors thereon. 2. To declare dividend on equity shares. 3. To appoint a director in place of Shri Rajendra P. Chitale who retires by rotation and being eligible offers himself for re-appointment. 4. To appoint Auditors and to fix their remuneration and in this regard to consider and if thought fit, to pass with or without modification(s), the following resolution as an Ordinary Resolution: RESOLVED THAT M/s. Chaturvedi & Shah, Chartered Accountants (Firm Registration. No W) and M/s. B S R & Co., Chartered Accountants (Firm Registration. No W), be and are hereby appointed as the Auditors of the Company, to hold office from the conclusion of this Annual General Meeting until the conclusion of the next Annual General Meeting of the Company, on such remuneration as shall be fixed by the Board of Directors. Special Business 5. To consider and, if thought fit, to pass, with or without modification, the following resolution as an Ordinar dinary Resolution: RESOLVED THAT Dr. Bidhubhusan Samal, who was appointed as an Additional Director of the Company pursuant to Section 260 of the Companies Act, 1956 and Article 135 of the Articles of Association of the Company and who holds office upto the date of this Annual General Meeting and in respect of whom the Company has received a notice in writing under Section 257 of the Companies Act, 1956, proposing his candidature for the office of Director, be and is hereby appointed as a Director of the Company, liable to retire by rotation. 6. To consider and, if thought fit, to pass, with or without modification, the following resolution as an Ordinar dinary Resolution: RESOLVED THAT Shri V. N. Kaul, who was appointed as an Additional Director of the Company pursuant to Section 260 of the Companies Act, 1956 and Article 135 of the Articles of Association of the Company and who holds office upto the date of this Annual General Meeting and in respect of whom the Company has received a notice in writing under Section 257 of the Companies Act, 1956, 10 proposing his candidature for the office of Director, be and is hereby appointed as a Director of the Company, liable to retire by rotation. 7. To consider and, if thought fit, to pass, with or without modification, the following resolution as a Special Resolution: a) "RESOLVED THAT pursuant to Section 81(1A) and all other applicable provisions of the Companies Act, 1956 (Act) (including any statutory modification or re-enactment thereof, for the time being in force) and enabling provisions of the Memorandum and Articles of Association of the Company, the Listing Agreements entered into with the Stock Exchanges and subject to the provisions of Chapter VIII of the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009 ("SEBI ICDR"), the provisions of the Foreign Exchange Management Act, 1999 and the Foreign Exchange Management (Transfer or Issue of Security by a Person Resident Outside India) Regulations, 2000, applicable rules, regulations, guidelines or laws and/or any approval, consent, permission or sanction of the Central Government, Reserve Bank of India and any other appropriate authorities, institutions or bodies (hereinafter collectively referred to as the "appropriate authorities"), and subject to such conditions as may be prescribed by any one of them while granting any such approval, consent, permission and/or sanction (hereinafter referred to as the "requisite approvals"), which may be agreed to by the Board of Directors of the Company (hereinafter called the "Board" which term shall be deemed to include any committee which the Board may have constituted or hereinafter constitute to exercise its powers including the power conferred by this resolution), the Board be and is hereby authorised to issue, offer and allot equity shares/fully convertible debentures/partly convertible debentures/non convertible debentures with warrants/any other securities (other than warrants), which are convertible into or exchangeable with equity shares on such date as may be determined by the Board but not later than 60 months from the date of allotment (collectively referred to as "QIP Securities" or Securities ), to the Qualified Institutional Buyers (QIBs) as per the SEBI ICDR, whether or not such QIBs are Members of the Company, on the basis of placement document(s), at such time or times in one or more tranche or tranches, at par or at such price or prices, and on such terms and conditions and in such manner as the Board may, in its absolute discretion determine, in consultation with the Lead Managers, Advisors or other intermediaries, provided however that the aggregate amount raised by issue of QIP Securities as above shall not result in increase of the issued and subscribed equity share capital of the Company by more than 15% of the then issued and subscribed equity shares of the Company. b) RESOLVED FURTHER THAT the relevant date for the determination of applicable price for the issue of the QIP Securities shall be the date on which the Board of the Company decide to open the proposed issue, or the date on which the holder of the securities which are convertible

11 Notice into or exchangeable with equity shares at a later date becomes entitled to apply for the said shares, as the case may be ("Relevant Date"). c) RESOLVED FURTHER THAT the Board be and is hereby authorised to issue and allot such number of equity shares as may be required to be issued and allotted upon conversion of any Securities referred to in paragraph (a) above or as may be necessary in accordance with the terms of the offering, all such shares being pari passu with the then existing shares of the Company in all respects, as may be provided under the terms of the issue and in the offering document. d) RESOLVED FURTHER THAT such of these Securities to be issued as are not subscribed may be disposed of by the Board to such persons and in such manner and on such terms as the Board in its absolute discretion thinks fit in accordance with the provisions of law. e) RESOLVED FURTHER THAT the issue to the holders of the Securities with equity shares underlying such Securities shall be inter alia, subject to suitable adjustment in the number of shares, the price and the time period etc., in the event of any change in the equity capital structure of the Company consequent upon any merger, amalgamation, takeover or any other re-organisation or restructuring in the Company. f) RESOLVED FURTHER THAT for the purpose of giving effect to any issue or allotment of Securities or instruments representing the same, as described in paragraph (a) above, the Board be and is hereby authorised on behalf of the Company to do all such acts, deeds, matters and things as it may at its absolute discretion, deem necessary or desirable for such purpose, including without limitation the entering into of underwriting, marketing and institution/ trustees/agents and similar agreements/and to remunerate the Managers, underwriters and all other agencies/intermediaries by way of commission, brokerage, fees and the like as may be involved or connected in such offerings of Securities, with power on behalf of the Company to settle any questions, difficulties or doubts that may arise in regard to any such issue or allotment as it may in its absolute discretion deem fit. g) RESOLVED FURTHER THAT for the purpose aforesaid, the Board be and is hereby authorised to settle all questions, difficulties or doubts that may arise in regard to the issue, offer or allotment of Securities and utilisation of the issue proceeds including but without limitation to the creation of such mortgage/hypothecation/charge on the Company's assets under Section 293(1)(a) of the said act in respect of the aforesaid Securities either on pari passu basis or otherwise or in the borrowing of loans as it may in its absolute discretion deem fit without being required to seek any further consent or approval of the Members or otherwise to the end and intent that the Members shall be deemed to have given their approval thereto expressly by the authority of this resolution. h) RESOLVED FURTHER THAT the Board be and is hereby authorised to delegate all or any of the powers herein conferred to any Committee of Directors or any other Officer(s)/ Authorised Representative(s) of the Company to give effect to the aforesaid resolution." 8. To consider and, if thought fit, to pass, with or without modification, the following resolution as a Special Resolution: "RESOLVED THAT pursuant to Sections 198, 309, 310 and all other applicable provisions, if any, of the Companies Act, 1956 (Act) (including any statutory modification or re-enactment thereof, for the time being in force) and subject to all permissions, sanctions and approvals as may be necessary, approval of the Company be and is hereby accorded for the payment of commission upto 3% of the net profits of the company, every year, computed in the manner specified in the Act to the Director(s) of the Company who is/are neither in the whole time employment nor managing director(s), in accordance with the provisions of Section 309(4) of the Act, for a period of 5 (five) years from the financial year commencing April 1, 2011, in such manner and upto such extent as the Board/Nomination/ Remuneration Committee of the Board may, from time to time, determine. RESOLVED FURTHER THAT for the purpose of giving effect to this resolution, the Board and/or Nomination/ Remuneration Committee constituted by the Board be and are hereby authorised to take all actions and do all such deeds, matters and things, as it may in its absolute discretion deem necessary, proper or desirable and to settle any question, difficulty or doubt that may arise in this regard." 9. To consider and, if thought fit, to pass, with or without modification, the following resolution as an Ordinar dinary Resolution: "RESOLVED THAT in accordance with the provisions of Sections 198, 269, 387 read with Schedule XIII and all other applicable provisions, if any, of the Companies Act, 1956 (Act) (including any statutory modification or reenactment thereof, for the time being in force), and subject to all such sanctions, as may be necessary, the consent of the Company be and is hereby accorded to the reappointment of Shri V. R. Mohan as the Manager of the Company, designated as President, Company Secretary & Manager for a period of 5 (five) years commencing from March 7, 2011 on the terms and conditions including remuneration set out in the Agreement to be entered into between the Company and Shri V. R. Mohan, a draft whereof was placed before this meeting which Agreement is hereby specifically sanctioned with liberty to the Board of Directors (hereinafter referred to as "Board" which term shall be deemed to include any Committee of the Board constituted to exercise its powers including powers conferred by this resolution) to alter and vary the terms and conditions including remuneration of the said re-appointment and/or Agreement, as may be agreed to between the Board and Shri V. R. Mohan, so as not to exceed the limits specified in Schedule XIII to the Companies Act, 1956 or any amendments thereto. RESOLVED FURTHER THAT in the event of loss or inadequacy of profits in any financial year during the currency 11

12 Notice of tenure of Shri V. R. Mohan, as Manager, the remuneration and perquisites set out as aforesaid be paid or granted to him as minimum remuneration and perquisites provided that the total remuneration by way of salary, perquisites and other allowances shall not exceed the applicable ceiling limit in terms of Schedule XIII to the said Act as may be amended from time to time or any equivalent statutory re-enactment thereof for the time being in force. RESOLVED FURTHER THAT the Board of Directors be and is hereby authorised to do all acts, deeds, matters and things and take all such steps as may be necessary, proper or expedient to give effect to this resolution." By Order of the Board of Directors V.. R. Mohan Compan ompany Secret etar ary & Manag anager Registered Office: H Block, 1st Floor, Dhirubhai Ambani Knowledge City, Navi Mumbai August 9, 2010 Notes: 1. A member entitled to attend and vote at the Annual General Meeting (the Meeting) is entitled to appoint a proxy to attend and vote on a poll, instead of himself/ herself and the proxy need not be a member of the Compan ompany. The instrument appointing proxy should, however er,, be deposited d at the Regist egister ered Offic ice of the Compan ompany not t less than for orty eight hours s befor ore the commenc ommencement ement of the Meeting eeting. 2. Corporate Members are requested to send a duly certified copy of the Board Resolution authorising their representatives to attend and vote at the Meeting. 3. Members/Proxies should fill the Attendance Slip for attending the Meeting and bring their Attendance Slip along with their copy of the annual report to the Meeting. 4. In case of joint holders attending the Meeting, only such joint holder who is higher in the order of names will be entitled to vote. 5. Members who hold shares in electronic form are requested to write their Client ID and DP ID numbers and those who hold shares in physical form are requested to write their Folio number in the Attendance Slip for attending the Meeting to facilitate identification of membership at the Meeting. 6. Relevant documents referred to in the accompanying Notice are open for inspection by the members at the Registered Office of the Company on all working days, except Saturday between a.m. and 1.00 p.m. up to the date of the Meeting. The certificate from the Auditors of the Company in terms of the SEBI (Employees Stock Option Scheme and Employees Stock Purchase Scheme) Guidelines, 1999 for the Company s ESOS Plans will be available for inspection at the Meeting. 7. (a) The Company has notified closure of Register of Members and Transfer Books thereof from Wednesday, September 15, 2010 to Tuesday, September 28, 2010 for determining the names of members eligible for dividend, if approved, on equity shares for the year ended March 31, In respect of shares held in electronic form, the dividend will be paid on the basis of particulars of beneficial ownership furnished by the Depositories for this purpose. (b) The dividend on equity shares, as recommended by the Board of Directors, if declared at the Meeting, will be paid after the Meeting. (c) Members may please note that the dividend warrants shall be payable at par at the designated branches of the Bank for an initial period of three months only. Thereafter, the dividend warrants on revalidation shall be payable only at Ltd. centres / branches of the said Bank. The members are therefore, advised to encash dividend warrants within the initial validity period. 8. Non-resident Indian members are requested to inform M/s. Karvy Computershare Pvt. Ltd. immediately on: a. the change in the residential status on return to India for permanent settlement. b. the particulars of the bank accounts maintained in India with complete name, branch, account type, account number and address of the bank, if not furnished earlier. 9. Re-appointment / Appointment of Directors: a. In terms of Article 154 of the Articles of Association of the Company, Shri Rajendra P. Chitale, Director retires by rotation and being eligible offers himself for re-appointment. b. Dr. Bidhubhusan Samal and Shri V. N. Kaul, Additional Directors hold office upto the date of this Meeting and are proposed to be appointed as Directors under Section 257 of the Companies Act, c. Brief resume of the Directors proposed to be appointed, nature of their expertise in specific functional areas, names of companies in which they hold directorship, membership and chairmanship of board committees, shareholding and relationships between directors inter-se, as stipulated under Clause 49 of the listing agreement with the Stock Exchanges are furnished in the Report on Corporate Governance forming part of the Report. 10. Members are advised to refer to the section titled Investor Information provided in this Annual Report. 11. Pursuant to Circular No.SEBI/CFD/DIL/LA/2/2007/26/ 4 dated April 26, 2007, issued by the Securities and Exchange Board of India, the statement containing the salient features of Balance sheet, Profit and Loss Account and Auditors Report (Abridged Financial Statements), is sent to the members, along with the Abridged Consolidated Financial Statements. Any member interested in obtaining a copy of the full Annual Report may write to the Registrar and Transfer Agent of the Company. 12. An explanatory statement pursuant to Section 173(2) of the Companies Act, 1956, relating to special businesses to be transacted at the Meeting are annexed hereto. 12

13 Explanat anator ory Stat atement pursuant to Section 173(2) of the Companies Act, 1956 to the accompan ompanying Notic tice dated August 9, Item No.5 & 6 Appointment of Directors Dr. Bidhubhusan Samal and Shri V. N. Kaul were appointed as Additional Directors with effect from October 30, 2009 and April 30, 2010 respectively in accordance with the provisions of Section 260 of the Companies Act 1956 and Article 135 of the Articles of Association of the Company. Pursuant to Section 260 of the Companies Act, 1956, Dr. Bidhubhusan Samal and Shri V. N. Kaul hold office upto the date of the ensuing Annual General Meeting. The Company has received notices in writing from members of the Company, along with deposits of Rs.500/- each, as per the provisions of Section 257 of the Companies Act, 1956 proposing their candidature for the office of Director. Dr. Bidhubhusan Samal and Shri V. N. Kaul are not disqualified from being appointed as Directors in terms of Section 274(1) (g) of the Act. The Company has received the requisite Form DD-A from Dr. Bidhubhusan Samal and Shri V. N. Kaul, in terms of the Companies (Disqualifications of Directors under Section 274 (1) (g) of the Companies Act, 1956) Rules, 2003, confirming their eligibility for such appointment. Profile of Dr. Bidhubhusan Samal and Shri V. N. Kaul is given in the Report on Corporate Governance forming part of the Report. Keeping in view the experience and qualification in their respective fields, your Directors considered it to be in the interest of the Company, if Dr. Bidhubhusan Samal and Shri V. N. Kaul are appointed as Directors of the Company, liable to retire by rotation as per the provisions of the Companies Act, Your Directors therefore recommend the said resolutions for your approval. The aforesaid Directors may be deemed to be concerned or interested in the resolution relating to their respective appointments. None of the other Directors or Manager of the Company is in any way concerned or interested in the said resolutions. Item No.7 Issue of equity shares to the Qualified Institutional Buyers. The Company, in order to enhance its global competitiveness, and the ability to compete with the peer group in domestic and international markets, needs to strengthen its financial position and net worth by augmenting long term resources. For this purpose and for general corporate purposes as may be decided by the Board from time to time, it is proposed to seek the enabling authorisation of the members of the Company to the Board of Directors (Board), without the need of any further approval from the Members, to undertake the Qualified Institutional Placement ("QIP") with the Qualified Institutional Buyers ("QIB"), in accordance with the provisions of Chapter VIII of the SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2009 ("SEBI ICDR"), as set out in the Resolution at item No.7. Pursuant to the above, the Board may, in one or more tranches, issue and allot equity shares/fully convertible debentures/partly convertible debentures/non convertible debentures with warrants/any other securities (other than warrants), which are convertible into or exchangeable with equity shares on such date as may be determined by the Board but not later than 60 months from the date of allotment (collectively referred to as "QIP Securities" or Securities ). The said QIP by the Board shall be subject to the provisions of the SEBI ICDR (as amended from time to time) including the pricing, which will not be less than the average of the weekly high and low of the closing prices of the related shares quoted on the stock exchanges during the two weeks preceding the Relevant Date. The Relevant Date for the determination of applicable price for the issue of the QIP Securities shall be the date of the meeting in which the Board of the Company decide to open the proposed issue or in case of securities which are convertible into or exchangeable with equity shares at a later date, the date on which the holder of such securities becomes entitled to apply for the said shares, as the case may be. For reasons aforesaid, an enabling resolution is therefore proposed to be passed to give adequate flexibility and discretion to the Board to finalise the terms of the issue. The equity shares issued pursuant to the offering would be listed on the Indian stock exchanges. The proposed issue of Securities as above may be made in one or more tranches such that the Securities to be issued shall not result in increasing the then issued and subscribed equity shares of the Company by more than 15 % of the then issued and subscribed equity shares of the Company. The Securities issued under QIP issue pursuant to offer may, if necessary, be secured by way of mortgage/hypothecation on the Company's assets as may be finalised by the Board of Directors in consultation with the Security Holders/Trustees in favour of Security Holders/Trustees for the holders of the said securities. As the documents to be executed between the Security Holders/Trustees for the holders of the said securities and the Company may contain the power to take over the assets or undertaking or management of the Company in certain events, enabling approval is also sought under Section 293 (1)(a) of the Companies Act, Section 81(1A) of the Companies Act, 1956 and listing agreement entered with the stock exchanges, provide, inter alia, that where it is proposed to increase the subscribed share capital of the Company by allotment of further shares, such further shares shall be offered to the persons who on the date of the offer are holders of the equity shares of the Company, in proportion to the capital paid-up on those shares as of that date unless the Members decide otherwise. The Special Resolution seeks the consent and authorisation of the Members to the Board of Directors to make the proposed issue of securities, in consultation with the Lead Managers, Legal Advisors and other intermediaries and in the event it is decided to issue securities convertible into equity shares, to issue to the holders of such convertible Securities in such manner and such number of equity shares on conversion as may be required to be issued in accordance with the terms of the issue, keeping in view the then prevailing market conditions and in accordance with the applicable provisions of rules, regulations or guidelines. Your Directors therefore recommend the said resolution for your approval. None of the Directors and Manager of the Company is, in any way, concerned or interested in the said resolution. Item No.8 Payment of Commission to Non Executiv ecutive Directors The shareholders, through Postal Ballot, result of which was declared on July 22, 2006 had approved payment of commission upto 3% p.a. to non executive directors, who are not in the whole time employment of the Company, under the provisions of Section 309(4) of the Companies Act, 1956 (Act), computed in the manner specified in the Act, for a period of 5 years from the financial year commencing April 1, The (five) Company had obtained approval from the Central Government vide letter No.12/255/2007-CL.VII dated 13

14 Explanat anator ory Stat atement pursuant to Section 173(2) of the Companies Act, 1956 to the accompan ompanying Notic tice dated August 9, April 19, 2007 for payment of Commission to non executive directors upto a limit of 3% of the profits of the Company for a period of 5 years from the financial year commencing April 1, 2006 i.e. upto financial year ending March 31, The Chairman and the non executive Directors are required to devote more time and attention, more so with the requirements of the revised Corporate Governance Policies. The Board therefore recognizes the need to suitably remunerate the Director(s) of the Company, who are neither in the whole time employment nor managing director(s) with such commission based on the net profits of the Company. As per provisions of Section 309 of the Act, a company can pay Commission to the Directors who are neither in the whole time employment of the Company nor Managing Director upto a ceiling of 1%, if the Company has a managing or whole time director or manager, or 3%, if the Company has no managing or whole time director or manager, of the net profits of the Company, every year, computed in the manner specified in the Act. The Company has appointed a Manager. The Company can pay remuneration exceeding 1% or 3% of its net profits, or such other limit as may be approved by the Central Government. The quantum of the said commission will be apportioned amongst the non executive Directors commensurate with their respective performance, which will be adjudged by the Nomination/Remuneration Committee of the Board, based on predefined qualitative and quantitative parameters. Your Directors therefore recommend the said resolution for your approval. All the Directors of the Company, may be deemed to be concerned or interested in this resolution to the extent of commission that may be payable to them from time to time. Manager of the Company is not, in any way concerned or interested in the said resolution. Item No.9 Re-appointment of Manager Shri V. R. Mohan was appointed as the Manager of the Company for a period of 5 (five) years commencing from March 7, 2006, i.e. upto March 6, 2011 as approved by the members in Annual General Meeting (AGM) held on June 9, The Nomination/Remuneration Committee and the Board of Directors of the Company at their meetings held on April 30, 2010, have, subject to the approval of the Members in the general meeting and the Central Government, if required, re-appoint Shri V. R. Mohan as the Manager of the Company, designated as President, Company Secretary & Manager for a period of 5 (five) years commencing from March 7, 2011 on the remuneration determined by the Nomination / Remuneration Committee / Board of Directors. Shri V. R. Mohan aged 57 years is a law graduate and a fellow member of the Institute of Company Secretaries of India. He has over two and half decades of experience in corporate secretarial, legal, finance and managerial functions. He is also the Company Secretary and Compliance Officer of the Company. The remuneration payable to and the terms of appointment of Shri V. R. Mohan as Manager of the Company during the tenure of his appointment will comprise salary, allowances and other perquisites, the aggregate monetary value of such salary, allowances and perquisites being limited to Rs lakh (Rupees sixty four lakh fourty thousand) per annum, plus discretionary Bonus not exceeding in any year the annual remuneration for that year as may be decided by the Nomination/Remuneration Committee/Board from time to time. 14 The perquisites and allowances payable to Shri V. R. Mohan will include Company owned/leased Accommodation (furnished or otherwise) or House Rent allowance in lieu thereof, house maintenance allowance together with reimbursement of expenses and/or allowances for utilisation of gas, electricity, water, furnishing and repairs, medical reimbursements, leave travel concession for self and his family including dependants; medical insurance and such other perquisites and/or allowances within the amount specified above. The said perquisites and allowances shall be eavaluated, wherever applicable, as per the Income Tax Act, 1961 or any Rules made thereunder (including any statutory modification(s) or re-enactment thereof, for the time being in force). However Company's contribution to Provident Fund, Superannuation or Annuity Fund to the extent these singly or together are not taxable under the Income Tax Act, 1961 and Gratuity payable and encashment of leave at the end of the tenure, as per the rules of the Company, shall not be included in the computation of limits for the remuneration. In addition to the above, Shri V. R. Mohan shall also be eligible to an annual increment not exceeding 25% on the last drawn salary, perquisites and allowances during his tenure as Manager. Shri V. R. Mohan fulfils the conditions for eligibility contained in t I of Schedule XIII of the Companies Act, The terms and conditions of appointment and payment of remuneration are set out in the Agreement to be entered into between the Company and Shri V. R. Mohan. The Board or any Committee thereof, subject to requisite approval(s), if necessary, is entitled and authorised to revise at any time, the salary, allowances and perquisites payable to the Manager of the Company such that the overall remuneration payable to the Manager of the Company shall not exceed the limits specified above. Either party may terminate the aforesaid Agreement by giving one month prior notice of termination in writing to the other party. The terms and conditions setout for appointment and payment of remuneration herein and/or in the agreement may be altered and varied from time to time by the Board/Nomination/ Remuneration Committee as it may, at its discretion, deem fit within the overall ceiling fixed herein. The draft Agreement to be entered into between the Company and Shri V. R. Mohan is available for inspection at the Registered Office of the Company on all working days except Saturdays between a.m. and 1.00 p.m. upto the date of the Meeting. The terms and conditions mentioned herein may also be treated as an abstract under Section 302 of the Companies Act, Your Directors therefore recommend the said resolution for your approval. Shri V. R. Mohan, Manager may deemed to be concerned or interested in the resolution. None of the Directors of the Company is, in any way, concerned or interested in the said resolution. By Order of the Board of Directors V.. R. Mohan Compan ompany Secret etar ary & Manag anager Registered Office: H Block, 1st Floor, Dhirubhai Ambani Knowledge City, Navi Mumbai August 9, 2010

15 Directors Report Dear Shareowners, Your Directors have pleasure in presenting the twenty fourth Annual Report, together with the audited statement of accounts of the Company for the year ended March 31, Financial Results The standalone performance of the Company for the financial year ended March 31, 2010 is summarised below: Financial Year ended Financial Year ended articul ticular ars March 31, 2010 March 31, 2009 # (Rs. in crore) (US$ in million*) (US$ in million**) Gross Income Gross Profit Less: Depreciation Profit before Tax Provision for Taxation Net Profit Add: Profit brought forward from the previous year Profit available for Appropriation Dividend including Dividend Tax Transfer to General Reserve Transfer to Statutory Reserve Fund Balance carried forward *1 US$ = Rs ** 1 US$ = Rs #Figures of previous year have been regrouped and reclassified, wherever required Financial Per erformanc ormance The Company s gross income for the financial year ended March 31, 2010 decreased to Rs.2, crore, from Rs.3, crore in the previous year, a decline of 26 per cent. The operating profit (PBDIT) of the Company decreased by per cent to Rs.1, crore during the year, from Rs.2, crore, in the previous year. Interest expenses for the year increased by 1.81 per cent to Rs.1, crore, from Rs.1, crore, in the previous year. Depreciation was at Rs crore as against Rs crore in the previous year. The provision for taxation during the year was Rs crore. The net profit for the year decreased by 185 per cent to Rs crore from Rs crore, in the previous year. An amount of Rs crore was transferred to the Statutory Reserve Fund pursuant to section 45-IC of the Reserve Bank of India Act, 1934, and an amount of Rs crore was transferred to the General Reserve during the year under review. The Company s Net worth as on March 31, 2010, stood at Rs.6, crore. Dividend Your directors are pleased to recommend a dividend of Rs.6.50 (65 per cent) per equity share on 24,56,32,800 equity shares of Rs.10 each aggregating to Rs crore (inclusive of dividend tax) for the financial year ended March 31, 2010, which, if approved at the ensuing Annual General Meeting, will be paid to (i) all those equity shareholders whose names appear in the Register of Members as on September 14, 2010 and (ii) to those whose names as beneficial owners, are furnished by the National Securities Depository Ltd. and Central Depository Services (India) Ltd. for the purpose. The dividend payout as proposed is in accordance with the Company s policy of paying, sustainable dividend linked to long term performance, keeping in view the capital needs for the Company s growth plans and the desire to achieve optimal financing of such plans through internal accruals. Management Discussion and Analysis Report The Management Discussion and Analysis Report for the year under review, as stipulated under Clause 49 of the listing agreement with the Stock Exchanges in India, is presented in a separate section which forms, part of the Annual Report. The Company has entered into various contracts in the areas of financial services business. While benefits from such contracts will accrue in the future years, their progress is periodically reviewed. Resources and Liquidity The Company has raised Rs.11, crore during the financial year by issuance of Commercial Paper, Non Convertible Debentures (NCDs) and other money market instruments. The Company s NCDs amounting to Rs.3,575 crore are listed on Bombay Stock Exchange Ltd. as on March 31, The funds were mainly deployed in providing consumer finance. RCL s debt equity ratio as on March 31, 2010 stood at 1.57:1. Subsidiaries During the year, Reliance Asset Management (Malaysia) SDN BHD became subsidiary of the Company. 15