My Dear fellow Shareowners,
 
 It gives me great pleasure to share with you the highlights of our
 Company''s performance during the financial year 2010-11.
 
 Today we stand closer to fulfilling the vision of our legendary founder
 and my father, late Shri Dhirubhai Ambani, in taking Reliance Capital
 to a position of pre-eminence as the leading financial powerhouse of a
 young, competitive and globalising India.
 
 Our current base of 20 million strong and loyal customers puts us in
 the ranks of the largest financial services players in India.  This
 large and rapidly growing family is served by over 6,800 distribution
 outlets and half-a-million business partners.
 
 25 Years old but a ''Young'' achiever
 
 This year, our Company completed 25 years of existence, although we
 started our commercial operations seriously only six years ago in late
 2005. This makes us one of the youngest players in India''s financial
 services space.
 
 However, our relative youth compared to peers does not deter us from
 pursuing our core values or DNA of thinking big and setting ourselves
 industry-beating milestones in the fastest possible time.
 
 It is this strong faith and self-belief that has powered our emergence
 in a short span of time as a leading Indian player in nearly all our
 businesses, surpassing established names operating for decades.
 
 Growth Mantra
 
 For us, growth is not an end in itself. It is but a means to the
 creation of wealth and value for our investors. We remain committed to
 being one of the most profitable financial services companies in India.
 
 In line with this vision, we looked, during the year, to lower our cost
 structures and dramatically raise operational efficiencies across all
 our businesses. As a result, we maintained our profitability despite
 important changes in the regulatory regime that severely impacted
 growth and gave rise to avoidable uncertainties in key service
 segments.
 
 Bottomline Boost
 
 I am very happy to inform you that our hard work and clarity of focus
 during the year paid off handsomely. Some of our key businesses viz.,
 asset management, commercial finance and broking & distribution, grew
 their bottomline substantially – well over 40 per cent year on year -
 while others managed to considerably pare down their losses. Our life
 insurance business, for instance, reduced its losses by as much as 54
 per cent.
 
 In fact, it achieved a small profit ofRs. 34 crore in the second half of
 the year. We are on course to achieve significant profits in the life
 insurance domain in the current financial year.
 
 Reliance Mutual Fund retains its ranking as the largest mutual fund in
 India for the fourth year in a row. Reliance Life Insurance counts
 amongst the top four private sector life insurers in India in terms of
 individual new business premium. Reliance Commercial Finance is amongst
 the leading lenders in the non-banking financial space. Reliance General
 Insurance is amongst the leading private sector general insurance
 companies in India.
 
 Our Company is one of India''s leading private sector financial services
 companies and ranks among the top four private sector financial services
 and banking groups, in terms of net worth. It has interests in asset
 management and mutual funds; life and general insurance; commercial
 finance; stock broking; investment banking; wealth management services;
 distribution of financial products; exchanges; private equity; asset
 reconstruction; proprietary investments and other activities in
 financial services.
 
 Our Company is an integral part of the Reliance Group. Reliance Group
 is amongst India''s leading business houses with 10 million strong
 shareholders base and over 230 million customers. It has a strong
 presence across a wide array of high growth commercial- facing
 businesses of telecom, financial services, energy power, infrastructure
 and media and entertainment.
 
 Today, each of us can claim with pride and humility that the Reliance
 Group touches the life of one in every eight Indians, every single day.
 
 This proud association defines our vision and values. It defines who we
 are, what we stand for and what we aspire to achieve.
 
 Performance Review
 
 The key financial highlights on a consolidated basis are:
 
 - Total income ofRs. 5,498 crore (US$ 1.2 billion), against Rs. 6,141
 crore (US$ 1.3 billion) in the previous year
 
 - Net profit (before one-time provisioning) ofRs. 475 crore
 
 (US$ 104.2 million), against Rs.  435 crore (US$ 95.3 million) in the
 previous year, an increase of 9 per cent
 
 - Earnings per share (EPS) of Rs. 11.85 (US$ 0.3), against Rs.17.69 (US$
 0.4) in the previous year
 
 - Total Assets of Rs. 31,965 crore (US$ 7.2 billion), against Rs. 26,029
 crore (US$ 5.8 billion) in the previous year, an increase of 23 per
 cent
 
 - Total net worth of Rs. 7,862 crore (US$ 1.8 billion) as against Rs.
 7,712 crore (US$ 1.7 billion) in the previous year, an increase of 1
 per cent
 
 These robust financial numbers have enabled us to recommend a dividend
 ofRs. 6.5 per share.
 
 Highest credit ratings
 
 Our Company''s short term borrowing program has been assigned a rating
 of A1  by ICRA, the highest credit rating given by the agency.
 Another credit rating agency Fitch, assigned our borrowing program a
 rating of F1 , which stands for the highest credit quality and
 indicates the strongest capacity for timely repayment of financial
 commitment - a resounding reaffirmation of our unwavering and
 long-standing commitment to financial prudence and conservatism.
 
 A third agency, CARE, assigned our long term debt paper a rating of
 CARE AAA. Instruments with this rating are considered to have the
 best credit quality, and offer investors the highest degree of safety
 for timely servicing of debt obligations. Such instruments carry
 minimal credit risk.
 
 Achievements during the year across key operating businesses
 
 The year under review has seen our operating businesses grow from
 strength to strength despite continual changes in the regulatory
 environment which led to operating uncertainties in some of the
 financial services sector.
 
 Reliance Capital Asset Management (RCAM) managed nearly Rs. 1,50,000
 crore (US$ 33.4 billion) across its mutual funds, pension funds,
 managed accounts and hedge funds. RCAM''s profit before tax increased by
 10 per cent at Rs. 294 crore (US$ 64.6 million) as againstRs. 268 crore
 (US$ 58.8 million) in the corresponding previous period.
 
 Reliance Mutual Fund (RMF) maintained its leadership position with a
 market share of 14.5 per cent. The average assets under management
 (AAUM) for RMF stands at Rs. 1,01,576 crore (US $ 22.3 billion). The
 number of investor folios have remained steady at 7.3 million, despite
 recent regulatory changes.
 
 In conjunction with hardening liquidity conditions, these changes have
 adversely impacted the pace of growth in AAUMs for India''s mutual fund
 Industry. RMF has addressed this by focusing on newer opportunities.
 RMF shifted its product mix to tap the retail opportunity. During the
 year, our portfolio of Systematic Investment Plan and Systematic
 Transfer plan investor accounts increased by 71 per cent to 1.87
 million.
 
 RMF launched a unique retail Gold Savings Fund in February 2011. It is
 the largest gold fund in India in terms of retail participation. More
 than 2 lakh investors participated in this fund offer through
 systematic investment plans (SIPs) and RMF has received a commitment of
 approximately Rs. 3,000 crore (US$ 658.1 million) over 10 years through
 these SIPs.
 
 Reliance Life Insurance (RLI) is amongst the leading private sector
 life insurers with a market share of 7.7 per cent in the private
 sector. It ranks among the top four private sector companies in terms
 of new individual business premium with a market share of 8.7 per cent.
 RLI garnered a total premium of Rs. 6,548 crore (US$ 1.4 billion) in the
 year, as against Rs. 6,588 crore (US$ 1.4 billion) in the previous year.
 
 RLI received new business premium of Rs. 3,035 crore (US$ 665.9 million)
 for the year as compared to Rs. 3,921 crore (US$ 860.3 million) in the
 previous year. The renewal premium for the year was Rs. 3,536 crore (US$
 776.0 million) as against Rs. 2,684 crore (US$ 588.9 million) in the
 previous year – an increase of 32 per cent. The total funds under
 management increased by 31 per cent to Rs. 17,855 crore (US$ 4.0
 billion). During the year, RLI sold the highest number of individual
 premium policies in the private sector at 1.9 million. The Company
 invested a sum of Rs. 120 crore (US$ 26.9 million) into the business by
 way of capital infusion during the year as against Rs. 231 crore (US$
 51.7 million) in the previous year, a 48 per cent reduction.  RLI did
 not require any fresh capital for the last 2 quarters of the financial
 year 2010-11.
 
 In fourth quarter of financial year 2010-11, Nippon Life, Japan''s
 largest private life insurer, signed a definitive agreement to acquire a
 26 per cent stake in Reliance Life Insurance, subject to necessary
 regulatory approvals. This is the largest FDI in Indian Financial
 Services sector and by far, the largest FDI in Insurance sector. The
 transaction pegs the valuation of Reliance Life Insurance at Rs. 11,500
 crore (US$ 2.6 billion). Nippon Life Insurance will invest Rs. 3,062
 crore (US$ 680.0 million) to acquire 26 per cent in Reliance Life
 Insurance. A 121 year old life insurance company, Nippon Life is the
 6th largest private life insurer in the world. As a strategic partner,
 Nippon Life will bring vast experience, expertise and global best
 practices in areas of product development, underwriting, investment
 management, distribution, customer relationship management and risk
 management.
 
 Reliance Securities, the equity broking arm of Reliance Capital, is one
 of the leading retail broking houses in India, providing customers with
 access to equities, equity options, wealth management services, mutual
 funds, IPOs and investment banking. Reliance Securities had 6.64 lakh
 broking accounts as on March 31, 2011. The average daily equity broking
 turnover stood at Rs. 1,413 crore (US$ 310.0 million). In wealth
 management, the AUM stood at Rs. 169 crore as on March 31, 2011, an
 annual growth of 85 per cent. In investment banking, the company
 handled 4 issues and mobilized Rs. 620 crore (US$ 136.0 million) and did
 IPO funding of Rs. 3,164 crore (US$ 694.2 million). Reliance Securities
 achieved profit before tax of Rs. 22 crore (US$ 4.8 million) for the year
 ended March 31, 2011, as against Rs. 28 crore (US$ 6.0 million) in the
 previous year.
 
 The distribution business of Reliance Capital, known as Reliance Money,
 is a comprehensive financial services and solutions provider, providing
 customers with access to mutual funds, life and general insurance
 products, money transfer, currency exchange, loans, gold coins and
 premium products. It has a pan-India distribution network of 6,200
 outlets. Reliance Money sold nearly 1,500 kg. of Gold in the financial
 year 2010-11, an increase of 235 per cent over the previous year figure
 of 433 kg. Reliance Money is now the largest private sector partner for
 Western Union Money Transfer, and has handled over 20 lakh money
 transfer transactions during the year. The business achieved profit
 before tax of Rs. 12 crore (US$ 2.7 million) for the year ended March 31,
 2011 as against a loss of Rs. 13 crore (US$ 2.8 million) in the previous
 year.
 
 Reliance General Insurance is amongst the leading private sector
 general insurance companies in India with a market share of 9.4 per
 cent. Reliance General Insurance''s gross written premium for the year
 ended March 31, 2011 was Rs. 1,655 crore (US$ 363.1 million) as against Rs.
 1,980 crore (US$ 434.3 million) in the corresponding previous period.
 
 Commercial Finance Business offers a wide range of products which
 include home loans, loans against property, SME loans, commercial
 vehicle loans, loans for construction equipment and infrastructure
 financing. The focus in this business is primarily on improving the
 asset quality as well as the profitability of each loan given; and not
 merely a gain in market share. Reliance Commercial Finance has emerged
 as one of the leading lenders in the Indian non banking finance space
 with a 52 per cent increase in disbursements at Rs. 8,782 crore (US$ 1.9
 billion). The Company has been disbursing only secured loans and is
 winding down the unsecured loans portfolio. The outstanding loan book
 grew by 34 per cent to Rs. 12,290 crore (US$ 2.8 billion) as on March 31,
 2011, compared to Rs. 9,166 crore (US$ 2.1 billion) as on March 31, 2010.
 This loan book is spread over 1,09,800 customers from top 18 Indian
 metros. The profit before tax grew 99 per cent at Rs. 269 crore (US$ 59.1
 million) as against Rs. 135 crore (US$ 29.6 million) for the previous
 year.
 
 Future Plans
 
 We have drawn up exciting growth plans for the next three to five years:
 
 - Increase our customer base - from 20 million to 50 million
 
 - Increase the distribution reach - from 5 thousand to 25 thousand
 cities and towns
 
 - Increase the number of business partners - from half a million to
 one million
 
 - Globalize operations by leveraging our domestic experience and
 capabilities to expand our asset management and wealth management
 businesses in emerging markets across the world
 
 Together, these initiatives will further accelerate our growth and lead
 to substantial value creation for all.
 
 Corporate Governance
 
 Reliance Capital has always maintained the best governance standards
 and practices by adopting, as is the norm for all constituent companies
 of the Group, the Reliance Group - Corporate Governance Policies and
 Code of Conduct. These Policies and Code prescribe a set of systems,
 processes and principles, which conform to the highest international
 standards and are reviewed periodically to ensure their continuing
 relevance, effectiveness and responsiveness to the needs of investors,
 both local and global, and all other stakeholders.
 
 Social Commitments
 
 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