A.  Background
 
 Reliance Capital Limited. (''the Company'') is registered as a
 Non-Banking Financial Company (''NBFC'') as defined under Section 45-IA of
 the Reserve Bank of India Act, 1934. The Company is principally engaged
 in lending and investment activities.
 
 1.  a) Previous Year''s figures have been reworked, regrouped and
 reclassified wherever necessary.
 
 b) The figures for the current year includes figures of Reliance
 Commercial Finance Pvt. Ltd. (Formerly Reliance Consumer Finance Pvt.
 Ltd.) (RCFPL) which is amalgamated with the Company with effect from
 April 1, 2010 and therefore to that extent not comparable to the
 Previous Year''s figures.
 
 2.  a) Pursuant to the Scheme of Amalgamation (the Scheme) under
 Sections 391 to 394 of the Companies Act, 1956 as sanctioned by the
 Hon''ble High Court of judicature at Bombay vide Order dated April 29,
 2011 and fled with the Registrar of Companies (RoC) Maharashtra on May
 18, 2011, Reliance Commercial Finance Pvt. Ltd.  (RCFPL) - (wholly
 owned subsidiary of the Company whose core business was commercial
 finance business) has been amalgamated with the Company with effect from
 April 1, 2010 i.e., the Appointed Date.
 
 b) The Amalgamation has been accounted for under the Purchase Method
 as prescribed by Accounting Standard (AS) 14 Accounting for
 Amalgamation prescribed by Companies (Accounting Standards) Rules,
 2006.
 
 c) In accordance with the said Scheme : i) All the assets, debts,
 liabilities, duties and obligations of RCFPL have been vested in the
 Company with effect from
 
 April 1, 2010 and have been recorded at their respective book values
 under the purchase method of accounting for Amalgamation. All
 Intercompany balances and transactions during the year has been
 cancelled. There were no difference in the accounting policies of RCFPL
 and the Company.
 
 ii) In accordance with the said Scheme, any excess / (shortfall)
 arising on transfer of assets over liabilities have been credited /
 (debited) to the General Reserve.
 
 iv) As per Scheme of Amalgamation, investments in the shares of RCFPL
 of Rs. 329 crore is written off in the profit & Loss Account and an
 equivalent amount is withdrawn from the General Reserve. Had the scheme
 not provided for the treatment the difference of Rs. 0.01 crore would
 have been credited to Capital Reserve and General Reserve would have
 been lower by Rs. 0.01 crore.
 
 b) The Company invests in Pass Through certificates (PTCs) and purchases
 loans through the direct assignment route. In some of the
 securitisation transactions, the Company also has invested in the
 assets securitised by it, which, however, is restricted to the maximum
 limit prescribed by RBI from time to time.
 
 c) During the year, Company has entered into an agreement with Reliance
 Home Finance Pvt. Ltd., a subsidiary of the Company (Previous Year with
 AU Financiers (India) Pvt. Ltd.) for loan assignment. As per deed of
 assignment, for loans aggregating to Rs. 492.88 crore (Previous Year Rs.
 8.16 crore), the Company has been assigned the right for future
 receivables along with a power of attorney authorising the Company,
 inter-alia, to obtain possession of the assets in case of default. The
 above loans are secured against hypothecation of underlying assets.
 
 3.  The Company had entered into business transfer agreements (BTA) on
 April 26, 2010 with its subsidiaries i.e. Reliance Home Finance Pvt.
 Ltd. (RHFPL) and Reliance Commercial Finance Pvt. Ltd. (RCFPL) to
 transfer the business of Commercial Finance Division (RCF) at book
 value, such that the entire economic risk and reward of the RCF segment
 passes to the purchasers from the commencement of business on the value
 date i.e. April 1, 2010.
 
 4.  Owing to the amalgamation of Reliance Commercial Finance Pvt. Ltd.
 (Formerly Reliance Consumer Finance Pvt. Ltd.) wholly owned subsidiary,
 with the Company with effect from April 1, 2010, the business transfer
 agreements (BTA) entered on April 26.  2010 stand cancelled.
 
 The Company has amended the BTA with Reliance Home Finance Pvt. Ltd. on
 January 31, 2011. As per the amended BTA with RHFPL :
 
 a) The Company holds loan assets of Rs. 134.88 crore and liabilities of Rs.
 1.14 crore of RHFPL in the capacity of trustee as on March 31, 2011.
 
 b) During the year, the Company has transferred the following assets,
 income and expenses : i) unamortized DSA Commission of Rs. 1.91 crore ii)
 interest & other income of Rs. 46.68 crore iii) interest & other expenses
 of Rs. 31.25 crore iv) DSA commission expenses of Rs. 1.87 crore
 
 5.  The Company operates two Employee Stock Option Plans; ESOS Plan A
 and ESOS Plan B introduced in the financial year 2009- 10, which cover
 eligible employees of the Holding Company, the Company and its
 subsidiaries. The vesting of the options is from expiry of one year and
 ranges till four to five years as per Plan under the respective ESOS(s).
 Each Option entitles the holder thereof to apply for and be allotted /
 transferred one Equity Share of the Company of Rs. 10 each upon payment
 of the exercise price during the exercise period. The Company
 implements and manages the ESOS plan through a trust. Advance of Rs.
 130.41 crore (Previous Year Rs. 96.41crore) has been granted to Trust.
 Out of the said advance, Trust has purchased 16,00,000 (Previous Year
 11,00,000) Equity Shares on account of ESOS upto March 31, 2011.
 
 The Company has chosen to account for the Plan by the Intrinsic Value
 Method. The total expense recognised for the period arising from stock
 option plan as per Intrinsic Value Method is Rs. Nil (Previous Year Rs.
 Nil). Had the company adopted fair value method the net results for the
 year would have been lower by Rs. 14.20 crore (Previous Year Rs. 2.53
 crore) [net of tax saving Rs. 14.20 crore (Previous Year Rs. 2.11 crore)
 and accordingly EPS (both Basic and Diluted) would have been lower by Rs.
 0.57 (Previous Year Rs. 0.09).
 
 6.  Micro, small and medium enterprises :
 
 During the current year, the management has carried out the process of
 identification of enterprises, which have provided goods and services to
 the Company and which qualify under the definition of medium and small
 enterprises, as defined under Micro, Small and Medium Enterprises
 Development Act, 2006. Based on the inputs received on above, there
 have been no reporting cases of delays in payments to micro and small
 enterprises or of interest payments due to delays in such payments.
 
 7.  The Company is a partner in the following firms: i) Reliance Capital
 Partners:
 
 a) The firm consists of following partners:
 
 i) Reliance Capital Limited ii) Reliance Land Pvt. Ltd.
 
 b) profit sharing ratio:
 
 The profit is distributed between the partners on the basis of the
 weighted average capital.
 
 c) The profit of Rs. 39.58 crore is considered as profit of the current
 financial year (Previous Year Loss of Rs. 1.04 crore).  ii) Reliance
 Capital Infrastructure Partners:
 
 a) The firm consists of following partners:
 
 i) Reliance Capital Limited ii) Reliance Infocomm Infrastructure Pvt.
 Ltd.  iii) Reliance Infraprojects Ltd.
 
 b) profit sharing ratio:
 
 The profit is distributed between the partners on the basis of the
 weighted average capital.
 
 c) The firm has not commenced operations as at March 31, 2011 and there
 has been no contribution of capital upto March 31, 2011.
 
 8. Tax on Proposed Dividend
 
 As on April 27, 2011, the Reliance Capital Assets Management Ltd.
 (RCAM), a subsidiary of the Company has proposed dividend of Rs. 161.40
 crore (Dividend distribution tax thereon Rs. 26.18 crore) which is
 subsequently approved by its shareholders in their general meeting held
 on May 23, 2011. As on May 26, 2011 the Company has received dividend
 of Rs. 149.99 crore from RCAM. In view of Section 115- O of the Income
 Tax Act, 1961, the Company has reduced its dividend tax liabilities to
 that extent.
 
 9.  Segment reporting:
 
 As per paragraph 4 of Accounting Standard -17 (AS-17), on Segment
 Reporting notified by the Companies (Accounting Standard) Rules 2006,
 where a single financial report contains both consolidated financial
 statements and the separate financial statements of the holding company,
 segment reporting needs to be presented only on the basis of
 consolidated financial statements. In view of this, segment information
 has been presented at Note No. 17 of the abridged consolidated financial
 statements.
 
 10.  Related party disclosures: (A) List of Related Parties: i) Holding
 Company
 
 Reliance Innoventures Pvt. Ltd.  ii) Individual Promoter
 
 Shri Anil D. Ambani, the person having control during the year
 
 11.  a) Accrued Premium / Interest on Investments includes Rs. 61.08
 crore due from Associates (Previous Year Rs. 24.95 crore).
 
 b) Accrued Premium / Interest on Investments amounting to Rs. 126.36
 crore are due within 1 Year. (Previous Year Rs. 45.31 crore).
 
 12.  In the financial year 2008-09, the Company has entered into a joint
 venture with KGS Developers Ltd. in respect of real estate project
 development. The Company has invested Rs. 85 crore and is entitled to
 share the profit / Loss equally.
 
 13. Contingent Liabilities and Commitments (As certified by the
 Management)
 
                                                     (Rs. in crore) 
 
 Particulars                      March 31, 2011   March 31, 2010
 
 Contingent Liabilities 
 
 i) Guarantees to Banks and Financial
 Institutions on behalf of 
 subsidiaries and                    1,142.48          235.00
 Associates
 
 ii) Claims against the Company not 
 acknowledged as debt                   12.71           11.95
 Commitments
 
 iii)  Estimated amount of contracts 
 remaining to be executed on capital
 account                                70.58           27.11
 (net of advances)
 
 iv)  Uncalled amount of Investments   354.68          371.66