Reliance Communications

My dear fellow Shareowners,
 
 It gives me great pleasure to share with you the highlights of your
 Company’s performance during the year 2007-08.
 
 This has been yet another outstanding year for us, marked by impressive
 financial achievements, new launches, global acquisitions /
 consolidation, and accelerated network roll out, which has transformed
 your Company into a Global Telecom Operator.
 
 This transformation is the outcome of the vision and business strategy
 of our Group, the Reliance Anil Dhirubhai Ambani Group, and India’s
 second largest business house, to seek a larger canvas to innovate,
 perform and deliver superior returns to our stakeholders. It redefines
 our relentless quest towards value creation and reaffirms our Group’s
 mission of building enduring assets for the nation.
 
 In a very short period of time, we have succeeded in firmly
 establishing our strong leadership position in becoming India’s largest
 fully converged and integrated communications service provider in the
 private sector with over 48 million individual, enterprise, and carrier
 customers in India and across the world.
 
 We are set to create new benchmarks in Telecom Operations, Enterprise
 Solutions, Networking backbone infrastructure which will help in
 infrastructure development of India. Our new growth path will take full
 advantage of the core competencies we possess in building and managing
 world class integrated convergent infrastructure assets.
 
 Our visionary founder Shri Dhirubhai H Ambani firmly believed that
 India’s social and economic independence would fructify only if we
 create a nation wide web of core infrastructure facilities. He firmly
 believed that this would enable every Indian citizen to take full
 advantage of the humongous opportunities that exist in our country.
 
 Our transformation into a Global Telecom and Infrastructure provider is
 guided by his vision. To formalise this metamorphosis, the Company has
 restructured the Global initiatives including portfolio of global
 communications business services, Global Voice, Managed Network,
 Carrier Ethernet, and Fiber Capacity Businesses into a single division
 named as Reliance Globalcom.
 
 Our breakthrough strategy in all initiatives focuses on results. Our
 goal is to build a valued Company for all our stakeholders and a bright
 future for our country.
 
 Reliance Communications has emerged as one of India’s leading and
 fastest growing companies in the telecommunication sector, with group
 revenues of Rs 19,068 crore (US$ 4,765 million), gross fixed assets of
 Rs 46,339 crore (US$ 11,578.90 million) and market capitalisation of
 nearly Rs 1,19,662 crore (US$ 29,901 million) as on 30th April, 2008.
 
 Performance Review
 
 You will be happy to note that your Company has consolidated and
 improved its financial and operational performance during the year.
 
 The salient features on a consolidated basis for the financial year
 ended 31st March, 2008 and comparison with period of 12 month ended on
 31st March, 2007 are:
 
 - Net Profit After Tax of Rs. 5,401 crore (US$ 1,350 million) as
 against Rs 3,164 crore (US$ 734 million) higher by 70.70%;
 
 - Total Revenue of Rs. 19,068 crore (US$ 4,765 million) as against Rs
 14,468 crore (US$ 3,357 million) higher by 31.80%;
 
 - Earnings before Interest, Depreciation/Amortisation and other items
 of Rs. 8,199 crore (US$ 2,049 million) as against Rs 5,721 crore (US$
 1,327 million) higher by 43.30%;
 
 - Return on Net Worth for the year is 26.75% reflecting improved
 resource utilisation;
 
 - Earnings per Share of Rs. 26.32 (basic) and Rs. 23.22 (diluted);
 
 - Net Worth of Rs. 25,461 crore (US$ 6362 million) – among the top
 three companies in India;
 
 Your company enjoys the highest-credit-quality ratings of ‘LAAA’ for
 long term debt and ‘A1+’ for short term debt assigned respectively by
 ICRA - a resounding re-affirmation of our unwavering and long-standing
 commitment to financial prudence and conservatism.
 
 Our robust financial numbers have enabled us to recommend an increased
 dividend of 15%.
 
 Platform for Growth
 
 We are focused on delivering cutting-edge products and services which
 are compelling in terms of service as well as features and
 functionality.  As an emphasis on success in consumer technologies, we
 are also working to define the next era of consumer deliverables.
 
 Voice
 
 We are the one of the leading Company to provide benefit of dual
 technology covering GSM and CDMA services in India. Our CDMA wireless
 service operates across the country, while the GSM wireless service
 operates in 8 licensed service areas (Circles) of Eastern and Central
 India. Our Nationwide GSM launch, slated for the end of 2008, will
 propel us to a new growth orbit and fundamentally transform the
 dynamics of the Indian telecom market both in terms of price as well as
 the choice of technology.
 
 Global
 
 We are continuously investing in growth initiatives for businesses and
 customers that leverage the power of these emerging technologies in new
 ways across the world
 
 Broadband
 
 Our scalable Network leased lines supporting Single to Multiple links
 provide good potential for Wide Area Network (WAN) bandwidth
 requirements, which are growing at rates exceeding 30% per year.
 
 We have the largest hosting facility in India with 6 Data Centers
 aggregating to 2,50,000 sq.ft and cater to more than 60% of content
 hosted in India. Web hosting and surfing has become an important
 activity of every enterprise. Our competitive pricing, scalable managed
 network services and hosting suites makes us the most preferred choice
 in the Industry
 
 Value added
 
 Our dynamic Telecom Services bundled with global reach Enterprise
 Business Solutions such as Virtual Private Network, Bandwidth
 Aggregation Hosting services, Managed Network Services and Voice
 solutions; touch every enterprise constituent across the industries.
 Reliance Business Solutions carve an edge for the Company. An Edge
 created though innovation, operational excellence, cost leadership,
 effective communication and delightful customer experience
 
 Customer Support
 
 Our retail presence of about 2,000 exclusive Reliance World and RCOM
 outlets on pan India basis, serves as the smart front office interface
 for sales and service to our customers. Our customer service is further
 supported by 24 X 7 ISO certified contact centre facility capable to
 handle over 15 languages. Our International Contact Centre solutions
 provide virtual business presence across the Globe
 
 Future Growth Drivers
 
 While India is now widely acknowledged as the world’s fastest growing
 telecom market, it still enjoys only around 20 per cent tele-density
 (wireline plus wireless), with nearly 70 per cent of households unable
 to access any wireline telecom service. The prospects for growth remain
 as robust as ever. To ride this enormous boom and retain our strong
 competitive advantage, we have launched a whole new range of products
 and services - from feature-rich low-end handsets to aggressive and
 innovative tariff plans. These path-breaking initiatives will not only
 broaden our subscriber base but also offer our millions of customer’s
 real choice in both CDMA and GSM networks.
 
 New Initiatives Entertainment
 
 Our DTH and IPTV services, slated for launch later this year, will
 begin our journey towards entertainment segment, which will use the
 power of our network technology in its roll out. This will create new
 opportunities for us to deliver end-to-end experiences consolidating
 our unique position in the industry
 
 Tower Infrastructure
 
 Our pioneering efforts to tie up with other operators to co-lease space
 for passive infrastructure on our towers have met with a huge positive
 response. Even as we formalise these arrangements, we have also taken
 the lead in setting up and managing infrastructure sites, and in
 providing mobile services in specified rural and remote areas of the
 country
 
 Technology and Intelligence Repository
 
 We have recently launched Reliance Tech, an arm to garner and build
 technical knowledge repository, which will serve as a strong platform
 for providing innovative solutions to high end industry segments.
 
 Cost effective measures
 
 To improve our competitiveness and become even more cost effective, we
 are exploring the joint venture route in managing our network services.
 
 Growth strategy
 
 We are well-positioned to build on our strength with convergent telecom
 businesses of greater sizes. We will also continue to pursue new
 opportunities in high-performance convergent unified communications,
 enterprise solutions and business intelligence.
 
 Corporate Governance
 
 We have adopted the Reliance Anil Dhirubhai Ambani Group Corporate
 Governance Policies and Code of Conduct which has prescribed systems,
 processes and principles conforming to the international standards,
 aimed at promoting the interests of all our 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 Dhirubhai H. 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.
 
 We will think bigger. Indeed not just bigger but better, creating ever
 greater value for all our statekholders.
 
 
 Anil D. Ambani
 Chairman
 
 30th April, 2008