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Reliance Capital Ltd.

BSE: 500111 Sector: Financials
NSE: RELCAPITAL ISIN Code: INE013A01015
BSE 00:00 | 27 Jan 14.47 -0.09
(-0.62%)
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14.48

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14.62

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14.10

NSE 00:00 | 27 Jan 14.45 -0.10
(-0.69%)
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OPEN 14.48
PREVIOUS CLOSE 14.56
VOLUME 245839
52-Week high 30.80
52-Week low 9.30
P/E
Mkt Cap.(Rs cr) 366
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 14.48
CLOSE 14.56
VOLUME 245839
52-Week high 30.80
52-Week low 9.30
P/E
Mkt Cap.(Rs cr) 366
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Reliance Capital Ltd. (RELCAPITAL) - Director Report

Company director report

Dear Shareowners

Your Directors present the 35th Annual Report and theaudited financial statement for the financial year ended March 31 2021.

Financial Performance and State of Company's Affairs

The Financial performance of the Company for the financial year endedMarch 31 2021 is summarised below:

Particulars Standalone Consolidated
March 31 2021 March 31 2020* March 31 2021 March 31 2020*
(Rs in crore) (Rs in crore) (Rs in crore) (Rs in crore)
Total Revenue 563 1 393 19 308 18 359
Profit / (Loss) Before Tax (10 972) (5 465) (9 114) (1 223)
Tax Expense - - 173 (24)
Profit / (Loss) After Tax (10 972) (5 465) (9 287) (1 199)
Closing surplus / (deficit) in statement of profit (18 733) (7 761) (22 737) (13 567)
and loss
Transfer to statutory reserve fund** - - - 1
Transfer to debenture reserve fund - - - 2

* Previous year figures has been regrouped / reclassified whereverrequired.

** No amount was transferred to the Statutory Reserve Fund pursuant toSection 45-IC of the Reserve Bank of India Act 1934 as company has incurred loss duringthe year

Core Investment Company

The Company is a Core Investment Company ('CIC') registered withReserve Bank of India under the Master Direction - Core Investment Companies (ReserveBank) Directions 2016.

Dividend

During the year under review the Board of Directors has notrecommended any dividend on the Equity Shares of the Company.

Management Discussion and Analysis

Management Discussion and Analysis Report for the year under review asstipulated under the Securities and Exchange Board of India (Listing Obligations andDisclosure Requirements) Regulations 2015 (the 'Listing Regulations') and MasterDirection - Core Investment Companies (Reserve Bank) Directions 2016 is presented in aseparate section forming part of this Annual Report.

Deposits

The Company has neither accepted nor renewed any fixed deposits duringthe year. There are no unclaimed deposits unclaimed / unpaid interest refunds due to thedeposit holders or to be deposited to the Investor Education and Protection Fund as onMarch 31 2021.

Resources and Liquidity

The Company has not borrowed any funds since August 2019.

Pursuant to the approval of Debenture Holders at their meeting held onJanuary 30 2020 a Committee of Debenture Holders (CoDH) was constituted. SteeringCommittee (SteerCo) constituted by CoDH are conducting an independent and transparentasset monetisation process and has appointed Process Advisors and Investment Bankers. TheCoDH and Vistra ITCL (India) Limited Debenture Trustee had issued an Expression ofInterest for key assets of the Company. The Company is engaged with debenture holders toarrive at a resolution by monetization of its assets and unlock the value of itsunderlying businesses and thereby significantly reduce its overall leverage subject toapprovals from courts creditors and regulatory authorities.

Particulars of Loans Guarantees or Investments

The Company is registered as Core Investment Company with RBI. Thusthe provision of Section 186 except sub-section (1) of the Act is not applicable to theCompany.

Subsidiary and Associate companies

During the year under review there are no companies which have become/ ceased to be Subsidiary / Associate company of the Company.

The summary of the performance and financial position of the each ofthe subsidiary and associate companies are presented in Form AOC-1 and of majorsubsidiaries and associates are mentioned in Management Discussion and Analysis Reportforming part of this Annual Report. Also a report on the performance and financialposition of each of the subsidiary and associate companies as perthe Act is provided inthe consolidated financial statement. The Policy for determining material subsidiarycompanies may be accessed on the Company's website at https://www.reliancecapital.co.in/pdf/Policy-for-Determination-of-Material-Subsidiary.pdf.

Standalone and Consolidated Financial Statement

The audited financial statement of the Company drawn up both onstandalone and consolidated basis for the financial year ended March 31 2021 are inaccordance with the requirements of the Companies (Indian Accounting Standards) Rules2015 the ("Ind AS Rules") prescribed under Section 133 of the Companies Act2013 read with the relevant rules and other accounting principles. The ConsolidatedFinancial Statement have been prepared in accordance with Ind AS and relevant provisionsof the Act based on the financial statement received from subsidiary and associatecompanies as approved by their respective Board of Directors.

Directors

The Company has received declarations from all the IndependentDirectors of the Company confirming that they meet the criteria of Independence asprescribed under the Act and Listing Regulations.

The details of programme for familiarization of Independent Directorswith the Company nature of the industry in which the Company operates and related mattersare put up on the website of the Company at the link http://www.reliancecapital.co.in/cg_policies.html.

In terms of the provisions of the Companies Act 2013 Mr. A NSethuraman Director of the Company retires by rotation and being eligible offershimself for re-appointment at the ensuing AGM.

Further based on the written representations received from thedirectors as on March 31 2021 taken on record by the Board of

Directors and the legal opinion obtained by the Company none of thedirectors is disqualified as on March 31 2021 from being appointed as a director in termsof Section 164 (2) of the Act. In the opinion of the Board the Independent Directorspossess the requisite expertise and experience and are the persons of high integrity andrepute. They fulfil the conditions specified in the Companies Act 2013 and the Rules madethereunder and are independent of the management.

Key Managerial Personnel

During the year Mr. Aman Gudral was appointed as the Chief FinancialOfficer (CFO) upon cessation of Mr. Vaibhav Kabra as CFO of the Company with effect fromJune 1 2020.

Further Mr. Vijesh Thota was appointed as CFO of the Company witheffect from July 1 2021 upon cessation of Mr. Aman Gudral as CFO with effect from June30 2021 who moved into another leadership role.

Evaluation of Directors Board and Committees

The Nomination and Remuneration Committee (NRC) of the Company hasdevised a policy for performance evaluation of the individual Directors Board and itsCommittees which includes criteria for performance evaluation.

Pursuant to the provisions of the Act and the Listing Regulations andbased on policy devised by the NRC the Board has carried out an annual performanceevaluation of its own performance its Committees and individual Directors. The Boardperformance was evaluated based on inputs received from all the Directors afterconsidering criteria such as Board composition and structure effectiveness of Board andinformation provided to the Board etc.

The performance of the Committees was evaluated by the Board ofDirectors based on inputs received from all the Committee members after consideringcriteria such as composition and structure of Committees effectiveness of Committeemeetings etc.

Pursuant to the Listing Regulations performance evaluation ofIndependent Directors was done by the entire board excluding the Independent Directorbeing evaluated.

A separate meeting of the Independent Directors was also held for theevaluation of the performance of Non-Independent Directors performance of the Board as awhole and that of the Chairman of the Board.

Policy on appointment and remuneration for Directors Key ManagerialPersonnel and Senior Management Employees

The Nomination and Remuneration Committee of the Board has devised apolicy for selection appointment and remuneration of Directors Key Managerial Personneland Senior Management Employees. The Committee has also formulated the criteria fordetermining qualifications positive attributes and independence of Directors. The Policyhas been put up on the Company's website athttps://www.reliancecapital.co.in/Policies.aspx.

Directors' Responsibility Statement

Pursuant to the requirements under Section 134(5) of the Act withrespect to Directors' Responsibility Statement it is hereby confirmed that:

i. In the preparation of the annual financial statement for thefinancial year ended March 31 2021 the applicable Accounting Standards had been followedalong with proper explanation relating to material departures if any;

ii. The Directors had selected such accounting policies and appliedthem consistently and made judgments and estimates that are reasonable and prudent so asto give a true and fair view of the state of affairs of the Company as at March 31 2021and of the loss of the Company for the year ended on that date;

iii. The Directors had taken proper and sufficient care for themaintenance of adequate accounting records in accordance with the provisions of theCompanies Act 2013 for safeguarding the assets of the Company and for preventing anddetecting fraud and other irregularities;

iv. The Directors had prepared the annual financial statement for thefinancial year ended March 31 2021 on a 'going concern' basis;

v. The Directors had laid down proper internal financial controls to befollowed by the Company and such financial controls are adequate and are operatingeffectively. The Company is taking constant steps to further strengthen the same; and

vi. The Directors had devised proper systems to ensure compliance withthe provisions of all applicable laws and that such systems are adequate and operatingeffectively.

Contracts and Arrangements with Related Parties

All contracts / arrangements / transactions entered into / by theCompany during the financial year under review with related parties were on an arm'slength basis and in the ordinary course of business.

There were no materially significant related party transactions whichcould have potential conflict with interest of the Company at large.

During the year the Company had not entered into any contract /arrangement / transaction with related parties which could be considered material inaccordance with the policy of the Company on materiality of related party transactions.

During the year the Company has not entered into any contract /arrangement / transaction with related parties which could be considered material inaccordance with the policy of Company on materiality of related party transactions orwhich is required to be reported in Form AOC - 2 in terms of section 134 (3)(h) read withSection 188 of the Act and Rule 8(2) of the Companies (Accounts) Rules 2014.

All Related Party Transactions were placed before the Audit Committeeand also the Board for approval. Prior omnibus approval of the Audit Committee wasobtained for the transactions which were of a repetitive nature. The transactions enteredinto pursuant to the omnibus approval so granted were reviewed and statements givingdetails of all related party transactions were placed before the Audit Committee and theBoard of Directors on quarterly basis. The policy on Related Party Transactions asapproved by the Board is uploaded on the Company's website at the link http://www.reliancecapital.co.in/pdf/Policy_for_Related_Party_Transaction. pdf. Your Directors drawattention of the members to Note No. 35 to the Standalone Financial Statement which setsout related party disclosures pursuant to Ind-AS and Schedule V of Listing Regulations.

Material Changes and Commitments if any affecting the financialposition of the Company

There were no material changes and commitments affecting the financialposition of the Company which have occurred between the end of the financial year and thedate of this Report.

Meetings of the Board

A calendar of Meetings is prepared and circulated in advance to theDirectors. During the financial year five Board Meetings were held. Details of meetingsheld and attended by each Director are given in the Corporate Governance Report.

Audit Committee

The Audit Committee of the Board consists of Independent Directorsnamely Ms. Chhaya Virani as the Chairperson Mr. Rahul Sarin Dr. Thomas Mathew andDirector & Chief Executive Officer of the Company Mr. Dhananjay Tiwari as Members.During the year all the recommendations made by the Audit Committee were accepted by theBoard.

Auditors and Auditors' Report

At the 30th Annual General Meeting (AGM) of the Company heldon September 27 201 6 the members of the Company had appointed M/s. Pathak H.D. &Associates LLP Chartered Accountants to hold office as Statutory Auditors for a period offive consecutive years till the conclusion of the 35th Annual General Meeting.At the ensuing AGM the first term of five years of M/s. Pathak H.D. & Associates LLPChartered Accountants shall expire and they are eligible re-appointment for another termof 5 years under the provision of the Companies Act 2013.

However RBI vide its circular dated April 27 2021 has issuedGuidelines for Appointment of Statutory Central Auditors (SCAs) / Statutory Auditors (SAs)of Commercial Banks (excluding RRBs) UCBs and NBFCs (including HFCs) (the "RBICircular"). In terms of requirement of RBI Circular the Company is required toappoint another firm of Chartered Accountants as Statutory Auditors. M/s. Gokhale &Sathe Chartered Accountants (Firm Registration No. 103264W) Chartered Accountants areproposed to be appointed as Auditors of the Company.

M/s. Gokhale & Sathe fulfil the eligibility criteria as prescribedin RBI Circular.

The Company has received letters from M/s. Gokhale & SatheChartered Accountants to the effect that they fulfils the eligibility criteria prescribedin RBI Circular and their appointment if made would be within the prescribed limitsunder Section 141(3) of the Act and that they are not disqualified from being appointed asStatutory Auditors of the Company.

Your Directors have therefore proposed to appoint M/s. Gokhale 6 SatheChartered Accountants as Statutory Auditors of the Company subject to the approval of themembers at the ensuing AGM.

The observations and comments given by the Auditors in their Reportread together with notes on Financial Statement are selfexplanatory and hence do not callfor any further comments under Section 134 of the Act.

No fraud has been reported by the Auditors to the Audit Committee orthe Board.

Secretarial Audit and Secretarial Compliance Report

Pursuant to the provisions of Section 204 of the Act read with theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 the Board ofDirectors had appointed M/s. Aashish K. Bhatt & Associates Practicing CompanySecretaries to undertake the Secretarial Audit of the Company.

The Audit Report of the Secretarial Auditors of the Company and itsmaterial subsidiary for the financial year ended March 312021 are attached hereto asAnnexure A1 and A2.

Pursuant to Regulation 24A of the Listing Regulations the Company hasobtained Annual Secretarial Compliance Report from a Practicing Company Secretary oncompliance of all applicable SEBI Regulations and circulars / guidelines issued thereunder and the same were submitted with the Stock Exchanges.

The observations and comments given by the Secretarial Auditor in theirReport are self-explanatory and hence do not call for any further comments under Section134 of the Act.

Secretarial Standards

During the year under review the Company has complied with theapplicable Secretarial Standards issued by the Institute of Company Secretaries of India.

Maintenance of Cost Records

The Central Government has not specified maintenance of cost recordsfor any of the products of the Company under Section 148(1) of the Act.

Annual Return

As required under Section 134(3)(a) of the Act the Annual Return forthe financial year 2020-21 is put up on the Company's website and can be accessed athttps://www.reliancecapital.co.in/Annual-Reports.aspx.

Particulars of Employees and related disclosures

(a) Employees Stock Option Scheme(s)

Employees Stock Option Scheme(s) (ESOS 2015 and ESOS 2017) wereapproved and implemented by the Company and Options were granted to the employees inaccordance with guidelines applicable to ESOS. The Nomination and Remuneration Committeeof the Board monitors the Scheme. The existing ESOS Scheme and Plans are in compliancewith the Securities and Exchange Board of India (Share Based Employee Benefits)Regulations 2014 (SEBI Regulations).

The Company has received a certificate from the Auditors of the Companythat the ESOS 2015 and ESOS 2017 have been implemented in accordance with the SEBIRegulations and as per the resolution passed by the members of the Company authorisingissuance of the said Options. The details as required to be disclosed under SEBIRegulations are put on the Company's website at http://www.reliancecapital.co.in/ESOS-Disclosure.aspx.

(b) Other Particulars

In terms of the provisions of Section 197(12) of the Act read with Rule5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel)Rules 2014 as amended a statement showing the names and other particulars of theemployees drawing remuneration in excess of the limits set out in the said Rules areprovided in the Annual Report which forms part of this Report.

Disclosures relating to the remuneration and other details as requiredunder Section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 as amended are also provided in theAnnual Report which forms part of this Report.

However having regard to the provisions of second proviso to Section136(1) of the Act the Annual Report excluding the aforesaid information is being sent toall the members of the Company and others entitled thereto. The said information

is available for inspection up to the date of the Meeting. Any memberinterested in obtaining the same may write to the Company Secretary and the same will befurnished on request.

Conservation of Energy Technology Absorption and Foreign ExchangeEarnings and Outgo

The Company is a Non-Banking Financial Company and does not involve inany manufacturing activity most of the information as required under Section 134(3)(m) ofthe Act read with Rule 8 of the Companies (Accounts) Rules 2014 are not applicable.However the information as applicable has been given in Annexure - B forming part of thisReport.

Corporate Governance

The Company has adopted 'Reliance Group-Corporate Governance Policiesand Code of Conduct' which sets out the systems processes and policies conforming to theinternational standards. The report on Corporate Governance as stipulated under Regulation34(3) read with Para C of Schedule V of the Listing Regulations and Master Direction -Core Investment Companies (Reserve Bank) Directions 2016 is presented in separate sectionforming part of this Annual Report.

A Certificate from M/s. Aashish K. Bhatt & Associates PracticingCompany Secretaries confirming compliance to the conditions of Corporate Governance asstipulated under Para E of Schedule V of the Listing Regulations is enclosed to thisReport.

Ombudspersons & Whistle Blower (Vigil Mechanism)

The Company has formulated an Ombudspersons & Whistle Blower (VigilMechanism) policy to address the genuine concerns if any of the Directors and employeesthe policy has been overseen by Audit Committee. No person has been denied for directaccess to the Chairperson of the Audit Committee. The details of the same have been statedin the Report on Corporate Governance and the policy can be accessed on the Company'swebsite.

Risk Management

The Company has laid down a Risk Management Policy to identify theinherent risks assess evaluate and monitor these risks continuously and undertakeeffective steps to manage these risks.

The Group Risk Management Committee consisting of Mr. Rahul Sarin asChairman Ms. Chhaya Virani Independent Directors Mr. Dhananjay Tiwari Director &Chief Executive Officer Chief Financial Officer and Chief Risk Officer as membersperiodically reviews Risk Management. The periodical update on the risk managementpractices and mitigation plan of the Company and subsidiaries are presented to the AuditCommittee and Board of Directors. The Audit Committee and Board periodically review suchupdates and findings and suggest areas where internal controls and risk managementpractices can be improved. More details on Risk Management indicating development andimplementation of Risk Management Policy including identification of elements of risk andtheir mitigation are covered in Management Discussion and Analysis section which formspart of this Report.

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 womanemployees and it has in place a policy which provides for protection against sexualharassment of women at work place and for prevention and redressal of such complaints.During the year no such complaints were received. The Company has also constituted anInternal Complaints Committee under the Sexual Harassment of Women at workplace(Prevention Prohibition and Redressal) Act 2013.

Corporate Social Responsibility

The Company has constituted Corporate Social Responsibility (CSR)Committee in compliance with the provisions of Section 135 of the Act read with theCompanies (Corporate Social Responsibility Policy) Rules 2014. The CSR Committee hasformulated a Corporate Social Responsibility Policy (CSR policy) indicating the activitiesto be undertaken by the Company.

The CSR policy may be accessed on the Company's website at the link;http://www.reliancecapital.co.in/pdf/Group_CSR_ Policy_Document.pdf.

As on March 312021 the CSR Committee consists of Ms. Chhaya Virani asChairperson Mr. Rahul Sarin and Dr. Thomas Mathew as the Members. The disclosures withrespect to CSR activities are given in Annexure - C.

Significant and material Orders passed by the Regulators or Courts orTribunal

The Company is prohibited from making any payment to secured orunsecured creditors and to dispose off alienate encumber either directly or indirectlyor otherwise part with the possession of any assets except in the ordinary course ofbusiness such as payment of salary and statutory dues vide Orders dated December 3 2019and December 5 2019 passed by the Hon'ble Debts Recovery Tribunal Orders dated November20 2019 and March 15 2021 passed by the Hon'ble Delhi High Court and Orders datedNovember 28 2019 November 4 2020 and March 5 2021 passed by the Hon'ble Bombay HighCourt.

Internal Financial Control Systems and their adequacy

The Company has in place adequate internal financial control systemsacross the organisation. The same is subject to review periodically by the internal auditcell for its effectiveness. During the year such controls were tested and no reportablematerial weakness in the design or operation was observed.

General

During the year under review there were no reportable events inrelation to issue of equity shares with differential rights as to dividend voting orotherwise issue of sweat equity shares to its Directors or Employees proceedings pendingunder the Insolvency and Bankruptcy Code 2016 and one-time settlement with any Bank orFinancial Institution

Acknowledgement

Your Directors would like to express their sincere appreciation for theco-operation and assistance received from shareholders debenture holders debenturetrustee bankers financial institutions regulatory bodies and other businessconstituents during the year under review. Your Directors also wish to place on recordtheir deep sense of appreciation for the commitment displayed by all executives officersand staff.

For and on behalf of the Board of Directors
Mumbai Anil Dhirubhai Ambani
August 6 2021 Chairman

.