Annual Report - Reliance Communications - 2009-2010

RELIANCE COMMUNICATIONS LIMITED

ANNUAL REPORT 2009-2010

DIRECTOR'S REPORT

Dear Shareowners,

Your Directors have pleasure in presenting the sixth Annual Report and the
audited accounts for the financial year ended 31st March, 2010.



Financial Results

The standalone performance of the Company for the financial year ended 31st
March, 2010 is summarised below:

Particulars Financial Year ended * Financial Year ended
31st March, 2010 31st March, 2009

(Rs. in US$ in (Rs. in US$ in
crore) million** crore) million**

Total income 12,511.72 2,771.76 13,694.66 2,700.05

Gross profit before
depreciation, amortisation
and exceptional items 2,149.06 476.09 3,288.75 648.41

Less:

a. Depreciation and
amortisation 1,511.24 334.79 1,933.51 381.21

b. Exceptional items and
other adjustments 18.35 4.07 (3,459.83) (682.14)

Profit before tax 619.47 137.23 4,815.07 949.34

Less: Provision for:

Current tax 140.54 31.13 - -

Fringe benefit tax - - 12.40 2.44

Profit after tax 478.93 106.10 4,802.67 946.90

Add: Balance brought
forward from previous year 502.75 111.37 4,300.24 847.84

Profit available for
appropriation 981.68 217.47 9,102.91 1,794.74

Appropriations:

Proposed Dividend on
equity shares 175.44 38.87 - -

Interim Dividend paid
on equity shares - - 165.12 32.56

Dividend Tax 29.14 6.46 28.06 5.53

Transfer to General Reserve 40.00 8.86 8,400.00 1,656.15

Transfer to Debenture
Redemption Reserve 74.96 16.61 6.98 1.38

Balance carried to
Balance Sheet 662.14 146.67 502.75 99.12

* Figures of previous year have been regrouped and reclassified, wherever
required.

** Exchange Rate Rs. 45.14 = US$ 1 as on 31st March, 2010 (Rs.50.72= US$1
as on 31st March, 2009).

Financial Performance

During the year under review, your Company has earned income of
Rs.12,511.72 crore against Rs.13,694.66 crore in the previous year. The
Company earned Profit after tax of Rs. 478.93 crore compared to Rs.
4,802.67 crore in the previous year.

Dividend

Your Directors have recommended a dividend of Re. 0.85, (17%) per equity
share each of Rs. 5 for the financial year ended 31st March, 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 14th September, 2010, and (ii) to those whose names appear as beneficial
owners, as at the end of the business hours on 14th September, 2010 as
furnished by the National Securities Depository Limited and Central
Depository Services (India) Limited for the purpose.

The proposed dividend is in accordance with the Company's policy to pay
sustainable dividend linked to long term performance, keeping in view the
capital needs for the Company's growth plans and the intent to optimal
financing of such plans through internal accruals.

Management Discussion and Analysis

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 forming part of the
Annual Report. The Company has entered into various contracts in the areas
of telecom and value added service businesses. While benefits from such
contracts will accrue in the future years, their progress is periodically
reviewed.

Business Operations

The Company operates on a pan-India basis and offers the full value chain
of wireless (CDMA and GSM), wireline, national long distance,
international, voice, data, video, Direct-To-Home (DTH) and internet based
communications services under various business units organised into three
strategic customer-facing business segments; Wireless, Global and
Broadband. These strategic business units are supported by passive
infrastructure connected to nationwide backbone of Optic Fibre Network
fully integrated network operation system and by the largest retail
distribution and customer services facilities. The Company also owns
through its subsidiaries, a global submarine cable network infrastructure
and offers managed services, managed Ethernet and application delivery
services.

During the year under review, the Company had crossed the landmark of 100
million wireless customers. The Company ranks among top two wireless
operators in the country. The momentous achievement has been attained
within seven years of the Company's first launching its pan-India mobile
services in 2003, fastest ramp up of mobile customers in the world. With
this landmark achievement, the Company becomes the 4th operator in the
world to serve over 100 Million customers in a single country.

Schemes of Arrangement

(a) Scheme of Arrangement with Reliance Infratel Limited

In terms of the Scheme of Arrangement between the Company and Reliance
Infratel Limited (RITL), a subsidiary of the Company and their respective
shareholders and creditors, as sanctioned by the Hon'ble High Court of
Judicature at Bombay vide order dated 18th July, 2009, the Optic Fiber
Undertaking of the Company was demerged and vested into RITL with effect
from 15th September 2009. The appointed date was 1st April 2008.

(b) Scheme of Amalgamation with Reliance Gateway Net Limited

Reliance Gateway Net Limited (RGNL), a wholly owned subsidiary of the
Company amalgamated with the Company w.e.f. 13th July 2009 in terms of the
Scheme of Amalgamation sanctioned by the Hon'ble High Court of Judicature
at Bombay vide order dated 3rd July, 2009. The appointed date was 31st
March, 2009.

Repurchase of Foreign Currency Convertible Bonds (FCCBs)

During the year under review, the Company had repurchased and cancelled 297
Zero Coupon FCCBs each of US $ 1,00,000 at a discount.

The outstanding FCCBs issued by the Company, if converted into the Equity
Shares of the Company, would result in increase to the paid up Equity Share
Capital of the Company by 8.91 crore Equity Shares each of Rs.5/-.

Subsidiary Companies

During the year under review, Global Innovative Solutions Private Limited,
Reliance WiMax D.R.C. B.V, Reliance WiMax Gambia B.V. Reliance WiMax
Mauritius B.V., Reliance WiMax Mozambique B.V, Reliance WiMax Niger B.V.,
Reliance WiMax Zambia B.V., Access Bissau LDA became the subsidiaries of
the Company. During the year under review, Reliance Mobile Limited and
Vanco (India) Private Limited ceased to be subsidiaries of the Company.

In terms of the approval granted by the Central Government under Section
212(8) of the Companies Act, 1956, copies of the Balance Sheet, Profit and
Loss Account, Report of the Board of Directors and Auditors of the
subsidiaries have not been attached with the Balance Sheet of the Company.
However, these documents will be made available upon request by any member
of the Company. As directed by the Central Government, the financial data
of the subsidiaries have been furnished under Financial Information of
Subsidiary Companies', which forms part of the Annual Report. The annual
accounts of the Company including that of subsidiaries will be kept for
inspection by any member. Further, pursuant to Accounting Standard (AS) -21
prescribed under the Companies (Accounting Standards) Rules, 2006,
Consolidated Financial Statements presented by the Company include
financial information of subsidiary Companies.

Employee Stock Option Scheme

During the year under review, the Company has not granted any Options to
the employees of the Company. Employees Stock Option Scheme (ESOS) was
approved and implemented by the Company and Options were granted to
employees under ESOS Plan 2008 and Plan 2009 in accordance with the
Securities and Exchange Board of India (Employee Stock Option Scheme and
Employee Stock Purchase Scheme) Guidelines, 1999 (the SEBI Guidelines').

The particulars as required under Clause 12 of SEBI (Employee Stock Option
Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 are as follows:

Particulars ESOS Plan 2008

a) Total Options granted 1,49,91,185 Options

b) No of Options surrendered 1,32,17,975 Options

c) Pricing formula decided by ESOS Market Price or such other
Compensation Committee price as Board / Committee
may determine. Different
Exercise price may apply to
different Plan(s).

d) Options vested 16,07,320 Options

e) Options exercised Nil

f) Total number of equity shares Subject to Option(s) exercised
arising as a result of exercise by the employees, not exceeding
of Options 16,07,320 Equity Shares.

g) Options lapsed during the year 4,85,109 Options

h) Variation of terms of Options None

i) Money realised by exercise of
Options during the year Nil

j) Total number of Options in force
at the end of the year 11,22,211 Options

k) Employee wise details of
Options granted to:

i. Senior managerial personnel Nil
(i.e. Managing Director/Whole-time
Director/ Manager)

ii. Employee who receives grant Nil
in any one year of option
amounting to 5% or more of
option granted during the year

iii. Identified employees who Nil
were granted options, during
any one year equal to or
exceeding 1% of the issued
capital (excluding outstanding
warrants and conversions) of
the company at the time of
grant

l) Diluted Earnings Per Share N.A.
(EPS) pursuant to issue of There would not be any fresh
shares on exercise of Options issue of equity shares of
calculated in accordance with the Company upon exercise
Accounting Standard (AS) 20 of Options by employees

m) The difference between employee
compensation cost using intrinsic
value method and fair value of
the Options and impact of this
difference on

Profits Rs. 3.56 crore
EPS of the Company Rs. 2.22

n) Weighted- average exercise Nil
prices of Options granted during
the year where exercise price is
less than market price.

o) Weighted- average fair values Nil
of Options granted during the year
where exercise price is less than
market price.

p) Significant assumptions made
in computation of fair value
base: Black Scholes model
(i) risk-free interest rate, 8.01% p.a.

(ii) expected life, 8 years

(iii) expected volatility, 56.26%

(iv) expected dividends (yield), and 0.47%

(v) the price of the underlying Rs. 541.15 per share
share in market
at the time of option grant.


Particulars ESOS Plan 2009

a) Total Options granted 1,32,17,975 Options

b) No of Options surrendered Nil

c) Pricing formula decided by ESOS Average of the weekly
Compensation Committee high and low of the
closing price of the
equity share of the
Company at National
Stock Exchange of India
Limited during two
weeks preceding the
date of Grant i.e.
16th January 2009.

d) Options vested 1,12,78,995 Options

e) Options exercised Nil

f) Total number of equity shares Subject to Option(s) exercised
arising as a result of exercise by the employees, not exceeding
of Options 1,32,17,975 Equity Shares.

g) Options lapsed during the year 19,55,780 Options

h) Variation of terms of Options None

i) Money realised by exercise of
Options during the year Nil

j) Total number of Options in force
at the end of the year 93,23,215 Options

k) Employee wise details of
Options granted to:

i. Senior managerial personnel Shri Hasit Shukla, President,
(i.e. Managing Director/Whole-time Company Secretary and Manager
Director/ Manager) 1,00,000 Options.

ii. Employee who receives grant Nil
in any one year of option
amounting to 5% or more of
option granted during the year

iii. Identified employees who Nil
were granted options, during
any one year equal to or
exceeding 1% of the issued
capital (excluding outstanding
warrants and conversions) of
the company at the time of
grant

l) Diluted Earnings Per Share N.A.
(EPS) pursuant to issue of There would not be any
shares on exercise of Options fresh issue of equity
calculated in accordance with shares of the Company
Accounting Standard (AS) 20 upon exercise of Options
by employees

m) The difference between employee
compensation cost using intrinsic
value method and fair value of
the Options and impact of this
difference on

Profits Rs. 12.26 crore
EPS of the Company Rs. 2.22

n) Weighted- average exercise Nil
prices of Options granted during
the year where exercise price is
less than market price.

o) Weighted- average fair values Nil
of Options granted during the year
where exercise price is less than
market price.

p) Significant assumptions made
in computation of fair value

(i) risk-free interest rate, 8.12% p.a.

(ii) expected life, 9 years

(iii) expected volatility, 56.26%

(iv) expected dividends (yield), and 0.47%

(v) the price of the underlying Rs. 174 per share
share in market
at the time of option grant.

The Company has received a certificate from the auditors of the Company
that the ESOS Plan 2008 and 2009 has been implemented in accordance with
the Guidelines and as per the resolution passed by the members of the
Company authorising issuance of ESOS.

Fixed Deposits

The Company has not accepted any fixed deposit during the year under
review.

Directors

In terms of the provisions of the Companies Act, 1956, Shri Deepak Shourie,
Director of the Company retires by rotation and being eligible, offers
himself for re-appointment at the ensuing Annual General Meeting.

A brief resume of the Director retiring by rotation at the ensuing Annual
General Meeting, nature of expertise in specific functional areas and names
of companies in which he holds directorship and/or membership/chairmanships
of Committees of the Board, as stipulated under Clause 49 of the listing
agreement with the Stock Exchanges in India, is given in the section on
Corporate Governance forming part of the Annual Report.

Directors' Responsibility Statement

Pursuant to the requirements under Section 217(2AA) of the Companies Act,
1956 with respect to Directors'

Responsibility Statement, it is hereby confirmed that:

i. in the preparation of the annual accounts for financial year ended 31st
March, 2010, the applicable Accounting Standards have been followed along
with proper explanation relating to material departures;

ii. the Directors had selected such accounting policies and applied them
consistently and made judgments and estimates that are reasonable and
prudent so as to give a true and fair view of the state of affairs of the
Company as at 31st March, 2010 and of the profit of the Company for the
year under review;

iii. the Directors had taken proper and sufficient care for the maintenance
of adequate accounting records in accordance with the provisions of the
Companies Act, 1956 for safeguarding the assets of the Company and for
preventing and detecting fraud and other irregularities; and

iv. the Directors had prepared the annual accounts for financial year ended
31st March, 2010 on a going concern' basis.

Group

Pursuant to intimation received from the Promoters, the names of the
Promoters and entities comprising Group' as defined under the Monopolies
and Restrictive Trade Practices Act, 1969 are disclosed in the Annual
Report for the purpose of the SEBI (Substantial Acquisition of Shares and
Takeovers) Regulations, 1997.

Consolidated Financial Statements

The Audited Consolidated Financial Statements, based on the financial
statements received from subsidiaries and associates, as approved by their
respective Board of Directors have been prepared in accordance with
Accounting Standard (AS) -21 on Consolidated Financial Statements' read
with Accounting Standard (AS) -23 on Accounting for Investments in
Associates', notified under Section 211(3C) of the Companies Act, 1956 read
with the Companies (Accounting Standards) Rules, 2006, as applicable.

Auditors and Auditors' Report

M/s. Chaturvedi & Shah, Chartered Accountants and M/s. B S R & Co.,
Chartered Accountants, as Statutory Auditors of the Company, hold office
until the conclusion of the ensuing Annual General Meeting and are eligible
for re-appointment.

The Company has received letters from M/s. Chaturvedi & Shah, Chartered
Accountants and M/s. B S R & Co., Chartered Accountants, to the effect that
their appointment, if made, would be within the prescribed limits under
Section 224(1B) of the Companies Act, 1956, and that they are not
disqualified for such appointment within the meaning of Section 226 of the
Companies Act, 1956.

The observations and comments given by Auditors in this report read
together with notes to Accounts are self explanatory and hence do not call
for any further comments under Section 217 of the Companies Act, 1956.

Particulars of Employees

In terms of the provisions of Section 217(2A) of the Companies Act, 1956
read with the Companies (Particulars of Employees) Rules, 1975, the names
and other particulars of employees are set out in the Annexure to the
Directors' Report. However, having regard to the provisions of Section
219(1)(b)(iv) of the Companies Act, 1956, the Annual Report excluding the
aforesaid information is being sent to all the members of the Company and
others entitled thereto. Any member interested in obtaining such
particulars may write to the Company Secretary at the Registered Office of
the Company.

Conservation of Energy, Technology Absorption and Foreign Exchange Earnings
and Outgo

The particulars as required to be disclosed pursuant to Section 217(1)(e)
of the Companies Act, 1956, read with the Companies (Disclosures of
Particulars in the Report of Board of Directors) Rules, 1988, are given in
the Annexure - A forming part of this Report.

Corporate Governance

The Company has adopted 'Reliance Anil Dhirubhai Ambani Group-Corporate
Governance Policies and Code of Conduct' which has set out the systems,
process and policies conforming to international standards. The report on
Corporate Governance as stipulated under Clause 49 of the listing agreement
with the Stock Exchanges, forms part of the Annual Report.

A Certificate from the Auditors of the Company M/s. Chaturvedi & Shah,
Chartered Accountants and M/s. B S R & Co., Chartered Accountants,
conforming compliance with conditions of Corporate Governance as stipulated
under the aforesaid Clause 49, is annexed to this Report.

Acknowledgements

Your Directors would like to express their sincere appreciation of the co-
operation and assistance received from shareholders, debentureholder,
bankers, regulatory bodies and other business constituents during the year
under review. Your Directors also wish to place on record their deep sense
of appreciation for the commitment displayed by all executives, officers
and staff, resulting in the successful performance of the Company during
the year.

For and on behalf of the Board of Directors

Mumbai Anil Dhirubhai Ambani
15th May, 2010 Chairman

Annexure -A

Conservation of Energy, Technology Absorption and Foreign Exchange Earnings
and Outgo:

Your Company being a telecommunications service provider does not involve
in any manufacturing activity, hence the provisions of the Section
217(1)(e) of the Companies Act, 1956 read with the Companies (Disclosure of
Particulars in the Report of the Board of Directors) Rules, 1988, is not
applicable.

However, the information as applicable is given hereunder:

(a) Conservation of Energy: Company is making all efforts to conserve
energy. The Company monitors energy costs and periodically reviews the
consumption of energy. It also takes appropriate steps to reduce the
consumption through efficiency in usage and timely maintenance /
installation / upgradation of energy saving devices.

(b) Technology Absorption: The Company continuously makes efforts towards
research and developmental activities and has been constantly active in
harnessing and tapping the latest and best technology in the industry.

(c) Foreign Exchange Earnings and Outgo:

Activities related to exports, initiatives taken to increase exports;
development of new export markets for products and services; and export
plans:

The Company has taken various initiatives for development of export markets
for its international telecom services in the countries outside India to
increase its foreign exchange earnings.

Total foreign exchange earnings and outgo for the financial year is as
follows:

a. Total Foreign Exchange earnings : Rs. 849.14 crore

b. Total Foreign Exchange outgo : Rs. 1,276.17 crore

MANAGEMENT DISCUSSION AND ANALYSIS

Forward looking statements:

Statements in this Management Discussion and Analysis of Financial
Condition and Results of Operations of the Company describing the Company's
objectives, expectations or predictions may be forward looking within the
meaning of applicable securities laws and regulations. Forward looking
statements are based on certain assumptions and expectations of future
events.

The Company cannot guarantee that these assumptions and expectations are
accurate or will be realised. The Company assumes no responsibility to
publicly amend, modify or revise forward-looking statements, on the basis
of any subsequent developments, information or events. Actual results may
differ materially from those expressed in the statement. Important factors
that could influence the Company's operations include interconnect usage
charges, determination of tariff and such other charges and levies by the
regulatory authority, changes in government regulations, tax laws, economic
developments within the country and such other factors globally.

The financial statements are prepared under historical cost convention, on
accrual basis of accounting, and in accordance with the provisions of the
Companies Act, 1956 (the Act) and comply with the Accounting Standards
notified under Section 211(3C) of the Act read with the Companies
(Accounting Standards) Rules, 2006. The management of Reliance
Communications Limited ('Reliance Communications' or 'RCOM' or 'the
Company') has used estimates and judgments relating to the financial
statements on a prudent and reasonable basis, in order that the financial
statements reflect in a true and fair manner, the state of affairs and
profits for the year.

The following discussions on our financial condition and result of
operations should be read together with our audited consolidated financial
statements and the notes to these statements included in the Annual Report.

Unless otherwise specified or the context otherwise requires, all
references herein to 'we', 'us', 'our', 'the Company', 'Reliance', 'RCOM',
'RCOM Group' or 'Reliance Communications' are to Reliance Communications
Limited and its subsidiaries and associates.

Macro economics

The Indian economy registered buoyant growth in Financial Year 2009-10
after combating severe headwinds caused by the global financial crisis in
the previous year. Having regained some of the growth momentum of the
earlier 9 per cent plus era, it is now poised to cross the double digit
growth' barrier. The challenge is to harness this quick economic recovery
and focus on the development of rural infrastructure.

There are several factors that underpin the robust performance of the
economy in recent times, and augur well for its longterm health. Apart from
the impressive recovery in the industrial sector, there has been a
significant revival in investment as well as private consumption demand.
Favourable capital market conditions, together with improved business
sentiment and capital inflows, have also been a cause for optimism. All
this has been accompanied by a marked pick-up in corporate earnings and
profits.

Given these macro indications, the GDP growth rate may well breach the 10
per cent mark in the near future.

Overall review

RCOM is India's truly integrated and fully converged telecommunications
service provider. We operate across the full spectrum of wireless,
wireline, voice, data, video and internet communication services. We also
have an extensive international presence through the provision of long
distance voice, data and internet services and submarine cable network
infrastructure globally. With a customer base of over 109 million
(including over 2.5 million overseas retail customers and 2.4 million BigTV
DTH customers), RCOM is the world's 4th largest operator in terms of number
of customers in a single country. Our corporate clientele includes 2,100
Indian and multinational corporations, and over 800 global, regional and
domestic carriers. Our enterprise customers include 850 of the top 1000
enterprises in India.

RCOM is India's first telecom service provider offering nationwide CDMA and
GSM mobile services with digital voice clarity. Reliance Communications has
established a pan-India, next generation, integrated (wireless and
wireline), convergent (voice, data and video) digital network that is
capable of supporting best-ofclass services spanning the entire
communications value chain, covering over 24,000 towns and 600,000
villages.

Our mobile portal, R World, offers the widest range of mobile content
spanning e-commerce, m-commerce entertainment, music, news, astrology,
cricket, bollywood, maps, search, oneclick set-up, access to email and
social networking. In short, it provides the full range of communication
tools which once fell in the realm of the personal computer, at the price
and convenience of a handset.

RCOM owns and operates the world's largest next generation IP enabled
connectivity infrastructure, comprising over 277,000 route kilometers of
fibre optic cable systems in India, USA, Europe, Middle East and the Asia
Pacific region. In India, we provide long distance business services
including wholesale voice, bandwidth and infrastructure services. Globally,
we provide carrier's carrier voice, carrier's carrier bandwidth, enterprise
data and consumer voice services.

RCOM offers the most comprehensive portfolio of enterprise voice, data,
video, internet and IT infrastructure services catering to large, medium
and small enterprises for their communications, networking and IT
infrastructure needs. Our product portfolio includes national and
international private leased circuits, broadband internet access, audio
solutions including Centrex, toll free services, voice VPN, video
conferencing , MPLS-VPN, remote access VPN, Global MPLS VPN managed
internet data centre ('IDC') services to name a few. RCOM has the biggest
Metro Ethernet network which is now available in 144 cities with about
35,000 Metro Devices in ring architecture thus enabling more than 1 million
buildings to provide reliable and scalable bandwidth Metro Ethernet
solutions.

RCOM operates nationwide Direct-to-Home satellite TV services under its
wholly owned subsidiary, Reliance Big TV Limited (Big TV). Big TV uses
state-of-the-art MPEG4 technology to deliver over 230 channels, including
32 exclusive movie channels, to its subscribers. We also deliver high
definition content and Dolby digital voice quality to our viewers on this
platform to create a highly personalised video experience.

New Initiatives

RCOM redefines industry benchmarks

Earlier this year, in a game changing move, Reliance broke through the
clutter of myriad tariffs, with one single rate for all local and STD calls
to any mobile or landline network, anytime, anywhere in India, without any
conditions or restrictions. Reliance Communications has set a new industry
standard, offering unbelievable, never-before prices in a simple and
transparent manner.

The Simply Reliance Plan' offers three variants to meet the needs of
customers with different calling patterns, namely, 50 paise per minute, 1
paise per second and Re.1 per call for duration of 3 minutes across pan
India available to all customers, whether existing pre-paid and post-paid
or new.

Alliance with Polycom Inc.

RCOM has formed an alliance with Polycom Inc., the global leader in tele-
presence, video and voice solutions, to introduce world's first wireless,
high-resolution video and CD-quality audio, conferencing service along with
simple-to-use content sharing capabilities - at a bandwidth speed of 256
kbps at any place. Using this service, events like live meetings, online
education, medical procedures, family events, weddings, parties and
ceremonies can be webcasted live by event managers on a pay-per-use basis
with a feel real-time, face-to-face visual communication.

Alliance to continue leadership in mobile applications

With the emergence of smart phones and the increased use of mobile
internet, the usage is driven by mobile application stores and mobile
versions of the popular internet services. RCOM has strategic tie-ups and
alliances with more than 350 technology and content partners, various
leading M-commerce solutions providers.

M-commerce solution, an emerging area in the mobile space, offers a fast,
secure, inter-operable and convenient platform to conclude payment
transactions using Reliance Mobile. Reliance subscribers will now be able
to transact in secured and Personal Identification Number (PIN) protected
environment for insurance services, DTH recharges, movie tickets, books and
periodicals, consumer goods, holiday packages as well as bus and train
tickets using their Reliance Mobile connection. These services are also
available on R World for all GSM customers.

Alliance with Microsoft

RCOM Enterprise Business partnered with Microsoft to combine the power of
virtualisation technology and cloud computing and launched 'Reliance Cloud
Computing Services'. This is a hosted infrastructure service for our
customers in India to access a variety of enterprise scale IT solutions,
business applications and services like server hosting, data storage and
archival, ERP and document management. There is a full suite of
applications and services based on the cloud computing model. Microsoft's
virtualisation and management technologies has helped us in reducing the
input costs involved in providing these services, thereby enabling Reliance
to pass on the cost benefits to the customers.

Reliance Infratel Limited (RITL) new agreements signed

RITL, during the year under review, signed contracts with all major new and
existing operators for providing passive Infrastructure which has been an
effective strategy for our customers for cost savings and improved quality
of service. Our customers now include the top five telecom operators as
well as five new entrant operators.

RITL signed a large bulk IRU lease agreement with Aircel for providing
ducts on pan India basis. Additionally, Aircel would take intermediate
stations' for deployment of their electronics as an add-on co-location
service. RITL will also be providing services for blowing the fiber for
Aircel.

Reliance Globalcom new agreements signed

In the Carrier Data segment, we signed contracts of over Rs. 500 crore with
our existing customer base. We continued to be the preferred service
provider to leading global carriers, ISPs and content providers around the
world.

In order to sustain our leadership in the global subsea network, we have
joined the US$400 million, 8,300 km, 17 Tbps design capacity Singapore -
Hong Kong - Japan (SJC) cable system consortium. The SJC cable system is
expected to be completed by Q3 2011 and will give us the capability and
reach to provide voice, internet and data services to our customers in the
South East Asian markets of Indonesia, Singapore and the Philippines.

Last but not least, our Next Generation cable 'Hawk' in the Mediterranean
between Middle East and Europe remains on track for completion in 2010-11.

Reliance Globalcom retail expansion

The global calling card market is experiencing hypercompetition. We have
been able to maintain our margins despite the introduction of disruptive
tariffs by other Indian operators both in the US and UK markets. We have
focused on delivering more value to our existing base of over 2 million
Reliance Global Call customers through event-based campaigns. We have also
expanded our network to Ireland, Spain, Austria, Belgium and Netherlands,
taking the total number to 16 countries where Reliance Global Call is now
present.

We are now engaging more closely with our customers in US, Canada, UK,
Australia, New Zealand, Singapore, Malaysia and promoting our brand across
local communities and events. This has been well received and will form the
basis for the launch of our new services Reliance iCall and Reliance Mind
Bridge.

Enterprise

In the Enterprise segment, we signed contracts of over Rs. 575 crore and
added more than 80 new logos.

We continue to be preferred by large multinational companies to rollout and
manage complex MPLS VPN networks in stiff competition with the Global top
four.

We launched Enterprise Global Ethernet or (EGE) in 36 countries. Only a
handful of other telcos can offer comparable Ethernet reach at one-stop.
This product will help us in addressing the Ethernet services demand from
enterprises outside the United States.

We launched a major brand building and advertising campaign in US and
Europe. This campaign has further strengthened our market position as an
agile, reliable and global service provider.

Industry Structure and Regulatory Developments

Industry Structure

Wireless

The Indian telecom sector continues to demonstrate strong growth in spite
of sluggishness in the global economic environment. The total base of
landline and wireless subscribers in India has grown to 621.28 million and
the tele-density to 52.74 per cent as on 31st March, 2010. The annual
growth of 44.58 per cent was primarily driven by rural expansion and the
proliferation of affordable devices.

Wireless subscribers reached 584.32 million and wireless teledensity stood
at 49.60 per cent.

The share of private sector in wireless connections touched 87.24 per cent
as on 31st March 2010.

The year under review witnessed dramatic drop in telecom tariffs. With the
launch of services by several new operators in the year, the total number
of operators in the market now stands at 15. The competition caused a
further shift with operators focusing on increased value-added and data
services to subscribers in the saturated urban markets.

Internet and Broadband

Internet subscribers in India grew moderately to 20.30 million and
broadband subscribers to 8.75 million by 31st March, 2010.

Telecom Infrastructure

The demand for telecom infrastructure in India is driven both by the robust
growth in the mobile industry as a whole and by the growth in usage in the
new semi-urban and rural markets. The industry landscape has changed with
the Government issuing over 120 licenses to new operators and the number of
players going up from 5-6 per circle to 9-10 in most circles. These new
operators have been allotted spectrum in about 18 to 20 circles and some of
them have now got joint venture tie-ups with large global players thereby
getting the necessary impetus to roll out their services. The roll-out of
mobile services by these new players further increases the demand for
telecom infrastructure. The telecom infrastructure industry will witness a
further significant upside from the 3G /BWA auctions and the network
rollout plans of the successful bidders.

The Industry now has about 300,000 towers, with ample opportunities for
existing infrastructure providers to offer tower tenancies to new domestic
and multinational operators.

Global

Our global business participates in diverse industry segments, viz., (i)
global submarine capacity sales (ii) national long distance for voice and
data (iii) international voice transit (iv) international retail voice (v)
enterprise connectivity and managed services business. A market leader
across different segments, we have the largest private submarine cable in
the world and the largest NLD network in India. We rank amongst the top 25
largest international voice traffic carriers and have established a strong
retail brand in the US. Our global business operates a service delivery
platform for internet, data, voice and multimedia communications and is
particularly strong in the fast-growing emerging markets of India, China
and the Middle East. We have also achieved leadership positions in the
developed markets of the US, UK, Western Europe, Australia and Singapore.
We are uniquely positioned to provide complete end-to-end solution through
our diverse best-in-class product range.

Industry Trends

1. Sustained High Growth

India will continue to be the fastest growing telecom market in the world
in terms of the total number of new subscriber additions. This exponential
growth phase is expected to last for a few years before the rate of growth
starts leveling off.

2. 3G and WiMax Roll-out

With 3G and WiMax (BWA) spectrum auctions under progress, there is a great
potential for the take-off of data access and broadband services.

3. Innovations in internet technology

Innovations in internet technology will have a material impact on the
mobile communications industry.

4. Rural Penetration

Rural coverage will be key to an operator's growth strategy. Rural tele-
density is still under 25 per cent with significant growth potential,
whereas urban tele-density has already crossed the 100 per cent mark.

5. Infrastructure sharing

There will be a greater potential for tower sharing / outsourcing model
with the entry of new telecom players into India and also due to the advent
of 3G and WiMax.

6. Competition

There will be fierce competition among existing and new telecom operators,
leading to substantial benefits for the subscribers.

Regulatory developments

1. Dual technology petition quashed by TDSAT

TDSAT, on 31st March, 2009, dismissed the petition filed by the Cellular
Operators Association of India (COAI) challenging the decision of the
Government of India to allow dual technology (CDMA and GSM) services to
RCOM and other CDMA operators. The tribunal has also declared that GSM
operators have no vested right to get the radio frequency beyond 6.2 MHz.
BSNL /MTNL and COAI have challenged the TDSAT order in Supreme Court.

2. Access Deficit Charges

The Telecom Regulatory Authority of India ('TRAI') had abolished Access
Deficit Charges ('ADC'), a levy paid by private telecom operators to Bharat
Sanchar Nigam limited ('BSNL'). Now all domestic and international calls
are free from the incidence of ADC.

BSNL challenged these ADC amendments before the Telecom Disputes Settlement
and Appellate Tribunal ('TDSAT'). The TDSAT had dismissed all the appeals.
Appeals have been filed by BSNL before Supreme Court against these orders
of the TDSAT. Being statutory appeals these have been admitted by Supreme
Court. However, no stay on TDSAT order has been granted.

3. IUC Regulation of TRAI challenged in TDSAT

TRAI had amended the IUC (Interconnect and Usage Charges) regulation by an
amendment dated 9th March, 2009. The revised IUC rates had become effective
from 1st April, 2009. The regulation was challenged by most of the
operators. Hearings in the case have been completed and TDSAT has reserved
its judgment.

4. Launch of Mobile Number Portability (MNP) delayed

On 6th May, 2009, the DoT issued an amendment in the licenses of Unified
Access Service (UAS), Cellular Mobile Telephone Service (CMTS), National
Long Distance (NLD), International Long Distance (ILD) and basic service to
facilitate the timely implementation of mobile number portability service
in the licensed service area as per the regulations/directions/orders made/
issued by TRAI.

TRAI notified the Telecommunications Mobile Number Portability Regulations
(MNP), 2009 (8 of 2009), detailing the procedure for porting, the rights
and obligations of various entities involved and time limits for carrying
out Mobile Number Portability. The regulation envisages a maximum time
period of 4 days for the completion of porting process in all licensed
service areas except in the case of Jammu and Kashmir, Assam and North
East, where the maximum time allowed is 12 days.

TRAI notified the Telecommunication Mobile Number Portability per Port
Transaction Charge and Dipping Charge Regulations, 2009 (9 of 2009) and the
Telecommunication Tariff (Forty-Ninth Amendment) Order, 2009, to fix
various charges for Mobile Number Portability. The porting charge i.e. the
amount to be paid by the subscriber shall not be more than the per port
transaction charge i.e. Rs. 19/-. The dipping charge has been left to be
settled by mutual negotiation between the telecom service providers and the
respective MNP service providers.

DoT has notified new dates for implementation of MNP, which is now expected
to be implemented by 30th September 2010.

5. QoS regulation for wireline and Cellular Mobile Telecom services

TRAI issued revised QoS (Quality of Service) regulation for CMTS and wire
line services on 20th March, 2009. The existing benchmarks have been
tightened and some of the parameters like service access delay have been
done away with. Some new parameters like - BTS accumulated downtime, worst
affected BTSs due to downtime, worst affected cells having more than 3 per
cent TCH drop - have been added. The benchmark for Call drop ratio has been
reduced to 2 from 3 per cent earlier. The revised regulation has come into
effect from 1st July, 2009.

6. Auctioning of 3G and Broadband Wireless Access (BWA) spectrum

In February 2010, DoT floated a NIA (Notice Inviting Application) to invite
potential bidders to apply for 3G and BWA spectrum. The key features of the
NIA were as follows:

* The willing applicants to apply before 19th March 2010.

* The e-auction of 3G spectrum to start on 9th April 2010; and the BWA
auction to start two days after the completion of the 3G auction.

* The number of slots up for auction to exclude licenses already allotted
to BSNL and MTNL.

* Five circles, namely Punjab, West Bengal, Himachal Pradesh, Bihar and
Jammu and Kashmir to have 4 slots of 5 MHz each for auction while remaining
17 circles to have 3 slots of 5MHz each for 3G auction. For BWA auction
there is one slot across 22 circles.

* A spectrum base price of Rs. 3,500 crore and Rs. 1,750 crore set for one
3G and one BWA slot respectively.

* Letter of Intent to be issued to the successful 3Gbidders but they would
be able to roll out services only from September, 2010.

7. Lock-in period of 3 years for promoter's equity

DoT vide its Circular dated 23rd July, 2009, inter alia provided for a
lock-in-period for sale of equity of an entity whose share capital is 10
per cent or more in the UAS licensee company on the effective date of UAS
licence and whose net-worth has been taken into consideration for
determining the eligibility for grant of UAS license, till completion of
three years from the effective date of the UAS licence or till fulfillment
of all the rollout obligations, whichever is earlier.

8. Security clearance for procurement of telecom equipments

DoT issued a directive to all the Unified Access Service as well as NLD,
ILD and ISP licensees on 3rd December 2009. As per the order, prior
approval has to be taken from the licensor before procurement of any
telecom equipment/software. DoT issued a format for providing the details
of the equipments, country of origin, port etc on 25th February 2010. DoT
vide its circular dated 18th March, 2010, exempted from security clearances
the passive equipments and equipments/ software manufactured in India by
Indian controlled manufactures as well as noncore equipments. This created
a situation where Licencees have not been able to import network equipment
since 3rd December, 2009. AUSPI and COAI have requested DoT to reconsider
such arbitrary and unreasonable requirements.

9. Review of Spectrum Management and license terms and conditions

DoT has sought TRAI's recommendations on the report of the DoT's Committee
on 'Allocation of Access (GSM/ CDMA) spectrum and pricing' of May 2009. In
addition, DoT has also sought TRAI's recommendations on the terms and
conditions of existing UAS/CMTS licence with respect to the duration of
licences, auctioning of all spectrums other than 800, 900 and 1800 MHz
bands, capping on the number of licences in each service area. To formulate
its recommendations and initiate consultation with stakeholders, TRAI
issued a Consultation Paper on 16th October, 2009, titled 'Overall Spectrum
Management and review of the license terms and conditions'. The
consultation paper covers spectrum and license related issues. The
recommendations of TRAI were issued on 11th May 2010.

The key recommendations are as follows:

* Uniform License fee of 6% on all the services including IP1 and ISP
license, in a phased manner.

* Removal of Subscriber Linked Criteria for allotment of additional
spectrum.

* Roll out criteria for allotment of additional spectrum. The priority for
allotment of additional spectrum has also been proposed. As per the
recommendation, those who have been allotted the initial spectrum and have
applied for allotment of additional spectrum so as to reach contracted
spectrum of 6.2 MHz, will be accorded the highest priority in allocation of
spectrum.

* Spectrum limits fixed at 10 MHz for GSM and 6.25 MHz for CDMA in Delhi
and Mumbai. In rest of India, these limits have been fixed at 8 MHz for GSM
and 5 MHz for CDMA technology.

* The operators possessing spectrum more than contracted spectrum of 6.2
MHz will have to pay one time charge based on 3G auction determined price.
This charge will be levied for a minimum period of 7 years.

* On merger and acquisition conditions, the merged entity can not have 30%
of subscriber market share and revenue market share. The merged entity can
retain spectrum up to 14.4 MHz.

* Spectrum trading has not been allowed. However spectrum sharing has been
permitted for those who have been allotted spectrum of 4.4 MHz. TRAI has
recommended that spectrum sharing should be permitted for a maximum period
of 5 years.

* Rebate of 0.5% in USO fund to those who complete 4 year roll out
obligations suggested by the TRAI. The USO fund rebate will be 2% for those
licensees who cover 100% of the habitations with a population of 500-2000.

* Refarming of 900 MHz band at the time of license renewal. It has been
suggested that all the licensees will be allotted spectrum in 1800 MHz on
the renewal of their licenses. 900 MHz band should be used for providing 3G
services.

DoT will take a final decision on the above recommendation brought out by
TRAI.

10. Re-examination of Merger guidelines by TRAI

DoT issued revised guidelines for intra service area merger on 22nd April,
2008. These guidelines have replaced the earlier guidelines issued on 21st
February, 2004. The threshold level for any merger to take place has been
revised to 40 per cent of revenue market share and subscriber market share.
For considering the number of subscribers, wireline and wireless
subscribers will be considered separately. The TRAI is re-examined these
guidelines and has recommended revising the combine market share limit of
the merging entities to 30% of the total market (together for wireline and
wireless). The DoT has yet to take final view on TRAI recommendations.

11. Re-verification of Mobile Subscribers

DoT has revised the penalty in case non verification of subscriber. On
representation, DoT vide their letter dated 30th September, 2009 has
allowed all the operators to re-verify the subscriber from 1st October,
2009 till 31st October, 2010 to avoid penalty.

12. Prepaid services in Jammu and Kashmir (J&K)

DoT had issued a directive in September 2009 for noncontinuation of prepaid
services in J&K. However, it subsequently allowed prepaid services in the
state to be resumed in January 2010, subject to re-verification of existing
prepaid customers. For new customers, theverification guidelines have been
strengthened. Prepaid services in J&K, North East and Assam are renewed on
yearly basis. The renewal of the services is to be done in the month of
February every year. Prepaid services have been renewed in these circles
till February 2011.

13. TRAI directive on Value Added Services

TRAI had issued a directive on subscription of VAS services on 27th April
2009. As per the directive, any value added service - for example, a Caller
Ring Back Tone could be offered to a customer only after receiving a
confirmatory SMS from him. However, after representation from the Industry,
TRAI simplified this procedure, and vide its directive dated 4th September
2009, permitted the subscription of VAS by pressing*' and 9' on the
handset, thereby making double electronic confirmation.

14. Utilisation of Numbering Resources

The TRAI has initiated discussions to review the current method of
allocation and sought suggestions for making more numbers available in the
10 digit format. They are also considering for the long term the
feasibility of using 11 digit numbering format.

15. DTH Regulatory and other issues

a. On 17th March, 2009, TRAI released the Telecommunication (Broadcasting
and Cable Services) Interconnection (Fifth Amendment) Regulations, 2009,
which essentially cover regulatory provisions on non-discriminatory access
to content, issues relating to interconnection for addressable platforms
and issues relating to registration of interconnection agreement.

b. TDSAT differentiates between whole sale rates of base pack and add-on
pack. In its judgment TDSAT has accepted ESPN's contention that 50 per cent
discount should be given only when the channel is being viewed by all or at
least a majority of the DTH operator's subscriber base.

c. A large number of state governments have started charging or will start
charging entertainment tax (Maharashtra, Karnataka, Rajasthan, Bihar, Goa,
Assam, UP, Delhi, Uttaranchal, Punjab, MP, Orissa, and Gujarat). Various
DTH operators have filed petitions against Entertainment tax such as the
petition filled by Bharti and Tata Sky against the levy of Entertainment
Tax in the Gujarat and Delhi High Courts.

d. Other operators have also filed a Petition in TDSAT for clarification of
the definition of AGR. The operators have contended that certain items
which are not related to the provision of DTH service should not be
included for the purpose of calculation of AGR for DTH service.

e. TRAI released consultation papers on Tariff related issues in DTH on
24th December, 2009. Individual players have offered their comments on the
papers after mutual discussions among all members of the DTH association.

Key Developments in the Company

Wireless business

RCOM achieves a landmark of 100 million customers

Earlier this year, RCOM crossed the 100-million subscriber mark, making it
the 2nd largest wireless operator in the country to reach the mark.
Remarkably, RCOM reached this milestone within seven years of the launch of
its pan-India mobile services, which is the fastest ramp up of mobile
customers anywhere in the world. With this landmark achievement, we became
the 4th operator in the world to serve over 100 million customers in a
single country.

To commemorate the occasion, RCOM launched a 100-day celebration, as part
of which a slew of initiatives were announced, including one day of free
and unlimited calling on the Reliance network across local, STD and
roaming.

Churn

Despite stiff and intensifying competition, the churn in our postpaid CDMA
and GSM businesses during the year was one of the lowest in the industry.
In addition, our special focus on retaining high value customers yielded
significant revenue benefits.

RCOM redefines industry benchmarks: Launches Simply Reliance plans

Reliance pioneered the mobile revolution in 2005 by making the cost of a
phone call cheaper than a post card.

The Simply Reliance Plan' offers one single rate of 50 paise per minute
across 24,000 towns and 600,000 villages, providing seamless and
unconditional benefits to all its existing customers, both prepaid and
post-paid, as well as the new ones. Subsequently, we expanded the portfolio
by offering subscribers the flexibility of usage depending on their
requirement - of 1 paisa per second' or 1 rupee per call' tariffs.

RCOM also unveiled two revolutionary tariff plans - 1paisa per SMS or Re.1
for unlimited number of SMSes every day for all mobile customers,
regardless of their tariff plans for voice and data services.

GSM - CDMA Integration

As a major step towards business migration of RCOM and RTL for seamless
customer service and improved efficiency at Reliance Touch Points, all
Customer Services processes and policies were integrated along with system
/ front end applications. This was further strengthened with RCOM CDMA
integration with GSM.

Reliance Netconnect Broadband Plus

During the year, we rolled out CDMA wireless broadband service, Reliance
Netconnect Broadband Plus, India's fastest Wireless internet service.
Netconnect Broadband Plus has a downlink speed of upto 3.1 Mbps. This makes
Netconnect Broadband+ best suited for video streaming, video surveillance,
rich media content and superior internet browsing.

The initial rollout of the Netconnect Broadband+ service consisted of 38
cities including the metros. This was later expanded to 62 cities towards
the end of the fiscal year. Netconnect Broadband+ will soon be made
available in 60 more cities, all with seamless handover to high speed 1x
service across 24,000 towns and 600,000 villages as well as all major road
and rail routes, covering over 99 per cent of India's internet population.
The Company retails Netconnect Broadband+ in 12,000 IT retail outlets
across India as well as 2,300 exclusive Reliance Communication retail
stores and nearly 240 Reliance World outlets.

Netconnect Broadband+ is targeting about 6 million road warriors who need
internet access on the move with their laptop and about 8 million home PC
users who access entertainment and educational content on a daily basis.

Global Business

Reliance Globalcom spearheads the global telecom operations of Reliance
Communications. The global business serves over 2,100 enterprises, 200
carriers and 2.5 million retail customers over 160 countries across 5
continents.

Reliance Globalcom brings together the synergies of Reliance Communications
Global Business encompassing Enterprise Services, Capacity Sales, Managed
Services and a highly successful bouquet of retail products and services
comprising of Global Voice, Internet Solutions and Value Added Services.

We own and operate the world's largest private undersea cable system
spanning 65,000 kilometers seamlessly integrated with domestic optic fiber
running over 190,000 kilometers, providing a robust Global Service Delivery
Platform connecting 40 key business markets in India, USA, Europe, the
Middle East, and the Asia Pacific region. Our Mediterranean cable system,
along withour participation in the Singapore Japan cable system, will give
us the distinction of being the foremost private submarine cable systems in
the world.

In the voice segment, we offer International Long Distance carriage and
termination to other carriers as well as, on an inter segment basis, to
other business units of Reliance Communications.

Carrier services

We offer NLD carriage and termination to other carriers and, on an inter-
segment basis, to other business units of Reliance Communications. We are
the leading provider of international connectivity and data services to
telecom operators, content providers and internet communities around the
globe.

Enterprise services

We are the leading global Managed Network Services provider serving over
60,000 sites in over 160 countries. We also rank among the top 6 global
Ethernet service providers for 2009, and among the top 2 connectivity
providers to the world's top exchanges.

Retail services

As part of our retail offering in voice, we offer virtual international
calling services to retail customers for calls to 200 international
destinations including India under the brand Reliance Global Call. Our
retail services are available to customers in several countries including
the United States, Canada, the United Kingdom, Australia, New Zealand, Hong
Kong and Malaysia. We have over 2.5 million customers for our Reliance
Global Call service. The usage of Reliance Global Call accounts for 40 per
cent of the total retail market calls from the US to India.

In our International Voice business, our focus has been to increase market
share and leverage our network capacity. This market is now served by 13
operators, as a result of which margins are under pressure. However, we
have been successful in gaining market share and our total ILD voice
traffic has grown more than 30 per cent on a year-on-year basis. We
continue to have the largest inbound traffic market share.

Enterprise Broadband

Continuing with our focus on directly connecting buildings in almost 50
cities in India, our Broadband network connected over 1 million buildings.

Our robust nationwide network backbone is continuously controlled and
monitored at the National Operating and Control Center (NOCC) located in
Mumbai. This NOCC facility is replicated at Hyderabad to guard against any
catastrophe as a redundancy measure. We have enhanced our capabilities in
the Managed Service Operations Centre (MSOC), which is dedicated towards
managing the customers' network. This is poised to help us garner higher
market share in the fast growing managed services market.

Infrastructure

Reliance Infratel Limited (RITL), our infrastructure subsidiary, signed
contracts during the year with major new and existing operators for
providing passive Infrastructure which has proved to be an effective
strategy for our customers for cost savings and improved quality of
service. Our customers now include the existing top five as well as five
new incumbents out of the total of 15 operators in the market.

* Our total tenancy stands at 1.75 per tower, the highest in the Industry.

* RITL now owns 190,000-Km optical fiber network, providing a more
economical and better quality link for tenants compared to microwave.

* RCOM's current utilisation of tower slot assets is 40-50 per cent. This
gives us significant potential for 3rd party tenants. It also complements
our existing passive infrastructure and provides an integrated solution to
tenants.

* As such, we offer our customers an extensive and diverse portfolio of
well-positioned assets and we believe that our wide and expanding portfolio
of tower sites puts us in a unique position to handle the needs of
national, regional, local and emerging wireless service providers in India.

Home / DTH

We launched India's fully Digital Home Entertainment Service on the world's
most advanced MPEG4 Direct-To-Home (DTH) Platform. Within 90 days of
launch, Reliance Big TV Limited (Big TV), the DTH arm of RCOM, acquired 1
million subscribers, the fastest ramp up of subscribers ever achieved by
any DTH operator in the world. As on 31st March, 2010, Big TV had 2.4
million customers with a National Market share of over 12 per cent. We are
today present across 6,500 towns with a pan-India service and installation
network.

The DTH Industry in India added 8 million subscribers in Financial Year
2009-10. There are six players in the industry with an estimated market
size of 20 million subscribers and a penetration rate of 20 per cent
amongst homes using cable network service.

Reliance Big TV DTH service boasts of over 230 channels, 6 interactive
services and a rich bouquet of subscription video-ondemand / pay per view'
offerings. With its state of the art price packaging models, customer
friendly entry/ subscription offers and sustained customer management
programs, Reliance Big TV commands one of the highest ARPUs in the
Industry.

As we move into our 2nd full year of operations, we have launched the dual-
capability HD -DVR set top box across top 100 cities - the only DTH
operator in the country to do so. On the cards is a look-and-feel revamp of
the platform through a contemporary Graphical User Interface along with the
added option of Hindi language. Reliance Big TV was able to secure 2
Transponders on the existing satellite. We plan to add 60 new channels
including a rich bouquet of HD channels to the platform. The brand is going
for an intensive distribution drive to tap into 15,000 towns nationally.

Opportunities and Challenges

Opportunities

3G Launch: The launch of 3G services will add a fresh impetus to telecom
growth in the country. We are proactively getting 3G ready, having
committed significant investments in wireless infrastructure IP backhaul
and VAS.

Both 3G and BWA technologies will be key to serving the pentup demand in
the underserved broadband market in India. The critical enablers of the
migration from narrowband voice to the broadband data market are the
availability of both adequate spectrum and low-cost devices. We expect the
floodgates to open once these enablers are realised post the spectrum
allocation; that is when the process of building India's digital economy
will begin in right earnest.

Convergence: Our full fledged convergence model is driven both by
technology and demand because, together, they hold the key to the overall
success of the value chains built to provide voice, data and video multi-
media networks into a single unified packet based multi-services platform.

With the BWA auctions currently in progress, the convergence in service
through robust Network will drive the Telecom value chains, and lead to a
better utilisation of capacity, greater coverage and improved quality. Our
initiatives for Corporate Convergence will activate consolidations,
mergers, acquisitions, or collaborations among the operators.

Rural opportunity: The overall tele-density in India has reached around
52.74 per cent. While the urban tele-density has crossed the 100 per cent
mark, the rural tele-density is pegged at 22.17 per cent and steadily
growing. Indeed, it is the latter which is driving telecom growth in the
second phase. Our nationwide network combined with the national
distribution framework gives us a unique advantage in tapping this large
opportunity.

Dual Technology: While offering dual technology services, we also benefit
from the massive network build-out for CDMA and GSM, helping us offer
highly attractive tariffs and products, leverage the available capacity and
provide multiple choices to subscribers.

We are also continuously aware of the emerging 3G/WiMAX opportunities and
the ensuing possible options to evolve our current network assets. We
possess a wealth of experience managing large-scale networks with extremely
high usage volumes at competitive prices.

Passive Infrastructure: The expected technology rollouts this year were
driven by 2G, 3G and BWA needs of the new and existing mobile operators as
well as of the ISP operators. This translates into the current demand of
nearly 500,000 slots - slated to go up to 700,000 in the next couple of
years for passive infrastructure as well as other services. Our next
generation infrastructure is favorably positioned to capture this
opportunity.

At RCOM, we approach the market in the telecom infrastructure business with
a unified and comprehensive approach covering the entire value chain of
telecom infrastructure services, including active and passive
infrastructure

Unique Positions in India

* We currently have sites in each of India's 22 circles - a total of 49,300
telecommunication towers as of 31st March, 2010.

* The current average age of our telecommunication towers is 2.8 years.

* All our existing telecommunication towers, unlike some of our
competitors, have the unique capacity to host multiple wireless service
providers as tenants Our multi-tenancy towers have, on an average, the
capacity to host 4 tenants each. As on 31st March, 2010, we had a tenancy
rate of 1.75, the highest in the industry. We are in a unique position in
the industry to offer more capacity/tenancy to 3rd party operators
(existing and new) in the B2B space.

* RITL has the largest fiber transmission network in the country with over
190,000 kms. of national optic fiber network.

* The duct and fiber pair offerings along with passive infrastructure
compliments our other offerings of transmission connectivity to sites, bulk
bandwidth, carriage, NLD / ILD, co-location of customer electronics in our
BSC, internet bandwidth and roaming solutions.

* Our customers have typically opted for 3 - 5 B2B services out of the
combined RITL-RCOM portfolio of services.

R World Content: Our Reliance Mobile World (R World) is a virtual one-stop-
shop for entertainment, communication, gaming and M-commerce. Thanks to its
wide range of applications, it has quickly endeared itself to users from
all walks of life. Reliance Mobile World has hundreds of useful
applications and over 200,000 content titles which include Mobile TV,
videos, cricket updates, music, ringtones, phonebook transfers, back-up
service, and other M-commerce services such as mobile banking, bill
payments, mobile e-mail and instant messenger, city and TV guides, gas
cylinder bookings, Speed Post tracking, Airlines and Railway reservations,
examination results and much more.

Global

With RCOM's ownership of Reliance Wimax World (eWave), a pioneer in the
global Wimax space, Reliance Globalcom has the capability to launch 4G
services in over 50 countries. The acquisition of Vanco Group, enables the
company to provide managed services to over 230 countries and territories
across the globe.

RTech: Our Information Technology arm, RTech, has 19,000+ person-years of
experience across various domains with more than 25 per cent of the team
having over 10 years of experience. RTech provides application development
and maintenance services, Business Consulting, Telecom Network Products and
solutions, ERP Implementation and Development services, Geographic
Information services, Business Intelligence and Data Analytics, Knowledge
Management, Network and internet Security services, Managed Network and
Infrastructure services, Unified Communication and Messaging services and
nationwide IT support services.

Retail

The Company has one of the most extensive distribution and service networks
amongst all telecom players in India, consisting of nearly 2,300 Reliance
World and Reliance Mobile Stores throughout India equipped to sell wireless
handsets and service packages, customer service centers with multilingual
capabilities that have over 6,000 agents. In addition, nearly a million
retail outlets sell recharges (of which approximately 90 per cent are
electronic recharge enabled). The Company also has alliances with banks for
providing electronic recharge at 14,000 ATMs. Our 24 x 7 customer service
is further supported by about 10,000 employees, multi-lingual contact
centre facilities providing full customer care interface and redressal
measures.

Challenges

Entry of many new Operators

The rapid entry of new telecom operators in the market has intensified
competition leading to downward pressure on prices. Our well planned
capital investments, backed by a world class network, puts us in an
enviable position in meeting the emerging competitive challenge in the
telecom space.

Entry of Mobile Virtual Network Operator (MVNO)/ Brand franchisees

There is a possibility that the Government may progressively relax MVNO
norms. As a result, more players may be able to access the Indian markets
through this route. Consequently, these operators may put pressure on
tariffs.

Risks and concerns

1. Some of the operating licences are subject to regulatory compliance
under the terms and conditions of licences grant over different part of the
world. The rules and regulations, issued by the respective government and
regulatory authorities, having jurisdiction over the Company's operations
and licenses, schedules and obligations require it to meet specified
conditions, network build-out requirements and tariff fixation. However,
the Company does not perceive any default on this account.

2. Mobile Number Portability (MNP), mandated by DoT, will be implemented on
a pan-India basis and could limit the acquisition of new subscribers and
the retention of existing ones. This move is bound to be beneficial for
congestion free new networks as they can use aggressive pricing strategies
to lure existing subscribers.

3. Rapid technological changes may increase competition and render the
Company's technologies, products or services obsolete. Our facilities are
tuned to next generation latest technology and we do not foresee
obsolescence at present.

4. The telecommunication services industry is capital intensive. Capital
Expenditure (CAPEX) on adaptation to latest technology may put pressures on
deliverables. However, the Company is constantly assessing such
technological challenges and taking immediate remedial steps through timely
CAPEX plans.

5. The Company faces significant and intense competition in its markets,
which could aggravate with the entry of new licensees that may result in
decreases in current and potential customers, revenues and profitability.
But we remain confident that our competitively priced tariff will continue
to attract large volumes of traffic, resulting in better utilisation of
network, operating efficiencies and cost benefits.

6. We are subject to market risks from changes in interest and foreign
currency exchange rates. In managing exposure to these fluctuations, we may
engage in various hedging transactions that have been authorised according
to documented internal policies and procedures.

Financial Performance - Overview

The company's financial performance is disclosed in detail under the head
Financial Performance' in the Directors' Report. The consolidated
performance of the Company is given below:

a. Revenues and operating expenses

On a consolidated basis, the Company earned total revenues of Rs. 22,132.28
crore (US$ 4903.03 million). The net profit after tax recorded by the
Company was Rs. 4,655 crore (US$ 1,031 million). Our total operating
expenditure stood at Rs.14,311.80 crore (US$ 3,170.54 million).

b. Operating profit before finance charges, depreciation and amortisation,
exceptional items and provision against fixed assets (EBITDA).

The Company earned EBITDA of Rs.7,820.48 crore (US$ 1,732.49 million). The
EBITDA margin for the year was 35.34 per cent.

c. Depreciation and amortisation

The Depreciation and amortisation charges was Rs. 3,746.51 crore (US$
829.98 million).

d. Profit before tax

The profit before tax was Rs. 5,222.83 crore (US$ 1157.03 million). The
provision for taxes was to the tune of Rs. 445.39 crore (US$ 98.67
million). The net profit after tax was Rs. 4,655.00 crore (US$ 1,031.24
million).

e. Balance Sheet

As at 31st March, 2010, the Company had total assets of Rs. 92,568.63 crore
(US$ 20,507.01 million). Stakeholders equity was Rs. 43,360.64 crore (US$
9,605.81 million), while net debt (excluding cash and cash equivalents) was
Rs. 24,856.95 crore (US$ 5,506.63 million), giving a net debt to equity
ratio of 0.57 times.

Segment Wise

1. Wireless Segment

Customer acquisition

During the year under review the Company added 29.78 million wireless
customers (net additions), an increase of 40.98 per cent over the previous
year. As on 31st March, 2010, the Company had 102.45 million wireless
customers on its network. During the year, we reached out aggressively to
rural areas on the back of a major network expansion that contributed
substantially to our customer acquisition.

Revenues and profit

The revenues for the financial year ended 31st March, 2010 were Rs.
16,639.61 crore (US$ 3,686.22 million). The EBITDA during the same period
was Rs.5,583.12 crore (US$ 1236.85 million), while the EBIT (Earnings
before Interest and Tax) was Rs. 3,754.96 crore (US$ 831.85 million).

2. Global Segment

Revenues and profit

The Revenues for the financial year ended 31st March, 2010 in this segment
were Rs. 8,318.68 crore (US$ 1,842.86 million). While the EBITDA was Rs.
1,662.68 crore (US$ 368.21 million), the EBIT stood at was Rs. 554.04crore
(US$ 122.74 million).

3. Enterprise Broadband Segment

We maintained our position as the premium integrated solutions provider for
Corporates in the Broadband segment. Our Enterprise Broadband business
maintained its leadership in Centrex, Virtual Private Network and internet
Data Centre products and One Office Duo (OOD) voice product.

The Company's Enterprise Broadband segment continued to maintain its growth
path and gained significantly during the year even in the midst of
aggressive competition in data and voice but particularly the internet
bandwidth segment. Of our current portfolio of more than 38 products, our
Enterprise Broadband business has not only positioned a larger number of
products with top corporates but also increased its share of wallet.

The new products launched during the year included Reverse ITFS, Managed
WAN, EWAN, One Office Duo, Global MPLS, and Global Ethernet etc.

Our innovative services assurance model of 'TechCheck' continued to gain
further impetus during the year in providing pro-active feedback to
subscribers on the service levels provided by the Company. Customers have
rated our Broadband Products and Services at a high customer satisfaction
and delight rating. Our CSAT (Customer Satisfaction) Score increased
steadily.

Our Broadband's Business IT Systems are ISO 27001:2005 Certified (an
Information Security Management System Standard).

4. Wireline

Our Optical Fiber Cable backbone network of 190,000+ route-kms supports
seamless last mile Broadband connectivity to over 1 million building across
44 cities. Our Broadband Access network is one of the largest in the world,
having approx. 38,000+ nodes currently.

Customer Base

Our customer acquisition kept momentum with the increase in network
coverage during the year. Net additions during the year grew by more than 6
per cent. During the year, the Company acquired close to 85,000 customers,
taking the total customer base to 1.47 million.

As the Company's Broadband business is currently serving mainly
enterprises, the revenue per line reflects the total portfolio of services
and solutions being delivered to customers. Our revenue per line has
remained well above industry averages, on account of our mainly enterprise
customer base and our successful cross-sell of services to our customers.

Revenues and profit

The revenues for the financial year ended 31st March, 2010 were Rs.
2,838.55 crore (US$ 628.83 million). The EBITDA was Rs. 1,147.43 crore (US$
254.19 million), while the EBIT (Earnings before Interest and Tax) was Rs.
681.39 crore (US$ 150.95 million).

Strategic Business Units:

Reliance Communications Infrastructure Limited (RCIL)

RCIL provide internet Data Centre (IDC) service facilities to house
computer systems and associated components, such as telecommunications and
secured storage systems to the user companies from our IDCs located in
Mumbai, Bangalore, Hyderabad and Chennai. During the year, we commissioned
2 new IDCs at Chennai and Hyderabad respectively. With this, our IDC
capacity has gone up more than 400,000 sq ft, making us the leader in this
segment with an estimated market share of close to 60 per cent.

Operations

Revenues and operating expenses

RCIL earned total revenues of Rs. 4,418.89 crore (US$ 978.93 million)
during the year as compared to Rs. 4,096.03 crore (US$ 807.58 million) for
the previous year. RCIL incurred total operating expenses of Rs. 4,022.58
crore (US$ 891.13 million) as compared to Rs. 3,402.73 crore (US$ 670.89
million) in the previous year.

Net Profit

The net profit after tax recorded by RCIL was Rs. 9.49 crore (US$ 2.10
million) as compared to profit of Rs. 266.18 crore (US$ 52.48 million) in
the previous year.

Balance Sheet

As on 31st March, 2010, RCIL had total assets (net) of Rs. 5,165.71 crore
(US$ 1144.38 million) and shareholders' fund amounting to Rs. 2,901.71
crore (US$ 642.82 million).

Reliance Telecom Limited (RTL)

RTL, a wholly owned subsidiary of the Company, offers GSM services in
Madhya Pradesh, West Bengal, Himachal Pradesh, Orissa, Bihar, Assam,
Kolkata and North East service areas.

Operations

During the year, RTL expanded its network, specifically at the areas in the
Eastern region.

Revenues and operating expenses

RTL earned total revenues of Rs. 2,279.47 crore (US$ 504.98 million) during
the year as compared to Rs. 2,050.83 crore (US$ 404.34 million) in the
previous year. RTL incurred total operating expenses of Rs. 1,862.88 crore
(US$ 412.69 million) as compared to Rs. 1,507.67crore (US$ 297.25 million)
in the previous year.

Net Profit

The net profit after tax recorded by RTL was Rs. 33.28 crore (US$ 7.37
million) as compared to net loss of Rs. 174.29 crore (US$ 34.36 million) in
the previous year.

Balance Sheet

As on 31st March, 2010, RTL had total assets (net) of Rs. 6,339.33 crore
(US$ 1,404.37 million) and shareholders' fund of Rs. 280.00 crore (US$
62.03 million).

Reliance Infratel Limited (RITL)

RITL's business is to build, own and operate telecommunication towers,
optic fiber cable and other related assets at designated sites and to make
available this passive infrastructure on a shared basis to wireless and
other communications service providers under long-term contracts. These
customers use the space on our telecommunication towers to install their
active communication-related equipment to operate their wireless networks.
The customers can also use our optic fiber network to connect the sites to
their own core network and to ensure connectivity between circles.

We have used the towers for both our CDMA and GSM technology based services
as a part of our strategy to provide dual services on a pan India basis. We
have 49,300 multi-tenancy towers, with a total capacity of 197,200 slots,
the most extensive compared to any other telecom infrastructure provider.
We are capable of adding tenancy capability at marginal cost on demand.

Revenues and operating expenses

RITL earned total revenues of Rs. 6,276.74 crore (US$ 1,390.51 million)
during the year as compared to Rs. 4,934.00 crore (US$ 972.79 million) in
the previous year. The Company incurred total operating expenses of Rs.
2,427.54 crore (US$ 537.78 million) as compared to Rs. 1,553.79 crore (US$
306.35 million) in the previous year.

Net Profit

The net profit after tax recorded by RITL was Rs. 905.58 crore (US$ 200.62
million) as compared to Rs. 1,685.72 crore (US$ 332.36 million) in the
previous year.

Balance Sheet

As at 31st March, 2010, RITL had total assets (net) of Rs. 16,487.52 crore
(US$ 3,652.53 million). Shareholders' fund was Rs. 5,164.21 crore (US$
1,144.05 million).

Outlook

New Horizons for future Growth

India's telecom network is the third largest in the world.
Telecommunication activities saw rapid growth in India and the efforts have
been made from both governmental and non-governmental organisations to
further improve the telecommunication infrastructure. The eventual goal is
to foster the development and widespread use of modern telecommunication
technologies that will serve all segments of India's culturally diverse
society, and to transform it into a country of technologically aware
people. The launch of 3G services later this year is likely to reach a size
of Rs. 344,921 crore (US$ 76.92 billion) by 2012 at a growth rate of over
26 per cent.

Mission 200 million subscribers

We are extremely well placed to capitalise on the growth opportunities in
the converged telecom market supported by our integrated infrastructure and
strong focus on quality of services.

Our leadership and strength is supported by

* An upgraded and expanded next generation network based on state-of-the-
art technology;

* A strong foray into the rapidly expanding rural market;

* A keen commitment to staying ahead of customer requirements;

* An international presence with owned submarine cable network and
gateways;

* Introduction of innovative products and services;

* A sterling track record of growth and execution;

* A focus on optimisation of resources and on building human capital.

Wireless Business

3G Telecom services

The exponential growth of the telecom industry in India has led to the
demand for better technology and the next level of service delivery. The
advent of 3G services later in the year will add a new dimension to the
market, giving us an excellent opportunity to cater our products to the
high-value subscribers.

On the downside, the bulk of the subscriber growth in the industry is from
low value customers, which is unlikely to translate into major revenue
gains for operators. The entry of new players into an already highly
competitive market has brought down the pricing, putting pressure on
revenue growth.

The urban market in India is now highly saturated, with over 100per cent
penetration. An increasing part of the new subscriber growth is therefore
coming from smaller towns/rural areas, with significantly lower revenue
contribution. The dual SIM phenomenon is contributing approximately 30-35
per cent of net additions.

Notwithstanding all this, the Indian telecom industry continues to maintain
a high growth trajectory. Thanks to the continued outstanding pace of
growth, the overall wireless tele-density reached 49.6 per cent as of 31st
March, 2010. The subscriber base for wireless services has increased to
584.32 million as on 31st March, 2010.

Most international developed markets have close to 100 per cent penetration
and most comparable developing markets currently have penetration levels of
60 per cent - 70 per cent.

In other words, despite the recent upswing, the penetration of mobile
services in India continues to be on the lower side, indicating the
tremendous future potential for growth.

Value added Services (VAS)

The mobile value added services include, text or SMS, menu based services,
downloading of music or ringtones, mobile TV, videos, streaming,
sophisticated m-commerce applications etc. With the introduction of 3G
technology, and relative inexpensive feature rich handsets, there will be a
marked shift in the structure of the VAS market, with non-SMS VAS services
becoming a dominant contributor to revenue.

Global Business

We believe that our strategy to leverage our global terabit network
together with leadership in Enterprise solutions is delivering a compelling
value proposition to our customers. Our customers are endorsing our
strategy through repeat and new business wins. Going forward, we expect
continued growth in every segment of Reliance Globalcom's business with the
following initiatives:

1. Focus on managed solutions

We continue to enjoy success in retaining our enterprise customers and
winning new logos in competitive bidding. As before, the key
differentiators are: (i) an owned network connectivity to emerging markets;
(ii) proven and trusted rollout expertise; (iii) own portfolio of products
to meet enterprise customer needs; and (iv) low cost delivery and
operations centre.

Going forward, we plan to continue expanding on this model and extend our
successes in the US, Europe, Middle East and Asia.

2. Focus on global Ethernet

There is currently a strong global demand for Ethernet services and it
remains a key area of focus for us. Our advantage in this segment lies in
the fact that many of the financial market participants in advanced market
of the U.S. are already on our network.

We plan to keep our competitive edge by investing in higher-than-industry-
standard Service Level Agreements and maintaining capacity with owned
metro, backhaul and building connectivity.

3. Ramp up collaboration service

We intend to leverage Reliance Global Call's adaptable and extendable
portal. The scalability and robustness of the portal makes it easier to
manage the expanding customer database. We plan to introduce additional
features such as ring back tones, content based services to Reliance Global
Call customers.

4. Leverage existing global service platform and augment it with focused
new builds

Our highly scalable global network and delivery platform is a key
competitive advantage. We intend to leverage this strength to grow our
customer base. We plan to target areas of high growth by expanding and
deepening the geographicreach of our network and platform through focused
new builds, at a low marginal cost.

5. Focus on customers in underserved emerging markets

We aim to exploit the growing demand from enterprises located in emerging
markets for greater connectivity to North America and Europe; particularly
in light of the offshoring of IT and ITES from the developed economies to
low-cost destinations.

Enterprise Broadband and Internet Data Centers (IDC)

We are positive about the revenue opportunities in the current financial
year. Corporates have started talking about expansion plans and we are well
placed to garner a big share of the new demand. Last year, in order to
enhance our share in the market, we adopted a new strategy where we formed
separate vertical teams to deliver higher value to our customers. This was
very well received by our customers, and our vertical team registered some
key wins. As a result, we are well poised to get higher revenues from this
sector.

Recently, the Small and Medium Business market segment has evolved as a new
focus area for us and we are working on expanding our customer base in this
segment. We expect this segment to emerge as a growth engines for our
business in the future. We are also creating new offerings specifically for
the segment and are realigning our sales channels to increase our reach in
the segment.

We have recently launched Cloud Computing Services in India on the
Microsoft platform. This will offer pay as you go' enterprise class IT
infrastructure, and also help in reducing the IT management hassles for
SMBs. We also plan to expand the portfolio of our IDC-based services and
products to be a onestop shop for enterprise and SMB customers.

Telecom Infrastructure

We are leveraging our extensive capability to offer a wide range of
services as an integrated service provider across the whole infrastructure
value chain. Our aim is to provide a fast track solution to our clients,
both for ongoing expansion of our existing telecom operators and the roll
out plans of the new ones. We have achieved unique position vis-a-vis other
infrastructure providers with better quality tower infrastructure, carriage
and transport infrastructure along with the unified approach as an
integrated service provider.

RITL is best positioned to attract tenants for:

* High quality portfolio, capable of housing 4 tenants;

* With marginal Capex, tower tenant capacity of 4 can be enhanced up to 7
tenants.

Home/DTH Business

As Reliance Big TV moves into its 2nd full year of operations, we have
launched the HD -DVR set top box across the top 100 Indian cities - the
only DTH operator to offer the dual capability of HD / DVR. We plan to add
60 new channels including a rich bouquet of HD channels to the platform.
Reliance Big TV is also seeking to revamp the look and feel of the advanced
MPEG4 platform through a new Graphical User Interface along with the added
option of Hindi language.

Adequacy of internal control and Systems

The Company has built adequate systems of internal controls aimed at
achieving efficiency in operations, optimum utilisation of resources,
effective monitoring and compliance with all applicable laws.

The internal control mechanism comprises of a well-defined organisational
structure, documented policy guidelines, predetermined authority levels and
processes commensurate with the level of responsibility.

The Management Audit Team undertakes extensive checks and reviews through
external firms of chartered accountants, who provide independent and
professional observations. The Audit Committee of the Board reviews major
internal audit reports as well as the adequacy of internal controls.

Risk Management Framework

The Company has instituted a self-governed Risk Management framework based
on identification of potential risk areas, evaluation of risk intensity,
and clear-cut risk mitigation policies, plans and procedures both at the
enterprise and operating levels. The framework seeks to facilitate a common
organisational understanding of the exposure to various risks and
uncertainties at an early stage, followed by timely and effective
mitigation. The Audit Committee of the Board reviews the risk management
framework at periodic intervals.

Human resource and employees relations

An online Speakup' - Employee engagement survey campaign launched by us
received overwhelming response from the employee participants, which
demonstrated the feel of the employees towards the management's highly
supportive and facilitative approach. The survey aims to enable the Company
to identify both its strengths as well as the areas for improvement. During
the year, we introduced several other HR-related initiatives aimed at
enhancing productivity, morale and motivation among the employees.

We revisited the organisational structure of the businesses to ensure
higher standard of customer delivery and lower cost. High-performing
employees with proven management capabilities were considered for key
management positions in the organisation.

The existing HR policies were revised with a view to making them more
transparent, employee-friendly and objective in line with best Industry
practices. These policies and the other HR processes have been automated
for employee convenience and ease of administration.

In order to empower our line managers, HR delegation matrix around
recruitment, retention etc., were rolled out for higher accountability as
well as speedier resolution of issues.

E People Solution - an employee portal was launched for redressing employee
queries and grievances in a time bound manner with service level
agreements.

During the year Company was successfully able to meet the manpower
requirements emerging from our expanding business. The manpower as on 31st
March, 2010 was 30,974 across all business.

Information technology

Our IT systems and processes converge across CDMA and GSM technologies
providing a seamless customer experience. Every day, we support more than 5
million transactions through 12,000 field and contact center employees. We
have built reusable and scalable components that can support over 130
million customers. Our delivery and operational processes are now certified
and bench-marked against global standards of CMMI Level 3 and ISO 20000, a
unique achievement for any telecom operator in terms of in-sourced IT
operations.

Our new secure and unified enterprise-wide collaborative platform, MyWorld
has won more than 5 international and local awards for its unique
implementation on a Web2.0 infrastructure. MyWorld has been a First-time-
right product with 98 per cent employee acceptance. It has enhanced
employee productivity by more than 18 per cent within the first 3 months of
launch. The value of this platform was that without any additional capex,
and simple reorganisation and representation of data and information from
different applications and databases, MyWorld completely changed
organisation behavior leading to immediate improvement in productivity
across all segments of users. It also created a user generated platform
that connects on it's own and makes itself relevant to each user in its own
way.

RTech, while continuing to service various RCOM business units, also
provides application development and maintenance services to Group
Companies like Reliance Big Entertainment and Reliance Health. The
uniqueness of RTech lies in its project management capabilities, ability to
infuse enormous domain knowledge and operational experience with technology
and customer focus and operational transparency. These capabilities of
RTech have been endorsed by successful external projects in areas of
Knowledge Management, Geographical Information Systems, health care
applications, Operational Support Systems (OSS) and IT Infrastructure
Management.

RTech's transformation into a full blown IT company- through innovation,
scale, ingenuity, cost sensitivity and efficiency has been recognised by
its peers in the International and Indian IT industry with a slew of awards
and accolades including 2010 Gartner Green Data Center Award, SNW
Computerworld's Award for Best Practices in Green Computing, Energy
Efficiency and the Data Center, CIO 100 Award (4th in a row), CIO 100
Infrastructure Award, CTO Forum's CTO of the year, IDC Enterprise
Innovation Award, Pioneer CIO Award and many others. RTech is also the sole
representative of the Indian telecom industry on the boards of the Tele
Management Forum and the Mobile Marketing Association.

Awards and Recognitions

During the year under review, we won the prestigious Global World
Communication Awards 09, held in London. We have won this award in the Best
Device Category where we participated with a new network device, developed
with CISCO. Our competition in this category, at the final stage was with
companies like Juniper and Etisalat. RCom was the only Indian company to
win an award at WCA 09.

Reliance Communications' has also won the Frost and Sullivan Market Share
Leadership award for 'Data Center and Managed Services' category (FY 2009).

We have also won INFOCOMM - CMAI National Telecom Award for the 'Largest
Telecom Network' category, presented by Secretary, DoT and Chairman,
Telecom Commission.

Corporate social responsibility

We continue to strive for sustainability in our operations by promoting the
integration of CSR into our business strategy as well as our everyday
functioning. During the year under review, we focused on 6 core areas
namely environment, community development, education, women's empowerment,
social awareness and health.

CSR Initiatives

Apart from supporting CSR initiatives promoted by Reliance Dhirubhai Ambani
Group, our CSR initiatives include the following:

* Organised internal campaigns for voluntary blood donations;

* Launched 'Little Genius', an effort aimed at more than 200 schools and 20
orphanages, with a view to providing under-privileged and served children
with an opportunity to explore the digital world in India;

* Provided appropriate solutions and communication services to help people
in rural areas access information technology by initiating programs like
e-Shikshit'. Trained 300 rural youth and women members;

* Provided eye care services to more than 4,000 individuals in the rural
terrain in Kerala;

* Promoted the cause for a healthy fulfilling life after Cancer by co-
organising a walkathon in Delhi wherein, more than 3,500 individuals
including cancer survivors participated.

* Extended support and services for rendering operative intervention for
100 children suffering from Cleft lip and Palate from Uttar Pradesh;

* Encouraged employees to support various social endeavours through
voluntary work; nearly 1800 employees contributed more than 22,000 man
hours.