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RELIANCE CAPITAL LTD.

26 February 2024 | 12:00

Industry >> Finance & Investments

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ISIN No	INE013A01015	BSE Code / NSE Code	500111 / RELCAPITAL	Book Value (Rs.)	-415.66	Face Value	10.00
Bookclosure	18/09/2018	52Week High	16	EPS	9.20	P/E	1.34
Market Cap.	312.10 Cr.	52Week Low	8	P/BV / Div Yield (%)	-0.03 / 0.00	Market Lot	1.00
Security Type	Other

NOTES TO ACCOUNTS

You can view the entire text of Notes to accounts of the company for the latest year

Year End :2024-03

s Provisions, contingent liabilities and contingent assets

The Company creates a provision when there is a present obligation as a result of past events and it is probable that
there will be outflow of resources and a reliable estimate of the obligation can be made of the amount of the obligation.
Contingent liabilities are not recognised but are disclosed in the notes to the standalone financial statements. A disclosure
for a contingent liability is made when there is a possible obligation or a present obligation that may, but probably will not,
require an outflow of resources. When there is a possible obligation or a present obligation in respect of which the likelihood
of outflow of resources is remote, no provision or disclosure is made.

Provisions are reviewed at each balance sheet date and adjusted to reflect the current best estimate. If it is no longer
probable that the outflow of resources would be required to settle the obligation, the provision is reversed.

Contingent assets are neither recognised nor disclosed in the standalone financial statements.

t Offsetting Financial Instruments

Financial assets and liabilities are offset and the net amount is reported in the balance sheet where there is a legally
enforceable right to offset the recognised amounts and there is an intention to settle on a net basis or realise the asset
and settle the liability simultaneously. The legally enforceable right must not be contingent on future events and must be
enforceable in the normal course of business and in the event of default, insolvency or bankruptcy of the Company or the
counterparty.

u Employee benefits

(i) Short-term obligations

Liabilities for wages and salaries, including non-monetary benefits that are expected to be settled wholly within 12
months after the end of the period in which the employees render the related service are recognised in respect of
employees' services up to the end of the reporting period and are measured at the amounts expected to be paid when
the liabilities are settled.

(ii) Post-employment obligations
Defined benefit plans
Gratuity

The Company's gratuity benefit scheme is a defined benefit plan. The Company's net obligation in respect of the gratuity
benefit scheme is calculated by estimating the amount of future benefit that employees have earned in return for their
service in the current and prior periods; that benefit is discounted to determine its present value, and the fair value of
any plan assets, if any, is deducted.

The present value of the obligation under such defined benefit plan is determined based on actuarial valuation using the
Projected Accrued Benefit Method (same as Projected Unit Credit Method), which recognises each period of service
as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final
obligation.

The obligation is measured at the present value of the estimated future cash flows. The discount rates used for determining
the present value of the obligation under defined benefit plan, are based on the market yields on Government securities
as at the balance sheet date.

Re-measurement gains and losses arising from experience adjustments and changes in actuarial assumptions are
recognised in the period in which they occur, directly in other comprehensive income. They are included in retained
earnings in the statement of changes in equity and in the balance sheet.

Actuarial gains and losses are recognised immediately in the Statement of Profit and Loss.

Defined contribution plans
Provident fund

Company's contributions to the recognised provident fund, which is a defined contribution scheme, are charged to the
Statement of Profit and Loss.

(iii) Other long-term employee benefit obligations

Compensated absences (Leave Encashment)

Leave encashment which is a defined benefit, is accrued for based on an actuarial valuation at the balance sheet date
carried out by an independent actuary.

v Share-based payments

(i) Employee Stock Option Scheme (ESOS)

The employees of the Company and its subsidiaries are entitled for grant of stock options (equity shares), based on the
eligibility criteria set in the ESOS plan of the Company. The fair value of options granted under ESOS is recognized as
an employee benefits expense with a corresponding increase in equity. The total amount to be expensed is determined
reference to the fair value of the options granted excluding the impact of any service conditions.

The total expense is recognised over the vesting period, which is the period over which all of the specified vesting
conditions are to be satisfied. At the end of each period, the entity revises its estimates of the number of options that are
expected to vest based on the service conditions. It recognises the impact of the revision to original estimates, if any, in
profit and loss, with a corresponding adjustment to equity.

(ii) ESOS Trust

The Company's ESOS scheme is administered through the RCAP ESOS Trust. The Company treats the trust as its
extension and shares held by RCAP ESOS Trust are treated as treasury shares and accordingly RCAP ESOS Trust has
been consolidated in the Company's books.

w Contributed Equity

Equity shares are classified as equity.

Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax,
from the proceeds.

Treasury shares are presented as a deduction from other equity and no gain or loss is recognised on the purchase, sale,
issue or cancellation of such shares.

x Dividends

Provision is made for the amount of any dividend declared, being appropriately authorised and no longer at the discretion of
the entity, on or before the end of the reporting period but not distributed at the end of the reporting period.

y Earnings per share

(i) Basic earnings per share

Basic earnings per share is calculated by dividing the profit attributable to owners of the Company by the weighted
average number of equity shares outstanding during the financial year, adjusted for bonus element in equity shares
issued during the year, if any and excluding treasury shares.

(ii) Diluted earnings per share

Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into account
the after income tax effect of interest and other financing costs associated with dilutive potential equity shares, and the
weighted average number of additional equity shares that would have been outstanding assuming the conversion of all
dilutive potential equity shares.

z Rounding of amounts

All amounts disclosed in the standalone financial statements and notes have been rounded off to the nearest lakh as per the
requirements of Schedule III, unless otherwise stated.

3. Critical estimates and judgements

As per the provisions of the Code, the fair value and liquidation value of the assets of the Company as on the insolvency
commencement date is required to be determined in accordance with Regulation 27 read with Regulation 35 of the Insolvency and
Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016. The Administrator of RCAP
duly appointed by the Hon'ble National Company Law Tribunal, Mumbai, is obligated to appoint 2 registered valuers to determine
such valuation and submit the report. In furtherance thereof, the Administrator had appointed 2 registered valuers who have
submitted their report. As per Ind AS 36- “Impairment of Assets”, impairment testing of assets is to be conducted on an annual
basis. Upon implementation of the Approved Resolution Plan, the Company will consider carrying out a comprehensive review of
all the assets including investments, other assets and intangible assets, liabilities and accordingly provide for impairment loss on
assets and write back of liabilities, if any.

Subject to the above, the Company makes estimates and assumptions that affect the amounts recognised in the standalone
financial statements, and the carrying amounts of assets and liabilities within the next financial year. Estimates and judgements
are continually evaluated and are based on management's experience and other factors, including expectations of future events
that are believed to be reasonable under the circumstances. Management also makes certain judgements, apart from those
involving estimations, in the process of applying the accounting policies. Judgements that have the most significant effect on the
amounts recognised in the standalone financial statements and estimates that can cause a significant adjustment to the carrying
amount of assets and liabilities within the next financial year include the following:

3.1 Estimation of fair value of unlisted securities

The fair value of financial instruments is ascertained in accordance with IND AS 107 as per the fair value hierarchy described
in note no. 48.

3.2 Effective interest rate method

The Company recognises interest income/expense using the effective interest rate, i.e., a rate that represents the best
estimate of a constant rate of return over the expected life of the loans. The effective interest method also accounts for
the effect of potentially different interest rates at various stages and other characteristics of the product life cycle (including
prepayments and penalty interest and charges).

This estimation, by nature, requires an element of judgement regarding the expected behavior and life-cycle of the instruments,
as well expected changes to India's base rate and other fee income/expense that are integral parts of the instrument.

3.3 Impairment of financial assets using the expected credit loss method

The impairment provisions for financial assets are based on assumptions about risk of default and expected loss rates. The
Company uses judgement in making these assumptions and selecting the inputs to the impairment calculation, based on the
Company's history, existing market conditions as well as forward looking estimates at the end of each reporting period.

3.4 Current tax

Provision for current tax is made after taking into consideration benefits admissible under the provisions of the Income Tax
Act, 1961. Minimum Alternative Tax credit entitlement is recognised where there is convincing evidence that the same can be
realised in future.

3.5 Deferred tax

The recognition of deferred tax assets is based upon whether it is more likely than not that sufficient and suitable taxable
profits will be available in the future against which the reversal of temporary differences can be deducted. To determine the
future taxable profits, reference is made to the latest available profit forecasts. Where the temporary differences are related
to losses, relevant tax law is considered to determine the availability of the losses to offset against the future taxable profits.
Recognition therefore involves judgement regarding the future financial performance of the particular legal entity or tax group
in which the deferred tax asset has been recognised.

3.6 Estimation of fair value of investments property

The Company carries out the valuation activity to assess fair value of its Investment in land and property. Accordingly, fair
value estimates for investment in land and property is classified as level 3.

a) Securities premium

Securities premium reserve is used to record the premium on issue of shares. The reserve can be utilised only for limited purposes
such as issuance of bonus shares in accordance with the provisions of the Companies Act, 2013.

b) Capital redemption reserve

The Capital Redemption Reserve is required to be created on buy-back of equity shares. The Company may issue fully paid up
bonus shares to its members out of the capital redemption reserve.

c) Capital reserve

The Reserve is created based on statutory requirement under the Companies Act, 2013. This is not available for distribution of
dividend but can be utilised for issuing bonus shares. Includes ' 77,237 lakh (Previous year ' 77,237 lakh ) created pursuant to
the Scheme of Amalgamation approved by High Court which shall for all regulatory and accounting purposes be considered to be
part of the owned funds / net worth of the Company.

d) Statutory reserve fund

Created pursuant to Section 45-IC of the Reserve Bank of India Act, 1934.

e) General reserve

The general reserve is used from time to time to transfer profits from retained earnings for appropriation purposes. As the general
reserve is created by a transfer from one component of equity to another and is not an item of other comprehensive income, items
included in the general reserve will not be reclassified subsequently to profit or loss. Includes ' 3,83,744 lakh (Previous year
' 3,83,744 lakh) created pursuant to Scheme of Amalgamation.

C. The nature and volume of material transactions for the year with above related parties are as follows:

40 a) The Company has sold 23,23,69,188 equity shares held by it in Reliance Home Finance Limited (“RHFL”) .RHFL has ceased
to be an associate of the Company with effect from August 9, 2023.

b) The Company had earlier pledged its entire equity holding ( No of shares 25,15,49,920) in Reliance General Insurance
Company Limited (“RGICL”) in favour of IDBI Trusteeship Services Limited (“Trustee”) against dues guaranteed by the
Company. The Trustee, on November 19, 2019, invoked the pledge and held the shares of RGICL in their custody. Vide orders
dated December 4, 2019 and December 27, 2019, Insurance Regulatory and Development Authority of India (“IRDAI”), has
informed the Company that the transfer of shares was void ab initio. The said order was challenged in Securities Appellate
Tribunal, Mumbai (“SAT”) and SAT vide its order dated February 27, 2020 held that that the Trustee is holding shares as
Trustee / custodian and will not exercise any control over RGICL and cannot exercise any voting rights on shares of RGICL.
The Administrator on behalf of the Company had filed an application before the NCLT on April 27, 2022, against the Trustee
inter alia seeking direction against the Trustee to return the custody and control of the RGICL shares owned by the Company.

The NCLT by its order dated May 4, 2023 had inter alia directed the Trustee to handover the possession of 25,15,49,920
shares of RGICL to the Administrator of RCL and that the security interest created on the said shares by virtue of pledge shall
remain unaltered. Accordingly, the Trustee had handed over the said shares back to RCL with pledge created on the said
shares in favour of IDBI Trusteeship Services Limited.

During the year, the Company has further invested ' 20,000 lakh towards fresh issue of 97,56,097 fully paid up equity shares
of RGICL.

c) The Company had earlier pledged 3.35% of the equity shareholding of Nippon Life India Asset Management Limited
(“NLIAM”), comprising of 2,04,97,423 equity shares in favour of IndusInd Bank Limited (“IBL”). IBL had wrongfully invoked
the pledge, which was challenged by the Company before the Hon'ble High Court of Bombay (“Bombay High Court”). The
Bombay High Court referred the matter to the arbitration. The sole arbitrator upon hearing the Interim Applications filed by
the Company passed an interim order on April 23, 2020, wherein it stated that status quo (as ordered by Bombay High Court
pursuant to its Order dated December 11,2019) will continue and the NLIAM shares, the pledge over which was invoked by
IndusInd Bank, will remain in a separate demat account.

The sole arbitrator in the matter of Reliance Capital Limited vs IndusInd Bank Limited in relation to invocation of 2,04,97,423
shares (“Subject Shares”) of Nippon Life India Asset Management Limited on November 18, 2019, has passed Minutes of
Award on August 19, 2023 (“Effective Date”).

The Key terms of the Minutes of Award are as below:

The Parties have mutually agreed, and IBL has undertaken to transfer to the Company the following:

(i) 26,40,068 shares of NLIAM being 12.88% of the Subject Shares (“Settlement Shares”); and

(ii) ' 9,37,22,417 (“Settlement Amount”) being the dividend accrued on the Settlement Shares till the Effective Date.

The Settlement Shares and the Settlement Amount are hereinafter collectively referred to as “Settlement Consideration”

The Subject Shares less the Settlement Shares being 1,78,57,355 shares of NLIAM shall herein after be referred to as the
“Balance Subject Shares”.

Pursuant to the Consent Arbitral Award, the Company has received the Settlement Consideration. With respect to the
Balance Subject Shares, the Company has created expected credit loss (ECL) provision and written off for an amount of
' 55,706 lakh i.e. the value of Balance Subject Shares as on Effective Date.

d) One of previous auditor of the Company's, after resigning from the office in June 2019 submitted a report under Section
143(12) of the Companies Act, 2013 with the Ministry of Corporate Affairs for matters relating to Financial Year 2018-19. The
Company has examined the matter and also appointed legal experts, who independently carried out an in-depth examination
of the matters and issues raised therein and have concluded that there was no matter attracting the provisions of Section
143(12) of the Companies Act, 2013. The matter is under consideration with the Ministry of Corporate Affairs.

e) The Administrator of Reliance Capital Limited, duly appointed by the NCLT, is obligated to file application for avoidance
transactions in accordance with section 25(2)(j) of the Code read with Regulation 35A of the Insolvency and Bankruptcy Board
of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 (“CIRP Regulations”). In furtherance of
the aforesaid, the Administrator had appointed a transaction auditor, BDO India LLP (“BDO or Transaction Auditor),”), to
determine if the Company has been subjected to transactions under sections 43, 45, 50 and 66 of the Code and submit
a report on the same (“BDO Report”). Estimated impact on the Company is ' 2,19,200 lakh as per the BDO report. On a
review and in consideration of the findings of the Transaction Auditor, the Administrator has filed 8 applications before the
NCLT under Section 60(5) and Section 66(2) of the Code read with the relevant CIRP Regulations in October 2022 seeking
appropriate relief. The Company has made requisite disclosures of the same under Regulation 30 of the Securities and
Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015. The applications are pending
before NCLT.

43.19 Detail of group entities that are not consolidated in the CFS

Name of Entity - RBEP Entertainment Private Limited (Formerly know as Reliance Big Entertainment Private Limited): Type
of business - Internet, digital media, film production, communications, radio programming, gaming, movies, animation,
music,broadcast, and other entertainment services, Size of its assets - ' 19,982 lakh, Debt Equity ratio - NA,Profitability FY
2020- 21 - ' (3,95,588) lakh, Profitability FY 2019-20 - ' (3,95,588) lakh, Exposure - ' 38,919 lakh Corporate Guarantee, and
' Nil Loan and interest.

Name of Entity - Reliance Media Works Financial Services Private Limited: Type of business - Lending and trading in
commodities, Size of its assets - ' 2,811 lakh, Debt Equity ratio - NA, Profitability Fy 2021-22 - ' 1,001 lakh, Profitability FY
2020-21 - '(61,914) lakh, Exposure - ' 18,885 lakh Corporate Guarantee.

Note:

(a) Exposure is provided net of provision or fair value change.

(b) Details of those entities have not been considered whose net exposures are Nil as on March 31,2024.

(d) Financials details of Group Companies are provided as per latest available Audited Financial Statement as on March
31,2023.

43.20 The Company does not have any exposure to non financial business other than reported in serial no 1 of note no 43.19.

43.21 There are no Loans and advances to firms/companies in which directors are interested.

43.22 Investments by the loanee of the CIC in the shares (Equity and Preference) of Parent Company and Group Companies
Nil,

Exposure is provided net of provision or fair value change. Details of those entities have not been considered whose net
exposures are Nil as on March 31,2024.

b) Penalties imposed by RBI and other regulators including strictures or directions on the basis of inspection reports or
other adverse findings:

The Reserve Bank of India (RBI) vide Press Release dated November 29, 2021 in exercise of the powers conferred
under Section 45-IE (1) of the Reserve Bank of India Act, 1934 (RBI Act) superseded the Board of Directors of your
Company on November 29, 2021 and the RBI appointed Shri Nageswara Rao Y, Ex-Executive Director of Bank of
Maharashtra as the Administrator of your Company under Section 45-IE (2) of the RBI Act.

On December 02, 2021 the RBI filed the Petition before the Hon'ble National Company Law Tribunal, Mumbai Bench
(“NCLT”/”Adjudicating Authority”)under sub-Clause (i) of clause (a) of Rule 5 of the Insolvency and Bankruptcy
(Insolvency and Liquidation Proceedings of Financial Service Providers and Application to Adjudication Authority) Rules,
2019 (“FSP Rules”) to initiate Corporate Insolvency Resolution Process ("CIRP") against RCL read with Section 227
of Insolvency and Bankruptcy Code, 2016, read with the rules and regulations framed there under and amended from
time to time (the “Code”). Further CIRP was initiated against the Company under Section 227 read with clause (zk) of
sub section (2) of section 239 of the Code and read with rules 5 and 6 of the FSP Rules by an order dated December
06, 2021 of the NCLT. The Adjudicating Authority vide the above order, appointed the Administrator to perform all the
functions of a resolution professional to complete the CIRP of the Company as required under the provisions of the
Code and declared a moratorium.

The Administrator of Reliance Capital Limited filed an application before the NCLT under Section 30(6) of the Code
for approval of the resolution plan submitted by IndusInd International Holdings Limited (“IIHL”) as approved by the
Committee of Creditors of the Company, with the NCLT, via e-filing on July 12, 2023.

The resolution plan submitted by IIHL, for acquisition of Reliance Capital Limited on a going concern basis was approved
("Approved Resolution Plan”) by the Hon'ble NCLT by its order dated February 27, 2024 ("NCLT Approval Order”).

A Monitoring Committee (“MC") has been constituted in terms of the Approved Resolution Plan to manage the operations
of the Company on a going concern basis and MC is the decision-making committee to do all such acts, deeds, matters
and things which shall be required for implementation of the Approved Resolution Plan including but not limited to
transfer of assets or investments as articulated in the Approved Resolution Plan.

Accordingly, your Company is under implementation of Approved Resolution Plan as per the provisions of the Code
along with the Regulations and Rules thereunder.

c) If the auditor has expressed any modified opinion(s) or other reservation(s) in his audit report or limited review report in
respect of the financial results of any previous financial year or quarter which has an impact on the profit or loss of the
reportable period, with notes on :

The Auditor has not expressed any modified opinion(s) or other reservation(s) in his audit report or limited review report
in respect of the financial results of any previous financial year or quarter thereof, which has an impact on the profit or
loss for the financial year ended March 31,2024.

The company is exposed to certain risks relating to its ongoing business operations. The primary risks managed using derivative
instruments are Market linked debentures.

The Company has a process whereby periodically all long term contracts (including derivative contracts) are assessed for material
foreseeable losses. At the year end, the Company has reviewed and ensured that adequate provision as required under any law
/ Indian Accounting Standards there are no foreseeable losses on such long term contracts (including derivative contracts) has
been made in the books of account.

48 Fair value measurement

a) Fair value hierarchy

The Company determines fair value of its financial instruments according to following hierarchy:

Level 1: Category includes financials assets and liabilities that are measured in whole or significant part by reference to
published quotes in an active market

Level 2: Category includes financials assets and liabilities that are measured using a valuation technique based on
assumptions that are supported by prices from observable current market transactions. The Company's investment in units
of AIF funds fall under this category.

Level 3: Category includes financials assets and liabilities that are measured using valuation techniques based on non¬
market observable inputs and subsidiaries and associates carried at deemed cost. This means that fair value are determined
in whole or in part using a valuation model based on assumptions that are neither supported by prices from observable
current market transactions in the same instrument nor are they based on available market data. The main asset classes in
this category are unlisted equity investments as well as unlisted funds.

49 Financial risk management

The Company is a Core Investment Company (CIC) and obtained the Certificate of Registration as a CIC under Core Investment
Companies (Reserve Bank) Directions, 2016. In compliance with the same Directions, the Company holds not less than 90% of
its net assets in the form of investments in equity shares, preference shares, debentures, debt or loans to group companies.

The Company is exposed to market risk, credit risk, liquidity & interest rate risk and capital management risk. In view of the
ongoing CIRP, Risk Management is being overseen by the Administrator. The major risks are summarised below:

Market risk

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market
prices. The Company has quoted investments which are exposed to fluctuations in stock prices. Similarly, the Company has also
raised funds through issue of Market Linked Debentures, whose returns are linked to relevant underlying market instruments
or indices. The Company continuously monitors market exposure for both equity and debt and, in appropriate cases, also uses
various derivative instruments as a hedging mechanism to limit volatility. The unquoted Compulsorily Convertible Preference
Shares and Compulsory Convertible debentures of group companies are measured at fair value through profit or loss. The fair
values of these investments are regularly monitored.

Credit risk management

Credit risk is the risk that one party to a financial instrument will cause a financial loss for the other party by failing to discharge an
obligation. Credit risk arises mainly from loans and advances, and loan commitments arising from such lending activities, but can
also arise from credit enhancement provided, such as financial guarantees, letters of credit, endorsements and acceptances. The
Company is a Middle Layer Core Investment Company (CIC) with its lending restricted to and within the Group companies.

The Company has assesses on a forward-looking basis the Expected Credit Losses (ECL) associated with its debt instruments
carried at amortized cost and FVOCI and with the exposure arising from loan commitments and financial guarantee contracts. The
Company recognizes a loss allowance for such losses at each reporting date.

Liquidity and Interest Rate Risk

Liquidity risk is the risk that an entity will encounter difficulty in meeting obligations associated with financial liabilities that are
settled by delivering cash or another financial asset. While interest rate risk is the risk that the fair value or future cash flows of a
financial instrument will fluctuate because of changes in market interest rates.

The Company is exposed to liquidity risk and interest rate risk principally, as a result of lending and investment for periods and
interest rates which may differ from those of its funding sources. Asset liability positions are managed in compliance with the
ALM policy of the company laid down in accordance overall guidelines issued by RBI in the Asset Liability Management (ALM)
framework.

Capital Management Risk

The Reserve Bank of India (RBI) sets and monitors capital adequacy requirements for the Company from time to time. The Core
Investment Companies (Reserve Bank) Directions, 2016, stipulate that the Adjusted Net Worth of a CIC shall at no point in time
be less than 30% its risk weighted assets on balance sheet and risk adjusted value of off-balance sheet items as on date of the
last audited balance as at the end of the financial year. The Core Investment Companies (Reserve Bank) Directions, 2016, further
stipulate that the outside liabilities of a CIC shall at no point of time exceed 2.5 times its Adjusted Net Worth as on date of the last
audited balance as at the end of the financial year.

Expected credit loss measurement

Ind AS 109 “Financial Instruments” outlines a ‘three-stage' model for impairment based on changes in credit quality since initial
recognition as summarised below,

The objective of the impairment requirements is to recognise lifetime expected credit losses for all financial instruments for which
there have been significant increases in credit risk since initial recognition - whether assessed on an individual or collective basis
- considering all reasonable and supportable information, including that which is forward-looking.

A financial instrument that is not credit-impaired on initial recognition is classified in ‘Stage 1' and has its credit risk continuously
monitored by the Company.

If significant increases in credit risk (‘SICR') since initial recognition is identified, the financial instrument is moved to ‘Stage 2' but
is not yet deemed to be credit-impaired.

If the financial instrument is credit-impaired, the financial instrument is then moved to ‘Stage 3'. Financial instruments in Stage 1
have their ECL measured at an amount equal to 12 month ECLs. Instruments in Stages 2 or 3 have their ECL measured based on
expected credit losses on a lifetime basis. Purchased or originated credit-impaired financial assets are those financial assets that
are credit impaired on initial recognition. Their ECL is always measured on a lifetime basis (Stage 3).

The measurement of ECL is calculated using three main components: (i) Probability of Default (PD) (ii) Loss Given Default (LGD)
and (iii) the Exposure At Default (EAD).

The 12 month ECL is calculated by multiplying the 12 month PD, LGD and the EAD. The 12 month and lifetime PDs represent
the PD occurring over the next 12 months and the remaining maturity of the instrument respectively. The EAD represents the
expected balance at default, taking into account the repayment of principal and interest from the balance sheet date to the default
event together with any expected drawdowns of committed facilities. The LGD represents expected losses on the EAD given the
event of default, taking into account, among other attributes, the mitigating effect of collateral value at the time it is expected to be
realised and the time value of money.

• Probability of default ( PD) represents the likelihood of a borrower defaulting on its financial obligation, either over the next
12 months (12M PD), or over the remaining lifetime (Lifetime PD) of the obligation.

• Exposure At default (EAD) is the total amount of an asset the entity is exposed to at the time of default. EAD is defined
based on the characteristics of the asset. EAD is dependent on the outstanding exposure of an asset, sanctioned amount of
a loan and credit conversion factor for non-funded exposures.

• Loss given default (LGD) It is the part of an asset that is lost provided the asset default. The recovery rate is derived as
a ratio of discounted value of recovery cash flows (incorporating the recovery time) to total exposure amount at the time of
default. Recovery rate is calculated for each segment separately. Loss given default is computed as (1 - recovery rate) in
percentage terms.

The Company assesses when a significant increase in credit risk has occurred based on quantitative and qualitative assessments.
Exposures are considered to have resulted in a significant increase in credit risk and are moved to Stage 2 when:

i. Quantitative test: Accounts that are 30 calendar days or more past due move to Stage 2 automatically. Accounts that are 90
calendar days or more past due move to Stage 3 automatically.

ii. Qualitative test: Accounts that meet the portfolio's ‘high risk' criteria and are subject to closer credit monitoring. High risk
customers may not be in arrears but either through an event or an observed behavior exhibit credit distress.

iii. Reversal in Stages: Exposures will move back to Stage 2 or Stage 1 respectively, once they no longer meet the quantitative
criteria set out above. For exposures classified using the qualitative test, when they no longer meet the criteria for a significant
increase in credit risk

The measurement of ECL reflects:

• An unbiased and probability-weighted amount that is determined by evaluating a range of possible outcomes;

• The time value of money; and

• Reasonable and supportable information that is available without undue cost or effort at the reporting date about past events,
current conditions and forecasts of future economic conditions. The measurement of the ECL allowance is an area that
requires the use of complex models and significant assumptions about future economic conditions and credit behaviour (e.g.
the likelihood of customers defaulting and the resulting losses).

As per the provisions of the Code, the fair value and liquidation value of the assets of the Company as on the insolvency
commencement date is required to be determined in accordance with Regulation 27 read with Regulation 35 of the Insolvency
and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 ("CIRP Regulations”).
The Administrator of RCAP duly appointed by the Hon'ble National Company Law Tribunal, Mumbai ("NCLT Mumbai Bench”), is
obligated to appoint 2 registered valuers to determine such valuation and submit the report ("Valuation Report”). In furtherance
thereof, the Administrator had appointed 2 registered valuers who have submitted their report. As per Ind AS 36- “Impairment of
Assets”, impairment testing of assets is to be conducted on an annual basis. Upon implementation of the Approved Resolution
Plan, the Company will consider carrying out a comprehensive review of all the assets including investments, other assets and
intangible assets, liabilities and accordingly provide for impairment loss on assets and write back of liabilities, if any.

Subject to the above, impairment provisions for financial assets are based on assumptions about risk of default and expected loss
rates. The Company uses judgement in making these assumptions and selecting the inputs to the impairment calculation, based
on the Company's history, existing market conditions as well as forward looking estimates at the end of each reporting period.

The Company has adopted the Ind AS while identifying and providing for the Expected Credit Losses (ECL The Company
measures credit risk using Probability of Default (PD), Exposure at Default (EAD) and Loss Given Default (LGD). This is similar
to the approach used for the purposes of measuring Expected Credit Loss (ECL) under Ind AS 109 “Financial Instruments”.
Company has put in place monitoring mechanisms commensurate with nature and volume of activities.

Collateral and other credit enhancements

The Company employs a range of policies and practices to mitigate credit risk. The most common of these is accepting collateral
for funds advanced. The principal collateral types for loans and advances are:

• Charges over business assets such as premises, inventory and accounts receivable; and

• Charges over financial instruments such as debt securities and equities.

Longer-term finance and lending to corporate entities are generally secured.

The Company's policies regarding obtaining collateral have not significantly changed during the reporting period and there has
been no significant change in the overall quality of the collateral held by the Company since the prior period.

The Company closely monitors collateral held for financial assets considered to be credit-impaired, as it becomes more likely that
the Company will take possession of collateral to mitigate potential credit losses. Financial assets that are credit-impaired and
related collateral held in order to mitigate potential losses.

Write-off policy

The Company writes off financial assets, in whole or in part, when it has exhausted all practical recovery efforts and has

concluded there is no reasonable expectation of recovery. Indicators that there is no reasonable expectation of recovery include
(i) ceasing enforcement activity and (ii) where the Company's recovery method is foreclosing on collateral and the value of the
collateral is such that there is no reasonable expectation of recovering in full.

The Company may write-off financial assets that are still subject to enforcement activity. The outstanding contractual amounts of
such assets written off during the year ended March 31,2024 was ' 21,212 lakh (Previous Year ' 60,986 lakh ). The Company
still seeks to recover amounts it is legally owed in full, but which have been partially written off due to no reasonable expectation
of full recovery.

50 Analysis of financial assets and liabilities by remaining contractual maturities

Refer note no 43.2 for the maturity profile of the undiscounted cash flows of the Company's financial assets and liabilities as at
March 31. The amounts disclosed in the table are the contractual undiscounted cash flows. Balances due within 12 months equal
their carrying balances as the impact of discounting is not significant.

NA= Not Applicable

52 The Company has not advanced or loaned or invested (either from borrowed funds or share premium or any other sources or
other kind of funds) to or in any other person or entity, including foreign entity (“Intermediaries”), with the understanding, whether
recorded in writing or otherwise, that the Intermediary shall, directly or indirectly lend or invest in other persons or entities identified
in any manner whatsoever by or on behalf of the Company (“Ultimate Beneficiaries”) or provide any guarantee, security or the like
on behalf of the Ultimate Beneficiaries;

The Company has not received any funds (which are material either individually or in the aggregate) from any person or entity,
including foreign entity (“Funding Parties”), with the understanding, whether recorded in writing or otherwise, that the Company
shall, directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the
Funding Party (“Ultimate Beneficiaries”) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries;

53. The disclosure on the following matters required under Schedule III as amended not being relevant or applicable in case
of the Company, same are not covered:

a) The Company has not traded or invested in crypto currency or virtual currency during the financial year.

b) No proceedings have been initiated or are pending against the Company for holding any benami property under the Benami
Transactions (Prohibition) Act, 1988 (45 of 1988) and rules made thereunder.

c) The Company has not been declared wilful defaulter by any bank or financial institution or government or any government
authority.

d) No registration and/or satisfaction of charges are pending to be filed with ROC.

e) There are no transactions which are not recorded in the books of account which have been surrendered or disclosed as
income during the year in the tax assessments under the Income Tax Act, 1961.

f) The Company does not have any relationship with struck off companies.

54 Disclosure under Micro, Small and Medium Enterprises Development Act, 2006

There are no Micro and Small Scale Business Enterprises, to whom the Company owes dues, which are outstanding for more
than 45 days as at March 31,2024. This information as required to be disclosed under the Micro, Small and Medium Enterprises
Development Act, 2006 has been determined to the extent such parties have been identified on the basis of information available
with the Company.

55 Figures for the previous year has been regrouped / rearranged wherever necessary to make them comparable to those with the
current year

As per our report of even date attached for Reliance Capital Limited

For Gokhale & Sathe (a Company under Corporate Insolvency Resolution Process by an order

Chartered Accountants dated December 06, 2021 passed by Hon' NCLT Mumbai)

Firm Registration No.: 103264W

Administrator Nageswara Rao Y

Rahul Joglekar Chief Financial Officer Aman Gudral

Partner

Membership Number : 129389 Company Secretary & Compliance Officer Atul Tandon

Mumbai, Mumbai,

Dated: May 30, 2024 Dated: May 30, 2024

Company Information

Indian Indices

Global Indices

Commodity

Forex

RELIANCE CAPITAL LTD.

NOTES TO ACCOUNTS

s Provisions, contingent liabilities and contingent assets

Defined contribution plansProvident fund

3. Critical estimates and judgements

3.1 Estimation of fair value of unlisted securities

3.2 Effective interest rate method

3.3 Impairment of financial assets using the expected credit loss method

3.4 Current tax

3.5 Deferred tax

3.6 Estimation of fair value of investments property

a) Securities premium

b) Capital redemption reserve

c) Capital reserve

d) Statutory reserve fund

C. The nature and volume of material transactions for the year with above related parties are as follows:

Investments

2023-24

2023- 24

Advances / Margin Money

2023- 24

Debentures (Borrowings)

2023- 24

Income

2023- 24

Expenditure

2023- 24

2023- 24

43.19 Detail of group entities that are not consolidated in the CFS

Note:

48 Fair value measurement

a) Fair value hierarchy

49 Financial risk management

Market risk

Credit risk management

Liquidity and Interest Rate Risk

Capital Management Risk

Collateral and other credit enhancements

Write-off policy

50 Analysis of financial assets and liabilities by remaining contractual maturities

53. The disclosure on the following matters required under Schedule III as amended not being relevant or applicable in caseof the Company, same are not covered:

54 Disclosure under Micro, Small and Medium Enterprises Development Act, 2006

Defined contribution plans
Provident fund

53. The disclosure on the following matters required under Schedule III as amended not being relevant or applicable in case
of the Company, same are not covered: