Directors' Report

Dear Shareowners,

Your Directors present the 86th Annual Report and the audited financial statements for the financial year ended March 31, 2015.

Financial Performance

During the year under review, your Company earned an income of Rs. 1 2,098 crore against Rs. 12,581 crore in the previous year. The Company earned a profit after tax of Rs. 1,533 crore for the year as compared to Rs. 1,588 crore in the previous year.

The performance and financial position of the subsidiary companies and associate companies are included in the consolidated financial statement of the Company and presented in the Management Discussion and Analysis forming part of this Annual Report.

Dividend

Your Directors have recommended a dividend of Rs. 8.00 (80 per cent) per equity share (Previous year Rs. 7.50 per equity share) aggregating to Rs. 249 crore (inclusive of dividend distribution tax) for the financial year 2014-15 which, if approved at the ensuing 86th Annual General Meeting (AGM), will be paid to (i) all those equity shareholders whose names appear in the Register of Members as on September 19, 2015 and (ii) to those members whose names appear as beneficial owners as on September 19, 2015 as furnished by National Securities Depository Limited and Central Depository Services (India) Limited for the purpose.

The Dividend payout as proposed 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 need to achieve optimal financing of such plans through internal accruals.

Business Operations

The Company is in the business of generation, transmission and distribution of electricity. The Company is the leading player in the country in the Engineering, Procurement and Construction (EPC) segment of the power and infrastructure sectors. The Company is also engaged in implementation, operation and maintenance of several projects through special purpose vehicles in various infrastructural areas.

Standby Charges

In the pending litigation on standby charges, The Tata Power Company Limited (TPC) had filed an appeal in the Hon'ble Supreme Court which admitted it and directed TPC to deposit Rs. 227 crore (being 50 per cent of the amount of refund including interest upto December 31, 2006) as per the order of the Appellate Tribunal for Electricity and furnish a bank guarantee for Rs. 227 crore. The Company was permitted to withdraw the amount after giving an undertaking to repay the amount, if required, without demur together with interest as may be determined by the Hon'ble Supreme Court. The Company, after giving such an undertaking received Rs. 227 crore on March 12, 2007. The Company is yet to receive the final order from The Hon'ble Supreme Court

Scheme of Amalgamation with WRTM and WRTG

The Scheme of Amalgamation envisaging merger of the step down subsidiaries, Western Region Transmission (Gujarat) Private Limited (WRTG) and Western Region Transmission (Maharashtra) Private Limited (WRTM) with the Company, with effect from the merger Appointed Date of April 1, 2013 ('Scheme'), was sanctioned by the Hon'ble High Court of Bombay vide Order dated July 15, 2014.

All requisite approvals have been obtained; however, certain procedural formalities with Central Electricity Regulatory Commission (CERC) are required to be completed. Pending completion of certain procedural formalities, the Company has given effect to the substance of the scheme and accordingly these subsidiaries have been amalgamated with the Company during the year ended March 31, 2015 with effect from the appointed date.

Open Offer for Acquisition of Pipavav Defence Offshore Engineering Company Limited through Open Offer

Reliance Defence Systems Private Limited (Acquirer), a wholly owned subsidiary of the Company and Reliance Infrastructure Limited (Person Acting in Concert referred as PAC) have entered into Purchase Agreement with the promoters of Pipavav Defence and Offshore Engineering Company Limited (Target Company) to purchase 13,00,00,000 equity shares constituting 17.66 per cent of the share capital of the Target Company from its promoters at a price of Rs. 63.00 per equity share in cash. In terms of the Purchase Agreement and subject to the conditions therein, the promoters of Target Company shall sell additional 5,47,87,774 equity shares of the Target Company, to the Acquirer at a price of Rs. 63.00 per equity share that would result in the Acquirer acquiring not less than 25.10 per cent of the paid-up equity share capital of the Target Company after taking into account the acquisitions made under the Offer.

Since the Acquirer has entered into an agreement to acquire voting rights in excess of 25 per cent of the total voting rights of the Target Company, the Acquirer has to make an open offer to the shareholders of the Target Company under Regulation 3(1) of the SEBI (Substantial Acquisition and Takeovers) Regulations, 2011.

The Acquirer and the PAC will make an open offer to the public equity shareholders of the Target Company to acquire up to 1 9,14,13,630 fully paid-up equity shares of face value of Rs. 10 each of the Target Company, constituting 26 per cent of the total fully diluted equity share capital of the Target Company at an offer price of Rs. 66 per share (the Offer Price) aggregating to total consideration of Rs. 1,263.33 crore (the Offer size) payable in cash.

The open offer is subject to approval from the Competition Commission of India (CCI) and the Gujarat Maritime Board. The Acquirer has received approval of the CCI on April 20, 2015 and the approval from the Gujarat Maritime Board is awaited.

Management Discussion and Analysis

The Management Discussion and Analysis 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 this Annual Report.

Issue of Non-Convertible Debentures

During the year under review, the Company issued Secured Redeemable Non Convertible Debentures aggregating to Rs. 495 crore (Series 24 to Series 25F) on Private Placement basis to various financial institutions, banks, pension fund and insurance companies. These Debentures are listed on BSE Limited and National Stock Exchange of India Limited.

Fixed Deposits

The Company has not accepted deposits from the public falling within the ambit of Section 73 of the Companies Act, 2013 ('the Act') and the Companies (Acceptance of Deposits) Rules, 2014.

Particulars of Investments

Pursuant to Section 186 of the Act, details of the Investments are provided in the standalone financial statements (Please refer to Note No. 12 to the standalone financial statements).

Subsidiary Companies, Associates and Joint Ventures

During the year under review, Reliance Defence Systems Private Limited, Reliance Defence Technologies Private Limited, Reliance Defence and Aerospace Private Limited and Reliance Defence Limited became wholly owned subsidiaries of the Company.

During the year under review, Reliance Cement and Infra Private Limited ceased to be a subsidiary of the Company.

The performance and financial position of the major subsidiaries are presented in Management Discussion and Analysis Report forming part of this Annual Report. Also, a report on the performance and financial position of each of the subsidiaries, associates and joint ventures as per the Act is provided in the consolidated financial statements.

The Policy for determining material subsidiary company, as approved, may be accessed on the Company's website at the link:<http://www.rinfra.com/pdf/Policy_for_Determining_> Material_Subsidiary.pdf.

Consolidated Financial Statement

The Audited Consolidated Financial Statements for the financial year ended March 31, 2015, based on the financial statements received from subsidiaries, associates and joint ventures, as approved by their respective Board of Directors, have been prepared in accordance with Accounting Standard (AS) - 21 on 'Consolidated Financial Statements' read with AS-23 on 'Accounting for Investments in Associates' and AS-27 on 'Financial Reporting of Interests in Joint Ventures', notified under the Act, read with the Accounting Standards Rules as applicable.

Directors

In terms of the provisions of the Act, Shri S Seth, Director of the Company retires by rotation and being eligible offers himself for re-appointment at the ensuing Annual General Meeting. A brief resume Shri S Seth, nature of his expertise in specific functional areas and names of the companies in which he holds directorship and/or membership/chairmanships of Committees of the respective Boards, shareholding and relationship between directors inter se as stipulated under Clause 49 of the Listing Agreement with the Stock Exchanges in India, is given in the section on Corporate Governance Report forming part of this Annual Report.

During the year under review, in terms of the provisions of the Act, the Company appointed Shri S S Kohli, Shri K Ravikumar and Ms Ryna Karani as Independent Directors for a period of five years from September 20, 2014. Further, the Company appointed Shri V R Galkar as Independent Director to hold office for a term commencing from the date of the said resolution on September 20, 2014, and ending on February 15, 2019.

The Company has received declarations from all the Independent Directors of the Company confirming that they meet the criteria of independence as prescribed under the Act and Clause 49 of the Listing Agreement entered into with the Stock Exchanges. The details of programme for familiarisation of Independent Directors with the Company, nature of the industry in which the Company operates and related matters are put up on the website of the Company at the link <http://www.rinfra.com/> pdf/Familiarisation_programme.pdf.

Key Managerial Personnel

Shri Lalit Jalan was Chief Executive Officer upto July 6, 2014. Duing the year, Shri M S Mehta, Chief Executive Officer, Shri Madhukar Moolwaney, Chief Financial Officer and Shri Ramesh Shenoy, Company Secretary were designated as the Key Managerial Personnel of the Company, as per requirement of the Act.

Evaluation of Directors, Board and Committees

The Company has devised a policy for performance evaluation of the individual director, Board and its Committee, which includes criteria for performance evaluation.

Pursuant to the applicable provisions of the Act and Clause 49 of the Listing Agreement, the Board carried out an annual performance evaluation of its own performance, the directors individually as well as the evaluation of the working of the committees of the Board. The performance of the Board was evaluated based on inputs received from all the Directors after considering criteria such as Board composition and structure, effectiveness of processes and information provided to the Board, etc. A separate meeting of the Independent Directors was also held during the year for the evaluation of the performance of non-independent Directors, performance of the Board as a whole and that of the Chairman.

The Nomination and Remuneration Committee also reviewed the performance of the directors based on their knowledge, level of preparation and effective participation in Meetings, understanding of their roles as directors, etc.

Policy on appointment and remuneration of Directors, Key Managerial Personnel and senior management employees

The Nomination and Remuneration Committee of the Board has devised a policy for selection, appointment and remuneration of directors and senior management. The Committee has formulated the criteria for determining qualifications, positive attributes and independence of Directors, which has been put up on the Company's website. Further, the Committee has also devised a policy relating to remuneration for Key Managerial Personnel and senior management employees. The policy on the above is attached hereto as Annexure A.

Directors' Responsibility Statement

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

i. in the preparation of the annual financial statements for the financial year ended March 31, 2015, the applicable accounting standards had been followed along with proper explanation relating to material departures, if any;

ii. the directors had selected such accounting policies and applied them consistently and made judgements 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 March 31, 2015 and of the profit of the Company for the year ended on that date;

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

iv. the directors had prepared the annual financial statements for the financial year ended March 31, 2015, on a going concern basis;

v. the directors had laid down proper internal financial controls to be followed by the Company and such financial controls are adequate and were operating effectively; and

vi. the directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.

Contracts and Arrangements with Related Parties

All contracts/arrangements/transactions entered by the Company during the financial year under review with related parties were on arm's length basis and in the ordinary course of business. There were no materially significant related party transactions made by the Company with Promoters, Directors, Key Managerial Personnel or other designated persons, which may have potential conflict with the interest of the Company at large.

All Related Party Transactions were placed before the Audit Committee for approval. Omnibus approval of the Audit Committee was obtained for the transactions which were of a foreseen and repetitive nature. The transactions entered into pursuant to the omnibus approval so granted were reviewed and statements giving details of all related party transactions were placed before the Audit Committee for its approval on a quarterly basis. The policy on Related Party Transactions as approved by the Board is uploaded on the Company's website at the link: <http://www.rinfra.com/pdf/Policy_for_Related_> Party_Transaction.pdf. None of the Directors has any pecuniary relationships or transactions vis-a-vis the Company.

Material Changes and Commitments if any affecting the financial position of the Company

There was no material change and commitment which materially affect the financial position of the Company occurred between the financial year ended on March 31, 2015 and the date of this Report.

Meetings of the Board

A calendar of Meetings is prepared and circulated in advance to the Directors. During the year, eight Board Meetings were held, details of which are given in the Corporate Governance Report.

Audit Committee

Shri S S Kohli, an Independent Director is the Chairman of Audit Committee. Shri K Ravikumar, Shri V R Galkar and Ms. Ryna Karani (Independent Directors) and Shri R R Rai (Non-independent Director) are other members of Audit Committee. During the year, all the recommendations made by the Audit Committee were accepted by the Board.

Auditors and Auditor's Report

M/s. Haribhakti & Co. LLP, Chartered Accountants and M/s.

Pathak H. D. & Associates, Chartered Accountants, the auditors of the Company hold office until the conclusion of the ensuing AGM and are eligible for re-appointment.

The Company has received letters from M/s. Haribhakti & Co. LLP, Chartered Accountants and M/s Pathak H. D. & Associates, Chartered Accountants to the effect that their appointment, if made, would be within the prescribed limits under Section 141 (3) of the Act, and that they are not disqualified from appointment as statutory auditors of the Company.

The observations and comments given by the Auditors in their report read together with notes on financial statements are self explanatory and hence do not call for any further comments under Section 134 of the Act.

Cost Auditors

Pursuant to the provisions of the Act and the Companies (Audit and Auditors) Rules, 2014, the Board of Directors have appointed M/s. V. J Talati & Co., Cost Accountants, as the Cost Auditors of the Company for conducting the cost audit of Power Generation, Transmission, Distribution Divisions and the Engineering, Procurement and Construction Division of the Company for the financial year ending March 31, 2016, and their remuneration is subject to ratification by the members at the ensuing Annual General Meeting of the Company.

Secretarial Audit

Pursuant to the provisions of Section 204 of the Act and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company appointed M/s. Kaushik

M. Jhaveri & Co., Company Secretaries in Practice to undertake the Secretarial Audit of the Company. There is no qualification, reservation or adverse remark made by the Secretarial Auditor in the Secretarial Audit Report. The Audit Report of the Secretarial Auditor is attached hereto as Annexure B.

Extract of Annual Return

Extract of the Annual Return of the Company in form MGT-9 is attached hereto as Annexure C.

Employees Stock Option Scheme

The Members of the Company had through Postal Ballot approved on January 8, 2007, the issue of securities under Employee Stock Option Scheme to the employees of the Company as well as employees of the subsidiary companies. However, the Company has not granted any stock options to the employees of the Company or to the employees of the subsidiary companies of the Company. The Company has constituted the Employees Stock Option Scheme Compensation Committee to review the Scheme from time to time.

Particulars of Employees and related disclosures

In terms of the provisions of Section 197 of the Act read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, a statement showing the names and other particulars of the employees drawing remuneration in excess of the limits set out in the said rules are provided in the Annexure to the Directors' Report. However, having regards to the provisions of Section 136 of the Act, the Annual Report excluding the aforesaid information is being sent to all the members of the Company and others entitled thereto. However, the said information is available for inspection had the registered office of the Company on all working days, except Saturdays, between 11.00 a.m. and 1.00 p.m. up to the date of the meeting and any member interested in obtaining the same may write to the Company Secretary. Upon such request, the information shall be furnished.

Disclosures relating to the remuneration and other details as required under Section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are provided in Annexure D.

Conservation of energy, technology absorption and foreign exchange earnings and outgo

Information in accordance with the provisions of Section 134(3) (m) of the Act, read with Rule 8 of the Companies (Accounts) Rules, 2014 regarding conservation of energy and technology absorption are given in Annexure E and forms part of this Report.

Corporate Governance

The Company has adopted the "Reliance Group-Corporate Governance Policies and Code of Conduct" which has set out the systems, processes 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 this Annual Report.

A certificate from the Auditors of the Company, M/s. Haribhakti

& Co. LLP, Chartered Accountants and M/s. Pathak H. D. &

Associates, Chartered Accountants, confirming compliance with conditions of Corporate Governance as stipulated under clause 49 of the Listing Agreement is attached to this Report

Vigil Mechanism

In accordance with Section 177 of the Act and the listing agreement, the Company has formulated a Vigil Mechanism to address the genuine concerns, if any, of the directors and employees. The details of the same have been stated in the Report on Corporate Governance and the policy can be accessed on the Company's website at the link: http//www.rinfra.com/ ir_corporate_whistleBlowlerPolicy.html.

Risk Management

Pursuant to the requirement of Clause 49 of the Listing Agreement, the Board of the Company during the year, constituted a Risk Management Committee. The Committee consists of majority of independent directors and also senior managerial personnel. The details of the Committee and its terms of reference etc. are set out in the Corporate Governance Report forming part of this Report.

The Company has a robust Business Risk Management framework to identify, evaluate business risks and opportunities. This framework seeks to create transparency, minimise adverse impact on the business objectives and enhance the Company's competitive advantage. The business risk framework defines the risk management approach across the enterprise at various levels including documentation and reporting. The framework has different risk models which help in identifying risks trend, exposure and potential impact analysis at the Company level as also separately for business segments.

Compliance with the provisions of Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013

The Company is committed to upholding and maintaining the dignity of women employees and it has in place a policy which provides for protection against sexual harassment of women at work place and for prevention and redressal of such complaints. During the year, no such complaints were received.

Corporate Social Responsibility

The Company has constituted a Corporate Social Responsibility Committee (CSR) in compliance with the provisions of Section 135 of the Act read with the Companies (Corporate Social Responsibility Policy) Rules, 2014. The Corporate Social Responsibility Committee consists of Shri K Ravikumar as Chairman, Dr. V.K. Chaturvedi and Ms Ryna Karani as members. The Corporate Social Responsibility Committee has formulated a Corporate Social Responsibility Policy (CSR policy) indicating the activities to be undertaken by the Company. The CSR policy may be accessed on the Company's website at the link: <http://www.rinfra.com/pdf/RInfra_CSR_Policy.pdf>

The disclosures with respect to CSR activities forming part of this Report is given as Annexure F.

Order, if any, passed by the regulator or courts or tribunals.

No orders have been passed by the regulators or courts or tribunals impacting the going concern status and the Company's operations.

Internal Financial Controls and their adequacy

The Company has in place adequate internal financial controls across the organization. The same is subject to review periodically by the internal audit cell for its effectiveness. During the year, such controls were tested and no reportable material weakness in the design or operation were observed.

Business Responsibility Statement

SEBI vide its Circular CIR/CFD/DIL/8/2012 dated August 13, 2012, has mandated top 100 listed entities, based on market capitalisation on BSE Limited and National Stock Exchange of India Limited at March 31, 2012, to include Business Responsibility Report ("BRR") as part of the Annual Report. In view of FAQ's issued by SEBI, the BRR has been uploaded on the website of the Company www.rinfra.com\investor  relations\shareholders. Any shareholder interested in obtaining physical copy of BRR may write to the Company Secretary at the Registered Office of the Company.

Acknowledgements

Your Directors would like to express their sincere appreciation for the co-operation and assistance received from shareholders, debentureholders, debenture trustees, bankers, financial institutions, government authorities, 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 of the Company, resulting in the satisfactory performance of the Company during the year.

For and on behalf of the Board of Directors

Anil Dhirubhai Ambani

Chairman

Mumbai

May 27, 2015