Reliance Communications - Limited Review For The Quarter Ended Sep 30, 2007

Reliance Communications Ltd has informed that in the limited review report of the Company for the quarter ended September 30, 2007, the Auditors of the Company have made the following observations:

Attention is drawn to note 7 (iii) to the financial results, with effect from April 012007, the Company has reclassified the liability towards foreign currency convertible bonds (FCCB) from monetary to non-monetary liability on the basis that given the current trend of earnings and movement of the Companys share prices over a period of redemption of the aforesaid bonds, it is expected that the bond holders would opt for conversion into shares of the Company and not redeem them for cash. Accordingly the liability towards FCCB has not been revalued at the period end exchange rate.