Reliancedigital Retail Limited
Schedules forming part of the Balance Sheet
SCHEDULE M SIGNIFICANT ACCOUNTING POLICIES
Basis of Preparation of Financial Statements
The financial statements are prepared under the historical cost convention in accordance with the generally accepted accounting principles in India, Companies (Accounting Standards) Rules 2006 and the provisions of the Companies Act, 1956.
Use of Estimates
The preparation of financial statements requires estimates and assumptions to be made that affect the reported amount of the assets and liabilities on the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Difference between the actual results and estimates are recognised in the period in which the results are known/ materialised.
Fixed Assets are stated at cost net of CENVAT, Value Added Tax less accumulated depreciation and impairment loss, if any. All costs attributable to Fixed Assets are capitalised. Improvement cost on Lease premises up to the date of commercial operation is capitalised as “Leasehold Improvements”.
Lease Rentals Operating lease rentals are expensed with reference to lease terms and other considerations. Depreciation
Depreciation on Fixed Assets is provided on Straight Line Method at the rates and in the manner prescribed in Schedule XIV to the Companies Act, 1956 over their useful life except, leasehold improvements are amortised over the lower of estimated useful life or lease period; fire alarm system, signage and access control system are depreciated over the estimated useful life of five years and baskets are depreciated over the estimated useful life of three years.
Impairment of Assets
An asset is treated as impaired when the carrying cost of assets exceeds its recoverable value. An impairment loss is charged to the Profit and Loss Account in the year in which an asset is identified as impaired. The impairment loss recognised in prior accounting period is reversed if there has been a change in the estimate of recoverable amount.
Foreign Currency Transactions
Transactions denominated in foreign currencies are recorded at the exchange rate prevailing at the time of the transaction or that approximates the actual rate at the date of transaction.
Monetary items denominated in foreign currencies at the year end are restated at year end rates.
Non monetary foreign currency items are carried at cost.
Any income or expense on account of exchange difference either on settlement or on translation is recognised in the Profit and Loss Account except in cases of long term liabilities, where they relate to acquisition of fixed assets, in which case they are adjusted to the carrying cost of such assets.
Current Investments are carried at the lower of cost or quoted/ fair value, computed category wise. Long Term Investments are stated at cost. Provision for diminution in the value of Long Term Investments is made only if such a decline is other than temporary.
Items of Inventories are measured at lower of cost or net realisable value, after providing for obsolescence, if any. Cost of Inventory comprises of all cost of purchase and other cost incurred in bringing them to the respective present location and condition. Costs are determined on weighted average cost basis.
Turnover Turnover includes sale of goods, services and service tax, adjusted for discounts (net) and Value Added Tax (VAT) if any.