Reliance Communication:

The Financial Statements are prepared under historical cost convention / fair
valuation in accordance with the generally accepted accounting principles
(GAAP) in India and the provisions of the Companies Act, 2013 (to the extent
notified) and provisions of the Companies Act, 1956 (to the extent applicable)
read with the Companies Accounting Standards Rules, 2006 (Accounting
Standard Rules) as well as applicable pronouncements of the Institute of
Chartered Accountants of India (ICAI).
Revenue Recognition.
Revenue is recognised as and when the services are provided on the basis of
actual usage of the Company's network. Revenue on upfront charges for services
with lifetime validity and fixed validity periods of one year or more are
recognised over the estimated useful life of subscribers and specified fixed
validity period, as appropriate. The estimated useful life is consistent with
estimated churn of the subscribers.
Interest income on investment is recognized on time proportion basis.
Dividend is recognized when right to receive is established.
The company sells right to use(ROU) that provides customer with network
capacity, typically over 5 to 20 years without transferring legal title. These
revenues are accounted as operating lease and recognized in the companys
income statement over life of the contract. Also bills raised on customers for long
term contracts and for which revenue is not recognized are included in deferred
revenue. Revenue on non-cancellable ROUs are recognized upfront as service
revenue on activation of services, that is, Provision is made in the accounts for
doubtful debts, loans and advances in cases where the management considers
the debts, loans and advances to be doubtful of recovery.
Asset and Liabilities:
Fixed Assets are stated at cost / fair value net of Modvat / Cenvat, Value Added
Tax and include amount added on revaluation less accumulated depreciation,
amortisation and impairment loss, if any. Expenses incurred relating to project,
prior to commencement of commercial operation, are considered as project
development expenditure and shown under Capital Work-in-Progress.
Intangible assets, namely Telecom Licenses and Brand License are stated at
fair value or at cost as applicable less accumulated amortisation. Indefeasible
Rights of Connectivity (IRC) are stated at cost less accumulated amortisation.
Operating Leases, lease rentals are expensed on straight line basis with
reference to lease terms and considerations except for lease rentals pertaining to
the period up to the date of commencement of commercial operations, which are
capitalised.
Borrowing costs that are attributable to the acquisition or construction of
qualifying assets are capitalised as part of the cost of such assets upto the
commencement of commercial operations. A qualifying asset is one that
necessarily takes substantial period of time to get ready for intended use. Other
borrowing costs are recognised as expense in the year in which they are
incurred.

An asset is treated as impaired when the carrying cost of assets exceeds its
recoverable value. An impairment loss is charged to the Statement of profit and
Loss in the year in which an asset is identified as impaired. The impairment loss
recognised in prior accounting period is increased/ reversed where there has
been change in the estimate of recoverable value. The recoverable value is the
higher of the assets'' net selling price and value in use.
Current Investments are carried at lower of cost and market value computed
Investment wise. Long Term Investments are stated at cost or fair value as
required under order of the High Court. Provision for diminution in the value of
long term investments is made only if such a decline is other than temporary in
the opinion of the management.
Inventories of stores and spares are accounted for at cost, determined on
weighted average basis or net realisable value, whichever is less.
Liabilities: Employee Benefits includes Provident Fund, Gratuity
Plan.Provident Fund contributions are made to a Trust administered by the
Trustees. Interest payable to the Provident Fund members, shall not be at a rate
lower than the statutory rate.
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 is deducted.
The present value of the obligation under such Defined benefit plan is
determined based on actuarial valuation using the Projected Unit Credit Method.
Liabilities: Taxes on Income:Provision for Income Tax is made on the basis of
taxable income for the year at current rates. Tax expense comprises of Current
Tax and Deferred Tax at the applicable enacted or substantively enacted rates.
The Deferred Tax Asset is recognised and carried forward only to the extent that
there is a reasonable certainty that the assets will be realised in future.
Liabilities: Provisions and Contingent Liabilities: Provisions involving
substantial degree of estimation in measurement are recognised when there is a
present obligation as a result of past events and it is probable that there will be
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. Contingent assets are neither recognised nor
disclosed in the Financial Statements.