SIGNIFICANT ACCOUNTING POLICES AND NOTES TO THE ACCOUNTS FOR THE YEAR ENDED 31 MARCH 2025
Note: 1
Significant Accounting Policies:
1.1 Corporate Information
Mercantile Ventures Limited (CIN: L65191TN1985PLC037309) is a public limited company incorporated on 23rd December
1985 under the provisions of the Companies Act, 1956. The Company is domiciled in India with its registered office situated
at No.88, Mount Road, Guindy, Chennai - 600032, Tamil Nadu. The Company is primarily engaged in the business of leasing
of properties and manpower supply services. The equity shares of the Company are listed on BSE Limited (BSE).
1.2 Basis of preparation of financial statements:
These financial statements are prepared in accordance with Indian Accounting Standard (Ind AS), under the historical cost
convention on the accrual basis except for certain financial instruments which are measured at fair values, the provisions
of the Companies Act, 2013 (‘the Act') (to the extent notified). The Ind AS are prescribed under Section 133 of the Act read
with Rule 3 of the Companies (Indian Accounting Standards) Rules, 2015 and relevant amendment rules issued thereafter.
Accounting policies have been consistently applied except where a newly issued accounting standard is initially adopted, or
an existing accounting standard requires a change in the accounting policy hitherto in use.
1.3 Use of Estimates
The preparation of the financial statements in conformity with Ind AS requires the management to make estimates, judgments
and assumptions. These estimates, judgments and assumptions affect the application of accounting policies and the reported
amounts of assets and liabilities, the disclosures of contingent assets and liabilities at the date of the financial statements and
reported amounts of revenues and expenses during the period.
1.4 Inventories (Ind AS 2)
The provisions of Ind AS 2 - Inventories are not applicable to the Company, as it does not hold or maintain any inventories
during the reporting period.
1.5 Cash Flow Statement (Ind AS 7)
Cash flows are reported using the indirect method, whereby profit for the period is adjusted for the effects of transactions
of a non-cash nature, any deferrals or accruals of past or future operating cash receipts or payments and item of income or
expenses associated with investing or financing cash flows. The cash flows from operating, investing and financing activities
of the Company are segregated. The company considers all highly liquid investments that are readily convertible to known
amounts of cash to be cash equivalents.
1.6 Accounting Policies, Changes in Accounting Estimates and Errors (Ind AS 8)
The financial statements have been prepared in accordance with the Indian Accounting Standards (Ind AS) notified under the
Companies (Indian Accounting Standards) Rules, 2015, as amended from time to time.
The Company selects and applies its accounting policies consistently for similar transactions, events, and conditions, unless
Ind AS specifically requires or permits categorization and application of different policies for different transactions.
Changes in Accounting Policies
Changes in accounting policies are made only if:
• Required by an Ind AS; or
• Such a change results in the financial statements providing more reliable and relevant information.
When a change in accounting policy is applied:
• It is accounted for retrospectively unless otherwise stated.
• The comparative figures for prior periods are restated, and
• The cumulative effect, if any, is adjusted in the opening balance of retained earnings.
Changes in Accounting Estimates
Changes in accounting estimates (e.g., useful lives, bad debt provisions) are recognized prospectively:
• In the period of the change, if the change affects only that period; or
• In the period of the change and future periods, if the change affects both.
Prior Period Errors
Material prior period errors are corrected retrospectively in the first set of financial statements approved after their discovery
by:
• Restating the comparative amounts for the prior period(s) presented; or
• If the error occurred before the earliest prior period presented, restating the opening balances of assets,
liabilities, and equity for the earliest period presented.
The nature of the error and the amount of the correction are disclosed in the notes to accounts.
7 Taxes on Income (Ind AS 12)
Income tax expense comprises both current tax and deferred tax. It is recognized in the Statement of Profit and Loss, except
to the extent that it relates to items recognized directly in other comprehensive income or in equity, in which case the tax is
also recognized in other comprehensive income or equity, respectively.
• Current Tax
Current tax is the amount of income taxes payable or recoverable in respect of the taxable profit or loss for a period. It is
calculated based on the applicable tax laws and rates that have been enacted or substantively enacted as on the reporting
date. The Company recognizes interest and penalties related to income tax, if any, under finance costs or administrative
expenses, as appropriate.
• Deferred Tax
Deferred tax is recognized using the balance sheet approach, for all temporary differences arising between the carrying
amounts of assets and liabilities in the financial statements and their corresponding tax bases. Deferred tax liabilities are
generally recognized for all taxable temporary differences. Deferred tax assets are recognized to the extent that it is probable
that future taxable profits will be available against which the temporary differences can be utilized.
The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no longer
probable that sufficient taxable profit will be available to allow the benefit of part or all of that deferred tax asset to be utilized.
Deferred tax assets and liabilities are measured using the tax rates and laws that have been enacted or substantively enacted
by the end of the reporting period and are expected to apply when the related deferred tax asset is realized, or the deferred
tax liability is settled.
• Offsetting
Deferred tax assets and liabilities are offset only if there is a legally enforceable right to offset current tax assets against
current tax liabilities and they relate to income taxes levied by the same taxation authority.
1.8 Property Plant & Equipment (Ind AS 16)
The land and properties of the company are stated at fair value and depreciation provided on straight line value method over
the estimated useful lives of the assets. Property, plant and equipment are part of the fixed assets of the Company. The
charge in respect of periodic depreciation is derived after determining an estimate of an asset's expected useful life and the
expected residual value at the end of its life under residual value method. The useful lives and residual values of Company's
assets are determined by the management at the time the asset is acquired and reviewed periodically, including at each
financial year end. The lives are based on historical experience with similar assets as well as anticipation of future events,
which may impact their life, such as changes in technology.
1.9 Employee Benefits: (Ind AS 19)
The Company has classified its employee benefits into the following categories:
1. Short-Term Employee Benefits
Short-term employee benefits such as salaries, wages, bonus, ex-gratia, and non-monetary benefits are recognized as
an expense in the Statement of Profit and Loss in the period in which the related service is rendered. These benefits are
accounted for at undiscounted amounts.
2. Defined Contribution Plans
The Company's contribution to provident fund and other funds governed by the Employees' Provident Fund and Miscellaneous
Provisions Act, 1952 is recognized as an expense in the Statement of Profit and Loss when the services are rendered by the
employees.
3. Defined Benefit Plans - Gratuity
The Company has a defined benefit gratuity plan which is funded through the Mercantile Ventures Limited Employees
Gratuity Trust with Life Insurance Corporation of India (LIC). The liability or asset recognized in the balance sheet in respect
of defined benefit plans is the present value of the defined benefit obligation at the end of the reporting period less the fair
value of plan assets.
• The liability for defined benefit obligations is determined annually using the Projected Unit Credit Method.
• The present value of the obligation is determined by discounting the estimated future cash outflows using
market yields on government bonds.
• The Company operates a separate gratuity trust. All payments are routed through LIC, and the fund is maintained by
LIC as part of their policy management.
4. Termination Benefits
Termination benefits are recognized as an expense in the period in which they are incurred.
1.10 Effect of changes in foreign exchange rates (Ind AS 21)
a) Transactions denominated in foreign currencies are recorded at the exchange rates prevailing on the date of transaction
or that approximates the actual rate at the date of transaction.
Ventures Limited
b) Any income or expense on account of exchange difference either on settlement or on translation is recognized in the
Statement of Profit and Loss except in case 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.
1.11 Earnings Per Share (EPS) (Ind AS 33)
In accordance with Ind AS 33 - Earnings Per Share, the Company presents Basic and Diluted Earnings Per Share for its
equity shares.
• Basic Earnings Per Share is calculated by dividing the net profit or loss attributable to equity shareholders of the
Company by the weighted average number of equity shares outstanding during the period.
• Diluted Earnings Per Share is determined by adjusting the profit or loss attributable to equity shareholders and
the weighted average number of equity shares outstanding for the effects of all dilutive potential equity shares,
such as employee stock options, convertible debentures, or other instruments convertible into equity.
• The Company does not currently have any outstanding dilutive instruments; hence, Basic EPS and Diluted EPS are the
same for all periods presented.
The earnings and the weighted average number of shares used in calculating basic and diluted EPS are disclosed in the
Notes to Financial Statements.
1.12 Impairment of Assets: (Ind AS 36)
The Company assesses the carrying amounts of property, plant and equipment at each reporting date to determine whether
there is any indication of impairment. If such indication exists, the recoverable amount is estimated as the higher of the
asset's fair value less costs of disposal and its value in use. If the asset does not generate independent cash flows, the
recoverable amount is determined for the Cash Generating Unit (CGU) to which the asset belongs.
An impairment loss is recognized in the Statement of Profit and Loss whenever the carrying amount of an asset or CGU
exceeds its recoverable amount. The impairment loss is reversed if there is an indication of reversal and a change in the
estimate used to determine the recoverable amount. The reversal is limited so that the carrying amount does not exceed the
amount that would have been determined (net of depreciation) had no impairment loss been recognized in earlier periods.
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