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Accounting Policies of Mercantile Ventures Ltd. Company

Mar 31, 2014

1 Basis of Preparation of Financial Statements

The Financial Statements have been prepared on accrual basis under the historical cost convention and applicable Accounting standards.

2 Use of Estimates

The preparation of the financial statements in conformity with Indian GAAP requires the Management to make estimates and assumptions considered in the reported amounts of assets and liabilites (including contingent liabilities) and the reported income and expenses during the year. The Management believes that the estimates used in preparation of the financial statements are prudent and reasonable. Future results could differ due to these estimates and the differences between the actual results and the estimates are recognised in the years in which the results are known / materialise.

3 Cash and cash equivalents (for Cash Flow Statement)

Cash on hand comprises Cash on hand and balance in Current account with Bank and other liquid funds.

4 Cash Flow Statement

Cash Flows are reported using the indirect method whereby profit/loss before extraordinary items and tax is adjusted for the effects of transactions of non-cash nature and any deferrals or accruals of past or future cash receipts or payments. The Cash Flows from operating investing and financing activities of the company are segregated based on the available information.

5 Fixed Assets

The Fixed Assets are stated at cost less accumulated Depreciation and impairment losses. Cost comprises the purchase price and any attributable cost of bringing the assets to its working condition for its intended use.

6 Depreciation

a) Depreciation is provided on Straight Line Method at the rates specified under Schedule XIV of the Companies Act, 1956.

b) Depreciation on certain premises is provided on composite cost where it is not possible to segregate the land cost.

c) Depreciation for additions to/deductions from Fixed Assets is calculated pro rata from/to the month of additions/deletions.

d) Fixed Assets individually costing Rs.5000 or less are depreciated in full in the year of additions.

7 Investments (Long Term)

a) Investments in shares and units are stated at cost, net of permanent diminution in value wherever necessary.

b) Dividends are accounted for when the right to receive the payment is established.

8 Impairment of assets

The company recognizes impairment of assets other than the assets which are specially excluded under the Accounting Standard 28 on impairment assets issued by the Institute of Chartered Accountants of India after comparing the assets recoverable value with its carrying cost in the books. In case carrying amounts exceeds recoverable value impairment losses are provided for.

9 Revenue recognition

a) Revenue is recognized on accrual basis and expenses are accounted on their accrual with necessary provisions for all known liabilities and losses.

b) Dividend income is recognized when the company''s right to receive the dividend is established by the reporting date.

c) Interest income is recognized on a time proportion basis taking into account the amount outstanding and the applicable interest rate.

10 Segment reporting

The main business of the company is that of lease of immovable properties which is the only business segment for the current year.

11 Provision for current tax and deferred tax

Provision for current tax is made after taking into consideration admissible benefits under the provisions of the Income Tax 1961. Deferred taxes are recognized when considered prudent for all timing differences between taxable and accounting income.

12 Retirement Benefits

The company has just commenced the operations and presently there are no post-employment and other long term benefits.


Mar 31, 2013

1 Basis of Preparation of Financial Statements

The Financial Statements relate to Mercantile Ventures Ltd. These Financial Statements have been prepared on accrual basis under the historical cost convention and applicable Accounting Standards.

2 Use of Estimates

The preparation of the financial statements in conformity with Indian GAAP requires the Management to make estimates and assumptions considered in the reported amounts of assets and liabilites (including contingent liabilities) and the reported income and expenses during the year. The Management belives that the estimates used in preparation of the financial statements are prudent and reasonable. Future results could differ due to these estimates and the differences between the actual results and the estimates are recognised in the periods in which the results are known / materialise.

3 Cash and cash equivalents(for Cash Flow Statement)

Cash on hand comprises Cash on hand and balance in Current account with Bank and other liquid funds.

4 Cash Flow Statement

Cash Flows are reported using the indirect method whereby profit/loss before extraordinary items and tax is adjusted for the effects of transactions of non-cash nature and any deferrals or accruals of past or future cash receipts or payments. The Cash Flows from operating, investing and financing activities of the company are segregated on the available information.

5 Fixed Assets

The Fixed Assets are stated at cost less accumulated Depreciation and impairment losses. Cost comprises the purchase price and any attributable cost of bringing the assets to its working condition for its intended use.

6 Depreciation

a) Depreciation is provided on straight Line Method at the rates specified under Schedule XIV of the Companies Act, 1956

b) Depreciation on certain premises is provided on composite cost where it is not possible to segregate the land cost

c) Depreciation for additions to/deductions from Fixed Assets is calculated pro rata from/to the month of additions/ deletions.

d) Fixed Assets individually costing Rs.5000 or less are depreciated in full in the year of additions.

7 Investments (Long Term)

a) Investments in shares and units are stated at cost, net of permanent diminution in value wherever necessary.

b) Dividends are accounted for when the right to receive the payment is established.

8 Impairment of assets

The company recognizes impairment of assets other than the assets which are specially excluded under the Accounting Standard 28 on impairment of Assets issued by the Institute of Chartered Accountants of India after comparing the assets recoverable value with its carrying cost in the books. In case carrying amounts exceed recoverable value, impairment losses are provided for.

9 Revenue recognition

a) Revenue is recognized on accrual basis and expenses are accounted on their accrual with necessary provisions for all known liabilities and losses.

b) Dividend income is recognized when the company''s right to receive the dividend is established by the reporting date.

c) Interest income is recognized on a time proportion basis taking into account the amount outstanding and the applicable interest rate.

10 Segment reporting

The main business of the company is that of lease of immovable properties which is the only business segment for the current period.

11 Provision for current tax and deferred tax

Provision for current tax is made after taking into consideration admissible benefits under the provisions of the Income Tax 1961. Deferred taxes are recognized when considered prudent for all timing differences between taxable and accounting income.

12 Retirement Benefits

The company has just commenced the operations and presently there are no post-employment and other long term benefits.