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Accounting Policies of Bombay Cycle & Motor Agency Ltd. Company

Mar 31, 2018

1. Significant Accounting Policies:

(a) Basis of Preparation of Financial Statements:

(i) The financial statements have been prepared in compliance with Indian Accounting Standards (Ind AS) notified under Section 133 of the Companies Act, 2013 (the Act) [Companies (Indian Accounting Standards) Rules, 2015] and other relevant provisions of the Act. The financial statements up to year ended 31 March 2017 were prepared in accordance with the accounting standards notified under Companies (Accounting Standard) Rules, 2006 (as amended) and other relevant provisions of the Act. These financial statements are the first financial statements of the Company under Ind AS. The date of transition to Ind AS is 1 April, 2016.

(ii) The financial statements have been prepared on the historical cost basis except for the following assets and liabilities which have been measured at fair value:

1. Financial instruments measured at fair value through profit and loss.

2. Defined benefit plans - plan asset value through other comprehensive income

(b) Critical accounting estimates and judgments:

The preparation of these financial statements in conformity with the recognition and measurement principles of Ind AS requires management to make judgments, estimates and assumptions, that affect the reported balances of assets and liabilities, disclosures relating to contingent liabilities as at the date of the financial statements and the reported amounts of income and expenses for the years presented. Actual results may differ from these estimates. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimates are revised and in any future periods affected. In particular, information about significant areas of estimation, uncertainty and critical judgments in applying accounting policies that have the most significant effect on the amounts recognized in the financial statements pertain to:

i) Useful lives of property, plant and equipment and intangible assets:

The Company has estimated useful life of each class of assets based on the nature of assets, the estimated usage of the asset, the operating condition of the asset, past history of replacement, anticipated technological changes, etc. The Company reviews the useful life of property, plant and equipment and Intangible assets as at the end of each reporting period. This reassessment may result in change in depreciation expense in future periods.

ii) Impairment testing:

Property, plant and equipment and Intangible assets that are subject to amortisation/ depreciation are tested for impairment when events occur or changes in circumstances indicate that the recoverable amount of the cash generating unit is less than its carrying value. The recoverable amount of cash generating units is higher of value-in-use and fair value less cost to sell. The calculation involves use of significant estimates and assumptions which includes turnover and earnings multiples, growth rates and net margins used to calculate projected future cash flows, risk-adjusted discount rate, future economic and market conditions.

iii) Income Taxes:

Income tax expense comprises current and deferred tax. It is recognised in profit and loss except to the extent that it relates to items recognised directly in equity or in OCI.

a) Current tax

Current tax comprises the expected tax payable or receivable on the taxable income or loss for the year and any adjustment to the tax payable or receivable in respect of previous years. It is measured using tax rates enacted or substantively enacted at the reporting date. Management periodically evaluates positions taken in tax returns with respect to situations in which applicable tax regulation is subject to interpretation. It establishes provisions where appropriate on the basis of amounts expected to be paid to the tax authorities. Current tax assets and liabilities are offset only if:

i) there is a legally enforceable right to set off current tax assets against current tax liabilities and when they relate to income taxes levied by the same taxation authority; and

ii) there is intention either to settle on a net basis, or to realise the asset and settle the liability simultaneously.

b) Deferred tax

Deferred tax assets are recognized to the extent that it is regarded as probable that deductible temporary differences can be realized. The Company estimates deferred tax assets and liabilities based on current tax laws and rates and in certain cases, business plans, including managementâs expectations regarding the manner and timing of recovery of the related assets. Changes in these estimates may affect the amount of deferred tax liabilities or the valuation of deferred tax assets and thereby the tax charge in the Statement of Profit or Loss. Provision for tax liabilities require judgments on the interpretation of tax legislation, developments in case law and the potential outcomes of tax audits and appeals which may be subject to significant uncertainty. Therefore the actual results may vary from expectations resulting in adjustments to provisions, the valuation of deferred tax assets, cash tax settlements and therefore the tax charge in the Statement of Profit or Loss.

iv) Effective Tax Rate:

The reconciliation of estimated income tax expenses at statutory income tax rate to income tax expense reported in statement of Profit and loss is as follows:

vi) Fair value measurement of derivative and other financial instruments:

The fair value of financial instruments that are not traded in an active market is determined by using valuation techniques. This involves significant judgments in selection of a method in making assumptions that are mainly based on market conditions existing at the Balance Sheet date and in identifying the most appropriate estimate of fair value when a wide range of fair value measurements are possible.

vii) Litigation:

From time-to-time, the Company is subject to legal proceedings the ultimate outcome of each being always subject to many uncertainties inherent in litigation. A provision for litigation is made when it is considered probable that a payment will be made and the amount of the loss can be reasonably estimated. Significant judgment is made when evaluating, among other factors, the probability of unfavourable outcome and the ability to make a reasonable estimate of the amount of potential loss. Litigation provisions are reviewed at each accounting period and revisions made for the changes in facts and circumstances.

viii) Defined benefit plans:

The cost of the defined benefit plans and the present value of the defined benefit obligation are based on actuarial valuation using the projected unit credit method. An actuarial valuation involves making various assumptions that may differ from actual developments in the future. These include the determination of the discount rate, future salary increases and mortality rates. Due to the complexities involved in the valuation and its long term nature, a defined benefit obligation is highly sensitive to changes in these assumptions. All assumptions are reviewed at each Balance Sheet date.

c) Revenue recognition:

Income and Expenditure are accounted on accrual, as they are earned or incurred, except in case of those involving significant uncertainties where the same is accounted on crystallization.

d) Borrowing Costs:

Borrowing costs are recognised in the Statement of Profit and Loss in the year in which they are incurred.

e) Inventories:

i) Auto spare parts:- At lower of cost and net realisable value.

(Cost in relation to spare parts of Auto Division business includes purchase price net of rebates and incentives from suppliers, octroi and freight)

ii) Materials purchased for preparation of and sale of Food & Beverages, in case of Hospitality Division:- At cost or net realisable value whichever is lower. Cost is determined on the basis of Weighted Average Method and includes all costs incurred for bringing these materials at doorstep of the company.

f) Property, Plant and Equipment:

Items of property, plant and equipment are stated in balance sheet at cost less accumulated depreciation and accumulated impairment losses, if any.

When parts of an item of property, plant and equipment have different useful lives, they are accounted for as separate items (major components) of property, plant and equipment.

An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are expected to arise from the continued use of the asset. Any gain or loss arising on the disposal or retirement of an item of property, plant and equipment is determined as the difference between the sales proceeds and the carrying amount of property, plant and equipment and is recognised in profit or loss.

Depreciation is recognised so as to write off the cost of assets (other than freehold land and Capital work-in-progress) less their residual values on straight-line method over their useful lives as indicated in Part C of Schedule II of the Companies Act, 2013. Depreciation methods, useful lives and residual values are reviewed at the end of each reporting period, with the effect of any changes in estimate accounted for on a prospective basis.

For transition to Ind AS, the Company has elected to continue with the carrying value of all of its property, plant and equipment (âPPEâ) recognised as of April 01, 2016 i.e. transition date, measured as per the previous GAAP and use that carrying value as its deemed cost as of the transition date.

g) Financial instruments:

A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity.

(A) Financial assets

Initial recognition and measurement

All financial assets are recognised initially at fair value plus, in the case of financial assets not recorded at fair value through profit or loss, transaction costs that are attributable to the acquisition of the financial asset. Purchases or sales of financial assets that require delivery of assets within a time frame established by regulation or convention in the market place (regular way trades) are recognised on the trade date.

Subsequent measurement

For purposes of subsequent measurement, financial assets are classified in four categories:

- Debt instruments at amortised cost

- Debt instruments at fair value through other comprehensive income

- Debt instruments and equity instruments at fair value through profit or loss

- Equity instruments measured at fair value through other comprehensive income

Debt instruments at amortised cost

A âdebt instrumentâ is measured at the amortised cost if both the following conditions are met;

The asset is held within a business model whose objective is to hold assets for collecting contractual cash flows, and

Contractual terms of the asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding

After initial measurement, such financial assets are subsequently measured at amortised cost using the effective interest rate method. Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the effective interest rate. The effective interest rate amortisation is included in Other Income in the profit or loss. The losses arising from impairment are recognised in the profit or loss.

Debt instrument at fair value through other comprehensive income

A âdebt instrumentâ is measured as at fair value through other comprehensive income if both of the following criteria are met:

a) The objective of the business model is achieved both by collecting contractual cash flows and selling the financial assets, and

b) The contractual terms of the instrument give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

Debt instruments included within the fair value through other comprehensive income category are measured initially as well as at each reporting date at fair value. Fair value movements are recognized in the other comprehensive income. However, the Company recognizes interest income, impairment losses & reversals and foreign exchange gain or loss in the profit or loss. On derecognition of the asset, cumulative gain or loss previously recognised in other comprehensive income is reclassified from the equity to profit or loss. Interest earned whilst holding fair value through other comprehensive income debt instrument is reported as interest income using the EIR method.

Debt instrument at fair value through profit or loss

Fair value through profit or loss is a residual category for debt instruments. Any debt instrument, which does not meet the criteria for categorization as at amortized cost or as fair value through other comprehensive income, is classified as at fair value through profit or loss.

In addition, the Company may elect to designate a debt instrument, which otherwise meets amortized cost or fair value through other comprehensive income criteria, as at fair value through profit or loss. However, such election is allowed only if doing so reduces or eliminates a measurement or recognition inconsistency (referred to as âaccounting mismatchâ).

Equity instruments

All equity instruments in scope of Ind AS 109 are measured at fair value. Equity instruments which are held for trading are classified as at fair value through profit or loss. For all other equity instruments, the Company may make an irrevocable election to present subsequent changes in the fair value in other comprehensive income. The Company makes such election on an instrument-by-instrument basis. The classification is made on initial recognition and is irrevocable.

If the Company decides to classify an equity instrument as at fair value through other comprehensive income, then all fair value changes on the instrument, including foreign exchange gain or loss and excluding dividends, are recognised in the other comprehensive income. There is no recycling of the amounts from OCI to profit or loss, even on sale of investment. However, the Company may transfer the cumulative gain or loss within equity.

Equity instruments included within the fair value through profit or loss category are measured at fair value with all changes recognized in the profit or loss.

(B) Financial liabilities and equity instruments Classification as debt or equity

Debt and equity instruments issued by the Company are classified as either financial liabilities or as equity in accordance with the substance of the contractual arrangements and the definitions of financial liability and an equity instrument.

Equity Instruments

An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting all of its liabilities. Equity instruments issued by the Company are recognised at the proceeds received, net of direct issue costs.

Initial recognition and measurement

All financial liabilities are recognised initially at fair value and, in the case of loans and borrowings and payables, net of directly attributable transaction costs.

Subsequent measurement

All financial liabilities are subsequently measured at amortised cost using the effective interest method or at fair value through profit or loss.

Financial liabilities at fair value through profit or loss

Financial liabilities are classified as at fair value through profit or loss when the financial liability is either contingent consideration recognised by the Company as an acquirer in a business combination to which Ind AS 103 applies or is held for trading or is designated upon initial recognition as at fair value through profit or loss. Financial liabilities are classified as held for trading if they are incurred principally for the purpose of repurchasing in the near term or on initial recognition it is part of a portfolio of identified financial instruments that the Company manages together and has a recent actual pattern of short-term profit-taking.

Financial liabilities subsequently measured at amortised cost

Financial liabilities that are not held-for-trading and are not designated as at fair value through profit or loss are measured at amortised cost at the end of subsequent accounting periods. The carrying amounts of financial liabilities that are subsequently measured at amortised cost are determined based on the effective interest rate method. Interest expense that is not capitalised as part of costs of an asset is included in the âFinance costsâ line item in profit or loss.

h) Cash and cash equivalents

For the purpose of presentation in the statement of cash flows, cash and cash equivalents includes cash on hand and balance with Banks.

i) Earnings per Share:

Basic earnings per share is computed by dividing the net profit after tax by the weighted average number of equity shares outstanding during the period. Diluted earnings per share is computed by dividing the net profit after tax by the weighted average number of equity shares as above and also the weighted average number of equity shares upon conversion of all dilutive potential equity shares.

j) Employees benefits:

i) Short term employee benefits are recognized as an expense at the undiscounted amount in the Profit and loss account of the year in which the related service is rendered. These benefits include compensated absences such as paid annual leave and performance incentives.

ii) Post employment and other long term employee benefits are recognized as an expense in the Profit and Loss account for the year in which the employee has rendered services. The expense is recognized at the present value of the amount payable determined using acturial valuation techniques. Acturial gains and losses are recognized in full in the Profit and Loss account for the period in which they occur.

Liability towards Gratuity is being discharged regularly in accordance with the terms of employment with the employees.

iii) Provident Fund scheme: The Company makes specified monthly contributions towards Employee Provident Fund to Employeesâ Provident Fund Organisation. Interest is credited to respective employees on regular basis as per the interest rate notified by government on time to time by Employeesâ Provident Fund Organisation.

k) Impairment of Assets: An asset is treated as impaired when the carrying cost of the asset 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 recognized in a prior accounting period is reversed if there has been a change in the estimate of the recoverable amount.

l) Financial risk management:

The Company has exposure to the following risks arising from financial instruments:

* Credit risk

* Liquidity risk and

* Market risk

Risk management framework

The Companyâs board of directors has overall responsibility for the establishment and oversight of the Companyâs risk management framework. The board of directors is responsible for developing and monitoring the Companyâs risk management policies.

Risk management policies and systems are reviewed regularly to reflect changes in market conditions and Companyâs activities. The Company, through its training and management standards and procedures, aims to maintain a disciplined and constructive control environment in which all employees understand their roles and obligations.

i) Credit risk

Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from the Companyâs receivables from customers and investments in debt securities, cash and cash equivalents, mutual funds, bonds etc.

The carrying amount of financial assets represents the maximum credit exposure.

Cash and cash equivalents

Credit risk from balances with banks is managed by the Companyâs treasury department in accordance with the companyâs policy. Investment of surplus funds are made in mainly in mutual funds with good returns and within approved credit ratings.

ii) Liquidity risk

Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they become due. The Company manages its liquidity risk by ensuring, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risk to the Companyâs reputation.

iii) Market risk

Market risk is the risk of loss of future earnings, fair values or future cash flows that may result from adverse changes in market rates and prices (such as interest rates) or in the price of market risk-sensitive instruments as a result of such adverse changes in market rates and prices. Market risk is attributable to all market risk-sensitive financial instruments and all short term and longterm debt. The Company is exposed to market risk primarily related interest rate risk and the market value of its investments.

m) Recent Accounting pronouncements: Standards issued but not yet effective

The amendments to standards that are issued, but not yet effective, up to the date of issuance of the Companyâs financial statements are disclosed below. The Company intends to adopt these standards, if applicable, when they become effective.

The Ministry of Corporate Affairs (MCA) has issued the Companies (Indian Accounting Standards) Amendment Rules, 2017 and Companies (Indian Accounting Standards) Amendment Rules, 2018 amending the following standard:

Ind AS 115 Revenue from Contracts with Customers:

On March 28, 2018, Ministry of Corporate Affairs has notified the Ind AS115, Revenue from Contract with Customers. The core principle of the new standard is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services.

Specifically, the standard introduces a 5-step approach to revenue recognition:

- Step 1: Identify the contract(s) with a customer

- Step 2: Identify the performance obligation in contract

- Step 3: Determine the transaction price

- Step 4: Allocate the transaction price to the performance obligations in the contract

- Step 5: Recognise revenue when (or as) the entity satisfies a performance obligation

Under Ind AS 115, an entity recognises revenue when (or as) a performance obligation is satisfied, i.e. when âcontrolâ of the goods or services underlying the particular performance obligation is transferred to the customer.

Further the new standard requires enhanced disclosures about the nature, amount, timing and uncertainty of revenue and cash flows arising from the entityâs contracts with customers.

The standard permits two possible methods of transition:

- Retrospective approach

Under this approach the standard will be applied retrospectively to each prior reporting period presented in accordance with Ind AS 8-Accounting Policies, Changes in Accounting Estimates and Errors

- Retrospectively with cumulative effect of initially applying the standard recognized at the date of initial application (Cumulative catch - up approach). The effective date for adoption of Ind AS 115 is financial periods beginning on or after April 1, 2018.

The Company will adopt the standard on April 1, 2018 by using the cumulative catch-up transition method and accordingly comparatives for the year ending or ended March 31, 2018 will not be retrospectively adjusted. The effect on adoption of Ind AS 115 is expected to be insignificant.

Appendix B to Ind AS 21, Foreign currency transactions and advance consideration:

On March 28, 2018, MCA has notified the Companies (Indian Accounting Standards) Amendment Rules, 2018 containing Appendix B to Ind AS 21, Foreign currency transactions and advance consideration which clarifies the date of the transaction for the purpose of determining the exchange rate to use on initial recognition of the related asset, expense or income, when an entity has received or paid advance consideration in a foreign currency. This amendment will come into force from April 1, 2018. The Company expects the impact of this on the financial statements to be insignificant.

Amendments to Ind AS 12 Recognition of Deferred Tax Assets for Unrealised Losses:

The amendments clarify that an entity needs to consider whether tax law restricts the sources of taxable profits against which it may make deductions on the reversal of that deductible temporary difference. Furthermore, the amendments provide guidance on how an entity should determine future taxable profits and explain the circumstances in which taxable profit may include the recovery of some assets for more than their carrying amount.

These amendments are effective for annual periods beginning on or after 1 April 2018. These amendments are expected to have insignificant impact on the Company.

Transfers of Investment Property - Amendments to Ind AS 40:

The amendments clarify when an entity should transfer property, including property under construction or development into, or out of investment property. The amendments state that a change in use occurs when the property meets, or ceases to meet, the definition of investment property and there is evidence of the change in use. A mere change in managementâs intentions for the use of a property does not provide evidence of a change in use.

These amendments are effective for annual periods beginning on or after 1 April 2018. These amendments are expected to have insignificant impact on the Company.

Mar 31, 2017

1) Corporate Information:

The Company was formed in 1919 with the main object to undertake business of sales and servicing of motor cars and at present its Automobile division situated at Church gate is operational for servicing of motor cars. The company diversified its operations in Restaurant and Banquets services at its Hospitality Division situated at Opera House.

2) Significant Accounting Policies:

a) Basis of Preparation of Financial Statements: These financial statements have been prepared in accordance with the generally accepted accounting principles in India under the historical cost convention on accrual basis. The company has prepared these financial statements to comply in all material respects with the accounting standards notified under section 133 of the Companies Act, 2013 read with Rule 7 of the Companies (Accounts) Rules, 2014.

All the assets and liabilities have been classified as current or noncurrent as per the Company''s normal operating cycle and other criteria set out in Schedule III to the Companies Act, 2013. Based on the nature of products and the time between the acquisition of assets for processing and their realization in cash and cash equivalent, the Company has ascertained its operating cycle to be 12 months for the purpose of current/noncurrent classification of assets and liabilities.

b) Use of estimates: The preparation of financial statements requires estimates and assumptions to be made that affect the reported balances of assets and liabilities as at the date of the financial statements and the reported amounts of income and expenses during the year. Management believes that the estimates used in preparation of the financial statements are prudent and reasonable.

c) Revenue Recognition: Income and Expenditure are accounted on accrual, as they are earned or incurred, except in case of those involving significant uncertainties where the same is accounted on crystallization.

d) Borrowing Costs: Borrowing costs are recognized in the Statement of Profit and Loss in the year in which they are incurred.

e) Inventories:

i) Auto spare parts:- At lower of cost and net realizable value. (Cost in relation to spare parts of Auto Division business includes purchase price net of rebates and incentives from suppliers, octroi and freight)

ii) Materials purchased for preparation of and sale of Food & Beverages, in case of Hospitality Division:- At cost or net realizable value whichever is lower. Cost is determined on the basis of Weighted Average Method and includes all costs incurred for bringing these materials at doorstep of the company.

f) Fixed Assets: Fixed assets are carried at cost of acquisition/installation. They are shown net of accumulated depreciation/amortization.

g) Method of Depreciation and Amortization:

I) Depreciation:

i) Depreciation on Building, Plant and Machinery, Electrical Installations, Furniture & Fixture and Equipment is provided on Written Down Value Method, over the estimated useful life of assets.

ii) Effective 1^st April, 2014, the Company depreciates its fixed assets over the useful life in the manner prescribed in Schedule II of the Act, as against the earlier practice of depreciating at the rates prescribed in Schedule XIV of the Companies Act, 1956.

iii) The Vehicles given on operating lease are also depreciated as per above method.

iv) Depreciation on additions to assets or on sale/discernment of assets is calculated prorata from the month of such addition or up to the month of such sale / discernment, as the case may be.

II) Amortization:

i) Leasehold land is amortized over the period of lease.

ii) 1/3^rd portion of balance amount in loose tools account at the end of the year is written off.

h) Investments: Investments that are readily realizable and are intended to be held for not more than one year from the date of investment are classified as current investments. All other investments are classified as long-term investments. Current investments are carried at cost or fair value, whichever is lower. Long-term investments are carried at cost. However, provision for diminution is made to recognize a decline, other than temporary, in the value of the investments, reduction being determined and made for each investment individually.

i) Accounting for taxes: Current tax is the amount of tax payable on the taxable income for the year as determined in accordance with the applicable tax rates and the provisions of the Income-tax Act, 1961 and other applicable tax laws.

Deferred tax is recognized on timing differences, being the difference between taxable income and accounting income, that originate in one period and are capable of reversal in one or more subsequent periods. Deferred tax liabilities are recognized for all timing differences. Deferred tax assets are recognized only if there is a reasonable/virtual certainty that they will be realized. j) Earnings per Share: Basic earnings per share is computed by dividing the net profit after tax by the weighted average number of equity shares outstanding during the period. Diluted earnings per share is computed by dividing the net profit after tax by the weighted average number of equity shares as above and also the weighted average number of equity shares upon conversion of all dilutive potential equity shares. k) Employees benefits:

ii) Post employment and other long term employee benefits are recognized as an expense in the Profit and Loss account for the year in which the employee has rendered services. The expense is recognized at the present value of the amount payable determined using actuarial valuation techniques. Actuarial gains and losses are recognized in full in the Profit and Loss account for the period in which they occur.

Liability towards gratuity is being discharged regularly in accordance with the terms of employments with the employees. l) Impairment of Assets: An asset is treated as impaired when the carrying cost of the asset 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 recognized in a prior accounting period is reversed if there has been a change in the estimate of the recoverable amount. m) Provisions, Contingent Liabilities and Contingent Assets: Provisions involving substantial degree of estimation in measurement are recognized when there is a present obligation as a result of past events and it is probable that there will be an outflow of resources. Contingent liabilities are not recognized but are disclosed in the notes. Contingent Assets are neither recognized nor disclosed in the financial statements.

n) Others :

i) Maharashtra Value Added Tax and Central Sales Tax are accounted on the basis of liability as per periodical returns filed with concerned tax authorities. Liability or refund on assessment/Vat audit report, if any, is accounted as and when the assessments / Vat audit are completed. The final liability in respect of unassisted years/unaudited years under MVAT Act remains indeterminate. Assessments under MVAT Act up to financial year ended 31^st March, 2013 have been closed and no dues are unpaid to that date. For subsequent year, the final liability remains indeterminate.

ii) Previous year''s figures have been regrouped / restated / rearranged wherever necessary to make them comparable with current year''s figures.

Mar 31, 2016

NOTE: 27 - SIGNIFICANT ACCOUNTING POLICIES AND OTHER NOTES

1) Corporate Information:

The Company was formed in 1919 with the main object to undertake business of sales and servicing of motor cars and at present its Automobile division situated at Church gate is operational for serving of motor cars. The company diversified its operations in Restaurant and Banquets services at its Hospitality Division situated at Opera House.

2) Significant Accounting Policies:

d) Borrowing Costs: Borrowing costs are recognized in the Statement of Profit and Loss in the year in which they are incurred.

e) Inventories :

i) Auto spare parts:- At lower of cost and net realizable value (Cost in relation to spare parts of Auto Division business includes purchase price net of rebates and incentives from suppliers, octroi and freight)

f) Fixed Assets: Fixed assets are carried at cost of acquisition/installation. They are shown net of accumulated depreciation/amortization.

g) Method of Depreciation and Amortization:

I) Depreciation:

i) Depreciation on Building, Plant and Machinery, Electrical Installations, Furniture & Fixture and Equipment is provided on Written Down Value Method, over the estimated useful life of assets.

iii) The Vehicles given on operating lease are also depreciated as per above method.

iv) Depreciation on additions to assets or on sale/discernment of assets is calculated pro rata from the month of such addition or unto the month of such sale / discernment, as the case may be.

II) Amortization:

i) Leasehold land is amortized over the period of lease

ii) 1/3rd portion of balance amount in loose tools account at the end of the year is written off.

ii) Post employment and other long term employee benefits are recognized as an expense in the Profit and Loss account for the year in which the employee has rendered services. The expense is recognized at the present value of the amount payable determined using actuarial valuation techniques. Actuarial gains and losses are recognized in full in the Profit and Loss account for the period in which they occur.

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 recognized in a prior accounting period is reversed if there has been a change in the estimate of the recoverable amount.

m) Provisions, Contingent Liabilities and Contingent Assets: Provisions involving substantial degree of estimation in measurement are recognized when there is a present obligation as a result of past events and it is probable that there will be an outflow of resources. Contingent liabilities are not recognized but are disclosed in the notes. Contingent Assets are neither recognized nor disclosed in the financial statements.

n) Others :

i) Maharashtra Value Added Tax and Central Sales Tax are accounted on the basis of liability as per periodical returns filed with concerned tax authorities. Liability or refund on assessment/Vat audit report, if any, is accounted as and when the assessments/ Vat audit are completed. The final liability in respect of unassisted years/unaudited years under MVAT Act remains indeterminate. Assessments under MVAT Act up financial year ended 31^st March, 2013 have been closed and no dues are unpaid to that date. For subsequent year, the final liability remains indeterminate.

ii) Previous year''s figures have been regrouped / restated / rearranged wherever necessary to make them comparable with current year''s figures.

Mar 31, 2015

1) Impact of Pending litigation on Financial position (as compiled and certified by Directors & Management):

a) Litigation initiated by others against Company, number of suits 9, financial loss Rs. 1272.26 lacs (net of amounts provided in books of account) plus further interest, damages, etc yet to be crystallised). However Directors and Management based on legal opinion obtained are of opinion that Company has fair chance of winning these cases and as such no provision has been made in the books of account and consequently in attached Financial Statements.

b) Litigations initiated by company against others, number of suits 4, compensation of Rs. 12.5 lacs plus mesne profit further yet to be crystallized. Although Directors and Management based on legal opinion obtained, are of opinion that company has fair chance of winning in these cases, on the grounds of caution and not accounting possible gains in future have made no provision for claims yet to be crystallised and same will be accounted in the year of verdict.

2) Assessments and Appeals under Direct & Indirect Taxes:

a) Demand raised by Income Tax department of Rs. 1.35/- lacs for A.Y 2011-12, appeal lost in first stage i.e. C.I.T (appeal). Work of appeal filing before Appelate Tribunal is in process.

b) Demand raised by Income Tax department of Rs. 84,240/- for A.Y 2009-10. Appeal filed with Commissioner (Appeal) hearing of which is pending.

c) Special Leave petitions filed by income tax department for A.Y. 2001-02 and A.Y. 2006-07 for demand raised for the respective years Rs. 22.86 lacs and Rs. 30.12 lacs and reduction of returned Loss for A.Y. 2002-03 and A.Y. 2003-04 are pending in Supreme court.

d) Penalty of Rs. 6 lacs under Central Excise laws against which appeal by the company filed with commissioner (Appeals) is pending and not yet taken up for hearing.

e) Assessments under MVAT Act up to Financial Year ended 31.03.2012 have been closed and no dues are unpaid to that date. For subsequent years, the final liability remains indeterminate.

f) Municipal property taxes of Rs. 14.16 lacs not payable as of now pursuant to Bombay High court order dated 24.02.2014 in writ petition no. 2592 of 2013.

g) Directors and Management based on legal opinion obtained, are of opinion that Company has fair chance of winning all these above cases and as such no provision has been made in the books of account and consequently in attached financial statements for the same.

3) Other Contingent Liabilities & Commitments - to the extent not provided for:

a) Counter guarantees of Rs. 1 lac to bank against guarantees issued on company's behalf secured by pledge of deposits of Rs. 224,764/- (Previous year Rs. 199,199/-).

b) Commitment: Interest of Rs. 6,895/- on car loan from Volkswagen Finance Pvt. Ltd. for balance loan period.

4) Significant Accounting Policies are as under:

a) Fixed assets are carried at cost of acquisition/installation. They are shown net of accumulated depreciation/amortisation.

b) DEPRECIATION AND AMORTISATION:

I) Depreciation:

i) As required under Schedule II of the Companies Act, 2013, the Company has adopted the revised estimates of the useful life of the Tangible Assets w.e.f. 1st April, 2014. Depreciation has been provided by spreading written down value of the existing assets over remaining useful life prorate for each accounting year and additions after 1-4-2014 over useful life portion of the accounting year. Consequent to this change, the Depreciation for the year ended 31st March, 2015 is lower by Rs. 6.16 lacs and profit before & after tax is correspondingly higher by Rs. 6.16 lacs respectively. Further, an amount of Rs. 0.32 lacs has been adjusted against the opening balance of Retained Earnings as on 31-3-2014 in respect of the residual value of assets wherein the remaining useful life has become NIL as on that date itself as required by the same depreciation provisions.

ii) The Vehicles given on operating lease are also depreciated as per above method.

II) Amortisation :

i) Leasehold land is amortised over the period of lease.

ii) 1/3rd portion of balance amount in loose tools account at the end of the year is written off.

c) INVESTMENTS: All Non-Current Investments are stated at cost of acquisition. Diminution of temporary nature in value of such long-term investments is not provided for except where deter- mined to be of permanent nature. The provision for diminution is reviewed at every year end in relation to market value and suitable write backs / write offs are accounted. Current investments are stated at lower of cost and fair value.

d) Maharashtra Value Added Tax and Central Sales Tax are accounted on the basis of liability as per periodical returns filed with concerned tax authorities. Liability or refund on assessment/Vat audit report, if any, is accounted as and when the assessments/ Vat audit are completed. The final liability in respect of unassessed years/unaudited years under MVAT Act remains indeterminate.

e) i) Income and Expenditure are accounted on accrual, as they are earned or incurred, except in case of those involving significant uncertainties where the same is accounted on crystallization. ii) Assets subject to operating leases are included in fixed assets. Lease income is recognized in the Profit & Loss Account on a written down value basis over the lease term. Cost including depreciation are recognised as an expenses in the Profit and Loss Account.

f) Inventories of Stock-in-trade are valued as under:

i) Auto spare parts - at lower of cost and net realisable value.

(Cost in relation to spare parts of Auto Division business includes purchase price net of rebates and incentives from suppliers, octroi and freight)

ii) Materials purchased for preparation of and sale of Food & Beverages, in case of Hospitality Division:- At cost or net realisable value whichever is lower. Cost is determined on the basis of Weighted Average Method and includes all costs incurred for bringing these materials at doorstep of the company.

g) Retirement Benefits:

Employees' Provident Fund and Pension Scheme: Monthly contributions are remitted to Central Provident Fund Commissioner who maintains the accounts and pays the dues on retirement.

Gratuity: The Liability has been funded separately by formation of Gratuity Fund and taking out Group Gratuity Scheme Policy from Life Insurance Corporation of India. The annual premium under the same is accounted as contribution to Gratuity Fund. At the time of actual payment of Gratuity, any shortfall on account of premature retirement is accounted as expenditure of that year.

Leave Encashment: The Company provides for estimated leave encashment liability each year on the basis of accumulated leave due to employees at the year end, valued at salaries excluding allowances of the last month of Accounting Year.

Mar 31, 2013

A) Fixed assets are carried at cost of acquisition/installation. They are shown net of accumulated depreciation/amortisation.

b) DEPRECIATION AND AMORTISATION:

Depreciation : Depreciation on all assets is provided uniformly under written down value method as per the rates and in the manner specified in Schedule XIV of the Companies Act, 1956, except in case of following assets where due to nature of business and type of assets suffering extra wear and tear, the rates used as also in earlier years are :

Hospitality Division:

Kitchen Equipments : 33.33%

Furniture & Fixture : 33.33%

Electrical Installations : 20.00%

Amortisation :

i) Leasehold land is amortised over the period of lease.

ii) 1/3rd portion of balance amount in loose tools account at the end of the year is written off.

c) INVESTMENTS: All Non-Current Investments are stated at cost of acquisition. Diminution of temporary nature in value of such long-term investments is not provided for except where deter- mined to be of permanent nature. The provision for diminution is reviewed at every year end in relation to market value and suitable write backs / write offs are accounted. Current investments are stated at lower of cost and fair value.

d) Maharashtra Value Added Tax and Central Sales Tax are accounted on the basis of liability as per periodical returns filed with concerned tax authorities. Liability or refund on assessment/Vat audit report, if any, is accounted as and when the assessments/ Vat audit are completed. The final liability in respect of unassessed years/unaudited years under MVAT Act remains indeterminate.

e) Income and Expenditure are accounted on accrual, as they are earned or incurred, except in case of those involving significant uncertainties where the same is accounted on crystallization.

f) Inventories of Stock-in-trade are valued as under:

i) Auto spare parts - at lower of cost or realisable value.

(Cost in relation to spare parts of Auto Division business includes purchase price net of rebates and incentives from suppliers, octroi and freight) ii) Food & Beverages, in case of Hospitality Division - at cost or net realisable value whichever is lower. Cost is determined on the basis of Weighted Average Method.

g) Retirement Benefits:

EmployeesÂ Provident Fund and Pension Scheme: Monthly contributions are remitted to Central Provident Fund Commissioner who maintains the accounts and pays the dues on retirement.

Gratuity: The Liability has been funded separately by formation of Gratuity Fund and taking out Group Gratuity Scheme Policy from Life Insurance Corporation of India. The annual premium under the same is accounted as contribution to Gratuity Fund. At the time of actual payment of Gratuity, any shortfall on account of premature retirement is accounted as expenditure of that year.

Leave Encashment: The Company provides for estimated leave encashment liability each year on the basis of accumulated leave due to employees at the year end, valued at salaries excluding allowances of the last month of Accounting Year.

Mar 31, 2012

A) Fixed Assets are carried at cost of acquisition/installation. They are shown net of accumulated depreciation/amortization.

b) DEPRECIATION AND AMORTISATION :

Depreciation : Depreciation on all assets is provided uniformly under written down value method as per the rates and in the manner specified in Schedule XIV of the Companies Act, 1956, except in case of following assets where due to nature of business and type of assets suffering extra wear and tear, the rates used as also in earlier years are :

Hospitality Division :

Kitchen Equipments : 33.33%

Furniture & Fixture : 33.33%

Electrical Installations : 20.00%

Amortisation :

i) Leasehold land is amortised over the period of lease.

ii) 1/3rd portion of balance amount in loose tools account at the end of the year is written off.

c) Investments : All Non-Current Investments are stated at cost of acquisition. Diminution of temporary nature in value of such long-term investments is not provided for except where determined to be of permanent nature. The provision for diminution is reviewed at every year end in relation to market value and suitable write backs / write offs are accounted. Current investments are stated at lower of cost and fair value.

d) Maharashtra Value Added Tax and Central Sales Tax are accounted on the basis of liability as per periodical returns filed with concerned tax authorities. Liability or refund on assessment/ Vat audit report, if any, is accounted as and when the asessments/Vat audit are completed. The final liability in respect of unassessed years/unaudited years under MVAT Act remains indeterminate.

e) Income and Expenditure are accounted on accrual, as they are earned or incurred, except in case of those involving significant uncertainties where the same is accounted on crystallization.

f) Inventories of Stock-in-trade are valued as under :

i) Auto spare parts - at lower of cost or realisable value.

(Cost in relation to spare parts of Auto Division business includes purchase price net of rebates and incentives from suppliers, octroi and freight).

ii) Food & Beverages, in case of Hospitality Division - at cost or net realisable value whichever is lower. Cost is determined on the basis of Weighted Average Method.

g) Retirement Benefits :

Employee's Provident Fund and Pension Scheme : Monthly contributions are remitted to Central Provident Fund Commissioner who maintains the accounts and pays the dues on retirement.

Mar 31, 2011

(1) Fixed assets including substantial Showroom and Service Station renovation expenses are carried at cost of acquisition/installation. Fixed assets are shown net of accumulated depreciation/amortization.

(2) DEPRECIATION AND AMORTISATION:

A) Depreciation : Depreciation on all assets is provided uniformly under written down value method as per the rates and in the manner specified in Schedule XIV of the Companies Act, 1956, except in case of following assets where due to nature of business and type of assets suffering extra wear and tear, the rates used as also in earlier years are :

Hospitality Division

a) Kitchen Equipments : 33.33%

b) Furniture & Fixture : 33.33%

c) Electrical Installations : 20.00%

B) Amortisation:

i) Leasehold land is amortised over the period of lease.

ii) 1/3rd portion of balance amount in loose tools account at the end of the year is written off.

(3) INVESTMENTS:

All long term Investments are stated at cost of acquisition. Diminution of temporary nature in value of such long-term investments is not provided for except where determined to be of permanent nature. The provision for diminution is reviewed at every year end in relation to market value and suitable write backs / write offs are accounted. Current investments are stated at lower of cost and fair value.

(4) Maharashtra Value Added Tax and Central Sales Tax are accounted on the basis of liability as per periodical returns filed with concerned tax authorities. Liability or refund on assessment/vat audit report, if any, is accounted as and when the assessments/ vat audit are completed. The final liability in respect of unassessed years/unaudit ed years under MVAT Act remains indeterminate.

(5) Income and Expenditure are accounted on accrual, as they are earned or incurred, except in case of those involving significant uncertainties where the same is accounted on crystallization.

(6) Inventories are valued as under:

A) Finished Goods - at lower of cost or realisable value.

(Cost in relation to finished goods of auto dealership business includes purchase price, octroi and freight)

B) Raw Materials, in case of Hospitality Division - at cost or net realisable value whichever is lower. Cost is determined on the basis of Weighted Average Method.

C) Consumables, Stores and Spare Parts - at lower of cost and net realisable value.

(7) RETIREMENT BENEFITS:

A) Employees' Provident Fund and Pension Scheme : Monthly contributions are remitted to Central Provident Fund Commissioner who maintains the accounts and pays the dues on retirement.

B) Gratuity : The Liability has been funded separately by formation of Gratuity Fund and taking out Group Gratuity Scheme Policy from Life Insurance Corporation of India. The annual premium under the same is accounted as contribution to Gratuity Fund. At the time of actual payment of Gratuity, any shortfall on account of premature retirement is accounted as expenditure of that year.

C) Leave Encashment: The Company provides for estimated leave encashment liability each year on the basis of accumulated leave due to employees at the year end, valued at salaries excluding allowances of the last month of Accounting Year.

(8) Deferred tax asset permitted under Accounting Standard 22 of ICAI on net brought forward losses, brought in books in earlier year is written off on the basis of notional tax on the profits of each year at prevailing tax rates until all losses are not set off. In the year of final set off of losses, the balance deferred tax asset amount, if any, is fully written off.

Mar 31, 2010

(1) Fixed assets including substantial Showroom and Service Station renovation expenses are carried at cost of acquisition / installation. Fixed assets are shown net of accumulated depreciation / amortisation.

(2) DEPRECIATION AND AMORTISATION:

A) Depreciation : Depreciation on all assets is provided uniformly under written down value method as per the rates and in the manner specified in Schedule XIV of the Companies Act, 1956, except in case of following assets where due to nature of business and type of assets suffering extra wear and tear, the rates used as also

B) Amortisation:

i) Leasehold land is amortised over the period of lease.

ii) 1/3rd portion of balance amount in loose tools account at the end of the year is written off.

(3) INVESTMENTS:

All long term Investments are stated at cost of acquisition. Diminution of temporary nature in value of such long-term investments is not provided for except where determined to be of permanent nature. The provision for dimunition is reviewed at every year end in relation to market value and suitable write backs/off are accounted. Current investments are stated at lower of cost and fair value.

(4) Maharashtra Value Added Tax and Central Sales Tax is accounted on the basis of liability under periodical returns filed with concerned tax authorities. Liability or refund on assessment, if any, is accounted as and when the assessments are completed. The final liability in respect of unassessed years remains indeterminate.

(5) Income and Expenditure are accounted on accrual, as they are earned or incurred, except in case of those involving significant uncertainties where the same is accounted on crystallization. Purchases of vehicles are accounted only on physical receipt of goods and after pre delivery inspection at the Companys showroom premises.

(6) Inventories are valued as under:

(A) Finished goods - at lower of cost or realisable value.

(Cost in relation to finished goods of auto dealership business includes purchase price, octroi, freight and driving cum escort charges up to showroom premises)

(B) Raw Materials, in case of Hospitality Division - At cost or net realisable value whichever is lower. Cost is determined on the basis of Weighted Average Method.

(C) Consumables, Stores and Spare Parts - at lower of cost and net realisable value.

(7) RETIREMENT BENIFITS:

(A) Employees Provident Fund and Pension Scheme : Monthly contributions are remitted to Central Provident Fund Commissioner who maintains the accounts and pays the dues on retirement.

(B) Gratuity : The Liability has been funded separately by formation of Gratuity Fund and taking out Group Gratuity Scheme Policy from Life Insurance Corporation of India. The annual premium under the same is accounted as contribution to Gratuity Fund. At the time of actual payment of Gratuity, any shortfall on account of premature retirement is accounted as expenditure of that year.

(C) Leave Encashment: The Company provides for estimated leave encashment liability each year on the basis of accumulated leave due to employees at the year end, valued at salaries excluding allowances of the last month of Accounting Year.

(8) Complimentary accessory items in the nature of sales incentives (Automobile Division) are charged to revenue in the year in which cost is incurred.

(9) Deferred tax asset permitted under Accounting Standard 22 of ICAI on net brought forward losses, brought in books in earlier year is written off on the basis of notional tax on the profits of each year at prevailing tax rates.

(10) As per the change in accounting policy made in F.Y. 2007 - 08 the eligible credit of M.A.T. payable u/s. 115JB of Income Tax Act 1961 for current year under review has been accounted as recoverable asset under seperate head in schedule of Loans and Advances.

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