NOTE: 1 - 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 brsent its Automobile division situated at Churchgate 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:

a) Basis of Preparation of Financial Statements: These financial statements have been brpared in accordance with the generally accepted accounting principles in India under the historical cost convention on accrual basis. The company has brpared 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 non current 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/non current classification of assets and liabilities.

b) Use of estimates: The brparation 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 brparation 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 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 brparation 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) Fixed Assets: Fixed assets are carried at cost of acquisition/installation. They are shown net of accumulated debrciation/amortization.

g) Method of Debrciation and Amortisation: I) Debrciation:

i) Debrciation 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 1st April, 2014, the Company debrciates its fixed assets over the useful life in the manner brscribed in Schedule II of the Act, as against the earlier practice of debrciating at the rates brscribed in Schedule XIV of the Companies Act, 1956.

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

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

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.

h) Investments: Investments that are readily realisable 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 recognise 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:

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 brsent 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 employements 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 recognised when there is a brsent obligation as a result of past events and it is probable that there will be an outflow of resources. Contingent liabilities are not recognised 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 unassessed years/unaudited years under MVAT Act remains indeterminate. Assessments under MVAT Act up financial year ended 31st 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.

8) MICRO, SMALL AND MEDIUM ENTERPRISES:

The Company has not received any declarations from its suppliers regarding their registration under "The Micro, Small and Medium Enterprises Development Act, 2006". Hence the information required to be given in accordance with Section 22 of the said Act is not ascertainable and therefore not given.

As per our report of even date

For & on behalf of

N.G. Thakrar & Co.

(I.C.A.I. REGN. NO. 110907W)

Chartered Accountants

Natwar G. Thakrar

(Partner)

Membership No. 036213

FOR BOMBAY CYCLE & MOTOR AGENCY LTD.

CHIRAG C. DOSHI Chairman & Managing Director

ASHOK T. KUKREJA Director

VINITA A. KAPOOR Company Secretary

MAHENDRA J. KHARWA Chief Financial Officer

Mumbai, 25th May, 2016