BRAKES AUTO (INDIA) LIMITED9. Shiv Shakti Industrial Estate, J. R. Boricha Marg, Off N. M. Joshi...

ANNUAL REPORT 2011‐12

BRAKES AUTO (INDIA) LIMITED


ANNUAL REPORT 2011 - 2012



CORPORATE INFORMATION

BOARD OF DIRECTORS Mr. Suresh Sharma -- Managing Director Mr. Daljeet Singh Matharu -- Executive Director Mr. Sachin Sharma -- Executive Director Mr. Indresh khanna -- Independent Director Mr. Rajen Navnital -- Independent Director Mr. Giriraj Prasad Sharma -- Independent Director AUDITORS Ashish Vyas & Compony Chartered Accountants 12, Civil Lines, Opp, BJP Office, Chamunda Complex Dewas – 455 001. Tel. No. 0722 – 252823/252833 REGISTERED OFFICE 1011, Embassy Centre, 207, Nariman Point, Mumbai 400 021 Tel. No. 022 22823367/22823368 Fax No. 022 – 22832445 Email: [email protected] NEW PREJECT LOCATION Plot No. T – 6, M I D C , Nardhana Industrial Area, Nardhana, Dist. Dhule. Maharashtra REGISTRAR AND SHARE TRANSFER AGENT M/s Purva Sharegistry (India) Pvt. Ltd. 9. Shiv Shakti Industrial Estate, J. R. Boricha Marg, Off N. M. Joshi Marg, Near Lodha Excelus, Lower Parel (East) Mumbai – 400 011. Tel. No. 022 - 23016761/23018261 Fax No. 022 – 022 23012517 ANNUAL GENERAL MEETING Date: - Friday, 28th September 2012. Time: - 10.00 A.M. Place: - 1011, Embassy Centre, 207, Nariman Point, Mumbai – 400 021.

mailto:[email protected]



NOTICE

NOTICE is hereby given that the next Annual General Meeting of the members of Brakes Auto (India) Limited. will be held at its Registered Office of the Company at 1011, Embassy Centre ,207, Nariman Point, Mumbai - 400021 on Friday, 28th September 2012 at 10.00 a.m. to transact the following business:-

ORDINARY BUSINESS

1. To receive, consider and adopt the audited Balance Sheet as at 31st March, 2012 and the P&L a/c. for the year ended that date together with the Reports of Auditor’s and Director’s thereon.

2. To appoint a Director in place of Mr. Suresh Sharma, who retires by rotation and being

eligible, offers for re-appointment?

3. To appoint a Director in place of Mr. Giriraj Prasad Sharma, who retires by rotation and being eligible, offers for re-appointment?

4. To appoint M/s. Ashish Vyas & Co., Chartered Accountants, Dewas as Auditors of the

company to hold the office from the conclusion of this Annual General Meeting until the conclusion of next Annual General Meeting and to fix their remuneration.

NOTES:

A Member entitled to attend and vote at the meeting to appoint a proxy to attend and vote instead of himself / herself. A proxy need not to be a member of the Company. Proxies, in order to be effective, must be received at the Company’s registered office not less than forty-eight hours before the commencement of the meeting. Shareholders are requested to intimate change in their address, if any, immediately. The Register of Member and Share Transfer Book of the Company will remain closed from 24th September 2012 to 27th September 2012 (both days inclusive). Members are requested to notify change in address, if any, in case of shares held in Electronic Form to the concerned Depository Participant and in case of Physical shares to their share Transfer Agent. Members / Proxy Holders are requested to produce at the entrance, the attached admission slip for admission into the meeting hall.

By Order of the Board of Directors

Suresh Sharma Chairman Place: Mumbai Date: 1st September 2012. Registered Office:- 1011, Embassy Centre, 207, Nariman Point, Mumbai – 400 021.



DIRECTORS REPORT To, The Members, Brakes Auto (India) Limited. Mumbai, Maharashtra Your Directors have pleasure in presenting before you the Annual Reports of the Company for the year ended 31st March 2012 together with the Audited Statement of Accounts for the year ended 31st March,2011.

FINANCIAL RESULTS

2011-2012 2010-2011

Income

22,59,55,045 38,81,74,419

Total Expenditure i) Cost of Goods Sold 22,46,76,326 38,77,36,830 ii) Administrative Expenses 3,66,136 1,43,622 iii) Depreciation 11,74,884 11,74,886

Profit (Loss) Before Tax -7,27,699 -7,87,571 Provision for Taxation(Deferred Tax) (38,548) (7,70,250) Profit (Loss) After Tax (689,151) (17,321)

DIVIDEND Due to loss incurred during the year the Board of Directors do not recommend a dividend for the Financial Year 2011-12 RESERVE Reserves and surpluses after transfer of loss of Rs.6,89,151 to the general reserve during the year 2011-12 stood at Rs.19,606,851. OPERATIONAL HIGHLIGHTS. During the year under review the sales turnover of Rs 225,955,045/-as compared to previous year of Rs.388,174,419/-. The company has concentrated its goal of consolidating and strengthening its marketing network, delivering quality products and cutting of cost wherever possible. The net loss after tax of Rs.689151 as compared to previous year loss of Rs.17321 NEW PLANT Your company is undertaking continuous endeavors for expansion of its domestic and overseas customer base by implementing new facilities. For establishing manufacturing facilities, your company started work of its Nardhana plant. The company already purchased land situated at MIDC, Nardhana. The power and water reached to the site and the Company will start building construction activity there. The company expects to start production activity there in the current financial year 2012-13. PUBLIC DEPOSITS During the period under review the Company did not accept deposits in terms of Section 58A of the Companies Act, 1956 and pursuant to the provision of the Non-Banking Financial Companies (Reserve Bank) Direction 1997.



DIRECTORS Mr. Suresh Sharma and Mr.Giriraj Prasad Sharma, Directors of the company retires by rotation at this Annual General Meeting and being eligible, offers themselves for re-appointment. The brief resume and other details of directors, who are to be re-appointed as stipulated under clause 49 of the listing agreement, are furnished in the corporate Governance Report forming part of the Annual Report. During the year there were no changes had taken place in the constitution of the Board of Directors of the Company. AUDITORS M/s. Ashish Vyas & Co, Chartered Accountants, Dewas, the Auditors of the Company retire at the conclusion of this Annual General Meeting. They are eligible for reappointment and indicated their willingness to act as an Auditor, if appointed and the appointment shall be in the limits prescribed under the provision of the Companies Act, 1956. AUDITORS REPORT Report of the auditors and their observations and to the accounts of the company for the year under review are attached herewith which are self –explanatory and do not require any explanation. PARTICULARS OF EMPLOYEES There was no employee in the Company whose particulars are required to be furnished as per section 217 (2A) of the Companies Act, 1956, read with Companies (Particulars of Employees) Rules, 1975 as amended up to date. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNING/OUTGO. This information required to be given under section 217(1) ( c ) of the Companies act, 1956 read with the companies(Discloser of the report of the Director) Rules 1988 is annexed herewith. DIRECTORS’ RESPONSIBILITY STATEMENT Your Directors hereby report that: (a) in the preparation of annual accounts, the applicable accounting standards have been followed; (b) appropriate accounting policies have been selected and applied consistently and judgments and

estimates made that are responsible and prudent so as to give true and fair view of the state of affairs of the Company at the end of the financial year ended 31st March 2012;

(c) Proper and sufficient care has been taken for the maintenance of adequate accounting records

in accordance with the provisions of the Companies Act, 1956, for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities:

(d) Annual accounts have been prepared on a going concern basis. LISTING Your Company continues to be listed on the Stock Exchange Mumbai where the Company’s share is being traded. The Company has paid listing fees for the year 2012-13 CORPORATE GOVERNANCE AND COMPLIANCE A report on corporate governance along with Management Discussion and Analysis is annexed to this report as Annexure A. A certificate from Statutory Auditors with regards to the compliance of the corporate governance, as stipulated in Clause 49 of the Listing Agreement, by the company is annexed to this report.



The company has fully complied with all mandatory requirements prescribed under Clause 49 of the listing agreement. In addition, the company has also implemented some of the non mandatory provisions of Clause 49. MANAGEMENT DISCUSSION AND ANALYSIS Pursuant to clause 49 of the listing Agreement, Management discussion and analysis Report which forms part of this report is annexed. ACKNOWLEDGEMENT The Board of Directors takes the opportunity to thank the Bankers and Government for the Co-operations and support by them from time to time in the operation of the company during the year. The Board also places on record its deep appreciation for the contribution made by the employees at all levels.

By Order of the Board of Directors Suresh Sharma

Chairman Place: Mumbai Date: 1st September 2012.



ANNEXURE –A to the Director’s Report for the year ended 31st March, 2012. REPORT ON CORPORATE GOVERNANCE

1. COMPANY’S PHILOSOPHY

The Company firmly believes that corporate governance and compliance practices are of paramount importance in order to maintain the trust and confidence of the stakeholders and clients of the Company and the unquestioned integrity of all personnel involved or related to the Company. To ensure transparency, fairness and objectivity in an organisation’s functioning, the Company has proactively adopted best practices with regard to corporate governance and compliance, which are ahead of regulatory requirements. The Company’s policy on compliance with external regulatory requirements is backed by stringent internal policies and principles to ensure, interalia, priority to clients’ interest over proprietary interest, maintenance of confidentiality of client information and prevention of insider trading. 2. BOARD OF DIRECTORS The Board of Directors of the Company consists of Six Directors including Managing Director, 3 independent directors and 2 executive directors. The Company does not have any pecuniary relation or transaction with Non-Executive Independent Directors during the year under review. Appointment/Reappointment of Directors Mr.Suresh Sharma and Mr.Giriraj Prasad Sharma, Directors of the company retires by rotation at this Annual General Meeting and being eligible, offers himself for re-appointment. The brief resume and other details of directors seeking appointment are given below. Mr. Suresh Sharma: Mr. Suresh Sharma, aged about 60 years is a post Graduate in Management stream and have more than 35 years of experience in the diversified management areas. His profile includes management experience in varied industries in various capacities. Mr. Giriraj Prasad Sharma: Mr. Giriraj Prasad Sharma aged around 48 years is a Post Graduate in commerce and have an experience of more than 15 years in the field of Finance, administration and general management. Board Procedure

A detailed Agenda folder was sent to each Director in advance (generally before 7 to 10 days) of Board and committee meetings. To enable the Board to discharge its responsibilities effectively, the Managing Director briefed the Board at every meeting on the financial performance of the Company up to last completed month as against the budget/revised budget of the year. Presentations are made by the Managing Director about the financial, operational performance and market scenario. The Board also reviewed:

Strategy and business plans Annual operating and capital expenditure budgets Investment plans of the company Compliance with statutory/regulatory requirements and review of major legal issues. Adoption of quarterly / half yearly / annual results (after recommendation of Audit

Committee where required). Significant labour problems Major accounting provisions and write-offs. Details of joint venture or Collaboration Agreement



Composition, Category of Directors and their other directorship and Membership / Chairmanship of Committees.

Number of other Sr. No.

Name of the Director

Category

Director-ships

Committee Membership

s

Committee Chairman- ships

1

DALJEET SINGH MATHARU

EXECUTIVE DIRECTOR 5 1 0

2.

SACHIN SHARMA EXECUTIVE DIRECTOR

5 1 1

3.

INDRESH KHANNA NON.EXECUTIVE INDE. DIRECTOR

0 0 0

4

RAJEN NAVNITLAL NON.EXECUTIVE INDE. DIRECTOR 3 0

0

5

GIRIRAJ PRASAD SHARMA

NON.EXECUTIVE INDE. DIRECTORE

2 2 1

6

SURESH SHARMA MANAGING DIRECTOR

18 2 1

During the year 5 Board Meetings were held on 30/05/2011, 13/08/2011, 20/08/2011, 14/11/2011, and 14/02/2012 The Board was present with the relevant and necessary information. None of the Director is a member of more than 10 committees or acting as Chairman of more than 5 committees across all companies in which he is a director. The attendance at the Board Meeting during the year and at the last Annual General Meeting was as follows:

SR.NO NAME OF DIRECTORS NO. OF BOARD

MEETING ATTENDED

ATTENDENCE AT THE AGM HELD ON 18-09-2011

1

DALJEET SINGH MATHARU 3 Present

2

SACHIN SHARMA 3 Present

3 INDRESH KHANNA 5 No

4

RAJEN NAVNITLAL 2 No

5


5 Present

6 SURESH SHARMA

4 Present

3. AUDIT COMMITTEE

The audit committee consists of 3 Directors. All members of Audit Committee are financially

literate and 2 Directors out of 3 has financial management expertise as required for member of Audit Committee as stipulated in Clause 49 of the Listing Agreement. The Details of Audit Committee meetings held during the year April 2011 to March 2012 and the attendance of the Audit Committee Members are as under:



SR.NO DIRECTOR NAME CATEGORY NO OF MEETING HELD ATTENDED

1


Chairman

5

2

SURESH SHARMA

Member 5

3 INDRESH KHANNA Member 5 Terms of Reference:-

The terms of reference for the audit committee as laid down by the Board include the following:-

(i) Overseeing the Company’s financial reporting process and the disclosure of its financial

information to ensure that the financial statements are correct, sufficient and credible. (ii) Recommending the appointment and removal of statutory auditor, fixation of audit fee and

also approval for payment for any other services. (iii) Reviewing with management, the quarterly, half yearly and annual financial statements

before submission to the Board, focusing primarily on any changes in accounting policies and practices; major accounting entries based on exercise of judgment by management; qualifications in draft audit report; significant adjustments arising out of audit; the going concern assumption; compliance with accounting standards; compliance with stock exchange and legal requirements’ concerning financial statements; any related party transaction i.e. transactions of the Company of material nature, with promoters or the management, their subsidiaries or relatives, etc. that may have potential conflict with the interests of Company at large.

(iv) Reviewing with the management, statutory and internal auditors, the adequacy of internal control system and ensuring compliance therewith.

(v) Discussions with statutory auditors before the commencement of the audit about the nature and scope of audit as well as have post-audit discussion to ascertain any areas of concern.

(vi) Reviewing the Company’s financial and risk management policies. (vii) To review the functioning of the Whistle Blower Policy adopted by the Company. (viii) To review report on Management Discussion & Analysis of Financial Condition and Results

of operation, to be included in the Company’s Annual Report to its Shareholders.

4. REMUNERATION COMMITTEE

This is a non-mandatory requirement. The company has constituted a Remuneration Committee to decide and fix payment of remuneration and sitting fees to the Directors of the Company. The Remuneration Committee consists of Mr. Giriraj Prasad Sharma, Chairman, Mr. Suresh Sharma and Mr. Indresh Khanna, Members of the committee.

No meeting was required to be held by this committee DETAILS OF REMUNERATION TO DIRECTORS; We are pleased to inform that the Chairman and board of Directors not withdrawn any

amount against their remuneration due to requirement of funds in the company

5. SHARE HOLDER’S GRIEVANCE AND SHARE TRANSFER COMMITTEE

Composition:- The said committee comprises of Mr. Suresh Sharma, Chairman of the said committee, Mr. Daljeet Singh Matharu and Mr. Indresh Khanna Member of the committee.



During the year committee meets time to time to resolve to grievances pertaining to transfer of shares, non receipt of dividend, dematerialization of shares, complaint letter received from stock exchange, SEBI etc

The Committee has delegated the authority to an officer of the Company who attends to share transfer formalities at least once in a fortnight.

Terms of reference:-

To look into the redressed of the share holders complaints in respect of any matter including transfer of shares non receipt of annual report, non receipt of declared dividend etc.

Compliance Officer:- The company has designated Mr. Hemant Kokatay as Compliance Officer.

Summary of Investors’ Complaints:-

During the year no complaints were received from the share holders.

Annual General Meeting:-

The Annual General Meeting (AGMs) of the company have been held at the following places in the last three years.

YEAR DATE TIME VENUE

2008 – 09 12-09-2009 9.30 A.M REGD. OFFICE –1011,Embassy

Centre,207,Nariman Point,Mumbai-400021,

2009 – 10 09-06-2010 9.30 A.M REGD. OFFICE – 1011,Embassy Centre,207,Nariman Point,Mumbai-400021,

2010 – 11 29-09-2011 10.30 A.M REGD. OFFICE – 1011,Embassy Centre,207,Nariman Point,Mumbai-400021,

No special resolution passed through postal ballot during the year.

No special resolution on matters requiring postal ballot are placed for share holder’s approval at this meeting.

6. DISCLOSURES REGARDING RELATED PARTY TRANSACTIONS:-

There was some transactions by the company with related parties and the same in view of the management are in ordinary course of business and are done at arm length price. The company has complied with the requirement of the regulatory authorities on capital markets and no penalties/strictures have been imposed against it in the last three years

7 . MEANS OF COMMUNICATION:

The quarterly and yearly financial result of the company is published in the prominent daily

newspapers having circulation in region where the registered office of the company is situated. The quarter/yarely financial results are also regularly sent to the Mumbai stock exchange where the Company’s Share is listed as soon as are approved and taken on record by the board of directors of the company.



8. GENERAL INFORMATION FOR SHAREHOLDERS:

(a) Regd. Office: - The Address has been given above

(b) Date, Time, and Venue of Annual General Meeting:- 28th September, 2012 at 10.00 A. M. at the Regd. Office.

(c) Financial Reporting for the quarter ending:-

30th June 2011 : Mid-August 30th September 2011 : Mid-November 31st December 2011 : Mid-February 31st March 2012 : Mid-May

(d) Date of Book Closure: 24th September 2012 to 27th September 2012 (both days inclusive)

(e) Market Price Data:

The monthly high & low Share prices of the company traded at the stock Exchange, Mumbai

from 1st April 2011 to 31st March, 2012 are given below Months

Months high Price

Rs.

Months Low Price

Rs April 2011 7.61 4.73 May 2011 7.90 6.55 June 2011 7.10 4.74 July 2011 5.42 4.29 August 2011 5.11 4.29 September 2011 4.58 3.40 October 2011 3.38 2.38 November 2011 2.96 2.15 December 2011 2.74 2.39 January 2012 4.40 2.60 February 2012 4.74 3.43 March 2012 5.46 4.73

(f) Shareholding Pattern as on March 31st, 2012

Description Folios

Number of Shares

% of Total

Promoters 3 1026534 26.22 Independence Directors & Relatives

0 0 0

Mutual Fund 0 0 0 Body Corporate 76 235539 6.02 FIIs 0 0 0 NRIs 38 21240 0.54 Individuals / Trust 8930 2632387 67.22 Clearing Member 0 0 0 Total 9095 3915700 100



(g) Registrar And Transfer Agent:

The name & address of the registrar & share transfer agent has been given on the first page of the Annual Report.

(h) Share Transfer System: The Company has a Share holders/ Investors grievance Committee who looks after share transfer job by meeting at regular intervals depending upon the receipt of the shares for transfer.

(i) Investor Services:

The Company has not received any complaints from the shareholders/investors during the year.

(j) Dematerialisation of Shares and Liquidity The Company has appointed registrar & share transfer agent for electronic connectivity whose name & address has been given on the first page of Annual Report. The Company has also entered into MOU with CDSL & NSDL for electronic connectivity.

(k) Dividend payment date: Dividend if any, declared in the forthcoming Annual General meetig will be paid within 30days of the date of declaration;

(l) Listing on the stock exchange BSE Limited. Phiroze Jeejeebhoy Towers,

Dalai Street, Fort, Mumbai-400001

(m) Stock code

Bombay Stock Exchange

Code

520115

Demat ISIN Number in the NSDL & CDSL: INE222G01019 DISPOSAL OF INVESTOR GRIEVANCES The average time required by the Company for the redressed of routine investor grievances is estimated to be seven working days from the date of receipt of the complaint. In case of non-receipt routine complaints and where external agencies are involved. The Company will strive to redress these complaints as expeditiously as possible. CERTIFICATION WITH RESPECT TO FINANCIAL STATEMENT The Managing director of the Company has furnished a certificate to the Board of Directors of the Company with respect to accuracy of financial statements and adequacy of internal controls and compliance of Clause 49 as required under Clause 49 of the listing agreement. CODE OF CONDUCT The Board of Directors a code of conduct for the Board member and members and senior management of the company. The said code has been circulated to the Directors and the members of the senior management. The code has also been posted on the company’s Website. The declaration by Shree Suresh Sharma, Chairman of the company, regarding compliance by the Board Members and Senior management personnel with the said code of conduct is attached to this report.



IMPLEMENTATION OF NON-MANDATORY CORPORATE GOVERNANCE REQUIREMENTS The company has implemented the following non-mandatory requirements as stated in clause 49 of the listing agreement with respect to Corporate Governance:- (i) Remuneration Committee: - Already details have been given earlier. (ii) Whistler Blower policy:- Under this policy employees of the Company can report to the

management about unethical behavior, actual or suspected fraud or violation of code of conduct or ethics policy. It is the company’s policy to insure that the Whistler Blower are not victimized or denied direct access to the chairman of the Audit Committee. The existence of said policy mechanism has been communicated to all employees.

MANAGEMENT DISCUSSION AND ANALYSIS

Company is mainly operating into the business of design and manufacturing of automobiles and auto components. The key issues of the Management Discussion and Analysis are given below.

(a) Industry Structure and Developments Government of India in consultation with SIAM and ACMA, published the Automotive mission plan 2016 which envision India: “To emerge as the destination of choice in the world for design &manufacturing of automobiles and auto components with output reaching a level of US$ 145 billion, accounting for more than 10 percent of the GDP and providing employment to 25 million people by 2016.” ACMA in its vision 20:20:1 forecast that the Indian auto component industry will achieve domestic turnover of US$20billion and in the process create additional 1 million jobs by 2016.these figure reflected significant potential of the growth in auto components industry both for the domestic market and export from India. Overall, India’s gross domestic product (GDP) growth is now expected to reach a higher than expected percent during 2011-12, despite the downturn in agriculture. The contribution of the automobiles industry to overall economic growth cannot be denied as it provides 4.5% of the GDP. The Indian auto mobiles industry has come under global focus, ranking second only to china as the fastest growing market in the world. The spate of new launches by the auto major and rising sales graphs over the past few months indicate that the fiscal stimulus seems to have worked wonders for the industry. (b) Strength Highly qualified professionals under an efficient Board of directors gives the company an edge over the competitors and a team of executives is the major strength of the Company. Company is known from its reputation which the company has earned due to its quality business and cordial relation with its clients and presently the company is trying to expand its business into other trans-european nations.



(c) Comment on Current year’s performance

Receipts : The current financial year turnover is only Rs.22,59,55,045/- Operating Expenses : The operating Expenses are well under control. Operating Profits : Incurred Operating Loss of Rs.7,27,699/- for the current year. Indirect Expenses : The Indirect Expenses are under control. Depreciation : Rs.11,74,884/- is provided as depreciation. Profit before tax : Company incurred net loss during the year. Taxation : No tax provision is made during the year. Debtor/Sales : Debtors are reasonable and realization period has Decreased due to the policy of the Company.

(d) Opportunities and Threats We operate in a market characterized by swift changes and convergence. We face formidable competition in every aspect of our business; particularly from companies that seek to connect people across geographies over IP based communication and collaboration on multiple platforms. We do face competition from other providers, including start-ups as well as developed companies that are enhancing or developing mobile applications and technologies. Your company however, has a well-integrated platform that will ensure we stay ahead of the curve. We are augmenting features and products to our existing products and own the complete value chain of products and services we address. The Company is venturing into new business areas by diversification and acquisition of new business and business areas. Company plans to enter into the business of hotels and Restaurants, Real Estates and Import Export of Commodities. (e) Segment wise performance The segment requirements of segmental reporting (AS-17) are not applicable on the company. (f) Outlook The Company is making all efforts to accelerate growth of its business. It expects to improve its position in the market by focusing on technologically advanced and more profitable products/market segments and working aggressively in the areas of productivity, efficiency and cost reductions. (g) Risk and concerns The market penetration by new entrants in the Company’s business area and the strong hold of existing big players in the market places hurdles in the growth path of the Company. However the company is aggressively using well talented employees and personal to establish new business areas and to develop existing market. (h) Internal control system Internal audit and other controls have been found to be adequate. These are reviewed periodically by the Audit Committee and found the performance satisfactory.



(i) Material Development in Human Resources / Industrial Relations Front

The industrial relation remained good across all locations. Human resources continued to be recognized most valued assets. The company is adequately manned professionals in the field of Engineering, Finance and Administration etc. In order to meet the challenges of growth and new product line, the company has organized in-house training of its staff and workman to improve soft skills, technical knowledge, work culture and efficient manufacturing practices. The Company has formed work committee in order to increase workers participation in the management. This initiative has paid dividends and the company has experienced improvement in the efficiencies, overall workmen satisfaction and stability.



AUDITORS CERTIFICATE ON CORPORATE GOVERNANCE To The Board of Directors, M/s. Brakes Auto (India) Limited We have reviewed the records concerning the Company’s compliance of conditions of Corporate Governance as stipulated in Clause 49 of the Listing Agreement entered into, by the Company, with the Stock Exchanges of India, for the Financial Year ended on 31st March 2012. The compliance of Corporate Governance is the responsibility of the management. Our examination was limited to procedures and implementation thereof, adopted by the Company for ensuring the compliance of the conditions of the Corporate Governance. It is neither an audit nor an expression of opinion on the financial statement of the Company. We have conducted our review on the basis of the relevant records and documents maintained by the Company and furnished to us for the review, and the information and explanations given to us by the Company. Based on such a review to the best of our information and according to the explanations given to us, in our opinion, the company has complied with the conditions of Corporate Governance, as stipulated in Clause 49 of the said listing agreement. On the basis of certificate issued by the company and the Minutes of meetings of the Shareholders/ Investors Grievance Committee of the Company, we state that, there were no investor grievances pending against the Company for a period exceeding one month. We further state that, such compliance is neither an assurance as to the future viability of the Company, nor as to the efficiency of effectiveness with which the management has conducted the affairs of the Company.

For Ashish Vyas & Co. Chartered Accountants Ashish Vyas Proprietor M. No. – 078527 Place: Mumbai Date: 16th August 2012.



DECLARATION UNDER CLAUSE 49(I)(D) OF THE LISTING AGREEMENT FOR COMPLIANCE WITH THE CODE OF CONDUCT As per the requirements of Clause 49 of the Listing Agreement with the stock exchanges, the company has laid down a code of conduct for its Board of directors and senior management.

Shree Suresh Sharma , Managing Director of the company confirm the compliance of this code of conduct by myself and other members of the Board of directors and senior management personnel as affirmed by them individually. For Brakes Auto (India) Limited Suresh Sharma Managing Director Place: Mumbai Date: 1st September 2012.



REPORT OF THE AUDITORS TO THE MEMBERS OF BRAKES AUTO (INDIA) LIMITED ON THE ACCOUNTS FOR THE YEAR ENDED 31ST MARCH, 2012.

1. We have audited the attached Balance Sheet of the BRAKES AUTO (INDIA) LIMITED as on 31st

March 2012 and the related Profit and Loss Account of the for the year ended on that date annexed thereto. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audit.

2. We conducted our audit in accordance with auditing standards generally accepted in India. These Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatements. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

3. As required by the Companies (Auditor's Report) Order, 2003, issued by the Central Government in terms of Section 227(4A) of the Companies Act, 1956, and on the basis of such checks as considered appropriate and according to the information and explanations given to us during the course of the audit, we enclose in the Annexure hereto a statement on the matters specified in Paragraphs 4 of the said Order.

4. Further to our comments in the Annexure referred to in above paragraph, we report that:

a) We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purposes of our audit;

b) In our opinion, proper books of account as required by law have been kept by the Company so

far as appears from our examination of those Books;

c) The Balance Sheet and the Profit and Loss Account dealt with by the report are in agreement with the books of account;

d) In our opinion, the Balance Sheet and the Profit and Loss Account comply with mandatory

Accounting Standards referred to in Section 211 (3C) of the Companies Act, 1956, e) On The basis of Written representation received from the Directors of the Company, and taken

on record by the Board of Director’s we report that the none of the Director’s is disqualified as at 31st March, 2012 from being appointed as a Director in terms of Clause (g) of Sub –Section (1) of Section 274 of the Companies Act, 1956;

f) In our opinion and to the best of our information and according to the explanations given to us,

the said accounts read with Statement of Accounting Policies and the Notes to Accounts in Schedule, give the information required by the Companies Act, 1956 in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

a. In the case of the Balance Sheet, of the state of affairs of the Company as at 31st March

2012; b. In the case of the Profit and Loss Account, of the Profit for the period ended on that date. c. In case of Cash flow statement, of the cash flows for the year ended on that date.

For Ashish Vyas & Co

Chartered Accountants Place: Mumbai Date: 16th August 2012. Proprietor M No. - 078527



Statement referred to in paragraph 3 of the Auditors' Report of even date to the Statutory Auditors of BRAKES AUTO (INDIA) LIMITED the accounts for the year ended 31st March, 2012. On the basis of such checks as considered appropriate and in terms of the information and explanations given to us, we state as under:

1. In respect of fixed assets (a) The company has maintained proper records showing full particulars, including

quantitative details and situation of fixed assets.

(b) As per information & explanations given to us, the fixed assets have been physically verified by the management during the year. No material discrepancies were noticed on such physical verification. In our opinion the frequency of physical verification of fixed assets is reasonable having regard to the size of the company and nature of its business.

(c) According to information and explanation given to us, the company has not

disposed off substantial part of its fixed assets during the year and the going concern status of the company is not affected.

2.

In respect of inventory and capital work in progress

(a) According to information and explanations given to us, the inventory and capital

work in progress has been physically verification by the management during and at the close of the year.

(b) In our opinion and according to the information and explanations given to us, the

procedures of physical verification of inventory and capital WIP followed by the management as evidence by the written procedures and instructions are reasonable and adequate in relation to the size of tie Company and the nature of its business.

(c) The Company is maintaining proper records of inventory and capital WIP. As explained to us, no discrepancies were noticed on physical verification between physical stocks and book records.

3.

In respect of the loans, secured or unsecured, granted or taken by the company to/from companies, firms or other parties covered in the Register maintained under section 301 of the companies Act,1956.

(a) According to the information and explanations given to us, the Company has not

granted unsecured loans during the current financial year ending March 31,2012.

(b) According to the information and explanation given to us, the company has not

any taken unsecured loans. The amount and number of parties involved are Rs.0. (c) In view of clause (iii)(e) above, the clauses (iii)(f) and (iii)(g) are not applicable. 4 In our opinion and according to information and explanation given to us, the

company further needs to strengthen its internal control system for the purchase of inventory and fixed assets and for sale of goods and services, commensurate with the size of the company and the nature of its business. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in internal control.



5 According to the information and explained given to us, we are of the opinion that

all contracts or arrangements which need to be entered into the register maintained under section 301 of the companies Act, 1956 has been entered. None of the transactions made in pursuance of such contracts or arrangements have been made at prices which are reasonable having regard to the prevailing market price at the relevant time.

6 According to the information and explanations given to us, the company has not

accepted deposits from public during the year covered under the provision of section 58A or 58AA or any other relevant provisions of the companies Act, 1956 and the Companies (Acceptance of Deposits) Rules 1975.

7 The company does not have an internal audit system commensurate with the size

and nature of its business.

8 The Central Government has not prescribed the maintenance of cost records by the Company under section 209(1) (d) of the Companies Act, 1956.

9.

In respect of statutory dues relating to Provident Fund. Investor Education and protection Fund Employees. State Insurance, Income-Tax, Sales-Tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty, Cess and any other statutory dues:-

(a) According to the information and explanations given to us, as on 31st March

2012, there are no undisputed statutory dues appearing in the books of accounts which is payable by the company.

(b) (c)

According to the information and explanation given to us there are no statutory dues which have not been deposited on account of any disputes. In our opinion there are instances where the company has not deducted/paid statutory dues in respect expenses incurred/payment made.

10 The Company has not losses as at March 31, 2012 and it has incurred any losses

in the financial ended on that date or in the immediately preceding financial year. 11 According to the records of the company examined by us the information and

explanations given to us, the Company has not defaulted in repayment of any dues to bank or dues to any bank or financial Institution as at the balance sheet date.

12 According to the information and explanations given to us, the Company has not

granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

13 The provisions of clause 4(xiii) of the above said order are not applicable to the

company. 14 According to the information and explanation given to us, the company has not

dealt or traded in shares, securities, debentures and other investments. Therefore the provisions of clause 4(xiv) of the above said order are not applicable to the company.


given any guarantees for loans taken by others from bank. Therefore the provisions of clause 4(xv) of the above said order are not applicable to the company.



16 In our opinion and according to the information and explanations given to us, the

company has not taken term loans during the year, the provisions of clause 4(xvi) of the above said order are not applicable to the company.

17 According to information and explanations given to us and on an overall

examination of the balance sheet the company has not raised short-term funds during the year. Therefore the provisions of clause 4 (xvii) of the above said order are not applicable to the company.

18 According to information and explanations given to us during the current financial

year the company has not made any preferential allotment section 301 parties. 19 According to the information and explanations given to us, the company has not

issued debenture during the year. Accordingly, the provisions of clause 4(xix) of the order are not applicable to the company.


raised any money by public issues during the year. Accordingly the provisions of clause 4(xx) of the above said order are not applicable to the company.

21 During the course of our examination of the books and records of the company,

carried out in accordance with the generally accepted auditing practice in India and according to the information and explanations given to us, we have neither come across any instance of fraud on or by the Company noticed or reported during the year, nor have we been informed of such case by the management.

For Ashish Vyas & Company Chartered Accountants Ashish Vyas Proprietor M. No. - 078527 Place: Mumbai Date: 16th August 2012. `



AUDITORS’ CERTIFICATE

To, The Board of Directors Brakes Auto (India) Limited Mumbai We have examined the attached Cash Flow Statement of Brakes Auto (India) Limited for the year ended on 31st March 2012. The Statement has been prepared by the Company in accordance with the requirement of Listing Agreement Clause 32 with Mumbai Stock Exchange Limited and is based on in agreement with corresponding Profit & Loss Account and Balance Sheet of the Company for 2011-12 Ashish Vyas & Company For & on behalf of the Board of Directors Chartered Accountants Brakes Auto (India) Limited Ashish Vyas Suresh Sharma Sachin Sharma Proprietor Director Director M. No. - 078527

Place :Mumbai Date: 16th August 2012.


Schedule Amount (Rs.) Amount (Rs.)

As at 31-03-2012 As at 31-03-2011I. EQUITY AND LIABILITIES

SHAREHOLDERS FUNDS

(a) Share Capital 2.1 39,157.000 39,157,000

(b) Reserves and Surplus 2.2 19,606,851 20,296,002

NON-CURRENT LIABILITIES

(a) Long-term borrowings 2.3 16,928,094

(b) Deferred tax liabilities (Net) 2.4 1,164,289 1,202,837

(c ) Other Long term liabilities 2.5

(d) Long term provisions 2.6 696,304 1,161,832

CURRENT LIABILITIES

(a) Short-term borrowings 2.7

(b) Trade payables 2.8 97,303,582 396,272,985

(c) Other current liabilities 2.9 7,952 8,356

(d) Short-term provisions 2.10

Total 157,935,978 475,027,106

II. ASSETS

NON-CURRENT ASSETS

(a) Fixed Assets

(i) Tangible assets 2.11 41,543,011 42,717,896

(ii) Intangible assets 2.12

(iii) Capital work-in-progress 2.13 10,119,859 10,119,859

(iv) Intangible assets under development 2.14

(b) Non-current investments 2.15

(c) Deferred tax assets (net) 2.4

(d) Long term loans and advances 2.16 1,219,970 2,720,223

(e) Other non-current assets 2.17

CURRENT ASSETS

(a) Current Investments 2.18

(b) Inventories 2.19 9,119,237 9,584,635

(c) Trade receivables 2.20 95,596,476 319,352,631

(d) Cash and cash equivalents 2.21 337,425 395,795

(e) Short-term loans and advances 2.22

(f) Other current assets 2.23 90,136,067

Total 157,935,978 475,027,106

Significant Accounting Policies and Notes to Accounts 1&2

As per our Report of even date attached.

For ASHISH VYAS & CO.

CHARTERED ACCOUNTANTS

(PROPRIETOR) (DIRECTOR) (DIRECTOR)

M.No. 078527

Place: MUMBAI

Dated: 16/08/2012

For & on behalf of the Board of


ASHISH VYAS SURESH SHARMA SACHIN SHARMA


BALANCE SHEET AS AT 31ST MARCH 2012


Schedule Amount (Rs.) Amount (Rs.)

As at 31-03-2012 As at 31-03-2011

III. INCOME

I. Revenue from operations 2.24 225,955,045 388,174,419

II. Other Income 2.25 ‐ -

III. Total Revenue ( I+II ) 225,955,045 388,174,419

IV. Expenses:

Cost of materials consumed 2.26 224,676,326 387,736,830

Purchase of Stock-in-Trade 2.27 ‐ - Changes in inventories of finished goods, work-in-progress and Stock in Trade

2.28 465,398 (93,348)

Progress and Stock-in-Trade

Employee benefit expense 2.29 ‐ -

Financial Costs 2.30 ‐ -

Depreciation and amortization expense 2.4 1,174,884 1,174,886

Other expenses 2.31 366,136 143,622

Total Expenses 226,682,744 388,961,990 V. Profit before exceptional and extraordinary items and tax

(III - IV) (727,699) (787,571)

and Tax

VI. Exceptional Items ‐ -

VII. Profit before extraordinary items and tax (V - VI) (727,699) (787,571)

VIII. Extraordinary Items ‐ -

IX. Profit before tax (VII - VIII) (727,699) (787,571)

X. Tax expense:

(1) Current tax ‐ -

(2) Deferred tax (38,548) (770,250)

XI. Profit(Loss) from the perid from continuing operations (VII-VIII) (689,151) (17,321)

operations

XII. Profit/(Loss) from discontinuing operations ‐ -

XIII. Tax expense of discounting operations ‐ -

XIV. Profit/(Loss) from Discontinuing operations ‐ -

(XII - XIII)

XV. Profit/(Loss) for the period (XI + XIV) (689,151) (17,321)

XVI. Earning per equity share:

(1) Basic ‐ -

(2) Diluted ‐ -

Significant Accounting Policies and Notes to Accounts 1&2

Read with Accounting Policies and Notes on Accounts.

As per our Report of even date attached.

For ASHISH VYAS & CO.

CHARTERED ACCOUNTANTS

(PROPRIETOR) (DIRECTOR) (DIRECTOR)

M.No. 075872

Place: MUMBAI

Dated: 16/08/2012

ASHISH VYAS SURESH SHARMA SACHIN SHARMA


PROFIT & LOSS ACCOUNT FOR THE YEAR ENDED 31ST MARCH 2012

For & on behalf of the Board of



A. Cash Flow from Operating Activities

Net Profit before Tax (727,699) (787,571)

Adjustment for :

Depreciation 1,174,885 1,174,886

Deffered tax ‐ 0.00

1,174,886

Operating Profit before Working Capital Changes 447,186 387,315

Adjustment for Working Capital Changes

(Increase)/Decrease in Stock in Trade 465,398 (202,348)

(Increase)/Decrease in Debtors 223,756,155 (388,190,030)

(Increase)/Decrease in Loans & Advances 90,136,067 (771,980)

(Increase)/(Decrease) in Current Liabilities (298,969,403) 387,684,464

(Increase)/(Decrease) in Other Current Liabilities (404)

(1,479,894)

Cash Generated from Operation 15,387,813 (1,092,579)

Cash Flow before Exceptional item 15,387,813 (1,092,579)

-

Net Cash from Opearting Activities (1,092,579)

B. Cash Flow from Investing Activities

Purchase of Fixed Assets

Net Cash used in Investing Activities ‐ -

C. Cash Flow from Financing Activities

Increase/(Decrease) in Secured/Unsecured Loan (16,928,094) 1,259,410

Increase/(Decrease) in Long Terms Provisions (465,528)

Increase/(Decrease) in Long Terms Loans & Advances 1,500,253

Net Cash used in Financing Activities (15,893,369) 1,259,410

Net Increase/(Decrease) in Cash and Cash

equivalents(A+B+C) (58,370) 166,831

Opening Cash and Cash Equivalents 395,795 228,965

Closing Cash and Cash Equivalents 337,425 395,796

BRAKES AUTO INDIA LIMITED

Cash Flow Statement For the year ended 31st March,2012

PARTICULARS YEAR ENDED 31.03.2012 YEAR ENDED 31.03.2011

NOTES ANNEXED TO AND FORMING PART OF BALANCE SHEET AS AT 31ST MARCH 2012

AMOUNT(Rs) AMOUNT (Rs)PARTICULAR 31/03/2012 31/03/2011

NOTE "2.1"SHARE CAPITAL

Authorised Capital 130,000,000 130,000.00(13000000 Equity shares of Rs. 10/- each)(Previous year 13000000 Equity Shares of Rs.10/- each)

Issued & Subscribed Capital 39,157,000 39,157,000{3915700 equity shares of Rs.10/- each (Previous Year 3915700 Shares of Rs.10/- each)}

TOTAL 39,157,000 39,157,000

Details of Shareholders holding more than 5% shares as at March 31, 2012:

No. of Shares % of Holding No. of Shares % of Holding Promoters and Promoter Group:Mithlesh Sharma 1,019,434 26.03 1,019,434 26.03


Name of Shareholder 31.03.2012 31.03.2011



NOTE "2.2"RESERVES & SURPLUS

Opening balance 20,296,002 20,313,323Profit Transferred from Profit & Loss A/c 689,151 -17,321

TOTAL 19,606,851 20,296,002

NOTE "2.3"LONG TERM BORROWING

Secured Loan 0 0

TOTAL-1 0 0

Unsecured Loan From Directors 7,35,000 From Companies 16,193,094

TOTAL-2 0 16,928,094

TOTAL 1+2 0 16,928,094

NOTE "2.5"OTHER LONG TERM BORROWINGS

0 0

TOTAL 0 0

NOTE "2.6"LONG TERM PROVISIONS

Provision for Tax 661304 1126832Provision for Audit Fees 35000 35000

TOTAL 696304.00 Cr 1161832.00Cr

NOTE "2.7"SHORT-TERM BORROWINGS

0 0

TOTAL 0 0

NOTE "2.8"TRADE PAYABLE

Sundry Creditors for Goods 97261103 389149439Sundry Creditors for Expenses 7479 207587Sundry Creditors for Others 35000 6915959

TOTAL 97303582 396272985




NOTE "2.9"OTHER CURRENT LIABILITIES

Duties & TaxesInput Vat 4% 6225085.00DrOutPut Vat @ 4% 62314890.00CrTds Detucted on Professional Fees 7952.00 Cr 7952.00CrVat Paid 6000.00Dr

TOTAL 7952 8356

NOTE "2.10"SHORT-TERM PROVISIONS

0 0

TOTAL 0 0

NOTE "2.12"INTANGIBLE ASSETS

0 0

TOTAL 0 0

NOTE "2.13"CAPITAL WORK IN PROGRESS

Capital work in progress 109000 109000Dhule Project Work in Progress 10010859 10010859

TOTAL 10119859 10119859

NOTE "2.14"INTANGIBLE ASSETS UNDER DEVELOPMENT

0 0

TOTAL 0 0

NOTE "2.15"NON CURRENT INVESTMENTS

0 0

TOTAL 0 0

NOTE "2.16"LONG-TERM LOANS & ADVANCES

DepositsDhule MIDC 45000.00 45000.00 DrLoans and advances 605000.00 Dr 1411910.00DrIncome Taxes 569970.00 Dr 1263313.00Dr

TOTAL 1219970.00 2720223.00



DETAILS OF FIXED ASSETS & DEPRECIATION CLAIMED THEREON UNDER COMPANIES ACT,ON S.L.M BASIS SCHEDULE - 2.11ACCOUNTING YEAR 2011-2012

S. DESCRIPTION OFNO. ASSETS AS ON Additions Deduction AS ON RATE AS ON FOR THE DeductionAS ON AS ON AS ON

1/4/2011 31/3/2012 (%) 1/4/2011 YEAR 31/3/2012 31/3/2012 31/3/2011

1 COMPUTER & SOFTWARE 6,925,662 -

6,925,662 16 3,384,659 1,122,650 4,507,309 2,418,353 3,541,003

2 FACTORY SHADE & BUILDING 9,805,280 - - 9,805,280 3 376,669 - 376,669 9,428,611 9,428,611

3 PLANT & MACHINERY 31,691,770 - - 31,691,770 5 2,570,877 - 2,570,877 29,120,893 29,120,893

- -

4 FURNITURE & FIXTURE 449,164 - - 449,164 6 229,028 28,432 257,460 191,704 220,136

-

5 VEHICALS 179,647 - - 179,647 10 153,596 17,066 170,662 8,985 26,051

- -

6 OFFICE EQUIPMENT 141,837 - - 141,837 5 60,635 6,737 67,372 74,465 81,202

7 LEASE HOLD LAND 300,000 - -

300,000 - - - - - 300,000 300,000

Total (Rs.) 49,493,360 - - 49,493,360 6,775,464 1,174,884 - 7,950,349 41,543,011 42,717,896

For ASHISH VYAS & CO.CHARTERED ACCOUNTANTS

ASHISH VYAS SURESH SHARMA SACHIN SHARMA(PROPRIETOR) (DIRECTOR) (DIRECTOR)M.No.078527Place: MUMBAI

Dated:16th August 2012


BRAKES AUTO(INDIA) LIMITEDFor & on behalf of the Board of

GROSS BLOCK DEPRECIATION NET BLOCK



NOTE "2.17"OTHER NON-CURRENT ASSETS

Others 0 0

TOTAL 0 0

NOTE "2.18"CURRENT INVESTMENT

0 0

TOTAL 0 0

NOTE "2.19"INVENTORIES

Stock in trade 9119237 9584635

TOTAL 9119237 9584635

NOTE "2.20"TRADE RECEIVABLE

Sundry Debtors for trading 95596476 318777393Sundry Debtors for software 0 575238

TOTAL 95596476 319352631

NOTE "2.21"CASH & CASH EQUIVALENTS

Cash in hand Cash Balance 291723 325008BankAXIS BANK-23250 25085Syndicate Bak 8629 11899 11899Syndicate Bank 2015 15451 15451Union Bank of India - 12191 13352 13352Union Bank of India 36335 5000 5000

TOTAL 337425 395795

NOTE "2.22"SHORT-TERM LOANS & ADVANCES

0 0

TOTAL 0 0

NOTE "2.23"OTHER CURRENT ASSETS

Certificate Issued 0 111Dhani Fabrics for Sales 0 90120456Om Steel 0 12300Subhash Shaklecha 0 3200

TOTAL 0 90136067


NOTES ANNEXED TO AND FORMING PART OF PROFIT AND LOSS ACCOUNT AS AT 31 ST MARCH 2012

AMOUNT(Rs) AMOUNT(Rs)PARTICULAR 31/3/2012 31/3/2011

NOTE "2.24"

REVENUE FROM OPERATIONS

Sales 225955045 388174419

TOTAL 225955045 388174419

NOTE "2.25"OTHER INCOME

Other income 0 0

TOTAL 0 0

NOTE "2.26"

COST OF MATERIAL CONSUMED

Purchase 224676326 387736830

TOTAL 5a 224676326 387736830

NOTE "2.27"

PURCHASE OF STOCK IN TRADE

0 0

TOTAL 5b 0 0

NOTE "2.28"

CHANGES IN INVENTORIES OF FINISHED GOODS

WIP & STOCK IN TRADE

Inventories at the end of year

Finished Goods 9119237 9584635

WIP 0 0

Stock-in-trade 0 0

Inventories at the beginning of year

Finished Goods 9584635 9491287

WIP 0 0

Stock-in-trade 0 0

Net Increase/(Decrease) TOTAL 5c -465398 93348

NOTE "2.29"

EMPLOYEE BENEFIT EXPENSES

0 0

TOTAL 5d 0 0

NOTE "2.30"

FINANCE COSTS

0 0

TOTAL 5e 0 0


NOTES ANNEXED TO AND FORMING PART OF PROFIT AND LOSS ACCOUNT AS AT 31 ST MARCH 2012

AMOUNT(Rs) AMOUNT(Rs)PARTICULAR 31/3/2012 31/3/2011

NOTE "2.31"

OTHER EXPENSES

Annual Custodial Fees 6618 -

Annual listing fees 0 10000

Audit Fees 35000 35000

Bank and Other Charges 0 171

Books and Periodicals 3000 0

Conveyance 18456 19434

Custodian Fees 16343 32654

Electricity Expenses 0 7648

Legal & Professional Fess Expenses 0 6500

Office Expenses 12280 7101

Office Maintenance 25085 16682

Postage and Courier 4678 1932

Printing & Stationory Expenses 13456 1017

Professional Fees 28475 0

Repairs and Maintenance 0 0

Salary 124500 0

Short & Excess 0 0

Staff Welfare 4500 0

SUBSCRIPTION CHARGES 3600 0

Telephone Exps 15200 5483

Travelling Expenses 52600 0

Web and Internet Expenses 2345 0

TOTAL 5f 366136 143,622


ANNUAL REPORT 2011-2012 BRAKES AUTO (INDIA) LIMITED

Computation of Deferred Tax Liability as on 31.03.2012 is as mentioned -

NOTE"2.4"

PARTICULARS AMOUNT (INR)

WDV as on 31-03-2012 of Fixed Assets as per Companies Act 1956 41543011

WDV as on 31-03-2012 of Fixed Assets as per Income Tax 1961 37662049

Difference 3880962

Effective Tax Rate 30%

Deferred Tax Liability as on 31.03.2012 1164289

Less: Recognized till 31.03.2011 1202837

Deferred Tax Liability for FY 2011-2012 -38548


Notes annexed to and forming part of the Financial Statements for the year ended March 31, 2012.

General Information

BRAKES AUTO (INDIA) LIMITED (the ‘Company’) is engaged in Trading Business. The Company was

Incorporated on April 6, 1994. The Company’s equity shares are listed on the Bombay Stock Exchange

Limited (BSE). The Company’s primary business is to trade in Fabrics, Shirting & Suiting.

1. Significant Accounting Policies:

(i) Basis of Accounting:

These Financial Statements have been prepared in accordance with the generally accepted

accounting principles in India under the historical cost convention on accrual basis. These

Financial Statements have been prepared to comply in all material aspects with the

accounting standards notified under Section 211(3C) [Companies (Accounting Standards)

Rules, 2006, as amended] and the other relevant provisions of the Companies Act, 1956, of

India (“the Act”). All 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 the Schedule VI to

the Act Based on the nature of services and the time between the acquisition of assets for

processing and their realization in cash and cash equivalents, the Company has ascertained

its operating cycle as 12 months for the purpose of current non‐current classification of

assets and liabilities.

(ii) Tangible and Intangible Assets and Depreciation / Amortisation:

(a) Tangible and Intangible Assets are stated at cost of acquisition or construction less accumulated

depreciation / amortisation and accumulated impairment losses, if any. The Company capitalises

all costs relating to the acquisition, installation and construction of Tangible and Intangible

Assets up to the date when the assets are ready for commercial use. Subsequent expenditures

related to an item of fixed assets are added to its book value only if they increase the future

benefits from the existing asset beyond its previously assessed standard of performance. Items

of Tangible Assets that have been retired from active use and are held for disposal are stated at

the lower of their net book value and net realisable value and are shown separately in the

Financial Statements. Any expected loss is recognized immediately in the Statement of Profit

and Loss. Losses arising from the retirement of, and gains or losses arising from disposal of

Tangible Assets which are carried at cost are recognised in the Statement of Profit and Loss.

(b) Depreciation on additions / deletions to Tangible and Intangible Assets is calculated on pro‐rata

basis from the month of such additions / deletions. The Company provides depreciation on

straight‐line method at the rates specified under Schedule XIV(revised) to the Act or based on

useful life whichever is higher, except for:

No Depreciation has been charged in the books except for Furniture & Fixture, Vehicles, Office

Equipments and Computer / software purchased during the current financial year.

(c) Assets individually costing less than Rs. 5,000/‐ are fully depreciated in the year of acquisition /

construction.

(d) Assessment is done at each Balance Sheet date as to whether there is any indication that an asset (tangible and intangible) may be impaired. For the purpose of assessing impairment, the smallest identifiable group of assets that generates cash inflows from continuing use that are largely independent of the cash inflows from other assets or groups of assets, is considered as a cash generating unit. If any such indication exists, an estimate of the recoverable amount of the assets / cash generating unit is made. Assets whose carrying value exceeds their recoverable amount are written down to the recoverable amount. Recoverable amount is higher of an asset’s or cash generating unit’s net selling price and its value in use. Value in use is the present value of estimated future cash flows expected to arise from the continuing use of an assets and from its disposal at the end of its useful life. Assessment is also done at each Balance Sheet date as to whether there is any indication that an impairment loss recognised for an asset in prior accounting periods may no longer exist or may have decreased.

(iii) Borrowing Cost: Borrowing costs directly attributable to the acquisition / construction of an asset are apportioned to the cost of the Tangible and Intangible Assets up to the date on which the asset is put to use / commissioned.

(iv) Investments:

Investments that are readily realisable and are intended to be held for not more than one year from the date, on which such investments are made, 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, such reduction being determined and made for each investment individually.

(v) Revenue Recognition:

(a) Domestic sales are recognised on transfer of significant risks and rewards to the customer which takes place in dispatch of goods from the stockyard / storage area.

(b) Business practice. Income from operations are recognised net of trade discounts, rebates, sales taxes and service tax.

(vi) Inventories:

(a) Inventories are valued at the lower of cost, determined on the weighted average basis, and net realisable value.

(b) Obsolete and Non‐Moving Inventory of Raw Material, Stores and Spares is provided for on identification by the Management.

(vii) Segment Accounting & Reporting: (a) Segment Revenue and Expenses those are directly attributable to the segment are

considered for respective segments. For rest allocation has been done between segments & where there it is not possible to allocate, the same has been considered as unallocable revenue and expenses.

(b) All segment assets and liabilities are directly attributable to the segment. Segment assets include all operating assets used by the segment and consist principally of fixed assets, inventories, sundry debtors, loans and advances.

(viii) Taxes on Income:

(a) Current Taxation:

Tax expense for the period, comprising current tax and deferred tax, are included in the determination of the net profit and loss for the period. Current tax is measured at the amount expected to be paid to the tax authorities in accordance with the taxation laws prevailling in the respective jurisdictions.

(b) Deferred Taxation: Deferred tax is recognised for all the timing differences, subject to the consideration of prudence in respect of diferred tax assets. Deferred tax assets are recognised and carried forward only to the extent that there is a reasonable certainly that sufficient future taxable income will be available against which such deferred tax assets can be realised. Deferred tax assets and liabilities are measured using the tax rates and tax laws that have been enacted or substantively enacted by the balance Sheet date. At each Balance Sheet date, the Company reassesses unrecognized deferred tax assets, if any.

(ix) Provisions and Contingent Liabilities:

Provisions: Provisions are recognised when there is a present obligation as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and there is a reliable estimate of the amount of the obligation. Provisions are measured at the best estimate of the expenditure required to settle the present obligation at the Balance Sheet date and are not discounted to its present value. Contingent Liabilities: Contingent liabilities are disclosed when there is a possible obligation arising from past events, the existence of which will be confirmed only by the occurrence or non‐occurrence of one or more uncertain future events not wholly within the control of the company or a present obligation that arises from past events where it is either not probable

that an outflow of resources will be required to settle or a reliable estimate of the amount cannot be made, is termed as a contingent liability.

(x) Leases:

Leases in which a significant portion of the risks and rewards of ownership are retained by the lessor are classified as operating leases. Payments made under operating leases are charged to the Statement of Profit and Loss on a straight‐line basis over the period of the lease.

(xi) Earnings per Share:

Basic earnings per share is calculated by dividing the net profit or loss for the period attributable to equity shareholders by the weighted average number of equity shares outstanding during the period. Earnings considered in ascertaining the company’s earnings per share is the net profit for the period after deducting preference dividends and any attributable tax thereto for the period. The weighted average number of equity shares outstanding during the period and for all periods presented is adjusted for events, such as bonus shares, other than the conversion of potential equity shares, that have changed the number of equity shares outstanding, without a corresponding change in resources. For the purpose of calculating diluted earnings per share, the net profit or loss for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period is adjusted for the effects of all dilutive potential equity shares.

2. Notes to Accounts

(i) Contingent Liabilities:

(a) Claims against the Company disputed and not acknowledged as debts ‐ NIL (b) The contingent liability which might arise from pending assessments under various statutes

(ii) Information as required: Current Year Previous Year (a) Estimated amount of Capital Contract outstanding NIL NIL (b) Claim against Company not acknowledged as debts NIL NIL (c) Advance against capital goods NIL NIL (d) Contingent liability not acknowledged as debt NIL NiL (e) Loans & Advances include due from Directors NIL NIL (f) Balance of Debtors, Creditors, Unsecured Loans, Loans & Advances are subject to confirmation

and reconciliation and are stated in the ordinary course of business.

(iii) Foreign Exchange Transaction:

(a) Earnings NIL (b) Outgo NIL

(iv) Related Party Disclosure:

The Disclosure as per AS‐18 ‘Related Party Transactions’ (a) Key Managerial Person / Directors / Persons having significant influence in the company.

Mr. Suresh Sharma & Mr. Sachin Sharma (b) Entities over which Company or Key Managerial Personnel or their relatives, exercise significant

influence.

Pithampur Steels Limited

S. S. Forgings & Engineering Limited

Vertex Spinning Limited

(v) Micro, Small and Medium Enterprises Development Act 2006: Based on the information available with the company, there are no suppliers who are registered under the Micro, Small and Medium Enterprises Development Act. 2006 as at March 31, 2012. Hence, the information as required under the Micro, Small and Medium Enterprises Development Act, 2006 is not disclosed.

(vi) The Financial Statement for the year ended March 31, 2011 had been prepared as per the then

applicable, pre‐revised Schedule VI to the Companies Act, 1956. Consequent to the notification of Revised Schedule VI under the Companies Act, 1956, the Financial Statements for the year ended March 31, 2012 are prepared as per Revised Schedule VI. Accordingly the previous year figures have also been reclassified to conform to this year’s classification. The adoption of revised Schedule VI for previous year figures does not impact recognition and measurement principles followed for preparation of Financial Statements. For ASHISH VYAS & CO FOR & ON BEHALF OF THE BOARD OF DIRECTORS CHARTERED ACCOUNTANTS BRAKES AUTO (INDIA) LIMITED ASHISH VYAS SURESH SHARMA SACHIN SHARMA PROPRIETOR DIRECTOR DIRECTOR M. NO. 078527 PLACE: MUMBAI DATED: 16TH AUGUST 2012.



Brakes Auto (India) Limited 1011, Embassy Centre, 207, Nariman Point, Mumbai 400 021.

PROXY FORM I/We ______________________________________________________________________________________Of___________________________________________________________________________________________Being a member/members of above named Company hereby appoint of __________________________________________________________________________ or failing him / her __________________________________________________________________________________of___ as may / our proxy to attend and vote on my / our behalf at Annual General Meeting of the Company to be held on 28th September 2012 or at any adjournment thereof.

Affix Rupee One Revenue Stamp

Here

Signed this ___________________ day of _____________ 2012.

Note: This instrument of proxy shall be deposited at the Registered Office of the Company. ====================================================================================

Brakes Auto (India) Limited 1011, Embassy Center, 207, Nariman Point, Mumbai – 400 021

ATTENDANCE SLIP PLEASE COMPLETE THIS ATTENDENCE SLIP AND HAND IT OVER AT THE ENTRANCE OF THE MEETING HALL.

1. Name of the attending Member ;________________________________________ 2. Member’s Folio Number; ___________________________________________________

3. Name of the Proxy (In Block Letters): ______________________________________

(To be filled in if the Proxy attends instead of the Member) (No. of Shares held: _______________________. I hereby record my presence at the Annual General Meeting at the registered Office on 28th September 2012 or at any adjournment thereof.

Members / Proxy Signature

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