In 1995, it had projected a net profit of Rs 12.86 crore for the year to March 31, 1999, assuming that Indian car sales will touch 1 million by the turn of the century.

The company, which would have been in the red without the other income, noted that profits fell because it had to give price cuts given to carmakers and the impact of the new investment at its Chakan plant.

Kalyani Brakes will hold the annual general meeting of its shareholders on July 28. The company, a joint venture between Kalyani group, Japan's Nabco and Germany's Bosch, manufactures hydraulic air brakes and components for cars. It also trades in brake fluid.

In 1995, based on trends in the automobile industry then, the company had projected a total income of Rs 142.93 crore excluding excise for the year toMarch 31, 1999. In the event, it posted a total turnover of Rs 97.75 crore, nearly 32 per cent lower than the projection.

The latest annual report admits that, since the automotive industry could not achieve the estimated growth, there has been a large variation in projections.

Kalyani Brakes' sales dropped to Rs 110.28 crore in 1998-99 from Rs 120.47 crore the previous year. The net profit dropped by 78 per cent to Rs 1.60 crore from Rs 7.37 crore the previous year.

Exports dropped by over 41 per cent to Rs 8.90 lakh from Rs 15.19 lakh. Royalty pay-out declined marginally in 1998-99 to Rs 73.10 lakh from Rs 82.16 lakh in the previous year.

During the year, Kalyani Brakes made provisions of Rs 1.21 crore for doubtful advances and depreciation.

The company's statutory auditors, Bansi S Mehta & Co, have noted in their report that there is non-receipt of confirmation from sundry debtors. According to the notes to the schedules, while reconciling the accounts, the management has provided Rs 20.57 lakhas doubtful of recovery. It has also classed as doubtful a sum of Rs 35.88 lakh recoverable from a supplier.

The management has provided Rs 64.30 lakh on account of depreciation in line with Accounting Standard 6.

Contingent liabilities include a disputed central excise and sales tax of Rs 21.99 lakh and Rs 7.76 lakh respectively. In both the cases, the company has appealed.

Kalyani Brakes has been unable to recover Rs 44.83 lakh on account of interest for intercorporate loans of Rs 2 crore advanced to a party. While the company has repaid the entire principal, the management noted that an outstanding interest of Rs 44.83 lakh is recoverable and so it has not provided this in its accounts for fiscal 1998-99.