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Clutch Auto Ltd.

BSE: 505052 Sector: Auto
BSE 00:00 | 04 Mar Clutch Auto Ltd
NSE 05:30 | 01 Jan Clutch Auto Ltd
OPEN 18.05
52-Week high 18.50
52-Week low 0.00
Mkt Cap.(Rs cr) 33
Buy Price 17.75
Buy Qty 1010.00
Sell Price 18.00
Sell Qty 60.00
OPEN 18.05
CLOSE 17.85
52-Week high 18.50
52-Week low 0.00
Mkt Cap.(Rs cr) 33
Buy Price 17.75
Buy Qty 1010.00
Sell Price 18.00
Sell Qty 60.00

Clutch Auto Ltd. (CLUTCHAUTO) - Director Report

Company director report

Dear Shareholders

Your Directors have pleasure in presenting their 44th Annual Report on the business andoperations of the Company and the accounts for the Financial Year ended March 312015.

1. Financial summary or highlights/Performance of the Company (Standalone)

(Rs. in lacs)

Particulars 2014-2015 2013-14
Net Sales 3893.33 3059.85
Profit /(Loss) Before Interest and Depreciation (2968.20) (2174.60)
Finance Charges 0.84 2103.56
Gross Profit/(Loss) (2969.04) (4278.16)
Provision for Depreciation 1922.50 355.22
Exceptional Item 13229.53 8871.28
Net Profit /(Loss) Before Tax (18121.09) (13504.69)
Provision for Tax (47.39) (207.69)
Net Profit/(Loss) After Tax (18073.70) (13296.99)

2. Brief description of the Company’s working during the year/State ofCompany’s affair During the year under report your Company has registered Net Salesof Rs.38.93 Crores in comparison to Rs.30.60 Crores for the financial year 2013-14depicting an increase of 27.26% YOY basis. This net sales has been achieved despite alldifficulties being faced by the company at this moment. With no support from any of theBanks in the form of working capital your company has achieved this feat with mereworking capital and effectively utilizing its customer base and Vendors simultaneously.

As lot much construction work is to be done and plant & machineries are to beinstalled at Bhiwadi Plant entailing huge capital expenditure and with no sign of anysubstantial foreseeable funds in near future your company has managed to maintain theexisting royal customers’ confidence intact and has kept the hope of revival of thecompany alive. Apart from strong hold in the replacement market your company has beenable to add few OEM Customers for the existing plant which is a substantial achievementfor the company in such a scenario. Your company is very much hopeful to replicate thisperformance in coming years and with the infusion of proper working capital in the systemyour company will be able to garner a much larger share in the Clutch I ndustry.

During the year under report your company has registered itself with Board forIndustrial & Financial Reconstruction (BIFR) as the networth of the Company got erodedin the financial year 2013-14. The Board formed the Opinion for registering the Company inBIFR in its meeting dated 14th August 2014 and get the Company registered on 18thNovember 2014 with BIFR as a Sick Company pursuant to provisions of the Sick Companies(Special Provisions) Act 1985 seeking revival of the company.

3. Change in the nature of business if any

There is no change in the nature of business.

4. Dividend

In view of huge losses your Board is not in a position to declare any dividend for thefinancial year 2014-15.

5. Reserves

Pursuant to huge losses incurred by the Company its net worth got eroded in consequencethereof and was forced to registered with BIFR Delhi for its revival.

6. Change of Name

There is no change in the name of the Company.

7. Share Capital

Your Company has not issued any fresh or further capital during the financial yearunder report. The paid up capital of the Company is Rs.1876.04 Lakhs.

8. Directors and Key Managerial Personnel

Ms. Pooja Kapur Director retire by rotation at the forthcoming Annual General Meetingand being eligible offer herself for reappointment.

9. Meetings

During the financial year ended 31st March 2015 six Board Meetings were held. Thedetails of which are given in the Corporate Governance Report. The intervening gap betweenthe Meetings was within the period prescribed under the Companies Act 2013.

10. Board Evaluation

Pursuant to the provisions of Section 149 read with Schedule IV of the Companies Act2013 and conditions of Corporate Governance the Independent Directors in their separatemeeting held on 31st March 2015 had reviewed the performance of the members of the Boardthe Board as a whole and the Chairman of the Company after taking into accounts theprevailing situation of the Company expressed satisfaction over the affairs of theCompany. Measures taken to revive the Company were discussed. The Performance criteria ofIndependent Directors have been laid down as per Clause 49-II(B) (5) of the ListingAgreement in consonance with Para VIII of Schedule IV of the Companies Act 2013.

11. Declaration by an Independent Director(s) and re- appointment if any

Your directors would like to confirm that all Independent Directors of the Company havegiven their declarations that they meet the criteria of independence as laid down underSection 149(6) of the Companies Act 2013 and Clause 49 of the Listing Agreement.

12. Remuneration Policy & Particulars of Employees:

The Board has to on the recommendation of the Nomination & Remuneration Committeeappoint directors if any and to decide remuneration along with senior personnel’s.A separate note has been given in the Corporate Governance Report.

Managerial Remuneration & Particulars of Employees:

No Remuneration was drawn by all Non-executive and Executive Director during the yearexcept reimbursement by Executive Director.

Since no remuneration except reimbursement has been drawn either by Managing Directoror any other Director provisions of Sub section 12 of Section 197 is not applicable tous.

However the information required pursuant to Section 197 read with Rule 5 of TheCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 in respect ofemployees of the Company will be provided upon request. In terms of Section 136 of theAct the Report and financial statements are being sent to the members and others entitledthereto excluding the information on employees particulars which is available forinspection by the members at the Registered Office of the Company during business hours onworking days of the Company upto the date of the ensuing Annual General Meeting. If anyMember is interested in obtaining a copy thereof such Member may write to the Company inthis regard.

Particulars of Employees

Sub Rule 2 of Rule 5 of Companies (Appointment & Remuneration of ManagerialPersonnel) 2014 is not applicable to us as no employee falls into this category.

13. Details of Subsidiary/Joint Ventures/Associate Companies

There is no Subsidiary/Joint Ventures/Associate Companies related to the Company.

14. Auditors

The Auditors M/s S C Garg & Associates Chartered Accountants New Delhi retire atthe ensuing Annual General Meeting and being eligible offer themselves for reappointmentfor a period of one year from the conclusion of this Annual General Meeting [AGM] till theconclusion of next AGM.

15. Auditors’ Report

Notes to Accounts and Auditors remarks in their report are self-explanatory and do notcall for any further comments.

Regarding observation made by the Auditors regarding non-provisioning of interest onWorking Capital and Term Loans being availed by the company at present such stand hasbeen taken by the Management as per the relevant Circulars of Reserve Bank of India whichdebars banks for charging interest on NPAs Accounts. However Banks are free to bookinterest in their memorandum account but in our case as all the Bank Accounts have turnedinto NPA and all the represented assets against such liabilities wiped out. The Managementhas decided not to make provision for interest in the books as the Company is not in aposition to pay any interest.

16. Secretarial Audit Report

In terms of Section 204 of the Act and Rules made there under M/s. D K Dubey &Associates Practicing Company Secretary have been appointed Secretarial Auditors of theCompany. The report of the Secretarial Auditors is enclosed as Annexure III to thisreport. The relevant observations made by the Secretarial Auditor in its report isself-explanatory and do not call for any further comments.

17. Vigil Mechanism :

In pursuant to the provisions of section 177(9) & (10) of the Companies Act 2013a Vigil Mechanism for directors and employees to report genuine concerns has beenestablished.

18. Risk management policy

Pursuant to the requirement of Clause 49 of the Listing Agreement the Company hasconstituted a Risk Management Committee. The details of Committee and other details arealso set out in the Corporate Governance Report forming part of the Board’s Report.

The Risk Management Committee has specified certain broad areas to be looked intoregularly so that minimization of risks can be achieved in view of the current situationof the Company as the operations of the Company are not at large scale.

19. Extract of Annual Return

As required pursuant to section 92(3) of the Companies Act 2013 and rule 12(1) of theCompanies (Management and Administration) Rules 2014 an extract of annual return in MGT9 as a part of this Annual Report as ANNEXURE I .

20. Details of significant and material orders passed by the regulators or courts ortribunals impacting the going concern status and company’s operations in future.

As the Company has registered itself with BIFR certain legal proceedings against theCompany have been stopped in view of the provisions of Section 22 of SICA (SpecialProvisions) Act 1985.

There are no significant material orders passed by the Regulators/Courts which wouldimpact the going concern status of the Company and its future operations. However in linewith the requirement of Clause 36 of the listing Agreement read with guidance note issuedby the Stock Exchanges the Company has reported all the major cases / litigation mattersetc. from time to time to the Stock Exchanges.

21. Deposits

During year under report your Company has not accepted/invited any Deposits.

22. Particulars of loans guarantees or investments under section 186

There is nothing to report under the above mentioned clause

23. Material changes and commitments if any affecting the financial position of thecompany which have occurred between the end of the financial year of the company to whichthe financial statements relate and the date of the report

No material changes have occurred after the closure of the financial year and to thedate of report which affects the financial position of the Company.

24. Details in respect of adequacy of internal financial controls with reference to theFinancial Statements.

The Company has made adequate arrangements for internal financial controls withreference to the Financial Statements.

25. Particulars of contracts or arrangements with related parties:

The particulars of every contract or arrangements to be entered into by the Companywith related parties referred to in subsection (1) of section 188 of the Companies Act2013 including arm’s length transactions have been entered into.

26. Corporate Governance Certificate

The Compliance certificate from a practicing company secretary regarding compliance ofconditions of corporate governance as stipulated in Clause 49 of the Listing agreement isannexed with the report.

27. Management Discussion and Analysis

The Management Discussion and Analysis forms part of this Annual Report for the yearended 31st March 2015.

28.Obligation of company under the sexual harassment of women at work place(Prevention prohibition and redressal) act 2013

In order to prevent sexual harassment of women at work place a new act The SexualHarassment of Women at Work place (Prevention Prohibition and Redressal) Act 2013 hasbeen notified on 9th December 2013. Under the said Act every company is required to setup an Internal Complaints Committee to look into complaints relating to sexual harassmentat work place of any women employee.

Your Board has took note of the same and is determined to prevent any such complaints.We believe in providing dignified environment to working ladies. However pursuant toshifting of plant to a remote area lady staffs have left the Company.

29. Conservation of energy technology absorption and foreign exchange earnings andoutgo

The details of conservation of energy technology absorption foreign exchange earningsand outgo are as follows:

1. Conservation of energy

The Company is continuously putting its efforts to improve Energy Management by way ofmonitoring energy related parameters on regular basis. It is putting best endeavor toreduce energy consumption in all its operations and activities.

Energy Conservation Measures Taken

1) Energy efficient LED lamps installed in Production Halls.

2) Strict Administrative measures have been adopted to save/control the utilization ofelectricity by switching off the Lamps & Fans before & after the Production &duty timings.

Information pursuant to Section 217(1)(e) of the Companies Act 1956.

A. Conservation of Energy: Power & Fuel Consumption 2014-15 2013-14
a) Electricity purchased Units (KWH) 202478 101680
Total Amount (Rs.) 2241877 1185589
Rate/Unit (Rs. KWH) 11.07 11.66
b) Own Generation through Diesel 18766 21790
Generators Units (KWH) Total Amount (Rs.) 223992 264177
-Diesel oil per litre (Rs.) 53.33 55.70
-Cost per unit (Rs.) 11.93 12.00
(Diesel Cost only)
Total Electricity consumed (units) 221244 123470
Total Production (units) 318324 216263
Electricity consumption (per unit) 0.69 0.57

2. Technology absorption adaption and innovation

A. Research & Development (R & D)

Due to shifting of machinery from Faridabad to Bhiwadi & other issues no specialinitiative was taken for Research & Development.

B. Technology absorption

No initiative could be taken on this front also.

Additional investment & proposals if any for reduction of conservation of Energy

Since our company has recently shifted to Rajasthan and running under huge losses theCompany is not in a position to make any additional investment in this regard.

3. Foreign exchange earnings and outgo 2014-15 2013-14
Total foreign exchange earned and used
1. Foreign Exchange Earned 0 0
2. Foreign Exchange Outgo:
i) Raw Materials (CIF) 0 0
ii) Travel 1980710 1287450
iii) Others 11977856 -
Total 13958566 1287450

30. Directors’ Responsibility Statement

The Directors’ Responsibility Statement referred to in clause (c) of sub-section(3) of Section 134 of the Companies Act 2013 shall state that—

(a) in the preparation of the annual accounts the applicable accounting standards havebeen followed along with proper explanation relating to material departures;

(b) Such accounting policies as mentioned in the notes to the financial statements havebeen selected and applied them consistently and made judgments and estimates that arereasonable and prudent so as to give a true and fair view of the state of affairs of thecompany as at 31st March 2015 and the profit and loss of the company for the financialyear ended 31st March 2015;

(c) proper and sufficient care has been taken for the maintenance of adequateaccounting records in accordance with the provisions of this Act for safeguarding theassets of the company and for preventing and detecting fraud and other irregularities;

(d) the annual accounts have been prepared on a going concern basis; and

(e) Proper internal financial controls have been followed by the company and that suchinternal financial controls are adequate and were operating effectively and

(f) proper systems to ensure compliance with the provisions of all applicable laws andthat such systems were adequate and operating effectively.

31. Transfer of Amounts to Investor Education and Protection Fund

Your Company did not have any funds lying unpaid or unclaimed for a period of sevenyears.

Therefore there were no funds which were required to be transferred to InvestorEducation and Protection Fund (IEPF).

32. Listing with stock exchanges:

The Company is in the process of paying the Annual Listing Fees for the year 2015-2016to NSE and BSE where the

Company’s Shares are listed.

33. Acknowledgements

The Directors express their gratitude to all the Concerned Stakeholders for theirco-operation extended to the Company.

Place: New Delhi For and on behalf of the Board of Directors
Date: 30.05.2015 Vijay Krishan Mehta
Managing Director