We have audited the attached Balance Sheet of M/s. CLUTCH AUTO LIMITED,
(hereinafter referred to as the ''Company'') as at March 31, 2012 and
also the Profit and Loss Account and Cash Flow Statement of the company
for the year ended on that date, annexed there to. 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.
We have conducted our audit in accordance with auditing standards
generally accepted in India. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made
by the management, as well as evaluating the overall financial
statements presentation. We believe that our audit provides reasonable
basis for our opinion.
As required by the Companies (Auditor''s Report) Order, 2003 issued by
the Central Government of India in terms of sub- section (4A) of
section 227 of the Companies Act. 1956, we enclose in the Annexure a
statement on the matters specified in paragraphs 4 & 5 of the said
Further to our comments in the Annexure referred to above, and subject
to the exceptions in the above paragraphs, 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 purpose of our
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
c) The Balance Sheet and the Profit and Loss Account dealt with by this
report are in agreement with the Books of Account.
d) In our opinion, the Balance Sheet and Profit & Loss Account and Cash
Flow Statement dealt with by this report comply with the accounting
standards referred to in sub-section (3C) of section 211 of the
Companies Act, 1956.
e) On the basis of written rset presentations received from the
directors, as on 31 March 2012, and taken on record by the Board of
Directors, we report that none of the directors is disqualified as on
31 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 read
with the Companies (Disqualification of Directors under Section 274(1)
(g) of the Companies Act, 1956) Rules, 2003.
f) In our opinion and to the best of our information and according to
the explanations given to us, the said accounts read in conjunction
with Note 1 to 24 and read with other notes appearing in Note 25 to
26 give the information required by the Companies Act, 1956, in the
manner so required and give a true and fair view in conformity with
accounting principles generally accepted in India :
i) In the case of the Balance Sheet of the State of Affairs of the
Company as at 31st March, 2012 and;
ii) In the case of the Profit & Loss Account of profit for the year
ended on that date.
iii) In case of the cash flow statement of the cash flows for the year
ended on that date.
Annexure to the Auditors'' Report
(Referred to in Paragraph (3) of the Auditors'' Report of even date to
the members of CLUTCH AUTO LIMITED on the financial statements for the
year ended 31-03-2012)
1) a) The Company has maintained a Fixed Assets Register, showing full
particulars, including quantitative details, however the register does
not include details of situation of fixed assets (other than Plant and
Machinery substantially). Further, in case of tools and implements
quantitative details have not been indicated in most of the cases.
b) On the basis of available records and according to the information
and explanations given to us, the fixed assets have been physically
verified by the respective department heads once during the year,
except for furniture and fitting, dyes and fixtures, testing & office
equipment including those held by job work parties. No material
discrepancies were noticed on such verification.
c) During the year, the Company has not disposed off any major part of
the plant and machinery. According to the information and explanations
given to us, we are of the opinion that the sale of other fixed assets
has not affected the going concern status of the Company.
2) a) The stocks of the finished goods, stores and spare parts have
been physically verified by the management at the year end. In our
opinion, the frequency of such verification is reasonable having regard
to the size of the Company and the nature of its business. Further we
are informed that in regards to stock held by job work parties''
confirmations have been received by the company in many cases.
b) In our opinion and according to the information and explanations
given to us, the procedures of physical verification of stocks followed
by the management are reasonable and adequate in relation to the size
of the company and nature of its business.
c) The company has maintained proper records of inventory. As explained
to us, there was no material discrepancies noticed on physical
verification of stocks, as compared to book records.
3) The company has taken unsecured loans from companies, firms or other
parties covered by register maintained under section 301 of the Indian
Companies Act, 1956. The maximum amount outstanding at any time during
the year and the balance outstanding as at 31.03.2012 was Rs. 16.50
The rate of interest and other terms and conditions of the loan taken
by the Company is not prima facie prejudicial to the interest of the
4) In our opinion and according to the information and explanations
given to us, certain items purchased are of special nature for which
suitable alternative sources do not exist for obtaining comparative
quotations, however there is an adequate internal control system
commensurate with the size of the company and the nature of its
business for the purchase of inventory, fixed assets and for the sale
of goods and services, except for MIS-ERP system used for tracking
inventory, in which there is scope for improvement. Further, on the
basis of our examination of the books and records of the company, and
according to the information and explanations given to us, we have
neither come across nor have been informed of any continuing failure to
correct major weaknesses in the aforesaid internal control system.
However there is scope for improvement in the internal control
procedure in the aforesaid areas.
5) a) To the best of our knowledge and according to the information and
explanations given to us, we are of the opinion that the particulars of
contracts or arrangements referred to in Section 301 of the Indian
Companies Act have been entered in the register required to be
maintained under that section.
b) In our opinion and according to the information and explanations
given to us, the transactions made in pursuance of contracts or
arrangements entered in the register maintained under section 301 of
the Indian Companies Act, 1956, and exceeding the value of Rupees Five
Lakhs in respect of any party during the year, have been made at prices
which are reasonable having regard to the prevailing market prices at
the relevant time where such market prices are available.
6) In our opinion and according to the information and explanations
given to us, the Company has not accepted any deposits from the public
during the period covered by the audit report, within the meaning of
Sections 58 A and 58 AA of the Companies Act, 1956 read with Companies
(Acceptance of Deposits) Rules, 1975.
7) A firm of M/s Puneet Mishra & Co., Chartered Accountants has
conducted the internal audit for the period up to 31st March 2012. The
report points out areas of weakness in internal control, inventory
management system, MIS- (ERP) and delays in payments of statutory dues
requiring management attention. In our opinion, and to the extent of
audit done, the Company has an Internal Audit system commensurate with
the size and the nature of its business.
8) We have broadly reviewed the records maintained by the Cost Audit
Department of company in respect of products where, pursuant to the
Rules made by the Central Government of India, the maintenance of cost
records has been prescribed under clause (d) of sub-section (1) of
Section 209 of the Act and are of the opinion that prima facie, the
prescribed accounts and records have been made and maintained. We have
not, however, made a detailed examination of the records with a view to
determine whether they are accurate or complete.
9) a) According to the information and explanations given to us and the
records of the company examined by us, in our opinion, the company is
not regular in depositing undisputed statutory dues including investor
education and protection fund, employees'' provident fund,
employees'' state insurance, income-tax, sale tax, wealth tax, service
tax, customs duty, excise duty and other statutory dues with the
appropriate authorities. According to information and explanations
given to us, no undisputed amount payable in respect of the aforesaid
dues except sale tax, Income tax & employees'' state insurance
aggregating to Rs. 437.19 lacs approx. as at 31 March 2012, which were
outstanding for a period of more than six months from the date they
became payable. However, liability is not ascertainable in the event of
penalty/interest on delayed payment.
b) According to the information and explanations given to us and the
records of the company examined by us, the particulars of dues of
excise duty and cess as at 31-03-2012 which have not been deposited on
account of a dispute are central Excise Duty amount Rs.421.36 Lakhs
appeals were pending in Central excise & Service Tax Appellate
Tribunal, income tax amount Rs.23.45Lakhs appeals were pending in
Income Tax Appellate Tribunal, Delhi and Income Tax penalty amount Rs.
18.50 Lakhs appeals was pending in Commissioner of Income Tax
c) According to the information and explanations given to us and the
records of the company examined by us, there are no other dues of
income-tax, sales tax, wealth tax, service tax, customs duty, excise
duty and cess which have not been deposited on account of any dispute.
10) There are no accumulated losses at the end of the financial year
and the company has not incurred any cash losses in the current
financial year and preceding financial year.
11) According to the records of the company examined by us and the
information and explanation given to us, the company is irregular in
repayment of certain payments to financial institution or bank or
debenture holders as at the balance sheet date.
12) 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 Company is not a Chit Fund, Nidhi or mutual benefit Society.
Hence the requirements of clause (xiii) of paragraph 4 of the Order are
not applicable to the Company.
14) The company is not a dealer or trader in shares, securities,
debentures and other investments.
15) According to the information and explanations given to us, the
company has not given any guarantee for loans taken by others from
banks or financial institutions during the year.
16) According to the information and explanations given to us, on an
overall basis, the term loans have been applied for the purposes for
which they were obtained.
17) According to the information and explanations given to us, the cash
flow statements examined by us and on the basis of an overall
examination of the balance sheet of the company, in our opinion and
according to the information and explanations given to us, there are no
funds raised on a short-term basis which have been used for long-term
investment and vice versa.
18) According to the information and explanations given to us
preferential allotment of 8,27,300 equity shares of Rs. 50/- each
aggregating to Rs. 413.65 lacs including premium of Rs. 40/- per share
has been made by the company as approved by the shareholders in EGM
dated 01.02.2010 to companies, firms or other parties listed in the
register maintained under section 301 of the Companies Act, 1956.
19) The Company has not issued any debentures. Hence the requirements
of clause (xix) of paragraph 4 of the Order are not applicable to the
20) The company has not raised any money by public issues during the
21) During the course of our examination of the books and records of
the company, carried out in accordance with the generally accepted
auditing practices 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 and on behalf of
B. Aggarwal & Co.
M. No. 510960
Place: New Delhi
Date: 22nd August, 2012