TO THE MEMBERS:-
Your directors are delighted to present Sixty Fifth Annual Report of your Company alongwith the audited statement of accounts for the year ended 31st March 2016.
FINANCIAL HIGHLIGHTS STATE OF COMPANY AFFAIRS & FATURE PROSPECTS
| || ||(Rs.In Lacs) |
|Particulars ||2015-16 ||2014-15 |
|OPERATING PROFITS/(LOSSES) ||715.65 ||(1832.53) |
|ADD : PROFIT ON SALE OF ASSETS ||(18.80) ||623.51 |
|ADD : PROFIT ON SALE OF MUTUAL FUND ||21.49 ||124.84 |
|ADD : DIVIDEND INCOME ||19.93 ||56.71 |
| ||22.62 ||805.06 |
| ||738.27 ||(1027.47) |
|LESS : FINANCE COST ||784.98 ||1107.4 |
|DEPRECIATION ||546.90 ||662.85 |
| ||1331.88 ||1770.25 |
| ||(593.61) ||(2797.75) |
|LESS : PROVISION FOR TAX ||(267.87) ||(902.48) |
| ||(325.74) ||(1895.24) |
|ADD : PROFIT BROUGHT FORWARD ||(2753.17) ||(857.93) |
| ||(3078.91) ||(2753.17) |
The Company has gone into high losses due to non performance of Malanpur Unit of theCompany which is being closed down by the Company and Company is showing remarkablerecovery. The Losses of the Company during the Financial Year ended 31.03.2016 were Rs.325.74 Lacs as against Rs. 1895.24 during the Financial Year ended 31.03.2015. TheCompany is optimistic that it will be able to show profits and declare dividend next yearonwards.
During the year under consideration the Company produced 2145411 bicycles as against2300923 bicycles in the previous year.
Sales during the year amounted to Rs. 570.99 Crore including the sales toforeign countries as against Rs. 594.59 Crore including the sales to foreigncountries in the previous year.
TRANSFER TO RESERVES
The Company proposes to transfer Rs. NIL to the General Reserve for the year 2015-16 asagainst Rs. NIL to General Reserve in the previous year.
During the period under consideration your Company exported bicycles and bicyclecomponents to several countries thereby earning valuable foreign exchange of Rs. 1735.38Lacs.
The paid up Equity Share Capital as at 31st March 2016 stood at Rs.32519190/- i.e. 3251919 Equity Shares of Rs. 10 Each. During the year under reviewthe Company has not issued shares with differential voting rights nor has granted anystock options or sweat equity. As on 31st March 2016 none of the
Directors of the Company hold instruments convertible into equity shares of theCompany.
During the year under review your company has not declared any Dividend for thefinancial year ended 31st March 2016 due to losses.
The Consolidated Financial Statements of the Company are prepared in accordance withrelevant Accounting Standards viz. AS-21 AS-23 and AS-27 issued by the Institute ofChartered Accountants of India and forms part of this Annual Report. The 3 wholly ownedsubsidiary companies of the Company are yet to commence its business.
CHANGE IN NATURE OF BUSINESS
There is no change in nature of business.
PERFORMANCE OF THE UNITS
Sahibabad unit of the Company continued to do well. There was a substantial increase innumber of cycles sold sale value and the net Profit of the unit. A series of high endalloy & carbon fiber bicycles was launched by the name called MAGNUM in the ultrapremium segment. Sonepat Units performance was not that good and Malanpur Unit ofthe Company is closed and is in the process of being sold.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
Management Discussion and Analysis Report for the year under review as stipulatedunder Regulation 34 (2) read with Part B of Schedule V of SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 is presented in a separate section formingpart of the Annual Report.
REMUNERATION POLICY REMUNERATION OF DIRECTOR AND APPOINTMENT OF DIRECTOR
For a policy on director appointment remuneration and criteria of evolution requiredto be disclosed under section 178(3) of the companies act 2013 and under the SEBI(Listing obligation and Disclosure Regulation) 2015 please refer to Point No. 8 ofCorporate Governance Report.
Mr. Hira Lal Bhatia (DIN: 00159258) is retiring by rotation at this Annual GeneralMeeting and being eligible offer himself for reappointment.
Further pursuant to Regulation 26 of SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 the shareholders may take note that Mr. Hira Lal BhatiaNon Executive Director of the Company holds Nil equity shares in the Company as on thedate of this report.
During the year Mr. Hari Krishan Ahuja (DIN : 00315876) ceased to be Non-ExecutiveDirector of the Company on 24th February 2016 due to his death. In the BoardMeeting held on 25th March 2016 the Board of Directors expressed profoundsorrow over the sad demise of Mr. Hari Krishan Ahuja Non-Executive Director of theCompany and observed a two minute silence as a mark of respect praying for the departedsoul to rest in peace.
On cessation of Mr. Hari Krishan Ahuja (DIN : 00315876) composition of board ofdirectors was required to be realigned and in order to have alteast 2 non-executivedirectors in the Board of Directors of the Company as per provisions of subsections (6)and (7) of section 152 of the Companies Act 2013 in respect of retirement of directors byrotation Ms. Veena Buber (DIN: 07163537) who was appointed as Independent Woman Directorof the Company in the previous Annual General Meeting of the Company on 30thSeptember 2015 for a tenure of 5 years was appointed as Non-Executive Woman Director ofthe Company retiring by rotation in the Board Meeting held on 25th March 2016.Accordingly the designation of Ms. Veena Buber (DIN: 07163537) was changed fromIndependent Woman Director to Non-Executive Woman Director of the Company liable to retireby rotation with effect from 25th March 2016. Mr. Vikram Khosla (DIN :01574818) ceased to be Independent Director of the Company with effect from 14thMay 2016 due to vacation of office as per provisions of Section 167 of the Companies Act2013 for not attending any of the Meetings of the Board of Directors of the Company for acontinuous period of 12 months.
In the Board Meeting held on 19th April 2016 the Board of Directors perusedand took note of the statement of declarations received from the Independent Directorsviz; Mr. Sanjiv Kavaljit Singh (DIN: 00015689) and Mr. Kartik Roop Rai (DIN: 06789287)that they fulfill all the criteria of Independent director envisaged in Regulation16(1)(b) of Securities Exchange Board of India (Listing Obligations and DisclosureRequirements) Regulations 2015 and under Section 149(6) of the Companies Act 2013.
CRITERIA FOR MAKING PAYMENT TO NON-EXECUTIVE DIRECTORS
Non-Executive Directors are paid only sitting fees of Rs. 10000 for attending theBoard Meeting and Rs. 4000 for attending the Committee Meeting of the Company.
KEY MANAGERIAL PERSONNEL
In the capacity of Key Managerial Personnel the Company has following officers :
1. Mr. Ishwar Das Chugh Whole Time Director
2. Mr. Chander Mohan Dhall Chief Financial Officer
3. Mr. Narendra Pal Singh Chief Executive Officer
4. Mr. Jaspreet Singh Company Secretary
Mr. Chander Mohan Dhall was appointed as Manager of the Company for a period of 1 yearfrom 1st January 2015 to 31st December 2015. Then he was appointedas Chief Executive Officer of the Company for a period from 1st January 2016 to31st March 2016. Then he ceased to be Chief Executive Officer of the Company on12th February 2016 and was appointed as Chief Financial Officer of the Companywith effect from 12th February 2016 till 31st March 2017. Mr.Narendra Pal Singh was appointed as Chief Executive Officer of the Company with effectfrom 12th February 2016 till 31st March 2017.
COMPLIANCE CERTIFICATE BY CHIEF FINANCIAL OFFICER AND CHIEF EXECUTIVE OFFICER
Board of Directors in the board meeting held on 24th August 2016 took noteof the Compliance Certificate duly signed by Mr. Chander Mohan Dhall Chief FinancialOfficer and Mr. Narendra Pal Singh Chief Executive Officer that they have reviewedfinancial statements and cash flow statement etc. as per Regulation 17(8) read withSchedule II Part B of SEBI (Listing Obligations and Disclosure Requirements) Regulations2015.
PERFORMANCE OF BOARD EVALUATION
Pursuant to the provisions of the Companies Act 2013 and Regulation 17(10) &Regulation 25(4) of SEBI (Listing Obligations and Disclosure Requirements) Regulations2015 a healthy discussion was held among directors after taking into consideration of thevarious aspects of the Boards functioning composition of the Board and itsCommittees culture execution and performance of specific duties obligations andgovernance in the Board Meeting held on 13th August 2015.
The performance evaluation of the Independent Directors as per Regulation 17(10) ofSEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 was completed.The performance evaluation of the Chairman and the Non-Independent Directors was carriedout by the Independent Directors as per Regulation 25(4) of SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015. The Board of Directors expressed theirsatisfaction with the evaluation process.
NUMBER OF MEETINGS OF THE BOARD
There were total 10 number of Board Meetings held during the financial year 2015-16.Further details are provided in the Corporate Governance Report.
DEPOSITS (INCLUDING LOANS FROM MEMBERS)
Unclaimed deposits aggregating to Rs. 21000 pending for more than 7 years have beencredited to Investors Education and Protection Fund of Government of India.
The Sahibabad Unit of the Company has repaid all its deposit holders amounting to Rs.60886000 and Sonepat Unit and Malanpur Unit of the Company are in the process ofrepaying all its deposit holders. The Company has not accepted any further deposits fromthe public or members during the year as Company could not fulfill the credit ratingrequirement and thus could not comply with all the provisions of Section 73 to 76 of theCompanies Act 2013 read with Companies (Acceptance of Deposits) Rules 2014.
The Company has also filed an application under Section 74(2) of Companies Act 2013 toNational Company Law Tribunal (erstwhile Company Law Board) for extension of time inrepayment of its deposits and interest thereon. Deposits due for payment but not paid ason date of application to NCLT / CLB i.e. 18th February 2016 amounted to Rs.33650958 for 175 Deposit Holders of Sonepat Unit of the Company and Nil for MalanpurUnit of the Company. Deposits not yet due for payment as on 18th February 2016amounted to Rs. 15522303 for 275 Deposit Holders of Sonepat Unit of the Company and Rs.32021857 for 2 Deposit Holders of Malanpur Unit of the Company who are also promotersof the Company and have consented to be paid over next 48 months.
PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS
There were NIL Loans Guarantees and Investments covered under the provisions ofSection 186 of the Companies Act 2013.
WHISTLE BLOWER MECHANISM / VIGIL MECHANISM
The Company has a whistle blower policy to report genuine concerns or grievances. TheWhistle Blower Policy has been posted on the website of the Company and whistle blowermechanism is reviewed regularly by the Audit Committee of the Company. There were Nilcomplaints recorded under Whistle Blower Mechanism during the year.
NOMINATION AND REMUNERATION POLICY
The Board of Directors has framed a policy which lays down a framework in relation toremuneration of Directors Key Managerial Personnel and Senior Management of the Company.This policy also lays down criteria for selection and appointment of Board Members. Thedetails of this policy are explained in the Corporate Governance Report.
RISK MANAGEMENT POLICY
The Company has developed and implemented the risk management policy for the Companyincluding identification therein of elements of risk if any which in the opinion of theBoard may threaten the existence of the company. The Company has formulated a RiskManagement Committee which discussed on the impact and acceptability of all risks to whichCompany is exposed. It also discussed to take suitable action or propose to the Board ofDirectors for taking any suitable action for minimizing the risks. Accordingly it hasconsidered to study risks by dividing into following categories :
1. Strategic Risk Assessment
2. Operation Risk Assessment
3. Compliance Risk Assessment
4. Internal Audit Risk Assessment
5. Financial Statement Risk Assessment
6. Fraud Risk Assessment
7. Market Risk Assessment
8. Credit Risk Assessment
9. Customer Risk Assessment
10. Supply Chain Risk Assessment
11. Product Risk Assessment
12. Security Risk Assessment
13. Information Technology Risk Assessment
14. Project Risk Assessment
The Risk Management Committee emphasized that unacceptable risk needs to be"designed out" of the system consciously at all stages at all levels in allareas for example management structure purchasing contracting developmentmaintenance and human factors. More details are explained in the Corporate GovernanceReport also.
RELATED PARTY TRANSACTIONS
All transactions entered with Related Parties for the year under review were onarms length basis and in the ordinary course of business and that the provisions ofSection 188 of the Companies Act 2013 are not attracted. Thus disclosure in form AOC-2 isnot required. Further there are no material related party transactions during the yearunder review with the Promoters Directors or Key Managerial Personnel and there are norelated party transactions which exceeds ten percent of the annual consolidated turnoverof the Company as per last audited financial statements of the Company. The Company hasdeveloped a Related Party Transactions framework through Standard Operating Procedures forthe purpose of identification and monitoring of such transactions.
All Related Party Transactions are placed before the Audit Committee on quarterly basisfor confirmation. Omnibus approval was obtained on a yearly basis for transactions whichare repetitive in nature subject to further approval in case actual transactions are foundto be exceeding the omnibus approval.
A statement giving details of all Related Party Transactions are placed before theAudit Committee for review on quarterly basis.
A Policy on Material Related Party Transactions as approved by the Board of Directorshas been uploaded on the website of the Company www.atlasbicycles.com. None of theDirectors have any pecuniary relationship or transactions vis--vis the Company.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS
There are no significant and material orders passed by the Regulators / Courts thatwould impact the going concern status of the Company and its future operations.
The Company complies with the clauses of Listing Agreement entered into with theNational Stock Exchange of India Limited and BSE Limited where the Companys sharesare listed and as New Listing regulations become applicable from 1st December2015 the Company complies with the SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015. Further in terms of the provisions of Section C of Schedule V of SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015 your Company hascomplied with the requirements of Corporate Governance and a Report on CorporateGovernance together with certificate from the Companys Statutory Auditors confirmingcompliance is set out in a statement which forms part of this Annual Report.
EXTRACT OF ANNUAL RETURN
The details forming part of the extract of the Annual Return in form MGT-9 as requiredunder Section 92 of the Companies Act 2013 is annexed to this Report and forms anintegral part of this Report.
STATUTORY AUDITORS AND AUDITORS REPORT
M/s Mehra Khanna & Co. Chartered Accountants (Firm Registration Number: 01141N)were re-appointed in the 63rd Annual General Meeting for a period of 3 yearsupto the conclusion of 66th Annual General Meeting. Their appointment isproposed to be ratified at the forthcoming Annual General Meeting. As required under theprovisions of Section 139 of the Companies Act 2013 the Company has obtained writtenconfirmation dated 10th August 2016 which was noted in the Board Meeting heldon 13th August 2016 from M/s Mehra Khanna & Co. that their appointment ifmade would be in conformity with the limits specified in the said Section. Thequalifications or remarks in the Auditors Report read with Notes to financialstatements are self explanatory.
SECRETARIAL AUDITOR AND SECRETARIAL AUDITORS REPORT
Pursuant to the provisions of Section 204 of the Companies Act 2013 and rules madethereunder the Company has appointed M/s Mukesh Arora & Company a firm of CompanySecretaries in Practice (Certificate of Practice Number : 4405) to undertake theSecretarial Audit of the Company. The Secretarial Audit Report is included as Annexure andforms an integral part of this Report. The 3 (three) secretarial audit observations forthe year under review requiring clarification by the Company are replied by the Companyand form part of the Secretarial Audit Report which is noted in the Board Meeting held on24th August 2016.
As per the requirement of Central Government and pursuant to Section 148 of theCompanies Act 2013 read with the Companies (Cost Records and Audit) Rules 2014 asamended from time to time your Company is not required to carry out audit of cost recordsrelating to Bicycle Industry. Accordingly your Company did not appoint Cost Auditor inthis financial year.
INTERNAL CONTROL SYSTEM AND THEIR ADEQUACY
Your Company has an effective internal control and risk mitigation system which areconstantly assessed and strengthened with new/revised standard operating procedures. TheCompanys internal control system is commensurate with its size scale andcomplexities of its operations. The Company has appointed Mr. Harish Kumar Arora asInternal Auditor of the Sonepat Unit of the Company Mr. Gopal D. Girdharwal as InternalAuditor of the Sahibabad Unit of the Company and Mr. Sanjay Kapur Joint President ofMalanpur Unit of the Company is reporting on internal control and audit proceduresfollowed. The main thrust of internal audit is to test and review controls appraisal ofrisks and business processes besides benchmarking controls with best practices in theindustry. The Audit Committee of the Company actively reviews the adequacy of internalcontrol systems and effectiveness of internal audit function.
CORPORATE SOCIAL RESPONSIBILITY (CSR)
Requirements relating to Corporate Social Responsibilities as envisaged in Schedule VIIof the Companies Act 2013 and Companies (Corporate Social Responsibility Policy) Rules2014 are not applicable on our Company.
HUMAN RESOURCE DEVELOPMENT AND INDUSTRIAL RELATION
Your Company strives to provide the best working environment with ample opportunitiesto grow and explore. Your Company maintains a work environment that is free from physicalverbal and sexual harassment. Every initiative and policy of the Company takes care ofwelfare of all its employees. The human resource development function of the Company isguided by a strong set of values and policies. The details of initiatives taken by theCompany for the development of human resource are given in Management Discussion andAnalysis Report. The Company maintained healthy cordial and harmonious industrialrelations at all levels throughout the year.
The Business Responsibility Reporting as required by Regulation 34 of SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 is not applicable to yourCompany for the financial year ending 31st March 2016.
PERSONNEL AND PARTICULARS OF EMPLOYEES
The industrial relations with the workers and staff of the Company remained cordialthroughout the year. There was unity of objective among all levels of employeescontinuously striving for improvement in work practices and productivity. Training anddevelopment of employees continue to be an area of prime importance.
Particulars of the employees as required under section 197 (12) of the Companies Act2013 read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules2014 and forming part of the Directors Report for the year ended 31stMarch 2016 is given in a Annexure to the Report.
None of the employees listed in the said Annexure is a relative of any Director of theCompany. Apart from Mr. Vikram Kapur President of Sonepat Unit Mr. Rajiv Kapur JointPresident of Sonepat Unit Mr. Gautam Kapur Joint President of Sahibabad Unit Mr. GirishKapur Joint President of Sahibabad Unit and Mr. Sanjay Kapur Joint President of MalanpurUnit none of the employees hold (by himself or along with his spouse and dependentchildren) more than two percent of the equity shares of the Company.
DISCLOSURES UNDER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION PROHIBITION& REDRESSAL) ACT 2013
There were NIL cases of sexual harassment filed during the Financial Year.
LISTING OF COMPANYS EQUITY SHARE
Your Companys shares continue to be listed on BSE Limited and National StockExchange of India Limited. The annual listing Fee for the year 2015-2016 has been paid toBSE Limited and National Stock Exchange of India Limited.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
The information under Section 134(3)(m) of the Companies Act 2013 read with Rule 8(3)of the Companies (Accounts) Rules 2014 for the year ended 31st March 2016 isgiven here below :
CONSERVATION OF ENERGY a. the steps taken or impact on conservation of energy;
The following measures were taken for Conservation of energy:-a) Power Loadrationalized and Contract demand reduced from 2250 KVA to 1350 KVA and all load on oneOLTC transformer of 1600 KVA and made 1000 KVA surplus. b) Plant being relaid to saveEnergy and movement cost. c) Lobo Compressor of 5 HP installed for agitation of ProcessPlants and stopped one Compressor of 25 HP. d) Hot Water Generator installed to replacePet Coke Boiler e) New Heat Exchanger installed in Paint Shop for better Fuel efficiency.
The following measures were taken for Conservation of energy:-a) L E D lights werefitted in store department in place of normal lights to save energy. b) Two rotarycompressors were installed in E.T. Plant in place of gear box &motor system to saveenergy. c) One more hot water generator was installed which is a substitute of boiler& is energy efficient. b. the steps taken by the company for utilising alternatesources of energy : Hot water generators were installed c. the capital investment onenergy conservation equipments : Negligible.
a. The efforts made towards technology absorption
The following efforts were made:-a. New Slat Conveyor line installed for betterproductivity of SKD Line. b. New Tail End Dippling line installed with I.R. Heater forbetter productivity. c. Flytomatic pretreatement line installed d. Drying Oven installedto dry components pretreatement for better quality. e. Higher capacity Rectifier installedin debrassing for improved productivity and quality.
The following efforts were made:-a. For the movement of fancy frames a new four wheelconveyor was installed from Assembly Department to Store dept. to replace manual handling.b. A Manual Phosphating line was converted to Automatic Phosphating line in Paint Shop toincrease production of fancy bicycles. c. One inclined slat conveyor was installed formovement of material to maximise floor in finished goods store to replace manual handling.b. The benefits derived like product improvement cost reduction product development orimport substitution : Cost Reduction; c. In case of imported technology (imported duringthe last three years reckoned from the beginning of the financial year)-i. the details oftechnology imported : Nil; ii. the year of import : Nil; iii. whether the technology beenfully absorbed : Nil; iv. if not fully absorbed areas where absorption has not takenplace and the reasons thereof: NA; and d. The expenditure incurred on Research andDevelopment : Negligible.
FOREIGN EXCHANGE EARNING AND OUTGO
Total foreign exchange earned: Rs. 1735.38 lacs Total foreign exchange used: Rs. 99.45lacs
DIRECTORS RESPONSIBILITY STATEMENT
To the best of knowledge and belief and according to the information and explanationsobtained by them your Directors make the following statement in terms of Section134(3)(c) of the Companies Act 2013 that: I. In the preparation of the Annual Accountsfor the year ended 31st March 2016 the applicable accounting standards havebeen followed along with proper explanation relating to material departures if any; II.The directors had selected such accounting policies and applied them consistently and madejudgments and estimates that are reasonable and prudent so as to give a true and fair viewof the state of affairs of the Company as at 31st March 2016 and of the loss of theCompany for that period;
III. The directors had taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the Act for safeguarding theassets of the Company and for preventing and detecting fraud and other irregularities tothe best of the knowledge and ability of the Directors.
IV. The Annual Accounts have been prepared on a going concern basis.
V. The Directors had laid down internal financial controls to be followed by theCompany and that such internal financial controls are adequate and were operatingeffectively; and VI. The Directors had devised proper system to ensure compliance with theprovisions of all applicable laws and that such systems were adequate and operatingeffectively.
INTERNAL FINANCIAL CONTROLS
The Internal Financial Controls with reference to Financial Statements are found to beadequate by the Statutory Auditors of the Company.
REPORT ON THE HIGHLIGHTS OF PERFORMANCE OF ITS SUBSIDIARY COMPANIES JOINT VENTURESASSOCIATE COMPANIES AND THEIR CONTRIBUTION TO THE OVERALL PERFORMANCE OF THE COMPANY
The Company has 3 (three) wholly owned subsidiary companies viz. Atlas Cycles SonepatLimited Atlas Cycles (Sahibabad) Limited and Atlas Cycles (Malanpur) Limited. Thesecompanies are yet to commence its business and accordingly there are no highlights ofperformance or their contribution to the overall performance of the Company to reflectduring the year. The Annual Reports of Subsidiary Companies are available for download atwww.atlasbicycles.com. Apart from these the Company do not have any associate companiesand joint ventures.
Form AOC-1 containing salient features of 3 wholly owned subsidiary companies dulycertified by Statutory Auditors of the Company under section 129(3) of the Companies Act2013 read with Rule 5 of Companies (Accounts) Rules 2014 are annexed herewith. There areno associate companies as per definition given in Section 2(6) of the Companies Act 2015.There are no companies which have become or ceased to be subsidiary companies associatecompanies or joint ventures during the year.
The Board of Directors wishes to place on record its appreciation for the commitmentdedication and hard work done by the employees in the Company and the cooperation extendedby Banks Government authorities customers and shareholders of the Company and looksforward to a continued mutual support and co-operation.
|HIRA LAL BHATIA || |
|(DIN: 00159258) || |
|3-B/11 N.E.A. Utri Marg || |
|New Delhi 110060 || |
| ||DIRECTORS |
|SANJIV KAVALJIT SINGH || |
|(DIN: 00015689) || |
|104 Malcha Marg Chanakya || |
|Puri Delhi - 110021 || |
|Date : 24th August 2016 || |
|Place : Delhi || |
SECRETARIAL AUDIT REPORT
FOR THE FINANCIAL YEAR ENDED ON 31ST MARCH 2016
[Form MR-3 Pursuant to section 204(1) of the Companies Act 2013 and rule No.9 of theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014.
To The Members ATLAS CYCLES (HARYANA) LIMITED
Atlas Road Industrial Area Sonepat -131001 (Haryana) India.
I have conducted the secretarial audit of the compliance of applicable statutoryprovisions and the adherence to good corporate practices by ATLAS CYCLES (HARYANA)LIMITED(hereinafter called the Company). Secretarial Audit was conducted in a mannerthat provided me a reasonable basis for evaluating the corporate conducts / statutorycompliances and expressing my opinion thereon.
Based on my verification of the Companys books papers minute books forms andreturns filed and other records maintained by the Company and also the informationprovided by the Company its officers agents and authorized representatives during theconduct of secretarial audit I hereby report that in my opinion the Company has duringthe audit period covering the financial year ended on 31st March 2016(Audit Period) complied with the statutory provisions listed hereunder andalso that the Company has proper Board-processes and compliance-mechanism in place to theextent in the manner and subject to the reporting made hereinafter : I have examined thebooks papers minute books forms and returns filed and other records maintained by theCompany for the financial year ended on 31st March 2016 according to theprovisions of:
(i) The Companies Act 2013 (the Act) and the rules made there under;
(ii) The Securities Contracts (Regulation) Act 1956 (SCRA) and the rulesmade there under;
(iii) The Depositories Act 1996 and the Regulations and Bye-laws framed there under;
(iv) Foreign Exchange Management Act 1999 and the rules and regulations made thereunder to the extent of Foreign Direct Investment Overseas Direct Investment and ExternalCommercial Borrowings;
(v) The following Regulations and Guidelines prescribed under the Securities andExchange Board of India Act 1992 (SEBI Act) viz.:
(a) The Securities and Exchange Board of India (Substantial Acquisition of Shares andTakeovers) Regulations 2011;
(b) The Securities and Exchange Board of India (Prohibition of Insider Trading)Regulations 2015;
(c) The Securities and Exchange Board of India (Issue of Capital and DisclosureRequirements) Regulations 2009 (Not applicable as the company did not issue anysecurity during the financial year under review.);
(d) The Securities and Exchange Board of India (Share
Based Employee Benefits) Regulations 2014 (Not applicable as the company has notgranted any options to its employees during the financial year under review);
(e) The Securities and Exchange Board of India (Issue and Listing of Debt Securities)Regulations 2008 (Not applicable as the company has not issued any debt securitiesduring the financial year under review);
(f) The Securities and Exchange Board of India (Registrars to an Issue and ShareTransfer Agents) Regulations 1993 regarding the Companies Act and dealing with client;
(g) The Securities and Exchange Board of India (Delisting of Equity Shares)Regulations 2009 (Not applicable as the company has not Delist its Equity Sharesduring the financial year under review); and
(h) The Securities and Exchange Board of India (Buyback of Securities) Regulations1998 (Not applicable as the company has not bought back any of its securities duringthe financial year under review);
(VI) and other applicable laws like Factories Act 1948 The Payment of Gratuity Act1972.
I have also examined compliance with the applicable clauses of the following:
(i) Secretarial Standards issued by The Institute of Company Secretaries of India i.e.Secretarial Standards-1(Meeting of the Board of Directors) & Secretarial Standards-2(General Meetings).
(ii) The Listing Agreements entered into by the Company with Bombay Stock Exchange (BSE)National Stock Exchange (NSE) and Delhi Stock Exchange (DSE).
(iii) The Securities and Exchange Board of India (Listing Obligation and DisclosureRequirements) Regulations 2015.
During the period under review the Company has complied with the provisions of theAct Rules Regulations Guidelines Standards etc. mentioned above subject to thefollowing observations :-
Observation No.1 Non-Compliance of Regulation 33 of SEBI (Listing Obligation &Disclosure Requirements) Regulation 2015 (Earlier Clause-41 of Listing Agreement)regarding delayed submission of financial result for the year ended 31stMarch 2016.
Company has also received notices of penalty in this regard from the Stock Exchanges(NSE/BSE). Companys Response: The Audited financial results for the yearended 31st March 2016 were not compiled timely due to the reason that therewas a delay in reconciliation of outstanding entries among the 3 units of the Company viz.Sonepat Unit Sahibabad Unit and Malanpur Unit and then the Manager (Accounts) of SonepatUnit of the Company had stopped coming to the office without giving any notice and withoutgiving proper handover of record of accounts and fixed deposits which led to someoperational difficulties in the preparation of financial results of all three units of theCompany viz. Sonepat Sahibabad and Malanpur. Observation No.2: Non-compliance ofSection 73 of Companies Act 2013 read with Rule 16 of Companies(Acceptance of Deposit)Rules 2014 regarding filing of Return of Deposit in E-Form DPT-3 in the year 2015-16.
Companys Response: The Manager (Accounts) of Sonepat Unit of the Company hadstopped coming to the office without giving any notice and without giving proper handoverof record of accounts and fixed deposits which led to some operational difficulties in thepreparation of List of Deposit Holders and Form DPT-3. Data of Sahibabad Unit and MalanpurUnit of the Company is ready and Sonepat Unit of the Company had also assured that it willbe able to prepare its information by the month of August 2016. The Company has alsofiled application for extension of time for repayment of fixed deposits under section74(2) of Companies Act 2013 to the National Company Law Tribunal (erstwhile Company LawBoard). Observation No. 3: Event occurred after audit period:-An objection has beenraised by the shareholder of the company that reappointment of Mr. Ishwar Das Chugh aswhole time director of the company in the Annual General Meeting of the company held on 30Sept. 2013 was invalid as Mr. Ishwar Das Chugh had crossed his age of 70 years andinstead of passing ordinary resolution a special resolution was required to be passed asper schedule XIII of the Companies Act 1956.
Companys Response: Although the resolution was passed with unanimous votes infavour of reappointment of Mr. Ishwar Das Chugh as Whole Time Director of the Company butinadvertently it was passed as Ordinary Resolution instead of Special Resolution. TheCompany has passed Board resolution on 21st July 2016 to appoint Mr. Ishwar Das Chugh asWhole Time Director of the Company & Company has convened an Extra Ordinary GeneralMeeting to be held on 29th August 2016 to re-appoint Mr. Ishwar Das Chugh as Whole TimeDirector by passing Special Resolution. The Company has also filed an application in thisregard on 28th July 2016 to the Central Government to obtain its approval to thereappointment of Mr. Ishwas Das Chugh as Whole Time Director of the Company. The Companyhas taken all the steps reasonably required to resolve the matter.
I further report that
The Board of Directors of the Company is duly constituted with proper balance ofExecutive Directors Non-Executive Directors and Independent Directors. The changes in thecomposition of the Board of Directors that took place during the period under review werecarried out in compliance with the provisions of the Act.
Adequate notice is given to all Directors to schedule the Board Meetings agenda anddetailed notes on agenda were sent at least seven days in advance and a system exists forseeking and obtaining further information and clarifications on the agenda items beforethe meeting and for meaningful participation at the meeting.
All decision at Board Meeting and Committee are carried through while the dissentingmembers views are captured and recorded as part of the minutes.
I further report that there are adequate systems and processes in the Companycommensurate with the size and operations of the company to monitor and ensure compliancewith applicable laws rules regulations and guidelines.
For Mukesh Arora & Co.
F.C.S No. 4819
C.P No. 4405
New Delhi 22nd August 2016
This report is to be read with our letter of even date which is annexed as Annexure-Aand forms an integral part of this report.
ATLAS CYCLES (HARYANA) LIMITED Atlas Road Industrial Area Sonepat -131001 (Haryana)India.
Our report of even date is to be read along with this letter
1. Maintenance of Secretarial Record is the responsibility of the management of thecompany. Our responsibility is to express an opinion on these secretarial records based onaudit
2. I have followed the audit practices and process as were appropriate to obtainreasonable assurance about the correctness of the contents of the secretarial records. Theverification was done on the test basis to ensure that correct facts are reflected insecretarial records. I believe that the process and practices we followed provide areasonable basis for our opinion
3. I have not verified that correctness and appropriateness of financial records andbooks of Accounts of the company
4. Where ever required I have obtained the Management representation about thecompliance of laws rules and regulations and happening of events etc.
5. The compliance of the provisions of corporate and other applicable laws rulesregulations standards is the responsibility of management. Our Examination was limited tothe verification of procedures on test basis
6. The Secretarial Audit report is neither an assurance as to the future viability ofthe company nor of the efficacy or effectiveness with which the Management has conductedthe affairs of the Company.
Practicing Company Secretary
Member ship No. 4819
Certificate of Practice No. 4405
Date: 22nd August 2016
Place: New Delhi
(Pursuant to first proviso to sub-section (3) of section 129 read with rule 5 ofCompanies (Accounts) Rules 2014)
Statement containing salient features of the financial statement ofsubsidiaries/associate companies/joint ventures
Part "A": Subsidiaries
(Information in respect of each subsidiary to be presented with amounts in Rs.)
|Particulars || ||Details || |
|1. Sl. No. ||(1) ||(2) ||(3) |
|2. Name of the subsidiary ||Atlas Cycles (Sahibabad) Limited (CIN:U35929HR1999 PLC034260) ||Atlas Cycles (Malanpur) Limited (CIN:U35929HR1999 PLC034259) ||Atlas Cycles Sonepat Limited (CIN:U35929HR1999 PLC034261) |
|3. The date since when subsidiary was acquired ||28-05-1999 ||28-05-1999 ||28-05-1999 |
|4. Reporting period for the subsidiary concerned if different from the holding companys reporting period ||NA ||NA ||NA |
|5. Reporting currency and Exchange rate as on the last date of the relevant Financial year in the case of foreign subsidiaries ||NA ||NA ||NA |
|6. Share capital ||500000 ||500000 ||500000 |
|7. Reserves & surplus ||(66136) ||(80614) ||(75690) |
|8. Total assets ||436162 ||421684 ||428791 |
|9. Total Liabilities ||2298 ||2298 ||4481 |
|10. Investments ||- ||- ||- |
|11. Turnover ||- ||- ||- |
|12. Profit before taxation ||(66136) ||(80614) ||(75690) |
|13. Provision for taxation ||- ||- ||- |
|14. Profit after taxation ||(66136) ||(80614) ||(75690) |
|15. Proposed Dividend ||- ||- ||- |
|16. Extent of shareholding (in percentage) ||100% ||100% ||100% |
1. Names of subsidiaries which are yet to commence operations : Atlas Cycles(Sahibabad) Limited Atlas Cycles (Malanpur) Limited and Atlas Cycles Sonepat Limited
2. Names of subsidiaries which have been liquidated or sold during the year : NIL
Part "B": Associates and Joint Ventures
Statement pursuant to Section 129 (3) of the Companies Act 2013 related to AssociateCompanies and Joint Ventures
|Name of associates/Joint Ventures || ||NIL || |
|1. Latest audited Balance Sheet Date || || || |
|2. Date on which the Associate or Joint Venture was associated or acquired || || || |
|3. Shares of Associate or Joint Ventures held by the Company on the year end || || || |
|No. || || || |
|Amount of Investment in Associates or Joint Venture || || || |
|Extend of Holding (in percentage) || || || |
|4. Description of how there is significant influence || || || |
|5. Reason why the associate/joint venture is not consolidated || || || |
|6. Networth attributable to shareholding as per latest audited Balance Sheet || || || |
|7. Profit/Loss for the year || || || |
|i. Considered in Consolidation || || || |
|ii. Not Considered in Consolidation || || || |
1. Names of associates or joint ventures which are yet to commence operations : NIL
2. Names of associates or joint ventures which have been liquidated or sold during theyear : NIL
This Form is certified in the same manner in which the Balance Sheet is certified.
| ||JASPREET SINGH KOHLI ||Chander Mohan Dhall |
| ||Company Secretary ||Chief Financial Officer |
|For MEHRA KHANNA & COMPANY || || |
|Chartered Accountants || || |
|FRN:01141N || || |
|CA.RAJIV BHASIN ||Sanjiv Kavaljit Singh ||Hira Lal Bhatia |
|PARTNER ||(DIN : 00015689) ||(DIN: 00159258) |
|M.NO:093845 ||Independent Director ||Chairman and Non Executive Director |
|Place: New Delhi || || |
|Date: 24th August 2016 || || |
DISCLOSURE IN DIRECTORS REPORT PURSUANT TO SECTION 197(12) OF THE COMPANIES ACT2013 READ WITH COMPANIES (APPOINTMENT AND REMUNERATION OF MANAGERIAL PERSONNEL) RULES2014
|Sr. No. ||Requirements ||Disclosure || |
|1. ||The ratio of the remuneration of each director to the median remuneration of the employees of the company for the financial year ||Name of the Director ||Ratio |
| || ||Mr. Hira Lal Bhatia (DIN: 00159258) ||NA |
| || ||Mr. I. D. Chugh (DIN: 00073257) ||6.25 X |
| || ||Mr. Kartik Roop Rai (DIN: 06789287) ||NA |
| || ||Mr. Sanjiv Kavaljit Singh (DIN: 00015689) ||NA |
| || ||Ms. Veena Buber (DIN: 07163537) ||NA |
| || ||Mr. Vikram Khosla (DIN: 01574818) ||NA |
| || ||Mr. Hari Krishan Ahuja (DIN: 00315876) ||NA |
| || ||1. The median remuneration of employees of the Company was 216600. |
| || ||2. For this purpose Sitting Fees paid to the Directors have not been considered as remuneration. Only Mr. I D Chugh Whole Time Director is paid remuneration and other directors are paid only sitting fees and conveyance for attending board meetings and committee meetings. |
| || ||3. Figures have been rounded off wherever necessary. |
|2. ||The percentage increase in remuneration of each director Chief Financial Officer Chief Executive Officer and Company Secretary in the financial year. ||Mr. Hira Lal Bhatia (Director)* ||NA |
| || ||Mr. I. D. Chugh (Whole Time Director) ||1.50% |
| || ||Mr. Kartik Roop Rai (Director)* ||NA |
| || ||Mr. Sanjiv Kavaljit Singh (Director)* ||NA |
| || ||Ms. Veena Buber (Director)* ||NA |
| || ||Mr. Chander Mohan Dhall (CFO)* ||NA |
| || ||Mr. Narendra Pal Singh (CEO)* ||NA |
| || ||Mr. Jaspreet Singh (CS) ||20% |
| || ||* For this purpose Sitting Fees paid to the Directors have not been considered as remuneration. |
| || ||** Mr. Chander Mohan Dhall is first time appointed as CFO and Mr. Narendra Pal Singh is first time appointed as CEO. |
| || ||*** Increase in remuneration is made as per appraisal system and Remuneration and |
| || ||Nomination Policy of the Company. |
|3. ||The percentage increase in the median remuneration of employees in the financial year: ||Same |
|4. ||The number of permanent employees on the rolls of company. ||There were 459 employees as on March 31 2016 |
|5. ||Average percentage increase already made in the salaries of employees other than the managerial personnel in the last financial year and its comparison with the percentage increase in the managerial remuneration and justification thereof and point out if there are any exceptional circumstances for increase in the managerial remuneration. ||Same |
|6. ||Affirmation that the remuneration is as per the remuneration policy of the Company ||Yes it is affirmed. |
1. Profit of the Company is calculated as per Section 198 of the Companies Act 2013.
STATEMENT SHOWING TOP TEN EMPLOYEES OF THE COMPANY :
|Sr. No. ||Name ||Designation ||Remuneration Received PER MONTH ||Nature of Employment ||% of Equity Shares held |
|1. ||MR. GAUTAM KAPUR ||JOINT PRESIDENT (Sahibabad) ||604935 ||JOINT PRESIDENT (Sahibabad) ||3.98% |
|2. ||MR. GIRISH KAPUR ||JOINT PRESIDENT (Sahibabad) ||604935 ||JOINT PRESIDENT (Sahibabad) ||3.97% |
|3. ||MR. RISHAV KAPUR ||SENIOR VICE PRESIDENT (Sahibabad) ||483416 ||SENIOR VICE PRESIDENT (Sahibabad) ||0.004% |
|4. ||MR. VIKRAM KAPUR ||PRESIDENT (Sonepat) ||481736 ||PRESIDENT (Sonepat) ||2.04% |
|5. ||MR. RAJIV KAPUR ||JOINT PRESIDENT (Sonepat) ||481621 ||JOINT PRESIDENT (Sonepat) ||2.78% |
|6. ||MR. RAHUL KAPUR ||SENIOR VICE PRESIDENT (Sahibabad) ||468653 ||SENIOR VICE PRESIDENT (Sahibabad) ||0.004% |
|7. ||MR. ABHINAV KAPUR ||SENIOR VICE PRESIDENT (Sahibabad) ||409641 ||SENIOR VICE PRESIDENT (Sahibabad) ||0.75% |
|8. ||MR. ANGAD KAPUR ||SENIOR VICE PRESIDENT (Sonepat) ||393359 ||SENIOR VICE PRESIDENT (Sonepat) ||0.80% |
|9. ||MR. I.D.CHUGH ||FACTORY MANAGER (Sahibabad) & Whole Time Director ||129813 ||FACTORY MANAGER (Sahibabad) & Whole Time Director ||0.002% |
|10. ||MR. SANJAY KAPUR ||JOINT PRESIDENT (Malanpur) ||111610 ||JOINT PRESIDENT (Malanpur) ||3.84% |
Note: No Employee is a relative of any Director of the Company.
STATEMENT SHOWING EMPLOYEES OF THE COMPANY DRAWING SALARY MORE THAN WHOLE TIME DIRECTOROF THE COMPANY AND HOLDING MORE THAN 2% EQUITY SHARES :
|Sr. No. ||Name ||Designation ||Remuneration Received PER MONTH ||Nature of Employment ||% of Equity Shares held |
|1. ||MR. GAUTAM KAPUR ||JOINT PRESIDENT (Sahibabad) ||604935 ||JOINT PRESIDENT (Sahibabad) ||3.98% |
|2. ||MR. GIRISH KAPUR ||JOINT PRESIDENT (Sahibabad) ||604935 ||JOINT PRESIDENT (Sahibabad) ||3.97% |
|3. ||MR. VIKRAM KAPUR ||PRESIDENT (Sonepat) ||481736 ||PRESIDENT (Sonepat) ||2.04% |
|4. ||MR. RAJIV KAPUR ||JOINT PRESIDENT (Sonepat) ||481621 ||JOINT PRESIDENT (Sonepat) ||2.78% |
Note : There are no employees in the Company in receipt of remuneration in aggregate ofRs. 10200000 in a year if employed for whole year or is in receipt of remuneration ofRs. 850000 per month.