BOARD'S REPORT / DIRECTORS' REPORT 2018-19
TO THE MEMBERS:-
Your directors are delighted to present Sixty Eighth (68th) Annual Report ofyour Company along with the Audited Statement of Accounts for the year ended 31st March2019.
FINANCIAL HIGHLIGHTS STATE OF COMPANY AFFAIRS & FUTURE PROSPECTS
| || || || ||(Rs In Lacs) |
|Particulars ||Standalone ||Consolidated |
| ||F.Y 2018-19 ||F.Y 2017-18 ||F.Y 2018-19 ||F.Y 2017-18 |
|Revenue from operations (Gross) ||53836.12 ||65327.46 ||53836.12 ||65327.46 |
|Total Income ||53891.65 ||65589.38 ||53891.65 ||65589.38 |
|Total Expenses ||59532.92 ||65786.14 ||59536.12 ||65787.36 |
|Profit Before Tax (after exceptional Item) ||(5641.27) ||(196.76) ||(5644.48) ||(197.98) |
|Tax Expenses (including Deferred tax) ||1060.09 ||36.20 ||1060.09 ||36.20 |
|Profit After tax ||(4581.18) ||(160.55) ||(4584.39) ||(161.78) |
The Net Loss of the Company during the FY 2018-19 was Rs 4581.18 Lacs as against lossof Rs 160.55 lacs during the FY 2017-18.
MGT-9 as required under sub-section (3) of section 92 of Companies Act 2013 has beenannexed to this report and forms its integral part. (Annexure-1)
During the year under consideration the Company produced 1836977 bicycles as against2299529 bicycles in the previous year.
Sales during the year amounted to Rs 53836.12 lacs including the sales to foreigncountries as against Rs 65327.46 lacs including the sales to foreign countries in theprevious year.
TRANSFER TO RESERVES
The Company proposes to transfer Rs NIL to the General Reserve for the F.Y. 2018-19 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 1403.92Lacs.
The paid up Equity Share Capital as at 31st March 2019 stood at Rs 32519190/- i.e.6503838 Equity Shares of Rs 5 each. During the year under review the Company has notissued shares with differential voting rights nor has granted any stock options or sweatequity. As on 31st March 2019 none of the Directors of the Company hold instrumentsconvertible into equity shares of the Company.
Since the books are not in good shape no Dividend has been declared in the FinancialYear 2018-19.
The Consolidated Financial Statements of the Company are prepared in accordance withIndian Accounting Standards ("Ind AS") issued by the Institute of CharteredAccountants of India and forming part of this Annual Report. The three wholly ownedsubsidiary companies of the Company are yet to commence its business.
CHANGE IN NATURE OF BUSINESS
There is no change in the nature of business.
PERFORMANCE OF THE COMPANY
Performance of the Company in terms of total quantity sold as compared to last year wasnegative because of labour unrest in one of the unit of the Company. A series of newmodels were launched in low price segment with normal margins by the name called ARMY tocompete with unorganized sector.
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 this Annual Report. (Annexure-2)
Mr. Hira Lal Bhatia (DIN: 00159258) is retiring by rotation at 68th Annual GeneralMeeting and being eligible offers himself for re-appointment.
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 2625 equity shares in the Company as on thedate of this report.
Based on the recommendations of the Nomination and Remuneration Committee and subjectto approval of members by special resolution at 68th Annual General Meeting and such otherstatutory and regulatory approvals as may be required the Board of Directors of theCompany at its meeting held on 14th August 2019 approved re-appointment ofMr. Sanjiv Kavaljit Singh (DIN: 00015689) and Mr. Kartik Roop Rai (DIN: 06789287) asIndependent Director of the Company for a further period of 5 years w.e.f. 30th December2019 to 29th December 2024 under the provisions of Section 149 read with Schedule IV ofthe Companies Act 2013 and Regulation 17 of the Securities and Exchange Board of India(Listing Obligations and Disclosure Requirements) Regulations 2015 and other applicableprovisions if any of the Companies Act 2013.
In the Board Meeting held on 2nd April 2019 the Board of Directors perusedand took note of the statement of declarations received from the Independent Directorsviz; Mr. Sanjiv Kavaljit Singh (DIN: 00015689) Mr. Kartik Roop Rai (DIN: 06789287) andMs. Sadhna Syal (DIN:- 07837529) that they fulfill all the criteria of Independentdirector envisaged in Regulation 16(1)(b) of Securities Exchange Board of India (ListingObligations and Disclosure Requirements) Regulations 2015 and under Section 149(6) of theCompanies Act 2013.
Ms. Sadna Syal (DIN: 07837529) has resigned from the post of Independent Director ofthe Company with effect from 22.04.2019 due to some personal reasons. Ms. Sadna Syal hasbeen Re-appointed as Additional Independent Director of the company w.e.f. 29th October2019 subject to the approval of the shareholders in the ensuing Annual General Meeting.
CRITERIA FOR MAKING PAYMENT TO NON-EXECUTIVE DIRECTORS
Non-Executive Directors are paid only sitting fees of Rs 15000 for attending the BoardMeeting and Rs 5000 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. Nikhil Bindal Company Secretary
* Mr. Lalit Lohia has resigned from the post of Company Secretary with effect from18.01.2019 and Mr. Nikhil Bindal was appointed as Company Secretary of the Company w.e.f.19.01.2019 in his place and is Key Managerial Personnel of the Company from such date.
Mr. Chander Mohan Dhall whose tenure as Chief Financial Officer of the Company wasexpiring on 31st March 2019 was re-appointed as Chief Financial Officer of the Company inboard meeting dated 12th March 2019 for the period 1st April 2019 to 31st March 2020. Mr.Narendra Pal Singh whose tenure as Chief Executive Officer of the Company was expiring on31st March 2019 was re-appointed as Chief Executive Officer of the Company inboard meeting dated 12th March 2019 for the period 1st April 2019 to 31st March 2020.
COMPLIANCE CERTIFICATE BY CHIEF FINANCIAL OFFICER AND CHIEF EXECUTIVE OFFICER
Board of Directors in the board meeting held on 29.10.2019 took note of the ComplianceCertificate duly signed by Mr. Chander Mohan Dhall Chief Financial Officer and Mr.Narendra Pal Singh Chief Executive Officer that they have reviewed financial statementsand cash flow statement etc. for the financial year ended 31st March 2019 as perRegulation 17(8) read with Schedule II Part B of SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015. Such certificate is annexed after Corporate GovernanceReport for F.Y. 2018-19 and forms Integral part of this Annual Report.
PERFORMANCE EVALUATION OF THE BOARD
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 Board's functioning composition of the Board and its Committeesculture execution and performance of specific duties obligations and governance in theBoard Meeting held on 14th August 2019
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 of 6 number of Board Meetings held during the financial year 2018-19.Further details are provided in the Corporate Governance Report.
DEPOSITS (INCLUDING LOANS FROM MEMBERS)
As per order passed by National Company Law Tribunal (NCLT) Chandigarh on 12th July2018 vide CP. No. 111/ND/2016 RT CP. NO. 150/CHD/HRY/2017 under section 74(2) of theCompanies Act 2013 the company has paid its pending fixed deposits along with overdueinterest to its fixed deposit holders. Further The Company has not accepted any furtherdeposit from the public or members during the financial year.
PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS
There were NIL Loans Guarantees and Investments covered under the provisions ofSection 186 of the Companies Act 2013.
VIGIL MECHANISM / WHISTLE BLOWER 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 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 them 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
Since our company is not among top 100 listed companies determined on the basis ofmarket capitalization at the end of F.Y 2018-19 (on the basis of list of top 100 companiesavailable on NSE/ BSE websites) it is not mandatory for our company to maintain suchcommittee.
RELATED PARTY TRANSACTIONS
All transactions entered with Related Parties for the year under review were on arm'slength basis and in the ordinary course of business and that the provisions of Section 188of the Companies Act 2013 are not attracted. Thus disclosure in form AOC-2 is notrequired. Further there are no material related party transactions during the year underreview with the Promoters Directors or Key Managerial Personnel and there are no relatedparty transactions which exceeds ten percent of the annual consolidated turnover of theCompany as per last audited financial statements of the Company. The Company has developeda Related Party Transactions framework through Standard Operating Procedures for thepurpose 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 PartyTransactions are placed before the Audit 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 has 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.
TRANSFER TO INVESTOR EDUCATION AND PROTECTION FUND (IEPF)
Pursuant to Rule 3 of the Investor Education and Protection Fund (Uploading ofinformation regarding unpaid and unclaimed amounts lying with companies) Rules 2012 theCompany has uploaded the details of unpaid and unclaimed amounts lying with it on theMinistry of Corporate Affairs website.
Equity shares in respect of which the dividend for the year 2009-10 remained unclaimedfor seven consecutive years has been transferred to the IEPF Authority in compliance withSection 124 of the Companies Act 2013 read with rule 6 of the Investor Education andProtection Fund (Accounting Audit Transfer and Refund) Rules 2017 after givingindividual notices to concerned Shareholders and advertisements in newspapers. Equityshares in respect of which the dividend for the year 2010-11 remained unclaimed for sevenconsecutive years are under process of transferring to the IEPF Authority.
The Company complies with the clauses of Listing Agreement entered into with theNational Stock Exchange of India Limited and BSE Limited where the Company's shares arelisted and the Company complies with the SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015. Further in terms of the provisions of Section C ofSchedule V of SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015your Company has complied with the requirements of Corporate Governance and a Report onCorporate Governance together with certificate from the Company's Statutory Auditorsconfirming compliance is set out in a statement which forms part of this Annual Report.
STATUTORY AUDITORS AND AUDITORS' REPORT
The shareholders of the company vide 66th Annual General Meeting of the company held on28th September 2017 approved appointment of M/s Dinesh Nangru & Co. CharteredAccountants (Firm Registration No. 015003N) for a term of five years commencing from F.Y31st March 2018 to FY 31st March 2022 and hold office from the conclusion of the 66thAnnual General Meeting of the Company till the conclusion of the 71st AnnualGeneral Meeting on such remuneration plus GST out of pocket expenses as may be mutuallyagreed between Board and Dinesh Nangru & Co.
As per amendments to the Companies Act 2013 and rules made therein and as pernotification dated 7th May 2018 by the Ministry of Corporate Affairs (MCA) ratificationof the Statutory Auditor is no longer required to be passed by shareholders at the ensuingAnnual General Meeting (AGM) and therefore approval of the shareholders is not sought atthe ensuing AGM.
The qualifications or remarks in the Auditor's Report read with Notes to financialstatements are self-explanatory.
SECRETARIAL AUDITOR AND SECRETARIAL AUDITOR'S 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 annexed to this reportand forms an integral part of this Report.
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 a comprehensive and effective internal control and risk mitigationsystem including internal financial control for all the major processes to ensurereliability of financial reporting timely feedback on operational and strategic goalscompliance with policies procedures law and regulations safeguarding of assets andeconomical and efficient use of resources. The Company's internal control system iscommensurate with its size scale and complexities of its operations. The main thrust ofinternal audit is to test and review controls appraisal of risks and business processesbesides benchmarking controls with best practices in the industry.
The Audit Committee of the Company actively reviews the adequacy of internal controlsystems 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 for this financial year.
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 year under review.
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 31st March2019 is annexed to this report and forms an integral part of this 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 COMPANY'S EQUITY SHARE
Your Company's shares continue to be listed on BSE Limited and National Stock Exchangeof India Limited. The annual listing Fee for the year 2018-19 has been paid to BSE Limitedand National Stock Exchange of India Limited within stipulated time.
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 2019 isgiven here below:
CONSERVATION OF ENERGY
Energy audit of the transformers installed in the factory was got done byapproved agency and suggestions were implemented resulting in improved power factor.
Cable end terminations changed with improved XLPE- aluminum lugs to eliminatejoint heating to avoid wastages.
The efforts made towards technology absorption were: -
New bus bar panel installed between 33KVA transformer & main ACB.
New Water Dry off Oven installed in existing phosphating plant to improve paintquality.
All tubular HSD furnaces converted to PNG system burners.
FOREIGN EXCHANGE EARNING AND OUTGO
Total foreign exchange earned: Rs 1403.92 lacs
Total foreign exchange used: Rs 3544.99 lacs
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 Accounts for the year ended 31st March2019 the applicable accounting standards have been followed along with proper explanationrelating to material departures if any;
II. The directors had selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the Company as at 31st March 2019 and of the loss ofthe Company for the year ended on that date.
III. The directors had taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act 2013 forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities to the 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 the provisions ofall applicable laws and that such systems were adequate and operating effectively.
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 ANDTHEIR CONTRIBUTIONTOTHE 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 2013.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 |
|ISHWAR DAS CHUGH || |
|(DIN: 00073257) || |
|I-73 Naraina Vihar || |
|New Delhi - 110028 || |
|Date : 29th October 2019 || |
|Place: Delhi || |