CIN: L35923HR1950PLC001614 TO THE MEMBERS:-
Your directors are delighted to present Sixty Sixth (66th) Annual Report ofyour Company along with the Audited Statement of Accounts for the year ended 31st March2017.
FINANCIAL HIGHLIGHTS STATE OF COMPANY AFFAIRS & FUTURE PROSPECTS
(Rs. In Lacs)
|Particulars ||Standalone ||Consolidated |
| ||F.Y. 2016-17 ||F.Y. 2015-16 ||F.Y. 2016-17 ||F.Y. 2015-16 |
|Revenue from operations (Gross) ||72646.74 ||60850.72 ||72646.74 ||60850.72 |
|Total Income ||68810.29 ||57177.63 ||68810.29 ||57177.63 |
|Total Expenses ||68308.03 ||57771.24 ||68309.01 ||57773.46 |
|Profit Before Tax (after exceptional Item) ||502.26 ||(593.61) ||501.28 ||(595.83) |
|Tax Expenses (including Deferred tax) ||197.65 ||(267.87) ||197.65 ||(267.87) |
|Profit After tax ||304.61 ||(325.74) ||303.63 ||(327.96) |
As committed last year the Company has shown remarkable recovery in F.Y. 2016-17 andhas earned profit this year Inspite of incurring heavy losses in F.Y. 2015-16 due to nonperformance of Malanpur Unit which is being closed down. The Net Profit of the Companyduring the F.Y. 2016-17 were Rs. 304.61 Lacs as against losses of Rs. 325.74 lacs duringthe F.Y. 2015-16.
During the year under consideration the Company produced 2513691 bicycles as against2145411 bicycles in the previous year.
Sales during the year amounted to Rs. 68427.58 lacs including the sales to foreigncountries as against Rs. 57099.00 Lacs including the sales to foreign countries inthe previous year.
TRANSFER TO RESERVES
The Company proposes to transfer NIL to the General Reserve for the F.Y. 2016-17 asagainst 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. 1942.32Lacs.
The paid up Equity Share Capital as at 31st March 2017 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 2017 none of the Directors ofthe Company hold instruments convertible into equity shares of the Company.
Since the books are not in good shape owing to continued losses in last 3 years (i.e.F.Y. 2013-14 to 2015-16) no Dividend has been declared even after profit for FinancialYear 2016-17.
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 forming part of this Annual Report. The three whollyowned subsidiary 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 UNITS
Performance of Sahibabad unit was very good during the year. Sales increased both interms of number of cycles sold as well as in value. Profit of Sahibabad unit was at alltime high level. A series of new models was launched by the name called ULTIMATE inthe premium segment.
Sonepat Unit's performance was better compared to previous year 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 forming partof this Annual Report.
Mr. Hira Lal Bhatia (DIN: 00159258) is retiring by rotation at 66th AnnualGeneral Meeting 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 Nil equity shares in the Company as on thedate of this report.
Ms. Veena Buber (DIN: 07163537) Non-Executive Director of the Company resigned fromthe Board w.e.f 1st April 2017. Ms. Sadhna Syal (DIN: 07837529) was appointedas Additional
Director of the Company w.e.f 2nd June 2017. The Company has received anotice in writing from a member along with deposit of the requisite amount pursuant toSection 160 of the Act proposing her candidature for the office of Independent Directorof the Company to be appointed as such under the provisions of Section 149 of theCompanies Act 2013 and the Board of Directors at its meeting held on 4thAugust 2017 noted such notice and proposed her appointment as Independent Director of theCompany for a consecutive term of 5 years subject to shareholders approval at 66thAnnual General Meeting of the Company.
In the Board Meeting held on 4th April 2017 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 2016 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. 15000 for attending theBoard Meeting 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 (DIN 00073257)
2. Mr. Chander Mohan Dhall Chief Financial Officer
3. Mr. Narendra Pal Singh Chief Executive Officer
4. *Mr. Lalit Lohia Company Secretary
*Mr. Jaspreet Singh was the Company Secretary and Key Managerial Personnel of theCompany for the F.Y. 2016-17. He resigned as Company Secretary of the Company w.e.f.10.04.2017 and ceased to Key Managerial Personnel of the Company from such date. Mr. LalitLohia was appointed as Company Secretary of the Company w.e.f. 02.05.2017 and is KeyManagerial Personnel of the Company from such date. Mr. Chander Mohan Dhall whose tenureas Chief Financial Officer of the Company was expiring on 31st March 2017 wasre-appointed as Chief Financial Officer of the Company in board meeting dated 10thMarch 2017 for the period 1st April 2017 to 31st March 2018. Mr.Narendra Pal Singh whose tenure as Chief Executive Officer of the Company was expiring on31st March 2017 was re-appointed as Chief Executive Officer of the Company inboard meeting dated 10th March 2017 for the period 1st April 2017to 31st March 2018.
COMPLIANCE CERTIFICATE BY CHIEF FINANCIAL OFFICER AND CHIEF EXECUTIVE OFFICER
Board of Directors in the board meeting held on 4th August 2017 took note ofthe Compliance Certificate duly signed by Mr. Chander Mohan Dhall Chief Financial Officerand Mr. Narendra Pal Singh Chief Executive Officer that they have reviewed financialstatements and cash flow statement etc. for the financial year ended 31stMarch 2017 as per Regulation 17(8) read with Schedule II Part B of SEBI (ListingObligations and Disclosure Requirements) Regulations 2015. Such ceritificate is annexedwith Corporate Governance Report and forms Integral part of this Annual Report.
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 Board's functioning composition of the Board and its Committeesculture execution and performance of specific duties obligations and governance in theBoard Meeting held on 4th August 2017.
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 11 number of Board Meetings held during the financial year 2016-17.Further details are provided in the Corporate Governance Report.
DEPOSITS (INCLUDING LOANS FROM MEMBERS)
The Sahibabad Unit has already repaid to all its deposit holders. Sonepat and MalanpurUnits of the Company are in the process of repaying to all their deposit holders. TheCompany has not accepted any further deposit from the public or members during the year.
The company has not repaid deposits as per requirement of Companies Act 2013. Howevercompany have applied for extension of repayment of fixed deposit to NCLT (National CompanyLaw Tribunal) and repayment are being made as per directions of NCLT.
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 RiskAssessment 12. Security Risk Assessment
13. Information Technology Risk Assessment 14. Project Risk Assessment
The Risk Manag ement 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.
Since our company is not among top 100 listed companies determined on the basis ofmarket capitalization at the end of F.Y. 2016-17 (Source: NSE/ BSE websites) it is notmandatory for our company to maintain such committee. The Board of Directors at itsmeeting held on 4th August 2017 has dissolved Risk Management Committee on thebasis of aforesaid grounds.
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 arefound to 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 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.
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.
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 tenure is expiring in66th Annual General Meeting.
The Board of Directors at its meeting held on 4th August 2017 approvedappointment of M/s Dinesh Nangru & Co. Chartered Accountants (Firm Registration No.015003N) in place of M/s Mehra Khanna & Co. Chartered Accountants for a term of fiveyears commencing from F.Y. 31st March 2018 to hold office from the conclusionof the 66th Annual General Meeting of the Company till the conclusion of the 71stAnnual General Meeting on such remuneration plus GST out of pocket expenses as may bemutually agreed between Board and M/s Dinesh Nangru & Co. subject to the approval ofshareholders in 66th Annual General Meeting. As required under the provisionsof Section 139 of the Companies Act 2013 the Company has obtained written confirmationdated 2nd August 2017 which was noted in the Board Meeting held on 4thAugust 2017 from M/s Dinesh Nangru & Co. Chartered Accountants that theirappointment if made would be in conformity with the limits specified in the said sectionand their firm is subjected to peer review by ICAI and hold its valid certificate.
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 an effective internal control and risk mitigation system which areconstantly assessed and strengthened with new/revised standard operating procedures. TheCompany's internal control system is commensurate with its size scale and complexities ofits operations. The Company has appointed Mr. Harish Kumar Arora as Internal Auditor ofthe Sonepat Unit of the Company Mr. Gopal D. Girdharwal as Internal Auditor of theSahibabad Unit of the Company and Mr. Sanjay Kapur Joint President of Malanpur Unit ofthe Company is reporting on internal control and audit procedures followed. The mainthrust of internal audit is to test and review controls appraisal of risks and businessprocesses besides benchmarking controls with best practices in the industry. The AuditCommittee of the Company actively reviews the adequacy of internal control systems andeffectiveness 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 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 March2017 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 2016-2017 has been paid to BSELimited and 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 2017 isgiven here below :
CONSERVATION OF ENERGY SONEPAT UNIT
The following measures were taken:-a) Energy saving by using Tube wells through two nos80 KL tanks (Settling) as the running hours of tube wells is being reduced. b) Automaticpower factor panel installed resulting into power saving. c) Conveyors are being relayout according to sections re layout resulting into less material movements finallyreduced operator fatigue. d) Low temperature Chemicals introduce in Phosphating lineresulting into saving in energy cost due to reduction in Boiler running hours. Alsoimprovement in product quality as fine crystalline coating of the phosphating layer havingmore coating life.
The following measures were taken:-a) To save energy 2000 normal tube lights werereplaced with LED tube lights. b) Copper Bus Bar was modified at Debrassing stage forbetter flow of current.
TECHNOLOGY ABSORPTION SONEPAT UNIT
The following efforts were made:-a. Converted all Brazing operation with PNG which ismore efficient and Environment friendly (use HSD on emergency only).
The following efforts were made:-a. Pouring system of white paint on tail-end ofmudguard was mechanized in place of manual working. b. BB cups and shockers fitting withframes were mechanized for better productivity & quality. c. The expenditure incurredon Research and Development
: Rs. 18.10 lacs.
FOREIGN EXCHANGE EARNING AND OUTGO
Total foreign exchange earned: Rs. 1942.32 lacs Total foreign exchange used: Rs. 113.54lacs
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 2017 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 fairview of the state of affairs of the Company as at 31st March 2017 and of the profit of theCompany 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 AnnualAccounts 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 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 : 4th August 2017 || |
|Place : New Delhi || |