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Directors Report of Atlas Cycles (Haryana) Ltd.

Mar 31, 2016

TO THE MEMBERS:-

The directors are delighted to present Sixty Fifth Annual Report of your Company along with the audited statement of accounts for the year ended 31st March 2016.

FINANCIAL HIGHLIGHTS, STATE OF COMPANY AFFAIRS & FATURE PROSPECTS

( In Lacs)

Particulars

2015-16

2014-15

OPERATING PROFITS/(LOSSES) ADD : PROFIT ON SALE OF ASSETS

(18.80)

715.65

623.51

(1832.53)

ADD : PROFIT ON SALE OF MUTUAL FUND

21.49

124.84

ADD : DIVIDEND INCOME

19.93

22.62

56.71

805.06

LESS : FINANCE COST

784.98

738.27

1107.4

(1027.47)

DEPRECIATION

546.90

1,331.88

662.85

1770.25

LESS : PROVISION FOR TAX ADD : PROFIT BROUGHT FORWARD

(593.61)

(267.87)

(325.74)

(2,753.17)

(2797.75)

(902.48)

(1895.24)

(857.93)

(3,078.91)

(2,753.17)

The Company has gone into high losses due to non performance of Malanpur Unit of the Company which is being closed down by the Company and Company is showing remarkable recovery. The Losses of the Company during the Financial Year ended 31.03.2016 were Rs, 325.74 Lacs as against Rs, 1,895.24 during the Financial Year ended 31.03.2015. The Company is optimistic that it will be able to show profits and declare dividend next year onwards.

PRODUCTION

During the year under consideration, the Company produced 21,45,411 bicycles as against 23,00,923 bicycles in the previous year.

SALES

Sales during the year amounted to Rs, 570.99 Crore including the sales to foreign countries as against Rs, 594.59 Crore including the sales to foreign countries in the previous year.

TRANSFER TO RESERVES

The Company proposes to transfer Rs, NIL to the General Reserve for the year 2015-16 as against Rs, NIL to General Reserve in the previous year.

EXPORTS

During the period under consideration your Company exported bicycles and bicycle components to several countries thereby earning valuable foreign exchange of Rs, 1735.38 Lacs.

SHARE CAPITAL

The paid up Equity Share Capital as at 31st March 2016 stood at Rs, 3,25,19,190/- i.e. 32,51,919 Equity Shares of Rs, 10 Each. During the year under review, the Company has not issued shares with differential voting rights nor has granted any stock options or sweat equity. As on 31st March 2016, none of the

Directors of the Company hold instruments convertible into equity shares of the Company.

DIVIDEND

During the year under review, your company has not declared any Dividend for the financial year ended 31st March 2016 due to losses.

CONSOLIDATED ACCOUNTS

The Consolidated Financial Statements of the Company are prepared in accordance with relevant Accounting Standards viz. AS-21, AS-23 and AS-27 issued by the Institute of Chartered Accountants of India and forms part of this Annual Report. The 3 wholly owned subsidiary 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 in number of cycles sold, sale value and the net Profit of the unit. A series of high end alloy & carbon fiber bicycles was launched by the name called MAGNUM in the ultra premium segment. Sonepat Unit''s performance was not that good and Malanpur Unit of the 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 stipulated under Regulation 34 (2) read with Part B of Schedule V of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, is presented in a separate section forming part of the Annual Report.

REMUNERATION POLICY, REMUNERATION OF DIRECTOR AND APPOINTMENT OF DIRECTOR

For a policy on director appointment, remuneration and criteria of evolution required to 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 of Corporate Governance Report.

DIRECTORS

Mr. Hira Lal Bhatia (DIN: 00159258) is retiring by rotation at this Annual General Meeting and, being eligible, offer himself for reappointment.

Further, pursuant to Regulation 26 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the shareholders may take note that Mr. Hira Lal Bhatia, Non Executive Director of the Company holds Nil equity shares in the Company as on the date of this report.

During the year, Mr. Hari Krishan Ahuja (DIN : 00315876) ceased to be Non-Executive Director of the Company on 24th February 2016 due to his death. In the Board Meeting held on 25th March 2016, the Board of Directors expressed profound sorrow over the sad demise of Mr. Hari Krishan Ahuja, NonExecutive Director of the Company, and observed a two minute silence as a mark of respect, praying for the departed soul to rest in peace.

On cessation of Mr. Hari Krishan Ahuja (DIN : 00315876), composition of board of directors was required to be realigned and in order to have al teast 2 non-executive directors 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 by rotation, Ms. Veena Buber (DIN: 07163537), who was appointed as Independent Woman Director of the Company in the previous Annual General Meeting of the Company on 30th September 2015 for a tenure of 5 years, was appointed as Non-Executive Woman Director of the Company retiring by rotation in the Board Meeting held on 25th March 2016. Accordingly the designation of Ms. Veena Buber (DIN: 07163537) was changed from Independent Woman Director to Non-Executive Woman Director of the Company liable to retire by rotation with effect from 25th March 2016.

Mr. Vikram Khosla (DIN : 01574818) ceased to be Independent Director of the Company with effect from 14th May 2016 due to vacation of office as per provisions of Section 167 of the Companies Act, 2013 for not attending any of the Meetings of the Board of Directors of the Company for a continuous period of 12 months.

In the Board Meeting held on 19th April 2016, the Board of Directors perused and took note of the statement of declarations received from the Independent Directors viz; Mr. Sanjiv Kavaljit Singh (DIN: 00015689) and Mr. Kartik Roop Rai (DIN: 06789287) that they fulfill all the criteria of Independent director envisaged in Regulation 16(1)(b) of Securities Exchange Board of India (Listing Obligations and Disclosure Requirements) 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 '' 10,000 for attending the Board Meeting and '' 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 year from 1st January 2015 to 31st December 2015. Then he was appointed as Chief Executive Officer of the Company for a period from 1st January 2016 to 31st March 2016. Then he ceased to be Chief Executive Officer of the Company on 12th February 2016 and was appointed as Chief Financial Officer of the Company with effect from 12th February 2016 till 31st March 2017. Mr. Narendra Pal Singh was appointed as Chief Executive Officer of the Company with effect from 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 note of the Compliance Certificate duly signed by Mr. Chander Mohan Dhall, Chief Financial Officer and Mr. Narendra Pal Singh, Chief Executive Officer that they have reviewed financial statements and cash flow statement etc. as per Regulation 17(8) read with Schedule II Part B of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

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) Regulations, 2015, a healthy discussion was held among directors after taking into consideration of the various aspects of the Board''s functioning, composition of the Board and its Committees, culture, execution and performance of specific duties, obligations and governance in the Board Meeting held on 13th August 2015.

The performance evaluation of the Independent Directors as per Regulation 17(10) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 was completed. The performance evaluation of the Chairman and the Non Independent Directors was carried out by the Independent Directors as per Regulation 25(4) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The Board of Directors expressed their satisfaction 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, 21,000 pending for more than 7 years, have been credited 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, 6,08,86,000 and Sonepat Unit and Malanpur Unit of the Company are in the process of repaying all its deposit holders. The Company has not accepted any further deposits from the public or members during the year as Company could not fulfill the credit rating requirement and thus could not comply with all the provisions of Section 73 to 76 of the Companies 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 to National Company Law Tribunal (erstwhile Company Law Board) for extension of time in repayment of its deposits and interest thereon. Deposits due for payment but not paid as on date of application to NCLT / CLB i.e. 18th February 2016 amounted to Rs, 3,36,50,958 for 175 Deposit Holders of Sonepat Unit of the Company and Nil for Malanpur Unit of the Company. Deposits not yet due for payment as on 18th February 2016 amounted to Rs, 1,55,22,303 for 275 Deposit Holders of Sonepat Unit of the Company and Rs, 3,20,21,857 for 2 Deposit Holders of Malanpur Unit of the Company who are also promoters of 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 of Section 186 of the Companies Act, 2013.

WHISTLE BLOWER MECHANISM / VIGIL MECHANISM

The Company has a whistle blower policy to report genuine concerns or grievances. The Whistle Blower Policy has been posted on the website of the Company and whistle blower mechanism is reviewed regularly by the Audit Committee of the Company. There were Nil complaints 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 to remuneration of Directors, Key Managerial Personnel and Senior Management of the Company. This policy also lays down criteria for selection and appointment of Board Members. The details 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 Company including identification therein of elements of risk, if any, which in the opinion of the Board may threaten the existence of the company. The Company has formulated a Risk Management Committee which discussed on the impact and acceptability of all risks to which Company is exposed. It also discussed to take suitable action or propose to the Board of Directors for taking any suitable action for minimizing the risks. Accordingly, it has considered 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 all areas, for example, management structure, purchasing, contracting, development, maintenance, and human factors. More details are explained in the Corporate Governance Report also.

RELATED PARTY TRANSACTIONS

All transactions entered with Related Parties for the year under review were on arm''s length basis and in the ordinary course of business and that the provisions of Section 188 of the Companies Act, 2013 are not attracted. Thus disclosure in form AOC-2 is not required. Further, there are no material related party transactions during the year under review with the Promoters, Directors or Key Managerial Personnel and there are no related party transactions which exceeds ten percent of the annual consolidated turnover of the Company as per last audited financial statements of the Company. The Company has developed a Related Party Transactions framework through Standard Operating Procedures for the purpose of identification and monitoring of such transactions.

All Related Party Transactions are placed before the Audit Committee on quarterly basis for confirmation. Omnibus approval was obtained on a yearly basis for transactions which are repetitive in nature subject to further approval in case actual transactions are found to be exceeding the omnibus approval.

A statement giving details of all Related Party Transactions are placed before the Audit Committee for review on quarterly basis.

A Policy on Material Related Party Transactions as approved by the Board of Directors has been uploaded on the website of the Company www.atlasbicycles.com. None of the Directors have any pecuniary relationship or transactions vis-a-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 that would impact the going concern status of the Company and its future operations.

CORPORATE GOVERNANCE

The Company complies with the clauses of Listing Agreement entered into with the National Stock Exchange of India Limited and BSE Limited where the Company''s shares are listed and as New Listing regulations become applicable from 1st December 2015, 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 has complied with the requirements of Corporate Governance and a Report on Corporate Governance together with certificate from the Company''s Statutory Auditors confirming 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 required under Section 92 of the Companies Act, 2013, is annexed to this Report and forms an integral 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 years up to the conclusion of 66th Annual General Meeting. Their appointment is proposed to be ratified at the forthcoming Annual General Meeting. As required under the provisions of Section 139 of the Companies Act, 2013, the Company has obtained written confirmation dated 10th August 2016 which was noted in the Board Meeting held on 13th August 2016 from M/s Mehra Khanna & Co. that their appointment, if made, would be in conformity with the limits specified in the said Section. The qualifications or remarks in the Auditor''s Report read with Notes to financial statements are self explanatory.

SECRETARIAL AUDITOR AND SECRETARIAL AUDITOR’S REPORT

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and rules made thereunder, the Company has appointed M/s Mukesh Arora & Company, a firm of Company Secretaries in Practice (Certificate of Practice Number : 4405) to undertake the Secretarial Audit of the Company. The Secretarial Audit Report is included as Annexure and forms an integral part of this Report. The 3 (three) secretarial audit observations for the year under review requiring clarification by the Company are replied by the Company and form part of the Secretarial Audit Report which is noted in the Board Meeting held on 24th August 2016.

COST AUDIT

As per the requirement of Central Government and pursuant to Section 148 of the Companies Act, 2013 read with the Companies (Cost Records and Audit) Rules, 2014 as amended from time to time, your Company is not required to carry out audit of cost records relating to Bicycle Industry. Accordingly, your Company did not appoint Cost Auditor in this financial year.

INTERNAL CONTROL SYSTEM AND THEIR ADEQUACY

Your Company has an effective internal control and risk mitigation system, which are constantly assessed and strengthened with new/revised standard operating procedures. The Company''s internal control system is commensurate with its size, scale and complexities of its operations. The Company has appointed Mr. Harish Kumar Arora as Internal Auditor of the Sonepat Unit of the Company, Mr. Gopal D. Girdharwal, as Internal Auditor of the Sahibabad Unit of the Company and Mr. Sanjay Kapur, Joint President of Malanpur Unit of the Company is reporting on internal control and audit procedures followed. The main thrust of internal audit is to test and review controls, appraisal of risks and business processes, besides benchmarking controls with best practices in the industry.

The Audit Committee of the Company actively reviews the adequacy of internal control systems and effectiveness of internal audit function.

CORPORATE SOCIAL RESPONSIBILITY (CSR)

Requirements relating to Corporate Social Responsibilities as envisaged in Schedule VII of the Companies Act, 2013 and Companies (Corporate Social Responsibility Policy) Rules,

2014 are not applicable on our Company.

HUMAN RESOURCE DEVELOPMENT AND INDUSTRIAL RELATION

Your Company strives to provide the best working environment with ample opportunities to grow and explore. Your Company maintains a work environment that is free from physical, verbal and sexual harassment. Every initiative and policy of the Company takes care of welfare of all its employees. The human resource development function of the Company is guided by a strong set of values and policies. The details of initiatives taken by the Company for the development of human resource are given in Management Discussion and Analysis Report. The Company maintained healthy, cordial and harmonious industrial relations at all levels throughout the year.

STATUTORY INFORMATION

The Business Responsibility Reporting as required by Regulation 34 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 201 5 is not applicable to your Company 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 cordial throughout the year. There was unity of objective among all levels of employees, continuously striving for improvement in work practices and productivity. Training and development of employees continue to be an area of prime importance.

Particulars of the employees as required under section 197 (12) of the Companies Act, 2013 read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 and forming part of the Directors'' Report for the year ended 31st March 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 the Company. Apart from Mr. Vikram Kapur, President of Sonepat Unit, Mr. Rajiv Kapur, Joint President of Sonepat Unit, Mr. Gautam Kapur, Joint President of Sahibabad Unit, Mr. Girish Kapur, Joint President of Sahibabad Unit and Mr. Sanjay Kapur, Joint President of Malanpur Unit, none of the employees hold (by himself or along with his spouse and dependent children) 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 Exchange of India Limited. The annual listing Fee for the year 2015-2016 has been paid to BSE 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 is given here below :

CONSERVATION OF ENERGY

a. the steps taken or impact on conservation of energy; SONEPAT UNIT

The following measures were taken for Conservation of energy:-

a) Power Load rationalized and Contract demand reduced from 2250 KVA to 1350 KVA and all load on one OLTC transformer of 1600 KVA and made 1000 KVA surplus.

b) Plant being relaid to save Energy and movement cost.

c) Lobo Compressor of 5 HP installed for agitation of Process Plants and stopped one Compressor of 25 HP.

d) Hot Water Generator installed to replace Pet Coke Boiler

e) New Heat Exchanger installed in Paint Shop for better Fuel efficiency.

SAHIBABAD UNIT

The following measures were taken for Conservation of energy:-

a) L E D lights were fitted in store department in place of normal lights to save energy.

b) Two rotary compressors were installed in E.T. Plant in place of gear box &motor system to save energy.

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 utilizing alternate sources of energy : Hot water generators were installed

c. the capital investment on energy conservation equipments : Negligible.

TECHNOLOGY ABSORPTION

a. The efforts made towards technology absorption SONEPAT UNIT

The following efforts were made:-

a. New Slat Conveyor line installed for better productivity of SKD Line.

b. New Tail End Dippling line installed with I.R. Heater for better productivity.

c. Flytomatic pretreatment line installed

d. Drying Oven installed to dry components pretreatment for better quality.

e. Higher capacity Rectifier installed in debasing for improved productivity and quality.

SAHIBABAD UNIT

The following efforts were made:-

a. For the movement of fancy frames, a new four wheel conveyor was installed from Assembly Department to Store dept. to replace manual handling.

b. A Manual Phosphate line was converted to Automatic Phosphate line in Paint Shop to increase production of fancy bicycles.

c. One inclined slat conveyor was installed for movement of material to maximize floor in finished goods store to replace manual handling.

b. The benefits derived like product improvement, cost reduction, product development or import substitution : Cost Reduction;

c. In case of imported technology (imported during the last three years reckoned from the beginning of the financial year)-

i. the details of technology imported : Nil;

ii. the year of import : Nil;

iii. whether the technology been fully absorbed : Nil;

iv. if not fully absorbed, areas where absorption has not taken place, and the reasons thereof: NA; and

d. The expenditure incurred on Research and Development : Negligible.

FOREIGN EXCHANGE EARNING AND OUTGO

Total foreign exchange earned: Rs, 1,735.38 lacs Total foreign exchange used: Rs, 99.45 lacs

DIRECTORS’ RESPONSIBILITY STATEMENT

To the best of knowledge and belief and according to the information and explanations obtained by them, your Directors make the following statement in terms of Section 134(3)(c) of the Companies Act, 2013 that:

I. In the preparation of the Annual Accounts for the year ended 31st March 2016, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;

II. The directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31st March 2016 and of the loss of the Company for that period;

III. The directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities, 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 the Company and that such internal financial controls are adequate and were operating effectively; and

VI. The Directors had devised proper system to ensure compliance with the provisions of all 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 be adequate by the Statutory Auditors of the Company.

REPORT ON THE HIGHLIGHTS OF PERFORMANCE OF ITS SUBSIDIARY COMPANIES, JOINT VENTURES, ASSOCIATE COMPANIES AND THEIR CONTRIBUTION TO THE OVERALL PERFORMANCE OF THE COMPANY

The Company has 3 (three) wholly owned subsidiary companies viz. Atlas Cycles Sonepat Limited, Atlas Cycles (Sahibabad) Limited and Atlas Cycles (Malanpur) Limited. These companies are yet to commence its business and accordingly there are no highlights of performance or their contribution to the overall performance of the Company to reflect during the year. The Annual Reports of Subsidiary Companies are available for download at www.atlasbicycles.com. Apart from these, the Company do not have any associate companies and joint ventures.

Form AOC-1 containing salient features of 3 wholly owned subsidiary companies duly certified by Statutory Auditors of the Company under section 129(3) of the Companies Act, 2013 read with Rule 5 of Companies (Accounts) Rules, 2014 are annexed herewith. There are no 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, associate companies or joint ventures during the year.

ACKNOWLEDGEMENT

The Board of Directors wishes to place on record its appreciation for the commitment, dedication and hard work done by the employees in the Company and the cooperation extended by Banks, Government authorities, customers and shareholders of the Company and looks forward to a continued mutual support and co-operation.

HIRA LAL BHATIA

(DIN: 00159258)

3-B/11, N.E.A., Utri Marg, I New Delhi - 110060

DIRECTORS

SANJIV KAVALJIT SINGH

(DIN: 00015689)

104, Malcha Marg Chanakya

Puri Delhi - 110021

Date : 24th August 2016 Place: Delhi


Mar 31, 2015

Dear MEMBERS,

Your directors are delighted to present Sixty Fourth Annual Report of your Company along with the audited statement of accounts for the year ended 31st March 2015.

FINANCIAL HIGHLIGHTS ( In Lacs)

Particulars 2014-15

OPERATING PROFITS/(LOSSES) (1832.53)

ADD : PROFIT ON SALE 623.51 OF ASSETS

ADD : PROFIT ON SALE 124..84 OF MUTUAL FUND

ADD : DIVIDEND INCOME 56.71 805.06

(1027.47)

LESS:FINANCE COST 1107.43

DEPRECIATION 662.85 1770.25

(2797.72)

LESS:PROVISION FOR TAX 902.48

(1895.24)

ADD : PROFIT BROUGHT FORWARD (857.93)

(2753.17)

Particulars 2013-14

OPERATING PROFITS/(LOSSES) 40.02

ADD : PROFIT ON SALE 13.16 OF ASSETS

ADD : PROFIT ON SALE 74.52 OF MUTUAL FUND

ADD : DIVIDEND INCOME 16.99 104.67

144.69

LESS:FINANCE COST 922.01

DEPRECIATION 713.34 1635.35

(1490.66)

LESS:PROVISION FOR TAX 483

(1007.66)

ADD : PROFIT BROUGHT FORWARD 149.73

(857.93)

PRODUCTION

During the year under consideration, the Company produced 23,00,923/- bicycles as against 25,87,585 bicycles in the previous year.

SALES

Sales during the year amounted to ' 594.59 Crore including the sales to foreign countries as against ' 650.11 Crore including the sales to foreign countries in the previous year.

TRANSFER TO RESERVES

The Company proposes to transfer ' NIL to the General Reserve for the year 2014-15 as against ' NIL to General Reserve in the previous year.

EXPORTS

During the period under consideration your Company exported bicycles and bicycle components to several countries thereby earning valuable foreign exchange of ' 2791.09 Lacs.

The company continued its efforts to increase sales in export market due to which it achieved better export earning than last year, despite stiff competition.

SHARE CAPITAL

The paid up Equity Share Capital as at 31st March 2015 stood at ' 3,25,19,190/- i.e. 23,51,919 Equity Shares of ' 10 Each. During the year under review, the Company has not issued shares with differential voting rights nor has granted any stock options or sweat equity. As on 31st March 2015, none of the Directors of the Company hold instruments convertible into equity shares of the Company.

DIVIDEND

During the year under review, your company has not declared any Dividend for the financial year ended 31st March 2015 due to losses.

CONSOLIDATED ACCOUNTS

The Consolidated Financial Statements of the Company are prepared in accordance with relevant Accounting Standards viz. AS-21, AS-23 and AS-27 issued by the Institute of Chartered Accountants of India and forming part of this Annual Report. The three wholly owned subsidiary companies of the Company are yet to commence their business.

PERFORMANCE OF THE UNITS

Performance of Sahibabad unit was good during last financial year. New range of high end ULTIMATE series introduced last year got encouraging response from the market; thus a lot of new models were further added to it. Unit is in the process of launching alloy bicycles vide a new series called MAGNUM in the Ultra Premium segment.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

Management Discussion and Analysis Report for the year under review, as stipulated under clause 49 of the Listing Agreement with the Stock Exchange, is presented in a separate section forming part of the Annual Report.

DIRECTORS

Mr. Hari Krishan Ahuja (DIN: 00315876) is retiring by rotation at this Annual General Meeting and, being eligible, offers himself for reappointment.

Further, pursuant to clause 49 (IV) (E) (iv) of the Listing Agreement, the shareholders may take note that Mr. Hari Krishan Ahuja, Non Executive Director of the Company holds Nil equity shares in the Company as on the date of this report.

In compliance with the requirement of Clause 49 of the Listing Agreement for appointment of Woman Director in the Company, the Board of Directors of the Company appointed Ms. Veena Buber (DIN: 07163537) as Additional Director of the Company on 26th March 2015 through Resolution by circulation whose appointment was ratified in the Board Meeting held on 29th April, 2015. She holds the office of Additional Director up to the date of ensuing Annual General Meeting of the Company and is eligible for appointment as Independent Woman Director of the Company for the tenure of 5 years effective from 30th September 2015.

KEY MANAGERIAL PERSONNEL

In the capacity of Key Managerial Personnel, the company has

1. Mr. Ishwar Das Chugh, Whole Time Director

2. Mr. Chander Mohan Dhall as Manager / Chief Executive Officer & Chief Financial Officer (In the capacity of Chief Financial Officer, he takes care of Malanpur Unit of the Company only)

3. Mr. Jaspreet Singh, Company Secretary

PERFORMANCE OF BOARD EVALUATION

Pursuant to the provisions of the Companies Act, 2013 and Clause 49 of the Listing Agreement, a healthy discussion was held among directors after taking into consideration of the various aspects of the Board's functioning, composition of the Board and its Committees, culture, execution and performance of specific duties, obligations and governance.

The performance evaluation of the Independent Directors was completed. The performance evaluation of the Chairman and the Non-Independent Directors was carried out by the Independent Directors. The Board of Directors expressed their satisfaction with the evaluation process.

NUMBER OF MEETINGS OF THE BOARD

There were total 10 number of Board Meetings held during the financial year 2014-15. Further details are provided in the Corporate Governance Report.

DEPOSITS (INCLUDING LOANS FROM MEMBERS)

Unclaimed deposits aggregating to ' 21,000 pending for more than 7 years, have been credited to Investors Education and Protection Fund of Government of India.

The Company is in process of repaying all its deposit holders and is not further accepting deposits from the public or members.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

Details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in the notes to the Financial Statement.

WHISTLE BLOWER MECHANISM

The Company has a whistle blower policy to report genuine concerns or grievances. The Whistle Blower Policy has been posted on the website of the Company.

REMUNERATION AND NOMINATION POLICY

The Board of Directors has framed a policy which lays down a framework in relation to remuneration of Directors, Key Managerial Personnel and Senior Management of the Company. This policy also lays down criteria for selection and appointment of Board Members. The details of this policy are explained in the Corporate Governance Report.

RELATED PARTY TRANSACTIONS

All transactions entered with Related Parties for the year under review were on arm's length basis and in the ordinary course of business and that the provisions of Section 188 of the Companies Act, 2013 are not attracted. Thus disclosure in form AOC-2 is not required. Further, there are no material related party transactions during the year under review with the Promoters, Directors or Key Managerial Personnel. The Company has developed a Related Party Transactions framework through Standard Operating Procedures for the purpose of identification and monitoring of such transactions.

All Related Party Transactions are placed before the Audit Committee on quarterly basis for confirmation. Omnibus approval was obtained on a yearly basis for transactions which are repetitive in nature subject to further approval in case actual transactions are found to be exceeding the omnibus approval. A statement giving details of all Related Party Transactions are placed before the Audit Committee for review on quarterly basis.

A Policy on Material Related Party Transactions as approved by the Board of Directors has been uploaded on the website of the Company. None of the Directors has any pecuniary relationship or transactions vis-a-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 that would impact the going concern status of the Company and its future operations.

CORPORATE GOVERNANCE

The Company complies with the clauses of Listing Agreement entered into with the National Stock Exchange of India Limited, BSE Limited and Delhi Stock Exchange Limited where the Company's shares are listed. It may be noted that the Delhi Stock Exchange has been de-recognized by SEBI. Further, in terms of the provisions of Clause 49 of the Listing Agreement, your Company has complied with the requirements of Corporate Governance and a Report on Corporate Governance together with certificate from the Company's Auditors confirming 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 required under Section 92 of the Companies Act, 2013, is annexed to this Report and forms an integral 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 years upto the conclusion of 66th Annual General Meeting. Their appointment is proposed to be ratified at the forthcoming Annual General Meeting. As required under the provisions of Section 139 of the Companies Act, 2013, the Company has obtained written confirmation from M/s Mehra Khanna & Co. that their appointment, if made, would be in conformity with the limits specified in the said Section. The qualifications or remarks in the Auditor's Report read with Notes to financial statements are self explanatory.

SECRETARIAL AUDITOR AND SECRETARIAL AUDITOR'S REPORT

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and rules made thereunder, the Company has appointed M/s Mukesh Arora & Company, a firm of Company Secretaries in Practice (Certificate of Practice Number : 4405) to undertake the Secretarial Audit of the Company. The Secretarial Audit Report is included as Annexure - B and forms an integral part of this Report. The secretarial audit qualifications for the year under review requiring clarification by the Board of Directors are replied by the Board of Directors and form part of the Secretarial Audit Report.

COST AUDIT

As per the requirement of Central Government and pursuant to Section 148 of the Companies Act, 2013 read with the Companies (Cost Records and Audit) Rules, 2014 as amended from time to time, your Company is not required to carry out audit of cost records relating to Bicycle Industry. Accordingly, your Company did not appoint Cost Auditor in this financial year. However, Cost Audit Report for the financial year 2013- 14 was duly filed with the Ministry of Corporate Affairs.

INTERNAL CONTROL SYSTEM AND THEIR ADEQUACY

Your Company has an effective internal control and risk mitigation system, which are constantly assessed and strengthened with new/revised standard operating procedures. The Company's internal control system is commensurate with its size, scale and complexities of its operations. The Company has appointed Mr. Harish Kumar Arora as Internal Auditor of the Sonepat Unit of the Company, Mr. Gopal D. Girdharwal, as Internal Auditor of the Sahibabad Unit of the Company and Mr. Chander Mohan Dhall, as Internal Auditor of the Malanpur Unit of the Company. The main thrust of internal audit is to test and review controls, appraisal of risks and business processes, besides benchmarking controls with best practices in the industry.

The Audit Committee of the Board of Directors actively reviews the adequacy and effectiveness of internal control systems.

CORPORATE SOCIAL RESPONSIBILITY (CSR)

Requirements relating to Corporate Social Responsibilities as envisaged in Schedule VII of the Companies Act, 2013 and Companies (Corporate Social Responsibility Policy) Rules, 2014 are not applicable on our Company.

HUMAN RESOURCE DEVELOPMENT AND INDUSTRIAL RELATION

Your Company strives to provide the best working environment with ample opportunities to grow and explore. Your Company maintains a work environment that is free from physical, verbal and sexual harassment. Every initiative and policy of the Company takes care of welfare of all its employees. The human resource development function of the Company is guided by a strong set of values and policies. The details of initiatives taken by the Company for the development of human resource are given in Management Discussion and Analysis Report. The Company maintained healthy, cordial and harmonious industrial relations at all levels throughout the year.

STATUTORY INFORMATION

The information required under Section 197(12) of the Companies Act, 2013 read with Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 and forming part of the Directors' Report for the year ended 31st March 2015 is given in a separate Annexure to this Report.

The above Annexure is not being sent along with this Report to the Members of the Company in line with the provision of Section 136 of the Companies Act. 2013. Members who are interested in obtaining these particulars may write to the Company Secretary at the Registered Office of the Company. The aforesaid Annexure is also available for inspection by Members at the Registered Office of the Company, 21 days before the 64th Annual General Meeting and upto the date of the ensuing Annual General Meeting during the business hours on working days.

None of the employees listed in the said Annexure is a relative of any Director of the Company. Apart from Mr. Vikram Kapur, President of Sonepat Unit, Mr. Rajiv Kapur, Joint President of Sonepat Unit, Mr. Gautam Kapur, Joint President of Sahibabad Unit, Mr. Girish Kapur, Joint President of Sahibabad Unit and Mr. Sanjay Kapur, Joint President of Malanpur Unit, none of the employees holds (by himself or along with his spouse and dependent children) more than two percent of the equity shares of the Company.

The Business Responsibility Reporting as required by Clause 55 of the Listing Agreement with the Stock Exchanges is not applicable to your Company for the financial year ending 31st March 2015.

PERSONNEL AND PARTICULARS OF EMPLOYEES

The industrial relations with the workers and staff of the Company remained cordial throughout the year. There was unity of objective among all levels of employees, continuously striving for improvement in work practices and productivity. Training and development of employees continue to be an area of prime importance. Only in Malanpur Unit of the Company there were some concerns due to closing down of the Malanpur Unit in the month of October 2014.

Particulars of the employees as required under section 197 (12) of the Companies Act, 2013 read with the Companies (Appointment and Remuneration of Managerial Personeen) Rules, 2014 and forming part of the Directors' Report for the year ended 31st March 2015 is given in a separate Annexure to the Report.

LISTING OF COMPANY'S EQUITY SHARE

Your Company's shares continue to be listed on BSE Limited, National Stock Exchange of India Limited and Delhi Stock Exchange Limited. Since Delhi Stock Exchange has been de- recognized by the SEBI, the annual listing Fee for the year 2014-2015 has been paid to BSE Limited and National Stock Exchange of India Limited.

SUBSIDIARY COMPANIES / ASSOCIATE COMPANIES

Statement of Accounts of the subsidiaries together with statement in Form AOC-1 under section 129(3) of the Companies Act, 2013 read with Rule 5 of Companies (Accounts) Rules, 2014 are annexed herewith. There are no associate companies as per definition given in Section 2(6) of the Companies Act, 2015.

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 2015 is given here below :

CONSERVATION OF ENERGY

SONEPAT UNIT

The following measures were taken for Conservation of energy:-

a) New OLTC type transformer of 1600 KVA rating has been installed in place of two old transformer of 1250 KVA and 1000 KVA to reduce losses.

b) Installed 1500KVA fuel efficient Diesel engine in place of old 500 KVA slow speed diesel engine.

c) Installation of Natural Wind Air Exhaust to replace exhaust fan in Granodising area.

d) Roots Blower of 5 HP installed in place of 25 HP capacity for energy saving.

e) All Sodium Vapor fittings of 250 watt and 400 watt replaced with LED street light of 40 Watt for energy saving.

f) Transparent sheet installed in plant for natural light.

g) New water wall changed of 4 ton boiler to reduce consumption of fuel and increase efficiency.

h) Two new compressor VFD type installed in place of old compressors for energy saving.

i) VFD drives installed in Phosphating plant for energy saving.

j) Modified Furnace design for better heating and longer life of Cruisibel.

SAHIBABAD UNIT

The following measures were taken for Conservation of energy:- - A hot water generator was installed to replace two boilers to save energy.

* An energy efficient oven being installed for tail end white paint baking to replace the old process of baking by IR bulbs.

TECHNOLOGY ABSORPTION SAHIBABAD UNIT

* Slat conveyors were introduced to increase the productivity of standard Frames in Assembly Section.

* Higher capacity Rectifiers were installed at Debrassing stage to increase productivity of Frames in Tubular Section.

FOREIGN EXCHANGE EARNING AND OUTGO

Total foreign exchange earned: Rs 2791.09 lacs

Total foreign exchange used: Rs 2835.35 lacs

DIRECTORS' RESPONSIBILITY STATEMENT

To the best of knowledge and belief and according to the information and explanations obtained by them, your Directors make the following statement in terms of Section 134(3)(c) of the Companies Act, 2013 that:

I. In the preparation of the Annual Accounts for the year ended 31st March 2015, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;

II. The directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31st March 2015 and of the loss of the Company for that period;

III. The directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities, 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 the Company and that such internal financial controls are adequate and were operating effectively; and

VI. The Directors had devised proper system to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

REPORT ON THE PERFORMANCE AND FINANCIAL POSITION OF EACH OF THE SUBSIDIARIES, ASSOCIATES AND JOINT VENTURE COMPANIES

The Company has 3 (three) subsidiary companies viz. Atlas Cycles Sonepat Limited, Atlas Cycles (Sahibabad) Limited and Atlas Cycles (Malanpur) Limited. These companies are yet to commence its business and accordingly there is no performance to reflect during the year. Apart from these, the Company do not have any associate companies and joint venture companies.

ACKNOWLEDGEMENT

The Board of Directors wishes to place on record its appreciation for the commitment, dedication and hard work done by the employees of the Company and the cooperation extended by Banks, Government authorities, customers and shareholders of the Company and looks forward to a continued mutual support and co-operation.

HARI KRISHAN AHUJA (DIN: 00315876) Non-Executive Director 147, Jor Bagh, New Delhi - 110003

DIRECTORS ISHWAR DAS CHUGH (DIN: 00073257) Whole Time Director I-73, Narain Vihar, New Delhi - 110028

Date : 7th September, 2015 Place : Delhi


Mar 31, 2014

Dear Members,

The directors are delighted to present Sixty Third Annual Report of your Company along with the audited statement of accounts for the year ended 31st March 2014.

FINANCIAL HIGHLIGHTS (Rs. In Lacs)

Particulars 2013-14 2012-13

OPERATING PROFITS/(LOSSES) 40.02 2411.10 ADD : PROFIT ON SALE

OF ASSETS 13.16 01.48

ADD : PROFIT ON SALE OF

MUTUAL FUND 74.52 83.66

ADD : DIVIDEND INCOME 16.99 104.67 24.78 109.92

144.69 2521.02

LESS : FINANCE COST 922.01 1459.94

DEPRECIATION 713.34 1635.35 706.82 2166.76

(1490.66) 354.26

LESS : PROVISION FOR TAX 483 77.00

(1007.66) 277.26 ADD : PROFIT BROUGHT

FORWARD 149.73 143.68

(857.93) 420.94

DIVIDEND

During the year under review, your company had not declared any Dividend for the financial year ended 31st March 2014 as against Rs. 4.50 per share for the financial year 2012-2013 on the capital of 32,51,919 equity shares of Rs. 10/- each.

PRODUCTION

During the year under consideration, the Company produced 25,87,585/- bicycles as against 26,88,047 bicycles in the previous year.

SALES

Sales during the year amounted to Rs. 650.11 Crore including the sales to foreign countries as against Rs. 678.31 Crore including the sales to foreign countries in the previous year.

EXPORTS

During the period under consideration your Company exported bicycles and bicycle components to several countries thereby earning valuable foreign exchange of Rs. 2481.00 Lacs as against Rs. 2197.07 Lacs in the previous year.

The company continued its efforts to increase sales in export market due to which it achieved better export earning than last year, despite stiff competition.

PERFORMANCE OF THE UNITS

Sahibabad Unit continued to do well in terms of sales and market share.

Revenue from operations grew in spite of sluggish market demand. The Unit introduces a new series of high end bicycles name ''ULTIMATE'' which is expected to generate very good response in future.

Sonepat Unit has also enhanced Relay out of shop by putting press shop, weld shop and single piece flow manufacturing plant which has been resulting in the increase of production and reduction in the cost.

During the year Company introduced number of new models in all segments like fancy gents, ladies and kids segments. A number of process improvements have been done resulting in improvement in quality and cost reduction.

Malanpur unit and ASTI could not do well during last year due to liquidity issues and thus incurred losses. As production activity in both the plants was very low, nothing much was done for conservation of energy or technical improvement.

CAPITAL EXPENDITURE

During the year, the Company acquired capital assets worth Rs. 799.47 lacs as against Rs. 713.67 lacs in the previous year. This includes capital assets worth Rs. 51.68 lacs under construction/ installation as against Rs. 135.84 lacs in the previous year.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

Management Discussion and Analysis Report for the year under review, as stipulated under clause 49 of the Listing Agreement with the Stock Exchange, is presented in a separate section forming part of the Annual Report.

DIRECTORS

Mr. Hira Lal Bhatia, (DIN: 00159258) Non-Executive Director and Mr. Hari Krishan Ahuja, (DIN: 00315876) Non-Executive Director are retiring by rotation at this Annual General Meeting and, being eligible, offer themself for reappointment.

Further, pursuant to clause 49 (IV) (E) (iv) of the Listing Agreement, the shareholders may take note that Mr. Hari Krishan Ahuja, Non Executive Director of the Company holds 200 equity shares in the Company as on the date of this report. The Board of Directors of the Company at its Meeting held on 19th December, 2013 appointed Mr. Vikram Khosla (DIN: 01574818), Mr. Kartik Roop Rai (DIN: 06789287), and Mr. Surinder Mohan Mehra (DIN: 06789189) as Additional Directors. Mr. Surinder Mohan Mehra (DIN: 06789189) resigned from Directorship on 13th August, 2014 due to his advance age and ill heath and the Board, after due deliberation, appointed Mr. Sanjeev Kavaljit Singh (DIN: 00015689) as additional Director on 3rd September, 2014. They hold the office of Additional Directors up to the date of the ensuing AGM of the Company and are eligible for appointment as Independent Directors of the Company. Impending notification of Section 149 and other applicable provisions of the Companies Act, 2013, your Directors are seeking appointment of Mr. Vikram Khosla (DIN: 01574818), Additional Director, Mr. Kartik Roop Rai (DIN: 06789287), Additional Director and Mr. Sanjiv Kavaljit Singh (DIN: 00015689), Additional Director as Independent Directors for five consecutive years for a term up to 29th December, 2019. Details of their proposal for appointment are mentioned in the explanatory statement under Section 102 of the Companies Act, 2013 of the Notice of 63rd Annual General Meeting.

DEPOSITS (INCLUDING LOANS FROM MEMBERS)

a) Total number of depositors on 31.03.2014 who have not claimed their deposits after the date on which their deposits became due for payment is 45.

b) The aggregate amount of deposits due to the depositors on 31.03.2014 who have not claimed their deposits, including interest accrued, if any, after the dates on which their deposits became due for payment is Rs. 32.37 lacs.

Deposits aggregating Rs. 21.47 lacs pertaining to 15 depositors have since either been renewed or paid.

Further unclaimed

deposits aggregating to Rs. 0.73 lacs have since been credited to investors Education and Protection Fund. The remaining depositors whose deposits, including interest, amount to Rs. 10.89 lacs have not sent any instructions for the disposal of their matured deposits. These will be renewed or repaid as soon as instructions are received from the concerned depositors.

TRANSFER TO RESERVES

The Company proposes to transfer Rs. NIL to the General Reserve for the year 2013-14 as against Rs. 100/- Lacs to General Reserve in the previous year.

CORPORATE GOVERNANCE

The Company complies with the clauses of Listing Agreement entered into with the National Stock Exchange, Bombay Stock Exchange and Delhi Stock Exchange where the Company''s shares are listed. Further, in terms of the provisions of Clause 49 of the Listing Agreement, your Company has complied with the requirements of Corporate Governance and a Report on Corporate Governance together with certificate from the Company''s Auditors confirming compliance, is set out in a statement, which forms part of this Annual Report.

AUDITORS AND AUDITORS'' REPORT

M/s Mehra Khanna & Co., Chartered Accountants, retire at the forthcoming Annual General Meeting and, being eligible, offer themselves for re-appointment for three year (i.e. upto conclusion of the Sixty Sixth AGM of the Company).

Auditors'' Report & Qualification therein is self explanatory. An explanation is also given in Point No. 8 of the Notes to accounts under Note no. 1 i.e. Significant Accounting Policies of the Notes to the Consolidated Financial Statement.

HUMAN RESOURCE DEVELOPMENT AND INDUSTRIAL RELATION

Your Company strives to provide the best working environment with ample opportunities to grow and explore. Your Company maintains a work environment that is free from physical, verbal and sexual harassment. Every initiative and policy of the Company takes care of welfare of all its employees. The human resource development function of the Company is guided by a strong set of values and policies. The details of initiatives taken by the Company for the development of human resource are given in Management Discussion and Analysis Report. The Company maintained healthy, cordial and harmonious industrial relations at all levels throughout the year.

PARTICULARS OF EMPLOYEES

The information required under section 217 (2A) of the Companies Act, 1956 and the rules framed hereunder relating to particulars of employees is given in the annexure to this report.

PERSONNEL AND PARTICULARS OF EMPLOYEES

The industrial relations with the workers and staff of the Company remained cordial throughout the year. There was unity of objective among all levels of employees, continuously striving for improvement in work practices and productivity. Training and development of employees continue to be an area of prime importance.

Particulars of the employees as required under section 217 (2A) of the Companies Act, 1956 read with the Companies (Particulars of the Employees) Amendment Rules, 2011 are not applicable since, none of the employee of the Company was drawing more than Rs. 60,00,000/- p.a or Rs. 5,00,000/- p.m. for the part of the year. Statement to this effect is as follows:

FOREIGN EXCHANGE EARNING AND OUTGO

Total foreign exchange earned : Rs. 2481.00 lacs Total foreign exchange used : Rs. 54.79 lacs

LISTING OF COMPANY''S EQUITY SHARE

Your Company''s shares continue to be listed on Delhi, Bombay and National Stock Exchanges. The annual listing Fee for the year 2014-2015 has been paid to all the three stock exchanges.

SUBSIDIARY COMPANIES

Statement of Accounts of the subsidiaries together with statement under section 129 of the Companies Act, 2013, are annexed herewith.

CONSERVATION OF ENERGY SONEPAT UNIT

The following measures were taken for Conservation of energy:-

a) All Sodium vapour fittings of 250 Walt replaced with led street lights of 40 Walt.

b) Led tube light of 18 Walt were installed in plant in replace of 80 Walt double tube light.

c) Transparent Sheet installed in the plant for natural light.

SAHIBABAD UNIT

The following measures were taken for Conservation of energy:-

a) Gas Fired Burners were introduced with Both the steam boilers instead of HSD Burners.

b) Dual Kit (Gas and Diesel) was introduced on 1250 KVA Generator.

TECHNOLOGY ABSORPTION

1. Specific areas in which R & D carried out by the Company:-

During the year under review, Sonepat Unit, worked mainly on design and development of new models of bicycles and upgrading/revamping of existing models and on improvement of manufacturing processes and quality.

Sahibabad Unit designed and developed more models to fulfill the requirement of the markets and Phosphating Plant was redesigned by Hot Air Tank and higher capacity Rectifier 2 no. of 35 K.W., Two MIG welding set of 400 Amp were added in Tubular Department to increase productivity of Frames.

2. Benefits derived as a result of the above R & D :-

New and upgraded models were introduced in the market during the year. Cost reduction measures and improvement in the manufacturing processes and quality controls have helped in increasing the Company''s market for fancy and conventional bicycles.

With the installation of new Disc Paint Plant, production capacity increased to meet the increased demand and to compete in the market for fancy and conventional bicycles.

3. Future Plan of Action :-

Development of new models, revamping of existing models, and improvement in development of manufacturing processes which would increase productivity at minimum cost without compromising on quality.

Technology absorption, adaptation and innovation:-

1. Efforts, in brief, made towards technology absorption, adaptation and innovation:-

a) Masking Room was installed on Paint Shop to introduce New Models Bicycles in the Market.

b) Two transporter system was installed on Phosphating line to increase the productivity of phosphasted items.

c) Automatic Box Packing Roller conveyor was installed in stores.

d) Higher capacity Rectifier 2 nos. of 35 K.W. were installed in Tubular Department to increase productivity of Frames.

e) Two MIG set of 400 Amp were added in Tubular Department to increase productivity of Frames.

f) To improve the Quality of Phosphated components, Hot Air Tank was installed in Phosphating line of Paint Shop.

g) One slat conveyor was installed in Assembly section to increase productivity of Frames.

h) Automatic Rim Hole Punching Machines were installed in Rim Plant.

i) Starting of transporter system on Phosphating line to increase the productivity of phosphasted items.

j) Two MIG welding set installed in Tubular Department to increase in the productivity of Frames.

DIRECTORS'' RESPONSIBILITY STATEMENT

Pursuant to the requirement of Section 217 (2AA) of the Companies Act, 1956, Directors hereby confirm that:

I. In the preparation of the Annual Accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures.

II. The directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31st March, 2014 and of the losses of the Company for that period.

III. The directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities, to the best of the knowledge and ability of the Directors.

V The directors had prepared the Annual Accounts on a going concern basis.

ACKNOWLEDGEMENT

The Board of Directors wishes to place on record its appreciation for the commitment, dedication and hard work done by the employees in the Company and the cooperation extended by Banks, Government authorities, customers and shareholders of the Company and looks forward to a continued mutual support and co-operation.

HARI KRISHAN AHUJA (DIN: 00315876) Non-Executive Director 147, Jor Bagh, New Delhi - 110003 DIRECTORS ISHWAR DAS CHUGH (DIN: 00073257) Whole Time Director I-73, Narain Vihar, New Delhi - 110028

Date : 19th November, 2014 Place: Sonepat


Mar 31, 2013

TO THE MEMBERS:-

The directors are delighted to present Sixty Second Annual Report of your Company along with the audited statement of accounts for the year ended 31st March 2013.

FINANCIAL HIGHLIGHTS (Rs. in Lacs)

PARTICULARS 2012-13 2011-12

OPERATING PROFITS/(LOSSES) 2411.10 2976.76

ADD : PROFIT ON SALE OF ASSETS 01.48 35.40

ADD : PROFIT ON SALE OF 83.66 109.24

MUTUAL FUND ADD : DIVIDEND INCOME 24.78 109.92 23.21 167.85

2521.02 3144.61

LESS : FINANCE COST 1459.94 1946.24

DEPRECIATION 706.82 2166.76 694.52 2640.76

354.26 503.85

LESS : PROVISION FOR TAX 77.00 150.00

277.26 353.85

ADD : PROFIT BROUGHT FORWARD 143.68 159.91

420.94 513.76

DIVIDEND

Based on the Company''s performance your directors recommend for approval of the members a final dividend @ 45% i.e. Rs. 4.50 per share for the financial year 2012-2013 on the capital of 32,51,919 equity shares of Rs. 10/- each.

The final dividend on the equity shares, if approved by the members, would involve cash outflow of Rs. 146.34 lacs excluding dividend tax. (Previous year Rs. 146.34 lacs).

PRODUCTION

26,88,047 bicycles were produced during the period under consideration.

SALES

Sales during the year amounted to Rs. 678.31 Crore including the sales to foreign countries.

EXPORTS

During the period under consideration your Company exported bicycles and bicycle components to several countries thereby earning valuable foreign exchange of Rs. 2197.07 Lacs.

The company continued its efforts to increase sales in export market due to which it achieved better export earning than last year, despite stiff competition.

PERFORMANCE OF THE UNITS

Sahibabad Unit continued to do well in terms of sales & market share.

Paint Plant was enhanced by putting up another Disc Paint Plant of latest technology of fine painting to cater to the growing demand for larger numbers and better esthetics.

Sonepat Unit has also enhanced capacity of the Paint Plant by putting up a Disc Paint Plant which is supposed to be of latest technology (French Make) to cater to the growing demand from large customers and give better esthetics to the bicycles.

Further Sonepat plant has put up a Powder Coating paint plant along with an oven for faster and higher output.

These disc plants are of world class quality to meet today''s customer requirement. Market has responded to these Improvements and sale volumes have grown.

To improve the quality in tubular shop in Sahibabad unit has also taken up the installation of 45 Tons chilling plant for debrassing to maintain temperature of chemicals thereby reducing related quality problems.

During the year Company introduced number of new models in all segments like fancy gents, ladies and kids. A number of process improvements have been done resulting in improvement in quality and cost reduction.

CAPITAL EXPENDITURE

During the year, the Company acquired capital assets worth Rs. 713.67 lacs as against Rs. 1017.49 lacs in the previous year. This includes capital assets worth Rs 135.84 lacs under construction/ installation as against Rs. 34.03 lacs in the previous year.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

Management Discussion and Analysis Report for the year under review, as stipulated under clause 49 of the Listing Agreement with the Stock Exchange, is presented in a separate section forming part of the Annual Report.

DIRECTORS

Shri Prithvi Raj Chawla is retiring by rotation at this Annual General Meeting and, being eligible, offer himself for reappointment.

Further, pursuant to clause 49 (IV) (E) (iv) of the Listing Agreement, the shareholders may take note that Shri Prithivi Raj Chawla Non Executive Director of the Company holds NIL equity shares in the Company as on the date of this report.

Your directors like to take the opportunity to place on record their appreciation of the contribution made by employees at all levels.

DEPOSITS (INCLUDING LOANS FROM MEMBERS)

a) Total number of depositors on 31.03.2013 who have not claimed their deposits after the date on which their deposits became due for payment -53.

b) The aggregate amount of deposits due to the depositors on 31.03.2013 who have not claimed their deposits, including interest accrued, if any, after the dates on which their deposits became due for payment is Rs. 16.91 lacs.

Deposits aggregating Rs. 6.72 lacs pertaining to 19 depositors have since either been renewed or paid. Further unclaimed deposits aggregating to Rs. 28,616 have since been credited to investors Education and Protection Fund. The remaining depositors whose deposits, including interest, amount to Rs. 16.91 lacs have not sent any instructions for the disposal of their matured deposits. These will be renewed or repaid as soon as instructions are received from the concerned depositors.

TRANSFER TO RESERVES

The Company proposes to transfer Rs. 100/- lacs to the General Reserve out of the amount available for appropriations and an amount of Rs. 149.73/- lacs is proposed to be retained in the Profit and Loss Account.

CORPORATE GOVERNANCE

The Company complies with the clauses of Listing Agreement entered into with the National Stock Exchange, Bombay Stock Exchange and Delhi Stock Exchange where the Company''s shares are listed. Further, in terms of the provisions of Clause 49 of the Listing Agreement, your Company has complied with the requirements of Corporate Governance and a Report on Corporate Governance together with certificate from the

Company''s Auditors confirming compliance, is set out in a statement, which forms part of this Annual Report.

AUDITORS

M/s Mehra Khanna & Co., Chartered Accountants, retire at the forthcoming Annual General Meeting and, being eligible, offer themselves for re-appointment.

HUMAN RESOURCE DEVELOPMENTAND INDUSTRIAL RELATION

Your Company strives to provide the best working environment with ample opportunities to grow and explore. Your Company maintains a work environment that is free from physical, verbal and sexual harassment. Every initiative and policy of the Company takes care of welfare of all its employees. The human resource development function of the Company is guided by a strong set of values and policies. The details of initiatives taken by the Company for the development of human resource are given in Management Discussion and Analysis Report. The Company maintained healthy, cordial and harmonious industrial relations at all levels throughout the year.

PARTICULARS OF EMPLOYEES

The information required under section 217 (2A) of the Companies Act, 1956 and the rules framed hereunder relating to particulars of employees is given in the annexure to this report.

PERSONNEL AND PARTICULARS OF EMPLOYEES

The industrial relations with the workers and staff of the Company remained cordial throughout the year. There was unity of objective among all levels of employees, continuously striving for improvement in work practices and productivity. Training and development of employees continue to be an area of prime importance.

Particulars of the employees as required under section 217 (2A) of the Companies Act, 1956 read with the Companies (Particulars of the Employees) Amendment Rules, 2011 are not applicable since, none of the employee of the Company was drawing more than Rs. 60,00,000/- p.a or Rs. 5,00,000/- p.m. for the part of the year. Statement to this effect is as follows:

Benefits derived as a result of the above efforts

Loop Tube Bending Tool will help improve productivity and result in cost reduction and improved aesthetics of the product and new assembly tool will help improve productivity. New Tubular fork will improve strength of fork.

FOREIGN EXCHANGE EARNING AND OUTGO

Total foreign exchange earned : Rs. 2197.07 lacs Total foreign exchange used : Rs. 116.01 lacs

LISTING OF COMPANY''S EQUITY SHARE

Your Company''s shares continue to be listed on Delhi, Bombay and National Stock Exchanges. The annual listing Fee for the year 2013-2014 has been paid to all the three stock exchanges.

SUBSIDIARY COMPANIES

Statement of Accounts of the subsidiaries together with statement under section 212 of the Companies Act, 1956, are annexed herewith.

CONSERVATION OF ENERGY

SONEPAT UNIT

The following measures were taken for Conservation of energy:-

a) New OLTC Type transformers of rating 1600 KVA has been installed in place of two old transformers of 1250 KVA and 1000 KVA to reduce the losses.

b) Installed fuel efficient 1500 KVA Diesel engine in place of old 500 KVA slow speed Diesel engine.

c) Installation of Natural wind Air exhaust to replace exhaust fans in Granodising Area.

d) Root Blowers of 5HP capacity has been installed in place of 25HP capacity.

SAHIBABAD UNIT

The following measures were taken for Conservation of energy:-

a) Fire Tubes of 1.5 Ton Boiler were replaced with new-one to reduce consumption of fuel and increase efficiency.

b) V.F.D. two nos. were installed on conveyors to save energy.

c) One more Capacitor was added to improve Power Factor to save energy.

MALANPUR UNIT

The following measures were taken for Conservation of energy:-

a) Gas burners for New Paint Plant have been installed which are highly fuel efficient.

b) The Disc Plant installed and it is working most efficiently resulting in better finish & high paint efficiency.

c) Trials are underway to convert brazing furnace to Gas for better fuel efficiency. New technology is also under study to improve brazing operation.

d) Computerized Controls have been installed for better fuel efficiency.

TECHNOLOGY ABSORPTION

1. Specific areas in which R & D carried out by the Company:-

During the year under review, Sonepat Unit, worked mainly on design and development of new models of bicycles and upgrading/revamping of existing models and on improvement of manufacturing processes and quality.

Sahibabad Unit designed and developed more models to fulfill the requirement of the markets and Phosphating Plant was redesigned for 12 Tanks system instead of 10 Tanks system to improve quality of the product.

Malanpur Unit introduced new models of bicycles in all categories of bicycles and planning to acquire latest technology in metal finishing during the next year.

2. Benefits derived as a result of the above R & D :-

New and upgraded models were introduced in the market during the year. Cost reduction measures and improvement in the manufacturing processes and quality controls have helped in increasing the Company''s market for fancy and conventional bicycles.

With the installation of new Disc Paint Plant, production capacity increased to meet the increased demand and to compete in the market for fancy and conventional bicycles.

3. Future Plan of action :-

Development of new models, revamping of existing models, and improvement in development of manufacturing processes which would increase productivity at minimum cost without compromising on quality.

Technology absorption, adaptation and innovation:-

1. Efforts, in brief, made towards technology absorption, adaptation and innovation:-

a) New gas fired (Highly Fuel efficient) burners fitted in paint shop.

b) Installation of Belt Conveyer for carton packing.

c) Brazing furnaces converted to Gas firing with latest technology from Wesman''s Gas train, Controllers and Burners.

d) Introduction of Pneumatic Wrench in assembly in place of manual operations.

e) Installation of Automatic Tapping machine.

f) Starting of Automatic Rim Hole Punching Machines.

g) Conversion of Air Start Gen sets to self start Gen sets.

h) 4-Wheel conveyor installed for transportation of frames to increase productivity.

i) One more line of Brazing & Machining was added to arrest Rust to improve the quality of Painting items in Paint-Shop.

J) Drying oven was installed in Paint-Shop to improve quality of phosphated component.

k) Better Exhaust system was installed in Disc Painting Plant for better working environment in Paint-Shop.

l) All analog temperature gauges of new phosphating have been replaced by digital temperature indicators having rugged and high durability.

AWARDS & CERTIFICATES

During the year under review, your Company has earned certificate from Department of Scientific and Industrial Research, Government of India, Ministry of Science and Technology in respect of In-house R&D Unit(s) of the Company

DIRECTORS'' RESPONSIBILITY STATEMENT

Pursuant to the requirement of Section 217 (2AA) of the Companies Act, 1956, Directors hereby confirm that:

I. In the preparation of the Annual Accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures.

II. The directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31st March 2013 and of the profit of the Company for that period.

III. The directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities, to the best of the knowledge and ability of the Directors.

IV. The directors had prepared the Annual Accounts on a going concern basis.

ACKNOWLEDGEMENT

The Board of Directors wishes to place on record its appreciation for the commitment, dedication and hard work done by the employees in the Company and the cooperation extended by Banks, Government authorities, customers and shareholders of the Company and looks forward to a continued mutual support and co-operation.



HARI KRISHAN AHUJA

HIRA LAL BHATIA DIRECTORS

ISHWAR DAS CHUGH



Sonepat, the 14th August, 2013


Mar 31, 2012

TO THE MEMBERS

The directors are delighted to present Sixty First Annual Report of your Company along with the audited statement of accounts for the year ended 31st March 2012.

FINANCIAL HIGHLIGHTS (Rs. in Lacs)

PARTICULARS 2011-12 2010-11

OPERATING PROFITS/(LOSSES) 2976.76 2415.68

ADD : PROFIT ON SALE OF ASSETS 35.40 (6.41)

ADD : PROFIT ON SALE OF 109.24 70.46

MUTUAL FUND

ADD : DIVIDEND INCOME 23.21 167.85 10.52 74.57

3144.61 2490.25

LESS : FINANCE COST 1946.24 1323.85

DEPRECIATION 694.52 2640.76 570.10 1893.95

503.85 596.30

LESS : PROVISION FOR TAX 150.00 220.00

353.85 376.30

ADD : PROFIT BROUGHT FORWARD 159.91 154.25

513.76 530.55

DIVIDEND

Based on the Company's performance your directors recommend for approval of the members a final dividend @ 45 % i. e. Rs. 4.50 per share for the financial year 2011-2012 on the capital of 32,51,919 equity shares of Rs. 10/- each.

The final dividend on the equity shares, if approved by the members, would involve cash outflow of Rs. 146.34 lacs excluding dividend tax. (Previous year Rs. 146.34 lacs).

PRODUCTION

34,42,508 bicycles were produced during the period under consideration.

SALES

Sales during the year amounted to Rs. 875.32 crore including the sales to foreign countries.

EXPORTS

During the period under consideration your Company exported bicycles and bicycle components to several countries thereby earning valuable foreign exchange of Rs. 3048.29 Lacs.

The company continued its efforts to increase sales in export market due to which it achieved better export earning than last year, despite stiff competition.

PERFORMANCE OF THE UNITS

The Company achieved higher production during the year compared to previous year. Sahibabad Unit continued to do well in terms of sales & market share.

Paint Plant was enhanced by putting up another Disc Paint Plant of latest technology of fine painting to cater to the growing demand for larger numbers and better esthetics.

Sonepat Unit has also enhanced capacity of the Paint Plant by putting up a Disc Paint Plant which is supposed to be of latest technology (French Make) to cater to the growing demand from large customers and give better esthetics to the bicycles. Further Sonepat plant has put up a Powder Coating paint plant along with an oven for faster and higher output.

These disc plants are of world class quality to meet today's customer requirement. Market has responded to these Improvements and sale volumes have grown.

In Sahibabad unit to improve the quality in tubular shop has also taken up the installation of 45 Tons chilling plant for debrassing to maintain temperature of chemicals thereby reducing related quality problems.

During the year Company introduced number of new models in all segments like fancy gents, ladies and kids segments. A number of process improvements have been done resulting in improvement in quality and cost reduction.

CAPITAL EXPENDITURE

During the year, the Company acquired capital assets worth Rs. 1017.49 lacs as against Rs. 2358.01 lacs in the previous year. This includes capital assets worth Rs 34.03 lacs under construction/installation as against Rs. 279.82 lacs in the previous year.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

Management Discussion and Analysis Report for the year under review, as stipulated under clause 49 of the Listing Agreement with the Stock Exchange, is presented in a separate section forming part of this Annual Report.

DIRECTORS

Shri Jai Narain Sawhney, a director of the Company, since 6th August, 1990 passed away on 3rd November, 2011. The Directors wish to place on record their deep appreciation of the valuable services rendered by him.

Shri Hira Lal Bhatia and Shri Hari Krishan Ahuja are retiring by rotation at this Annual General Meeting and, being eligible, offer themselves for re-appointment.

Further, pursuant to clause 49 (IV) (E) (iv) of the Listing Agreement, the shareholders may take note that Shri Hari Krishan Ahuja Non Executive Director of the Company holds 200 equity shares in the Company as on the date of this report.

Your directors like to take the opportunity to place on record their appreciation of the contribution made by employees at all levels.

DEPOSITS (INCLUDING LOANS FROM MEMBERS)

a) Total number of depositors on 31.03.2012 who have not claimed their deposits after the date on which their deposits became due for payment -81.

b) The aggregate amount of deposits due to the depositors on 31.03.2012 who have not claimed their deposits, including interest accrued, if any, after the dates on which their deposits became due for payment is Rs. 91.29 lacs.

Deposits aggregating Rs. 78.96 lacs pertaining to 49 depositors have since either been renewed or paid. Further

1 unclaimed deposits aggregating to Rs. 7154/- have since been credited to investors Education and Protection Fund. The remaining depositors whose deposits, including interest, amount to Rs. 12.33 lacs have not sent any instructions for the disposal of their matured deposits. These will be renewed or repaid as soon as instructions are received from the concerned depositors.

TRANSFER TO RESERVES

The Company proposes to transfer Rs. 200.00 lacs to the General Reserve out of the amount available for appropriations and an amount of Rs. 143.68 lacs is proposed to be retained in the Profit and Loss Account.

CORPORATE GOVERNANCE

The Company complies with the clauses of Listing Agreement entered into with the National Stock Exchange, Bombay Stock Exchange and Delhi Stock Exchange where the Company's shares are listed. Further, in terms of the provisions of Clause 49 of the Listing Agreement, your Company has complied with the requirements of Corporate Governance and a Report on Corporate Governance together with certificate from the Company's Auditors confirming compliance, is set out in a statement, which forms part of this Annual Report.

AUDITORS AND AUDITORS' REPORT

M/s Mehra Khanna & Co., Chartered Accountants, retire at the forthcoming Annual General Meeting and, being eligible, offer themselves for re-appointment.

HUMAN RESOURCE DEVELOPMENT AND INDUSTRIAL RELATION

Your Company strives to provide the best working environment with ample opportunities to grow and explore. Your Company maintains a work environment that is free from physical, verbal and sexual harassment. Every initiative and policy of the Company takes care of welfare of all its employees. The human resource development function of the Company is guided by a strong set of values and policies. The details of initiatives taken by the Company for the development of human resource are given in Management Discussion and Analysis Report. The Company maintained healthy, cordial and harmonious industrial relations at all levels throughout the year.

PERSONNEL AND PARTICULARS OF EMPLOYEES

The industrial relations with the workers and staff of the Company remained cordial throughout the year. There was unity of objective among all levels of employees, continuously striving for improvement in work practices and productivity. Training and development of employees continue to be an area of prime importance.

Particulars of the employees as required under section 217 (2A) of the Companies Act, 1956 read with the Companies (Particulars of the Employees) Amendment Rules, 2011 are not applicable since, none of the employee of the Company was drawing more than Rs. 60,00,000/- p.a or Rs. 5,00,000/- p.m for the part of the year. Statement to this effect is as follows:

FOREIGN EXCHANGE EARNING AND OUTGO

Total foreign exchange earned : Rs. 3048.29 lacs

Total foreign exchange used : Rs. 154.03 lacs

LISTING OF COMPANY'S EQUITY SHARE

Your Company's shares continue to be listed on Delhi, Bombay and National Stock Exchanges. The annual listing Fee for the year 2012-2013 has been paid to all the three stock exchanges.

SUBSIDIARY COMPANIES

Statement of Accounts of the subsidiaries together with statement under section 212 of the Companies Act, 1956, are annexed herewith.

CONSERVATION OF ENERGY SONEPAT UNIT

The following measures were taken for Conservation of energy:-

a) Two new screw compressors commissioned to replace conventional reciprocating compressors resulting in saving of 100 KW electrical load.

b) 50 Nos. Natural air ventilators installed in place of electrical exhaust fans of 0.5 HP each.

c) Steps were taken to reduce air leakage in production shops.

d) Old Air Conditioners replaced with 8 nos. of 5 star rated new air conditioners.

SAHIBABAD UNIT

The following measures were taken for Conservation of energy:-

a) Six no. wind air vents have been installed in stores to replace exhaust fans.

b) Energy efficient rotary air compressor has been installed In place of reciprocation air compressor.

c) We have installed six cylinder 500 KVA Diesel engine in DG set in place of twelve cylinder 500 Diesel engine.

d) Electrostatic Disc Paint Plant has been installed which is energy efficient as compared to the conventional paint plant.

Statement pursuant to Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Amendment Rules, 2011 and forming part of the Directors' Report for the financial year ended 31st March, 2012

Sr. Name Designation & Remuneration Qualifications No. Nature of Duties Gross (Rs.)

------------------NIL---------------

Name Date of appointment Age Last employment in years

---------------NIL------------

MALANPUR UNIT

a) Gas burners have been installed which are highly fuel efficient.

b) The Disc Paint Plant installed and it is working efficiently resulting in better finish & high paint efficiency.

c) Trials are underway to covert brazing furnace to Gas for better fuel efficiency. New technology is also under study to improve brazing operation.

d) Computerized Controls have been installed for better fuel efficiency.

TECHNOLOGY ABSORPTION

1. Specific areas in which R & D carried out by the Company :-

During the year under review, Sonepat Unit, worked mainly on design and development of new models of bicycles and upgrading/revamping of existing models and on improvement of manufacturing processes and quality.

Sahibabad Unit installed and commissioned a new Disc Paint Plant so as to enhance paint quality and finish on critical components like frame, fork mudguards etc.

Malanpur Unit introduced new models of bicycles in all categories of bicycles and planning to acquire latest technology in metal finishing during the next year.

2. Benefits derived as a result of the above R & D :-

New and upgraded models were introduced in the market during the year. Cost reduction measures and improvement in the manufacturing processes and quality controls have helped in increasing the Company's market for fancy and conventional bicycles.

With the installation of new Disc Paint Plant, production capacity increased to meet the increased demand and to compete in the market for fancy and conventional bicycles.

3. Future Plan of action :-

Development of new models, revamping of existing models, and improvement in development of manufacturing processes which would increase productivity at minimum cost without compromising on quality.

Technology absorption, adaptation and innovation :-

1. Efforts, in brief, made towards technology absorption, adaptation and innovation :-

a) Two electrostatic lwata guns commissioned in Paint Plant touchup booth.

b) In Tubular section manual fitting fixtures were replaced by pneumatic fixtures.

c) Change brazing of frames started for reducing the brass consumption.

d) Rotary welding fixtures installed in tubular section for higher productivity.

e) PNG Pipe Line commissioned to reduce fuel cost in tubular and paint shop.

f) New tool for bending & pressing Chain Stays developed.

g) Mitering of Tubes on hydraulic machine introduced PLC monitored.

h) Bending of Tubes on hydraulic machine introduced PLC monitored

i) New Tubular Fork introduced for standard cycles.

Benefits derived as a result of the above efforts

Loop Tube Bending Tool will help improve productivity and result in cost reduction and improved aesthetics of the product and new assembly tool will help improve productivity. New Tubular fork will improve strength of fork.

AWARDS & CERTIFICATES

During the year under review, your Company has earned certificate from Department of Scientific and Industrial Research, Government of India, Ministry of Science and Technology in respect of In-house R&D Unit(s) of the Company.

DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to the requirement of Section 217 (2AA) of the Companies Act, 1956, Directors hereby confirm that:

I. In the preparation of the Annual Accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures.

II. The directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31st March 2012 and of the profit of the Company for that period.

III. The directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities, to the best of the knowledge and ability of the Directors.

IV. The directors had prepared the Annual Accounts on a going concern basis.

ACKNOWLEDGEMENT

The Board of Directors wishes to place on record its appreciation for the commitment, dedication and hard work done by the employees in the Company and the cooperation extended by Banks, Government authorities, customers and shareholders of the Company and looks forward to a continued mutual support and co-operation.

HARI KRISHAN AHUJA

HIRA LAL BHATIA DIRECTORS

ISHWAR DAS CHUGH

PRITHVI RAJ CHAWLA

Sonepat, the 4th September, 2012


Mar 31, 2011

TO THE MEMBERS :-

The directors have pleasure in submitting their Sixtieth Annual Report together with the audited accounts of the company for the year ended 31st March 2011.

FINANCIAL HIGHLIGHTS (Lac/Rs.)

2010-11 2009-10

OPERATING PROFITS/(LOSSES) 2242.91 1829.41

ADD : PROFIT ON SALE OF ASSETS - 15.93

ADD : PROFIT ON SALE OF MUTUAL FUND 70.46 209.86

ADD : DIVIDEND INCOME 10.52 80.98 9.33 235.12

2323.89 2064.53

LESS : INTEREST 1157.49 1046.39

DEPRECIATION 570.10 1727.59 503.33 1549.72

596.30 514.81

LESS : PROVISION FOR TAX 220.00 134.00

376.30 380.81

ADD : PROFIT BROUGHT FORWARD 154.29 144.12

530.59 524.93

DIVIDEND

Your directors recommend dividend @ 45 % p.a. on 32,51,919 equity shares for the year under report.

The amount of dividend will total to Rs. 146.34 lacs (Previous year Rs. 146.34 lacs).

PRODUCTION

31,45790/- bicycles were produced during the period under consideration.

SALES

Sales during the year amounted to Rs. 765.19 crore including the sales to foreign countries.

EXPORTS

During the period under consideration your Company exported bicycles and bicycle components to several countries thereby earning valuable foreign exchange of Rs. 2772.71 Lacs. The company continued its efforts to increase sales in export market due to which it achieved better export earning than last year, despite stiff competition.

PERFORMANCE OF THE UNITS

The Company achieved higher production during the year compared to previous year.

Sahibabad Unit continued to do well in terms of sales & market share.

Sahibabad unit has further increased capacity of paint plant by putting up one more Disc Paint plant. It has also converted one bell Paint plant to disc plant to improve paint finish.

Sonepat Unit has also enhanced capacity of the Paint Plant by putting up a Disc Paint Plant which is supposed to be of latest technology (French Make) to cater to the growing demand from large customers and give better esthetics to the bicycles.

Further Sonepat plant has put up a Powder Coating paint plant along with an oven for faster and higher output.

These disc plants are of world class quality to meet today's customer requirement. Market has responded to these Improvements and sale volumes have grown.

In Sahibabad unit to improve the quality in tubular shop has also taken up the installation of 45 Tons chilling plant for debrassing to maintain temperature of chemicals thereby reducing related quality problems.

During the year Company introduced number of new models in all segments like fancy gents, ladies and kids segments. A number of process improvements have been done resulting in improvement in quality and cost reduction.

During the year under review Sonepat unit of the Company has obtained ISI mark on Frames and Mudguards.

CAPITAL EXPENDITURE

During the year, the Company acquired capital assets worth Rs. 2358.01 lacs as against Rs. 924.88 lacs in the previous year. This includes capital assets worth Rs 279.82 lacs under construction/installation as against Rs. 3.99 lacs in the previous year.

DEPOSITS (INCLUDING LOANS FROM MEMBERS)

a) Total number of depositors on 31.03.2011 who have not claimed their deposits after the date on which their deposits became due for payment -49.

b) The aggregate amount of deposits due to the depositors on 31.03.2011 who have not claimed their deposits, including interest accrued, if any, after the dates on which their deposits became due for payment is Rs. 57.94 lacs.

Deposits aggregating Rs. 46.12 lacs pertaining to 08 depositors have since either been renewed or paid. Further 6 unclaimed deposits aggregating to Rs. 1.59 Lacs have since been credited to investors Education and Protection Fund. The remaining depositors whose deposits, including interest, amount to Rs. 11.82 lacs have not sent any instructions for the disposal of their matured deposits. These will be renewed or repaid as soon as instructions are received from the concerned depositors.

CONSERVATION OF ENERGY SONEPAT UNIT

The following measures were taken for Conservation of energy:- A) Introduction of 4 (Four) Natural (Exhauster) air ventilator in place of exhauster fans and more to follow.

B) Energy efficient screw compressor have been put in place of old reciprocating Compressors.

C) Energy efficient state of the disc or paint plant has been installed.

E) In efficient Reciprocating compressors have been over hauled to get more efficiency.

SAHIBABAD UNIT

The following measures were taken for Conservation of energy:- a) Use of PNG in place of H.S.D & LPG in all 3 Disc Paint Plants, One bell paint plant & Two manual paint plant.

b) Use of HSD being also replaced by PNG in two boilers.

c) New DG set 1250 KVA has been installed to improve efficiency of captive power.

d) A survey was done to study possible energy loses & steps to be taken for conservation. This includes not only major but small points also like increase of natural source of light by putting up more transparent roofing etc.

MALANPUR UNIT

Better and fuel efficient technology is being introduced and computerized controls are being installed in the burners. A very tight maintenance is being maintained for better fuel efficiency. Use of Gas flow of HSD in new paint shop.

TECHNOLOGY ABSORPTION

1. Specific areas in which R & D carried out by the Company :-

During the year under review, Sonepat Unit, Sahibabd Unit and Malanpur Unit of the Company worked mainly on design and development of new models of bicycles and upgrading/revamping of existing models and on improvement of manufacturing processes.

2. Benefits derived as a result of the above R & D :-

New and upgraded models were introduced in the market during the year. Cost reduction measures and improvement in the manufacturing processes and quality controls have helped in increasing the Company's market for fancy and conventional bicycles.

3. Future Plan of action :-

Development of new models, revamping of existing models, and improvement in development of manufacturing processes which would increase productivity at minimum cost without compromising on quality.

Technology absorption, adaptation and innovation :- 1. Efforts, in brief, made towards technology absorption, adaptation and innovation :-

a) New tool for bending & pressing Chain Stays developed.

b) Mitering of Tubes on hydraulic machine introduced PLC monitored.

c) Bending of Tubes on hydraulic machine introduced PLC monitored

d) New Tubular Fork introduced for standard cycles.

Benefits derived as a result of the above efforts

Loop Tube Bending Tool will help improve productivity and result in cost reduction and improved aesthetics of the product and new assembly tool will help improve productivity. New Tubular fork will improve strength of fork.

FOREIGN EXCHANGE EARNING AND OUTGO

Total foreign exchange earned : Rs. 2772.71 lacs

Total foreign exchange used : Rs. 173.14 lacs

PARTICULARS OF EMPLOYEES

The information required under section 217 (2-A) of the Companies Act, 1956 and the rules framed hereunder relating to particulars of employees is given in the annexure to this report.

LISTING OF COMPANY'S EQUITY SHARE

Your Company's shares continue to be listed on Delhi, Bombay and National Stock Exchanges. The annual listing Fee for the year 2011-2012 has been paid to all the three stock exchanges.

SUBSIDIARY COMPANIES

Statement of Accounts of the subsidiaries together with statement under section 212 of the Companies Act, 1956, are annexed herewith.

DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to the requirement of Section 217 (2AA) of the Companies Act, 1956, Directors hereby confirm that :

I. In the preparation of the Annual Accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures.

II. The directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31st March 2011 and of the profit of the Company for that period.

III The directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities, to the best of the knowledge and ability of the Directors.

IV The directors had prepared the Annual Accounts on a going concern basis.

CORPORATE GOVERNANCE

A separate report on Corporate Governance is attached as a part of this report (Annexure- 1). The Management Discussion and Analysis Report form a part of the Corporate Governance report.

AUDITORS

M/s Mehra Khanna & Company, Charted Accountants, retire at the forthcoming Annual General Meeting and, being eligible, offer themselves for reappointment.

DIRECTORS

S/Shri Jai Narain Sawhney and Prithvi Raj Chawla are retiring by rotation at this Annual General Meeting and, being eligible, offer themselves for reappointment.

Your directors like to take the opportunity to place on record their appreciation of the contribution made by employees at all levels.

In the end, your directors wish to express their gratitude and appreciation to Central and State Governments, and Company's bankers for the continued support, assistance and encouragement accorded to the Company.

DIRECTORS

HARI KRISHAN AHUJA

HIRA LAL BHATIA

ISHWAR DAS CHUGH

JAI NARAIN SAWHNEY

PRITHVI RAJ CHAWLA

New Delhi, the 25th August, 2011


Mar 31, 2010

The directors have pleasure in submitting their Fifty Ninth Annual Report together with the audited accounts of the Company for the year ended 31st March, 2010.

FINANCIAL HIGHLIGHTS (Lac/Rs.)

2009-10 2008-09

OPERATING PROFITS/(LOSSES) 1829.4 2067.94 ADD : PROFIT ON SALE OF ASSETS 15.93 20.88

ADD : PROFIT ON SALE OF MUTUAL FUND 209.86 -

ADD : DIVIDEND INCOME 9.33 235.12 34.70 55.58

2064.53 2123.52

LESS : INTEREST 1046.39 1230.80

DEPRECIATION 503.33 1549.72 512.55 1743.35

514.81 380.17

LESS : PROVISION FOR TAX 134.00 190.08

380.81 190.09

ADD : PROFIT BROUGHT FORWARD 144.12 225.24

524.93 415.33

DIVIDEND

Your directors recommend dividend @ 45 % p.a. on 32,51,919 equity shares for the year

under report.

The amount of dividend will total Rs. 146.34 lacs (Previous year Rs. 146.34 lacs).

PRODUCTION

2898352 bicycles were produced during the period under consideration.

SALES

Sales during the year amounted to Rs. 654.33 crore including the sales to foreign countries.

EXPORTS

During the period under consideration your Company exported bicycles and bicycle components to several countries, thereby earning valuable foreign exchange of Rs. 1875.61 Lacs. The Company continued its efforts to increase export sales due to which it achieved better export earnings than last year, despite stiff competition.

PERFORMANCE OF THE UNITS

The Company achieved higher production during the year compared to previous year.

Sahibabad Unit continued to do well in terms of sales & market share. Capacity of the

Paint Plant was enhanced by putting up a Disc Paint Plant which is supposed to be the latest technology of fine painting to cater to the growing demand for larger numbers and better esthetics.

In spite of global financial crisis and slow down in demand, the Company achieved healthy growth in all existing marekt and adding new markets to our kitty.

The Company introduced number of new models in all segments like fancy gents, ladies and kids segments. A number of process improvement have been done resulting in improvement in quality and cost reduction.

CAPITAL EXPENDITURE

During the year, the Company acquired capital assets worth Rs. 924.88 lacs as against Rs. 1405.72 lacs in the previous year. This includes capital assets worth Rs. 3.99 lacs under construction/installation as against Rs. 335.29 lacs in the previous year.

DEPOSITS (INCLUDING LOANS FROM MEMBERS)

a) Total number of depositors on 31.03.2010 who have not claimed their deposits after the date on which their deposits became due for payment –70.

b) The aggregate amount of deposits due to the depositors on 31.03.2010 who have not claimed their deposits, including interest accrued, if any, after the dates on which their deposits became due for payment Rs. 22.62 lacs.

Deposits aggregating Rs. 7.19 lacs pertaining to 19 depositors have since either been renewed or paid. Further 2 unclaimed deposits aggregating to Rs. nil have since been credited to Investors Education and Protection Fund. The remaining depositors whose deposits, including interest, amount to Rs. 14.71 lacs have not sent any instructions for the disposal of their matured deposits. These will be renewed or repaid as soon as instructions are received from the concerned depositors.

CONSERVATION OF ENERGY SONEPAT UNIT

The following measures were taken for Conservation of energy :- A) Overhauling of one 1000 KVA and One 500 KVA D.G. Sets for enhancing the efficiency by 25%.

B) Replacement of cooling tower of D.G. one number to put more load and get more efficiency.

C) Fitting of exhaust fans in D.G. Room for taking out hot air and enabling the D.G. Sets to perform more efficiently.

We will replace two more cooling towers to get maximum efficiency for D.G. and maximum utilization of our plants by which we can get more output with same fuel consumption and installation of new Screw Compressors of 500 cfm. To reduce the running cost respectively in the next financial year for energy conservation.

SAHIBABAD UNIT

The following measures were taken for Conservation of energy :

a) Use of LPG instead of H.S.D. in one Paint shop.

b) Installation of 12 Nos. Natural exhaust systems (Wind Air Vent) in place of motorized exhausts.

MALANPUR UNIT

Better and fuel efficient techonology is being introduced and computerized controls are being installed in the burners. A very tight maintenance schedule is being maintained for better fuel efficiency.

TECHNOLOGY ABSORPTION

1. Specific areas in which R & D carried out by the Company :- During the year under review, Sonepat Unit worked mainly on design and development of new models of bicycles and upgrading/revamping of existing models and on improvement of manufacturing processes.

Sahibabad Unit installed and commissioned a new Disc Paint Plant so as to enhance paint quality and finish on critical components like frame, fork, mudguards etc. Malanpur Unit introduced new models of bicycles in all categories of bicycles and planning to acquire latest technology in metal finishing during the next year.

2. Benefits derived as a result of the above R & D :- New and upgraded models were introduced in the market during the year. Cost reduction measures and improvement in the manufacturing processes and quality controls have helped in increasing the Companys market share despite adverse market conditions.

With the installation of new Disc Paint Plant, production capacity increased to meet the increased demand and to compete in the market for fancy and conventional bicycles.

3. Future Plan of action :-

Developement of new models, revamping of existing models, improvement in development of manufacturing processes which would increase productivity at minimum cost without compromising on quality.

Technology absorption, adaptation and innovation :- 1. Efforts, in brief, made towards technology absorption, adaptation and innovation :-

New tool for bending Loop Tube on Press has been developed and new tool for Assembling Diamond and Rear Triangle of Suspension frames has been developed.

Benefits derived as a result of the above efforts

Loop Tube Bending Tool will help improve productivity and result in cost reduction and improved aesthetics of the product and new assembly tool will help improve productivity.

FOREIGN EXCHANGE EARNING AND OUTGO

Total foreign exchange earned : Rs. 1875.61 lacs Total foreign exchange used : Rs. 176.39 lacs

PARTICULARS OF EMPLOYEES

The information required under section 217(2-A) of the Companies Act, 1956 and the rules framed thereunder relating to particulars of employees is given in the annexure to this report.

SECRETARIAL COMPLIANCE CERTIFICATE

As required under Section 383-A of the Companies Act, 1956 a certificate from a Secretary in whole time practice regarding compliance of the provisions of the Act is attached.

LISTING OF COMPANYS EQUITY SHARES

Your Companys shares continue to be listed on Delhi, Bombay and National Stock Exchanges. The Annual Listing Fee for the year 2010-2011 has been paid to all the three stock exchanges.

SUBSIDIARY COMPANIES

Statement of Accounts of the subsidiaries together with statement under section 212 of the Companies Act, 1956, are annexed herewith.

DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to the requirement of Section 217(2AA) of the Companies Act, 1956, Directors hereby confirm that :

I. in the preparation of the Annual Accounts, the applicable accounting standards have been followed along with proper explanations relating to material departures.

II. The directors had selected such accounting policies and applied them consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31st March, 2010 and of the profit of the Company for that period.

III The directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities, to the best of the knowledge and ability of the Directors.

IV The directors had prepared the Annual Accounts on a going concern basis.

CORPORATE GOVERNANCE

A separate report on Corporate Governance is attached as a part of this report (Annexure- 1). The Management Discussion and Analysis Report forms a part of the Corporate Governance report.

AUDITORS

M/s Mehra .Khanna & Company, Chartered Accountants, retire at the forthcoming Annual General Meeting and, being eligible, offer themselves for reappointment.

DIRECTORS

S/Shri Hira Lal Bhatia and Hari Krishan Ahuja are retiring by rotation at this Annual General Meeting and, being eligible, offer themselves for reappointment.

Your directors like to take the opportunity to place on record their appreciation of the contribution made by employees at all levels.

In the end, your directors wish to express their gratitude and appreciation to Central and State Governments, and Companys bankers for the continued support, assistance and encouragement accorded to the Company.

HARI KRISHAN AHUJA

HIRA LAL BHATIA DIRECTORS

ISHWAR DAS CHUGH

JAI NARAIN SAWHNEY

PRITHVI RAJ CHAWLA

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