Atlas Cycle Industries

1. We have audited the attached Balance Sheet of M/s Atlas Cycles
 (Haryana) Limited as at 31st March 2008 and also the profit and loss
 account of the company for the year ended on that date, annexed thereto
 and the cash flow statement for the year ended on that date. These
 financial statements are the responsibility of the companys
 management.  Our responsibility is to express an opinion on these
 financial statements based on our audit.
 
 2) We have conducted our audit in accordance with auditing standards
 generally accepted in India. Those standards require that we plan and
 perform the audit to obtain reasonable assurance about whether the
 financial statements are free of material misstatement. An audit
 includes, examining on a test basis, evidence supporting the amounts
 and disclosures in the financial statements. An audit also includes
 assessing the accounting principles used and significant estimates made
 by management, as well as evaluating the overall financial statement
 presentation. We believe that our audit provides a reasonable basis for
 our opinion.
 
 3) As required by the Companies (Auditors Report) Order, 2003 issued
 by the Central Government of India in terms of Section 227 (4A) of the
 Companies Act, 1956 , we annex here to a statement on the matters
 specified in paragraphs 4 and 5 of the said order.
 
 4) Further to our comments in the annexure referred to in paragraph 3
 above, we report that:
 
 a) We have obtained all the information and explanations which to the
 best of our knowledge and belief were necessary for the purpose of our
 audit;
 
 b) In our opinion proper books of account as required by law have been
 kept by the company so far as appears from our examination of those
 books;
 
 c) The balance sheet .profit and loss account and cash flow statement
 dealt with by this report are in agreement with the books of account.
 
 d) In our opinion, the balance sheet, profit and loss account and cash
 flow statement dealt with by this report comply with the mandatory
 accounting standards referred to in sub-section (3C) of section (211)
 of the Companies Act, 1956;
 
 e) On the basis of written presentations received from the directors
 and taken on record by the Board of Directors of the Company, none of
 the directors is disqualified as on 31st March, 2008 from being
 appointed as a director in terms of clause (g) of sub- section (1) of
 section 274 of the Companies Act, 1956;
 
 f) In our opinion and to the best of our information and according to
 the explanations given to us, the said account together with the notes
 thereon and attached thereto give in the prescribed manner the
 information required by the Act and give a true and fair view in
 conformity with the accounting principles generally accepted in India;
 
 (i) In the case of the Balance Sheet, of the state of affairs of the
 Company as at 31st March, 2008 
 
 (ii) In the case of profit and loss account, of the profit of the
 company for the year ended on that date; and
 
 (iii) In the case of the cash flow statement, of the cash flows for the
 year ended on that date.
 
 ANNEXURE TO THE AUDITORS REPORT
 
 Annexure referred to in paragraph 3 of Auditors Report to the Members
 of ATLAS CYCLES (HARYANA) LIMITED on the accounts for the year ended
 31st March, 2008.
 
 (i) (a) The Company is maintaining proper records showing full
 particulars including quantitative details and situation of fixed
 assets.
 
 (b) The management has carried out a physical verification of most of
 its fixed assets during the year. In our opinion, the frequency of
 verification is reasonable having regard to the size of the company and
 the nature of its fixed assets. The discrepancies noticed on such
 verification were not material and have been property dealt with in the
 books of account.
 
 (c) In our opinion and according to the information and explanations
 given to us a substantial part of fixed assets has not been disposed
 off by the company during the year.
 
 (ii) (a) During the year, the inventories have been physically verified
 by the management except for inventory lying with third parties which
 have been confirmed by the parties.  In our opinion, the frequency of
 verification is reasonable.
 
 (b) In our opinion and according to the information and explanations
 given to us, the procedure of Physical verification of stock followed
 by the management are reasonable and adequate in relation to the size
 of the Company and the nature of its business.
 
 (c) On the basis of our examination of the record of inventories, we
 are of the opinion that, the Company is maintaining proper records of
 inventories. The discrepancies noticed on physical verification of
 inventories as compared to books of records were not material and have
 been properly dealt with in the books of account.
 
 (iii) According to the information and explanations given to us, the
 company has neither granted nor taken any loans, secured or unsecured
 to / from companies, firms or other parties covered in the register
 maintained under section 301 of the Companies Act, 1956. Accordingly,
 paragraphs 4 (iii) (b), (c) & (d) of the order are not applicable.
 
 (iv) In our opinion and according to the information and explanations
 given to us, there are adequate internal control procedures
 commensurate with the size of the Company and nature of its business
 with regard to the purchase of inventories and fixed assets and with
 regard to sale of goods. Further, on the basis of our examination and
 according to the information and explanations given to us, we have
 neither come across nor have informed of any instance of major
 weaknesses in the aforesaid internal control procedures.
 
 (v) According to the information and explanations given to us, during
 the year, there was no transaction that needed to be entered into the
 register maintained under section 301 of the Companies Act, 1956 .
 
 (vi) In our opinion and according to the information and explanations
 given to us, the company has complied with the provision of section 58A
 and provision of section 58AA of the Companies Act, 1956 and the
 companies (Acceptance of Deposits) rules, 1975, with regard to the
 deposits accepted from the public. As per information and explanations
 given to us, no order under the aforesaid section has been passed by
 the company law board on the company.
 
 (vii) In our opinion, the company has ah internal audit system
 commensurate with the size and nature of its business.
 
 (viii) We have broadly reviewed the books of account maintained by the
 company in respect of products where pursuant to the rule made by the
 central government the maintenance of the cost records has been
 prescribed under section 209(1) (d) of the Companies Act, 1956 and are
 of the opinion that, prima facie, the prescribed accounts and records
 have been made and maintained. We have not however, made a determining
 whether they are accurate or comptete.
 
 (ix) (a) According to the information and explantions given to us and
 the records of the company examined by us, the company has been regular
 in deposited undisputing statutory dues including provident fund,
 investor education protection fund, employees state insurance,
 income-tax, sales tax, wealth tax, custom duty, excise duty, cess and
 other material statutory dues applicable to it, we are informed that
 there are no undisputed statutory dues as at the year end outstanding
 for a period of more than six months from the date they become payable.
 
 (b) Accordingly to the information and explanations given to us and the
 records of the company examined by us, there are no disputed dues of
 income-tax wealth-tax, custom duty and cess matters. The detail of
 disputed sale-tax and excise duty dues are as follows:-
 
 Nature of the           Nature of the     Forum where
 statute                 dues              pending
 
 Central excise law      excise duty       commissioner (appeals)
 
 Sales tax laws          entry tax         commissioner (appeals)
 
 Sales tax               CST & LST         commissioner (appeals)
 
 
 Amount        Period to which the
 (in lac)      amount relates
 
 4.01          1997-98
 
 7.80          1999-2000
 
 213.83        1998-99
 
 (x) The Company does not have accumulated losses at the end of the
 financial year march 31, 2008. Further, the company has not incurred
 any cash losses during the financial year ended March 31, 2008 and in
 the preceding financial year ended March 31,2007.
 
 (xi) According to the records of the company examined by us and the
 information and explanations given to us, the company during the year
 has not defaulted in repayment of dues to financial institutions, banks
 or debenture holders.
 
 (xii) As the company has not granted any loans and advances on the
 basis of security by way of pledge of shares, debentures and other
 securities, paragraph 4 (xii) of the order is not applicable.
 
 (xiii) The provision of any special statute as specified under paragrph
 4 (xiii) of the Order are not applicable to the company.
 
 (xiv) The company has maintained proper records of transactions and
 contracts in respect of trading in mutual funds and timely entries have
 been made there in. All investments have been held in the name of the
 company.
 
 (xv) In our opinion and according to the information and explanations
 given to us the company has not given guarantees during the year for
 loans taken by others from banks and financial institutions.
 
 (xvi) In our opinion and according to the information and explanations
 given to us, the terms loans taken during the year have been applied
 for the purpose for which they were obtained.
 
 (xvii) According to the information and explanations given to us on an
 overall Examination of the balance sheet of the company, we report that
 short term funds have not been used to finance long term investments
 and vice versa.
 
 (xviii) As the company has not been made any preferential allotment of
 shares during the year, paragraph 4 (xix) of the order not applicable.
 
 (xix) During the year, since the company has not issued any debentures
 paragraph, 4 (xix) of the order not applicable.
 
 (xx) During the year, since the company has not raised any money by way
 of public issue, paragraph 4 (xx) of the order is not applicable.
 
 (xxi) Based upon the audit procedures performed and information and
 explanations given by the management, we report that no fraud on or by
 the company has been noticed or reported during the course of our audit
 for the year ended 31st March, 2008.
 
                                               For Mehra Khanna & Co.
                                               Chartered Accountants
 
                                                    CA. Rajiv Bhasin
 Place : Delhi                                             (Partner)
 Date  : 21st August, 2008