Atlas Cycle Industries

The directors have pleasure in submitting their Fifty seventh Annual
 Report together with the audited accounts of the Company for the year
 ended 31st March, 2008.
 
 FINANCIAL HIGHLIGHTS                                        (Lac/Rs.)
                                            2007-08           2006-07
   
 OPERATING PROFITS/(LOSSES)                 1803.57          (2489.95)
 
 ADD : PROFIT ON SALE OF ASSETS     32.96          10064.23
 
 ADD : PROFIT ON SALE OF 
 MUTUAL FUND                        83.14             84.86
 
 ADD : DIVIDEND INCOME             111.11    227.21   78.05  10227.14
 
                                            2030.78           7737.19
  
 LESS : INTEREST                   948.10            703.16
 
 DEPRECIATION                      640.78   1588.88  450.75   1153.91
 
                                             441.90           6583.28
 
 LESS : PROVISION FOR TAX                    241.50           1217.00
 
                                             200.40           5366.28
 
 ADD : PROFIT BROUGHT FORWARD                316.05            120.97
 
                                             516.45           5487.25
 
 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
 
 2868214 bicycles were produced during the period under consideration.
 
 SALES
 
 Sales during the year amounted to Rs. 56239.87 lacs 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. 2315.11 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 plant added a new state-of-the-art paint
 plant during the year to improve the aesthetics of its bicycles. The
 unit also introduced electric bikes in the market with technical
 support from companies based in Korea and China.
 
 The Tube Mill was shifted form Gurgaon to Bawal during previous year.
 The operations were streamlined during the year. By the end of the year
 the operations had come to the same level as was being performed at
 Gurgaon plant. The teething trouble for new technology upgradation was
 over and the plant is now running smoothly.
 
 Further 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. 2577.69
 lacs as against Rs.  3719.87 lacs in the previous year. This includes
 capital assets worth Rs. 850.47 lacs under construction/installation as
 against Rs. 332.36 lacs in the previous year.  
 
 DEPOSITS (INCLUDING LOANS FROM MEMBERS)
 
 a) Total number of depositors on 31.03.2008 who have not claimed their
 deposits after the date on which their deposits became due for payment
 -56.
 
 b) The aggregate amount of deposits due to the depositors on 31.03.2008
 who have not claimed their deposits, including interest accrued, if
 any, after the dates on which their deposits became due for payment Rs.
 12.99 lacs.
 
 Deposits aggregating Rs. 4.60 lacs pertaining to 18 depositors have
 since either been renewed or paid. Further 3 unclaimed deposits
 aggregating to Rs. 0.41 lac have since been credited to Investors
 Education and Protection Fund. The remaining depositors whose deposits,
 including interest, amount to Rs. 7.97 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) Use of 5 HP Air Blower in place of 25HP Air Blower supplying air to
 Granodising plant in Paint Shop thus saving of around Rs.0.33 Lac per
 month.
 
 B) Discontinuing the use of electric furnaces in Heat Treatment
 sections thus saving electric energy by 50 KW per hour i. e. Rs. 1.10
 Lac per month.
 
 C) Replacement of power capacitors in Switch Board to increase power
 factor from 0.95 to 0.96.
 
 Further the unit is in process to use of 3 ton coal/wood fired Steam
 Boiler in place of two 4 ton oil fired Steam Boilers which will
 decrease the cost of fuel consumption by Rs.48 Lac per annum.
 
 SAHIBABAD UNIT
 
 Eposy Coating of paint in the plant has been introduced to achieve fuel
 saving.
 
 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 efficiency.
 
 Additional investment is being made in more energy efficient Metal
 Finishing Plant.  The above measures will give lasting benefits to the
 Company.  
 
 TECHNOLOGY ABSORPTION
 
 1.  Specific areas In which R&D carried out by the Company :-
 
 Sahibabad Unit installed and commissioned a new sophisticated painting
 plant suitable to do painting wet over wet to improve upon the glow and
 life of paint. Further the Unit also installed another cooling tower in
 Debrassing Plant to achieve better finish.  Further we worked during
 the year, substantially 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
 have helped in increasing the Companys market share despite adverse
 market conditions.
 
 With the installation of new painting plant, production capacity could
 be 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, improvement in
 manufacturing techniques and finishing process, installation of
 sophisticated and latest plants to meet the increased demand of
 bicycles with better finish and above all to achieve the foregoing at
 minimum cost without compromising on quality.
 
 4.  Expenditure on R & D :-
 
 (a) Capital Nil
 
 (b) Recurring Rs. 3.93 Lacs
 
 (c) Total Rs. 3.93 Lacs
 
 Total R&D expenditure as a
 
 % of total turnover 0.007
 
 Technology absorption, adaptation and Innovation :-
 
 1.  Efforts. In brief, made towards technology absorption, adaptation
 and Innovation:-
 
 Sonepat Unit developed new tube bending press tools which were replaced
 with manually operated bending fixtures for production.
 
 2.  Benefits derived as a result of the above efforts
 
 The new tube bending press tools have helped improve productivity.
 
 FOREIGN EXCHANGE EARNING AND OUTGO
 
 Total foreign exchange earned : Rs. 2315.11 lacs Total foreign exchange
 used : Rs. 208.04 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.
 
 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
 2008-2009 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, 2008 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
 tor 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 Lai Bhatia and Hari Krishan Abuja are retiring by rotation
 at this Annual Generai 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
 
                                ISHWAR DAS CHUGH             DIRECTORS
 
                              JAI NARAIN SAWHNEY      
 
                              PRITHVI RAJ CHAWLA  
 
 New Delhi, the 21st August, 2008