atlas cycles Management discussions

(for year ended 31^st March, 2023)

FORWARD LOOKING STATEMENTS

This report contains forward-looking statements, which may be identified by the use of words like ‘plans, ‘expects, ‘will, ‘anticipates, ‘believes, ‘intends, ‘estimates or other words of similar connotation. All statements that address expectations or projections about the future, including, but not limited to statements about the Companys strategy for growth, product development, market position, expenditures, forward-looking statements. Forward-looking statements are based on certain assumptions and expectations of future events. The Company cannot guarantee that these assumptions and expectations are accurate or will be realized. The Companys actual results, performance or achievements could thus differ materially from those projected in any such forward looking statements. The Company assumes no responsibility to amend, modify or revise any forward looking statement, on the basis of any subsequent developments, information or events.

INDUSTRY OVERVIEW

India produces approximately 10% of the world annual bicycle production, which is estimated at 150 Million units. The annual domestic demand of bicycles in is approximately 12.5 million units, out of which around 4.0 million units is a government demand for the various welfare schemes. Exports out of India are largely to Africa and the less developed economies and negligible to western markets. Today, the Indian bicycle manufacturing and bicycle parts industry is widely recognized for its quality standards in the international market. Bicycle market in India is projected to grow at a CAGR of over 10% till 2023 on account of growing population base, increasing discretionary spending and rising health consciousness among people. In India cycle is being swiftly adopted as a mean to stay fit recreationalactivity.Growingurbanpopulationbase and rising demand for roadster bicycles from rural population to derive growth in the countries bicycle market in the ensuring years.

The market for the premium or the lifestyle bikes targeted towards the lifestyle consumer is just about emerging on account of increasing individual incomes and higher aspiration the "specials segment" (Sport Light Roadster, mountain terrain bike and childrens bicycles) was higher than in the "standard segment". The definition of high end bikes itself is changing.

Not only are the price points changing, but even definitions of the segments. Cycles were simplistically segmented into gents, ladies, kids and high end. But now the lifestyle bikes are being segmented in line with the global trend that is based on their usage. There are Road bikes, Mountain tarrain bikes and Children bikes etc.

M/s. Atlas Cycles (Haryana) Limited is a Public Limited financial results, are Listed Company having presence in bicycles segment with a track record of more than 70 Years, having established brand both in Indian as well as InternationalMarket. The company is engaged in manufacturing of bicycles and bicycles components.

OPPORTUNITY AND THREATS

The areas of strength are promoters having long track record, rich experience and adequate manufacturing infrastructure with latest technology and strong dealers network. Atlas Brand is well accepted both in Indian as well as International Market and one of the largest cycle manufacturer in the world. However, the areas of weaknesses: Rising input cost i.e. prices of sheets, strips, Tyres, Tubes and other related chemicals are governed by external forces including its trend in International

Market. Product obsolescence vis-a-vis non-acceptance of model could adversely affect the revenue stream and profitability. Further these are the major areas under business risk, promoters risk, and financial

PRODUCTWISE PERFORMANCE

The company has a recognized Research and Development centre recognized by the Government of India which is continuously of new models and upgrading the present models. The company has introduced a number of new models in the market keeping in view theandas market popular trend and customer preference for fancy bicycles. Further Atlas has widened its product range concent rating and the company is researching more and more on Fancy cycles for satisfying changing needs of youth.

OUT – LOOK

India is the second largest manufacturer of bicycles in the world. Unlike the developed nations where bicycle is used primarily for health & recreational levels of the middle income group. Growth in bicycles for socio-economic empowerment of 1/3^rd of its populations. Growth in population, health consciousness and socio-economically sustainable rural development are most important demographic trends promoting bicycle as the obvious choice of transportation in future Out of the total quantity sold, approximately 55% bicycles are roadsters 25% fancy and about 20% meant for kids. With rising income of the middle class, fancy and kids segment will grow at a much faster pace as compared to normal roadster cycles.

SEGMENT WISE PERFORMANCE

Bicycle industry has continued to show a growth around 4 to 5% during last two years inspite of general slowdown in the economy. Standard bicycle segment which contributes around 55% of the total sales is growing marginally as compared to Fancy and Kids segments which are growing at 7 to 8% every year. Fancy cycles with features like disc breaks, shockers, alloy wheels and gears are driving the sales particularly in metro and mini metro cities. With rising income of the middle class, fancy segment especially the kids segment is showing a very healthy growth.

RISK AND CONCERNS

Small manufacturers from unorganized sectors are increasing their market presence every year. With little infrastructure and low over heads, they are able to supply bicycles at a very low price as compared to the organized sector because of which profitability of the is under stress. Though they are not supplying very good quality product and their after sales service is not comparable, but because of the price advantage, their sales volume is increasing every year.

INTERNAL CONTROL SYSTEM AND THEIR ADEQUACY of operation, To achieve reliability of financial reporting and compliance applicable laws, rules, and regulations of significant policies, the Company has a well defined system of internal control throughout the organization

The internal audit department regularly probes the deficiency in operationof internal control and suggest ways to rectify such deficiencies. and internal control company has introduced Microsoft

Navision 2009, an Enterprise Resource Planning (ERP) system. Due to the total integration, there is a consistent flow of accurate and easy to access data within all the departments. The company has adequate systems of internal control to provide reasonable assurance that assets are safeguarded and protected against loss from unauthorized use or disposition are authorized, recorded and reported properly.

FINANCIAL PERFORMANCE

The company has achieved a turnover 173.15 Lacs in FY 2022-23 compared to 342.05 Lacs during the previous year.

HEALTH SAFETY AND ENVIRONMENT

Atlas is fully committed to the safety, health and well-being of its employees and to minimizing the environmental impact on its business operations. A safe and healthy environment is maintained and appropriate steps are taken with the object of minimizing the environmental impact on all processes and practices. The Company has a range of policies on quality, safety and health aspects to guide the employees work practices, actions and decisions. The Company strives to continuously improve the effectiveness of its policies and the employees are encouraged to contribute their mite in this direction.

All employees are obliged to ensure that they fully understand all policies and do fully comply with the requirements.

HUMAN RESOURCE AND INDUSTRIAL RELATIONS

One of the "Key" reasons for the exponential growth of

Atlas is undoubtedly its "People". The Company has always provided an open and challenging work environment, wherein the staff members get an opportunity to rapidly gain and assimilate knowledge. Creativity and dedication of all the employees represent ithe most precious assets of the Company. For the growth of the organization, human resource function has an important role to play not only in identifying and recruiting but also in developing and rewarding its employees. As such, we have remained focused on strengthening human capital through continuous training and development and by upgrading skills Toimproveefficiency of employees to meet the Companys objectives. The Company has a union free environment and the industrial relations scenario continued to be stable during the year.

DETAILS OF SIGNIFICANT CHANGES (I.E. CHANGE OF 25% OR MORE AS COMPARED TO THE IMMEDIATELY PREVIOUS

FINANCIAL YEAR) IN KEY FINANCIAL RATIOS, ALONG WITH DETAILED EXPLANATIONS THEREFOR, INCLUDING:

There has been significant changes in the Financial Ratios of the Company. The key Financial Ratio are as below:-

S.No. Particulars	FY 2022-23	FY 2021-22	Reasons for
I Debtors Turnover	1079.35	618.09	Due to reduction in Turnover but slow realization of debtors.
II Inventory Turnover Ratio	655.30	486.87	Due to shut down of the two plant of the company
III InterestCoverage	(506.63)	(283.91)	It is poor as the company is incurring a loss.
IV Current Ratio	0.38	0.44	-
V Debt Equity ratio	(0.28)	(0.97)	Increase in ratio as the net worth of the company is reducing trend due to the losses
VI Operating Profit Margin Ratio	(1350.27)	(847.88)	Company is Non Operational.
VII Net Profit Margin Ratio	(1345.65)	(840.45)	Company is Non Operational.
VIII Return on Net worth	(71.56)	(310.31)	Company is Non Operational.

CAUTIONARY STATEMENT

Statements in the Directors Report & Managementto all Discussion and Analysis describing the Companys objectives, projections, estimates, expectations predictions may be "forward-looking statements" within the meaning of applicable securitieslaws and regulations. Actual results could differ materially from those expressed or implied. Important factors that could make a difference to the Companys operation include raw material availability and prices, cyclical demand and pricing in the Companys principal market, changes in Government regulations, tax regimes, economic developments within India and the countries in which the Company conducts business and other incidental factor.

APPRECIATION

Your Directors express their warm appreciation employees working at various units for their diligence and contribution. Your Directors also wish to record their appreciation for the support and co-operation from the dealers, agents, suppliers, bankers and all other stakeholder.