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Directors Report of Rico Auto Industries Ltd.

Mar 31, 2015

The Directors have pleasure in presenting the 32nd Annual Report of your Company, together with the Audited Accounts for the year ended 31st March, 2015.

FINANCIAL RESULTS

(Rs. in Crores)

Year Ended Year Ended Particulars 31/03/2015 31/03/2014

Gross Sales and other Income 943.90 1041.62

Net Sales and other Income 872.26 963.04

Profit before Interest, Depreciation &

Exceptional Items 87.41 134.79

Interest & Financial charges 46.97 59.36

Profit before Depreciation, Exceptional

Items and Tax 40.44 75.43

Depreciation 64.22 71.33

Profit before Exceptional Items and Tax (23.78) 4.10

Exceptional Items 220.94 -

Profit before Tax (PBT) 197.16 4.10

Provision for Income Tax 48.39 2.54

Provision for Deferred Tax (22.50) (1.07)

Previous year Income Tax (0.06) -

Net Profit 171.87 2.63

Surplus brought forward from 81.91 80.86

previous years

Amount available for appropriations 253.78 83.49

Appropriations:

Dividend paid (10%) - 1.35

Interim Dividend paid (100%) 13.53 -

Proposed Final Dividend on

Equity Shares (200%) 27.06 -

Corporate Dividend Tax 8.11 0.23

Balance carried to Balance Sheet 202.19 81.91

253.78 83.49

OPERATIONS AND THE STATE OF COMPANY'S AFFAIRS

Your Company has recorded a gross turnover of Rs.943.90 crores in the year under report as against Rs.1041.62 crores in the previous year. Your Company has earned a Profit after Tax (PAT) of Rs.171.87 crores during the year under report over the previous year's profit of Rs.2.63 crores. During the period under review, the PAT includes onetime capital gain on the sale of entire 39,50,000 fully paid-up equity shares of Rs.10/- each of the Joint Venture Company namely FCC Rico Limited.

DIVIDEND

During the financial year ended 31st March, 2015, your Company has paid an Interim Dividend @ 100 percent i.e. Re.1/-per Equity Share of Re.1/- each, amounting to Rs. 16.23 crores including dividend tax of Rs.2.70 crores which was declared by the Board of Directors on 14th February, 2015 and paid on 13th March, 2015. In addition, your Directors recommended a Final Dividend @ 200 percent i.e. Rs.2/- per Equity Share of Re.1/- each for the financial year 2014-15. If approved, the total dividend (interim and final dividend) will amount to Rs.48.70 crores including dividend tax of Rs.8.11 crores as against a dividend of 10 percent i.e. Re.0.10 per Equity Share of Re.1/- each aggregating to Rs.1.58 crores including dividend tax of Rs.0.23 crore in the previous year on the same Equity Share Capital. The Dividend paid during the financial year is a onetime special dividend out of capital gain on sale of the entire stake in Joint Venture Company namely FCC Rico Limited.

RESERVES

The reserves of your Company after proposed appropriations shall stand at Rs.428.97 crores as against Rs.308.69 crores in the previous year.

EXPORT

The export turnover of your Company during the period under review was Rs. 192.64 crores as against Rs. 193.20 crores in the previous year. The export turnover includes sales to wholly owned subsidiaries amounting to Rs.122.13 crores as against Rs.124.33 crores in the previous year. Our wholly owned subsidiaries in United Kingdom and United States of America are engaged in providing last mile sales and customer support in the regions.

During the quarter ended 30th June, 2015 of current year, export turnover was Rs.53.69 crores as against Rs.45.42 crores in the corresponding quarter of the previous year. Further details as regards efforts of your Company on this front have been dealt with in the Management Discussion and Analysis section of this report.

OUTLOOK FOR CURRENT YEAR

The Unaudited Financial Results for the first quarter ended 30th June, 2015, already announced, show a gross turnover of Rs.236.45 crores for the first quarter of the current year against a turnover of Rs.229.97 crores in the corresponding quarter of the previous year. Steps are being taken to further improve the turnover and margin during the remaining part of the year.

NEW PLANTS AND FACILITIES

The Company continues its efforts towards expansion of its domestic and overseas customer base by first utilizing the existing available capacities and also implementing new facilities to enhance capacity by acquiring new technologies and also de-risking its operations geographically. The Company is working for setting-up its:

A. Bawal Plant

This plant has been set up for High Tonnage High Pressure Die Casting work with full automation and controls and High Precision Machining for auto parts and assembly. The Company is now gearing up for higher volumes for our esteemed customers namely BMW, Renualt, GKN,Eaton and Tata Motors.

B. Chennai Plant

The Company has set up a manufacturing plant for supply of HPDC parts to Renault - Nissan in Chennai. The plant and machinery has been installed and production trials are in progress. Commercial production is expected to start in 3rd Quarter of current financial year.

C. Pathredi (Bhiwadi) Plant

Site development work has been completed. The building construction is expected to commence in the last quarter of the current financial year.

D. Sanand Plant

In view of low demand by Tata Motors Limited for the components for the Nano Car, supply is being made from the Company's Gurgaon Plant. Efforts are being made to add more customers so the Plant capacity can be utilized. Re-starting of the Sanand Plant is under discussion with Tata Motors for manufacturing new parts for their new models. Further discussions are in progress with Hero Motocorp and Maruti Suzuki for supplies to their up-coming plants in Gujarat and other states.

SUBSIDIARY COMPANIES

Your Company has four Wholly Owned Subsidiaries and one Subsidiary Company and three Step-down Subsidiary Companies. There was no material change in the nature of the business of any subsidiary company. During the year under review, Rico Jinfei Wheels Limited, Rasa Autocom Limited and Rico Aluminium and Ferrous Auto Components Limited (formerly RAA Autocom Limited) have become step-down subsidiaries of the Company. None of the below mentioned subsidiary companies is a material subsidiary of the Company.

A. Rico Auto Industries Inc., USA

This Company is engaged in the business of trading of Auto Components and providing warehousing and logistics support to our OEMs and Tier-I Customers in the North American and Brazilian Markets. The Company has recorded a gross turnover of Rs.90.95 crores during the financial year ended 31st March, 2015 as against Rs.85.44 crores in the previous year. The Company earned a net profit of Rs.1.07 crores in the financial year ended 31st March, 2015 as against Rs.1.02 crores in the previous year. The Company has not declared any dividend for the financial year ended 31st March, 2015.

This Subsidiary has achieved a gross turnover of Rs.27.01 crores for the first quarter ended 30th June, 2015 as against Rs.22.29 crores in the corresponding quarter of the previous year, an increase of 21.18 percent. During the financial year and period under review, your Company has not made any additional investment in this Subsidiary.

The Subsidiary is expecting significant growth during the remaining part of the current financial year based on the demand of our OEMs and Tier-I Customers.

B. Rico Auto Industries (UK) Limited, U.K.

This Company is engaged in the business of trading of Auto Components and providing warehousing and logistics support to our OEMs and Tier-I Customers for the European Markets. The Company recorded a gross turnover of Rs.37.26 crores during the financial year ended 31st March, 2015 as against Rs.56.45 crores in the previous year. The Company earned a net profit of Rs.0.27 crore in the financial year ended 31st March, 2015 as against Rs.0.35 crore in the previous year. The Company has not declared any dividend for the financial year ended 31st March, 2015.

This Subsidiary has achieved a gross turnover of Rs.6.84 crores for the first quarter ended 30th June, 2015 as against Rs.12.17 crores in the corresponding quarter of the previous year, a decrease of 43.80 percent. During the financial year and period under review, your Company has not made any additional investment in this Subsidiary.

The Subsidiary, despite decrease in turnover in first quarter, is expecting significant growth during the remaining part of the current financial year based on the demand of our OEMs and Tier-I Customers.

C. Uttarakhand Automotives Limited

During the year under review, this Company has not started any manufacturing activities. The Company has earned total revenue of Rs.11.02 crores by way of remission of interest. After adjusting expenses and exceptional items recorded a profit of Rs.1.71 crores as against loss of Rs.0.0035 crore in the previous year. During the financial year and period under review, your Company has not made any additional investment in this Subsidiary.

D. AAN Engineering Industries Limited

This Company has been set-up to focus on, non-automotive components business, especially for manufacturing and supplying of technical and engineering equipment required for Defence i.e. Army, Aerospace, Navy and Homeland Security. The Company is now registered with the Directorate General of Supplies & Disposals (DGS&D), National Small Industries Corporation (NSIC) and Ordnance Factories Board (OFB), besides various DPSU like HAL, BEL, HVF etc. This Company obtained the AS 9100C Certification as 'Manufacturer of Precision Machined Components and Assemblies'. This Company has also signed an International Distributor & Representation Agreement with two foreign companies in the field of Track Assemblies for Armoured Track Vehicles and Handheld and Mounted Observation Systems.

During the year under review, the Company has developed required engineering expertise to provide services for the specific products e.g. Mechanical & Electrical Fuzes for Ammunition, Tank Track Link Assembly & Opto Mechanical for Defense Sector. Technical agreement with a world renowned European company for Tank Refurbishment has also been inked.

The year under review also saw successful on site Audit by large Private Aerospace OEMs e.g. Airbus further strengthening our Company probability of bagging new business opportunities.

During the year under review, the Company has earned total revenue of Rs. 0.05 crore. The Company has incurred total expense of Rs. 0.13 crore during the financial year 2014-15. The Company has accumulated loss of Rs.0.91 crore as on 31st March, 2015. During the financial year under review, your Company has not made any additional investment in this Subsidiary.

E. Rico Investments Limited

During the year under review, the Board of your Company with a strategic view of restructuring the business operations of the Company has formed a subsidiary company namely Rico Investments Limited on 7th January, 2015 as a Core Investment Company to hold Investments in the Group Companies. Your Company with your approval has sold the investments held in its three subsidiary companies namely Rico Jinfei Wheels Limited, Rasa Autocom Limited and Rico Aluminium and Ferrous Auto Components Limited (formerly RAA Autocom Limited) to this Company, consequently these Companies have become step down subsidiaries.

This Company has earned total revenue of Rs.1.11 crores and net profit of Rs.0.38 crore for the quarter ended 30th June, 2015.

During the year under review, your Company has invested in the equity share capital of this Subsidiary Company for the purpose of holding strategic investments in the various Group Companies. The details of the step-down subsidiary companies are given below:

i) Rico Jinfei Wheels Limited

This Company has recorded a gross turnover of Rs. 108.90 crores during the financial year ended 31st March, 2015 as against Rs. 63.41 crores in the previous year. This Company has earned a profit of Rs. 10.96 crores in the financial year ended 31st March, 2015 as against the loss of Rs. 12.81 crores in the previous year.

Further, this Company has achieved a gross turnover of Rs.30.12 crores for the quarter ended 30th June, 2015 as against Rs.20.56 crores in the corresponding quarter of the previous year, an increase of 46.50 percent. Rico Investments Limited has made an investment of Rs.6.04 crores in the Equity Share Capital of the Company. The Company has not declared any dividend for the financial year ended 31st March, 2015.

ii) Rasa Autocom Limited

This Company is engaged in the business of manufacturing of high pressure and gravity die cast auto components. Its plant is being equipped for automation and better controls to produce high quality parts in large volume for export. The Company has recorded a gross turnover of Rs.7.76 crores during the financial year ended 31st March, 2015 as against Rs. 16.89 crores in the previous year. The Company has incurred loss of Rs.1.94 crores in the financial year ended 31st March, 2015 as against the loss of Rs.7.52 crores in the previous year.

This Subsidiary has achieved a gross turnover of Rs.8.97 crores for the first quarter ended 30th June, 2015 as against Rs.2.01 crores in the corresponding quarter of the previous year. Rico Investments Limited has made an investment of Rs.5.46 crores in the Equity Share Capital of the Company.

Mi) Rico Aluminum and Ferrous Auto Components Limited (formerly RAA Autocom Limited)

During the year under review, this Company has started manufacturing and recorded a gross turnover of Rs.6.45 crores in the financial year 2014-15. The Company has incurred total expenses of Rs.4.11 crores during the financial year 2014-15. The Company has earned profit of Rs.1.60 crores as on 31st March, 2015. Rico Investments Limited has made an investment of Rs.46.00 crores in the Equity Share Capital of the Company.

Further, this Company has achieved a gross turnover of Rs.70.77 crores forth quarter ended 30th June, 2015.

JOINT VENTURE COMPANIES

A. Magna Rico Power train Private Limited

Magna Rico recorded a gross turnover of Rs. 65.55 crores in the financial year ended 31st March, 2015 as against Rs.51.36 crores in the previous year. The Company has earned a net profit of Rs.6.12 crores in the financial year ended 31st March, 2015 as against Rs.1.74 crores in the previous year. The Company has not declared any dividend for the financial year ended 31st March, 2015. During the financial year and period under review, your Company has not made any additional investment in this Subsidiary.

Further, this Company has achieved a gross turnover of Rs. 14.60 crores for the quarter ended SO91 June, 2015 as against Rs. 12.93 crores in the corresponding quarter of the previous year, an increase of 12.91 percent.

B. FCC Rico Limited

During the year under review, your Company has sold the entire 39,50,000 fully paid-up equity shares of Rs. 10/- each of the Joint Venture Company namely FCC Rico Limited to its JV Partner's two Group Companies namely, FCC Clutch India Private Limited and FCC (Philippines) Corporation. The entire consideration of Rs.495.00 crores towards our investment has been received and consequently FCC Rico Limited has ceased to be our Joint Venture Company w.e.f. 23rd December, 2014.

FINANCIAL STATEMENTS

Pursuant to the Listing Agreements, the appended Audited Consolidated Financial Statements of the Subsidiaries and the Joint Venture Companies, in accordance with Accounting Standards issued by the Institute of Chartered Accountants of India form a part of the Annual Report.

A Statement containing salient features of the financial statements of subsidiary and joint venture companies has been provided in Form AOC-1 which is annexed and forms part of this Report. Further, audited financial statements of the subsidiary companies have also been placed on the website of the Company. The Company will make available these documents upon request by any member of the Company interested in obtaining the same.

CORPORATE RESTRUCTURING

During the financial year under review, the Board of Directors of the Company after obtaining your approval by way of Special Resolution through postal ballot has (i) sold the investments held in its subsidiary companies namely Rico Jinfei Wheels Limited, Rasa Autonomy Limited and Rico Aluminum and Ferrous Auto Components Limited to its subsidiary company namely Rico Investments Limited for consideration of Rs.1.04 crores, Rs.0.46 crore and Rs.0.003 crore respectively (ii) sold and transferred (a) Ferrous based Auto Components plants at Gurgaon and Manesar, Haryana; and (b) Aluminum based Auto Components plant at Sanand, Gujarat as a going concern on a 'slump sale' basis for a lump sum consideration, without values being assigned to individual assets and liabilities to Rico Aluminum and Ferrous Auto Components Limited for a total consideration of Rs.44.40 crores (Rupees Forty four crores and forty lacs only) in cash, based on report of an independent valuer and fairness opinion report obtained from merchant banker.

MATERIAL CHANGES AND COMMITMENTS

There was no change in the nature of the business of the Company. There were no material changes and commitments affecting the financial position of the Company occurring between 31st March, 2015 and the date of this Report.

FIXED DEPOSITS

The Company has not accepted deposits from the public during the year under review.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT (MDA)

Pursuant to Clause 49 of the Listing Agreement, MDA which forms part of this Report is annexed.

RISK MANAGEMENT

Business risk evaluation and management is an ongoing process within the Company. The same is further discussed in Management Discussion and Analysis, which forms part of this Report.

INTERNAL CONTROL SYSTEM AND THEIR ADEQUACY

The adequacy of Internal Financial Control is also discussed in Management Discussion and Analysis, which forms part of this Report.

SECRETARIAL STANDARDS

The Company is in compliance with the disclosure as per Secretarial Standard of ICSI pertaining to Board Meetings and General Meetings.

NUMBER OF MEETINGS OF THE BOARD

During the year under review, nine Board Meetings were held and one separate meeting of Independent Directors was held, the details of which forms part of Corporate Governance Report.

CORPORATE GOVERNANCE

A separate report on Corporate Governance along with General Shareholders information as prescribed under the Listing Agreement is annexed as a part of this Report, along with the Certificate from the Practicing Company Secretary regarding compliance of conditions of Corporate Governance as stipulated in Clause 49 of the Listing Agreement with the Stock Exchanges.

AUDIT COMMITTEE

The Board of Directors of your Company has revised its terms of reference to make in line with the requirements of Section 177 of the Companies Act, 2013 and the rules made there under and Clause 49 of Listing Agreement. Details of the Audit Committee are given under the Corporate Governance Report. There are no recommendations of the Audit Committee which were not accepted by the Board.

NOMINATION AND REMUNERATION COMMITTEE

Your Company has a Nomination and Remuneration Committee to meet the requirements of the Companies Act, 2013 and Listing Agreement with the Stock Exchanges. Details of the Nomination and Remuneration Committee are given under the Corporate Governance Report. The Remuneration Policy is annexed and forms part of this Report.

CORPORATE SOCIAL RESPONSIBILITY (CSR)

The CSR activities of the Company are being taken care by the CSR Committee. The details about the policy on Corporate Social Responsibility (CSR) including initiatives taken on CSR, annual report on CSR activities and the composition of CSR Committee are annexed and forms part of this report. The Policy is available on the website of the Company.

VIGIL MECHANISM

The Company has established Vigil Mechanism/Whistle Blower Policy for Directors and Employees as an avenue to report concerns including unethical behaviour, actual or suspected, frauds or violation of the Company's code of conduct. The same also covers the Whistle Blower Policy under the Clause 49 of the Listing Agreement and is available on the website of the Company.

RELATED PARTY TRANSACTIONS

The Company has duly approved policies for determining the Material Subsidiaries and Material Related Party Transactions.

These Policies are available on the website of the Company. All contracts/arrangements/transactions entered by the Company during the financial year with related parties were in the ordinary course of business and on arm's length basis. During the year under review, the Company has entered into contracts/arrangements/ transactions with related parties and the details are provided in Form AOC-2 which is annexed and forms part of this Report. Please also refer note to the standalone financial statements for related party disclosures.

LISTING OF EQUITY SHARES

The Equity Shares of your Company are presently listed on BSE Limited and the National Stock Exchange of India Limited. The Annual Listing Fees have been paid for the financial year 2015-16.

EXTRACT OF ANNUAL RETURN

The Extract of Annual Return in Form MGT-9 is enclosed and forms part of this report.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

Particulars of investment made and loans given are provided in the standalone financial statements. (Please refer Note to the standalone financial statements).

DIRECTORS & KEY MANAGERIAL PERSONNEL

In accordance with the provisions of the Companies Act, 2013 and the Articles of Association, Shri Rakesh Kapur, Director of the Company will retire by rotation at the forthcoming Annual General Meeting and being eligible, offers himself for re-appointment.

Smt. Upasna Kapur has been appointed as the Additional Director of the Company w.e.f. 19June, 2015. She hold office upto the date of the ensuing Annual General Meeting of the Company. The Board recommends the proposal of her appointment as Director of the Company which is included in the Notice of the ensuing Annual General Meeting for you approval.

The Board has re-appointed Shri Arun Kapur as Joint Managing Director for a further period of five years commencing from 2nd May, 2015 to 1MMay, 2020. Resolutions for his re-appointment and remuneration are being placed for your approval in the forthcoming Annual General Meeting.

Brief resume relating to Directors who are being appointed/re- appointed are given in the Notice of the Annual General Meeting.

Shri Sanjay Syal has been appointed as Chief Financial Officer of the Company w.e.f. 1st April, 2015 pursuant to Section 203 of the Companies Act, 2013 and rules made there under.

All Independent Directors of the Company have given declarations confirming that they meet the criteria of independence as laid down under Section 149(6) of the Companies Act, 2013 and Clause 49 of the Listing Agreement.

FAMILIARISATION PROGRAMME FOR DIRECTORS

The Company from time to time familiarizes the Independent Directors about the Company, its product, business and the ongoing events relating to the Company through presentations. The appointment of an Independent Director is formalized by issuing a letter to the Director, which inter alia explains the role, function, duties and responsibilities expected of him as a director of the Company. The Managing Director of the Company also provides a brief of the development in the industry and business operations of the Company to the Directors at the Board Meetings on regular basis.

DIRECTORS'RESPONSIBILITY STATEMENT

Pursuant to Section 134 of the Companies Act, 2013, your Directors confirm that:

i) in the preparation of the annual accounts for the financial year ended 31st March, 2015, the applicable accounting standards have been followed and there are no material departures;

ii) appropriate accounting policies have been selected and applied consistently and have 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 profit for the year 1st April, 2014 to 31st March, 2015;

iii) proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and preventing and detecting fraud and other irregularities;

iv) the annual accounts for the financial year ended 31st March, 2015 have been prepared on a going concern basis;

v) internal financial controls have been laid down to be followed by the company and that such internal financial controls are adequate and were operating effectively; and

vi) proper systems have been devised to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

BOARD EVALUATION

Pursuant to the Companies Act, 2013 and Clause 49 of the Listing Agreement, the Board of Directors has carried out an annual performance evaluation of its own performance, the directors individually as well as the evaluation of the working of its Committees.

AUDITORS

M/s. Walker Chandiok & Co LLP, Chartered Accountants (Firm Registration No.N500013) have been re-appointed for a period of three years in the previous Annual General Meeting subject to ratification of members in every Annual General Meeting. The Company has received a consent and certificate from the Auditors confirming their eligibility for ratification for the financial year 2015-16. The Board recommends the ratification from the conclusion of the ensuing 32nd Annual General Meeting until the conclusion of next (33rd) Annual General Meeting.

The observations in the Auditor's Report on Consolidated Financial Statements are dealt within the notes to accounts at appropriate places and being self-explanatory, need no further comments.

COST AUDITORS

The Board, on the recommendation of Audit Committee has appointed M/s. J.K. Kabra & Co., Cost Accountants, New Delhi as Cost Auditors to carry out the cost audit of the Company for the financial year 2015-16. In terms of Section 148 of the Companies Act, 2013 and the rules made there under, remuneration of Cost Auditors is to be ratified by members of the Company. Accordingly, a resolution is included in the Notice of forthcoming Annual General Meeting for your approval. The Cost Audit Report for the financial year 2014-15 would be filed with Hon'ble Ministry of Corporate Affairs, New Delhi within stipulated time.

SECRETARIAL AUDITORS

The Board has appointed Shri K.K. Sachdeva, Practicing Company Secretary, as Secretarial Auditors to carry out the secretarial audit of the Company for the financial year 2015-16. The Secretarial Audit Report for the financial year ended 31st March, 2015 is annexed and forms part of this report. The Company was required to appoint Woman Director on or before 31st March, 2015. The Board has appointed Smt. Upasna Kapur w.e.f 19th June, 2015 as Woman Director in compliance of Clause 49 of the Listing Agreement and Section 149 of the Companies Act, 2013.

TRANSFER OF UNCLAIMED AMOUNTS TO INVESTOR EDUCATION AND PROTECTION FUND (IEPF)

Pursuant to the provisions of Section 205A(5) of the Companies Act, 1956, the declared dividends, which remained unpaid/unclaimed for a period of seven years have been transferred by the Company to the IEPF established by the Central Government pursuant to Section 205C of the said Act.

CONSERVATION OF ENERGY, RESEARCH & DEVELOPMENT, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS & OUTGO

As required by the provisions of Section 134(3)(m) of the Companies Act, 2013 read with the Companies (Accounts) Rules, 2014, the relevant information is given in the annexure forming part of this report.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS

There were no significant and material orders passed against the Company by the regulators or courts or tribunals during financial year 2014-15 impacting the going concern status and Company's operations in future.

PERSONNEL

In terms of provisions of Section 197(12) of the Companies Act, 2013, read with the Rule 5 of the Companies (Appointment and Remuneration) Rules, 2014, a disclosure pertaining to remuneration and the names and particulars of the employees is annexed and forms part of this Report.

The Company has zero tolerance for sexual harassment at workplace and has adopted a policy on prevention, prohibition and redressal of sexual harassment at workplace. The Policy is placed on the intranet of the Company for the benefit of its employees. There were no complaints received from any employee during the year under review.

The Industrial relations with personnel are cordial at all Plants. Your Directors wish to place on record their appreciation of the sincere and unstinted support being provided to the Company by its employees at all levels.

ACKNOWLEDGEMENT

The Board wishes to place on record its sincere appreciation for the continued assistance and support extended to the Company by Financial Institutions, Banks and various departments of Central and State Governments. Your Directors acknowledge with gratitude the encouragement and support extended by our valued customers, business associates and shareholders.

On behalf of the Board of Directors



Arvind Kapur

Place : Gurgaon Chairman, CEO & Managing Director

Date : 12th August, 2015 (DIN: 00096308)


Mar 31, 2014

To the Shareholders,

The Directors have pleasure in presenting the 31st Annual Report of your Company, together with the Audited Accounts for the year ended 31st March, 2014.

FINANCIAL RESULTS

(Rs. in Crores)

Year Ended Year Ended Particulars 31/03/2014 31/03/2013

Gross Sales and other Income 1041.62 1185.87

Net Sales and other Income 963.04 1090.30

Profit before Interest & Depreciation 134.79 137.23

Interest & Financial Charges 59.36 63.08

Profit before Depreciation and Tax 75.43 74.15

Depreciation 71.33 64.94

Profit before Tax (PBT) 4.10 9.21

Provision for Income Tax 2.54 4.77

Provision for Deferred Tax (1.07) (5.72)

Net Profit 2.63 10.16

Surplus brought forward

from previous years 80.86 73.58

Amount available for appropriations 83.49 83.74

Appropriations:

Proposed Dividend on Equity

Shares @10% 1.35 -

Dividend on Equity Shares @15% - 2.03

Corporate Dividend Tax 0.23 0.34

Transferred to General Reserve - 0.51

Balance carried to Balance Sheet 81.91 80.86

83.49 83.74

Your Company has recorded a turnover of Rs.1041.62 crores in the year under report as against Rs.1185.87 crores in the previous year. Your Company has earned a Profit after Tax (PAT) of Rs.2.63 crores during the year under report over the previous year''s profit of Rs.10.16 crores.

OUTLOOK FOR CURRENT YEAR

The Unaudited Financial Results for the first quarter ended 30th June, 2014, already announced, show a turnover of Rs.229.97 crores for the first quarter of the current year against a turnover of Rs.293.19 crores in the corresponding quarter of the previous year. Your Directors are taking steps to improve the turnover and margin during the remaining part of the year.

RESERVES

The reserves of your Company after proposed appropriations shall stand at Rs.308.69 crores as against Rs.307.64 crores in the previous year.

EXPORT

The export turnover of your Company during the period under review was Rs.193.20 crores as against Rs.181.99 crores in the previous year. The export turnover includes sales to wholly owned subsidiaries amounting to Rs.124.33 crores as against Rs.116.56 crores in the previous year. Our wholly owned subsidiaries in United Kingdom and United States of America are engaged in providing last mile sales and customer support in the regions.

During the quarter ended 30th June, 2014 of current year, export turnover was Rs.45.42 crores as against Rs.52.77 crores in the corresponding quarter of the previous year. Further details as regards efforts of your Company on this front have been dealt with in the Management Discussion and Analysis section of this report.

DIVIDEND

Your Directors have recommended a Dividend @10 per cent i.e. Re.0.10 per Equity Share of Re.1/- each for the financial year 2013-14, amounting to Rs.1.58 crores including dividend tax of Rs.0.23 crore on the Equity Share Capital of Rs.13.53 crores as against a dividend of 15 per cent i.e. Re.0.15 per Equity Share of Re.1/- each aggregating to Rs.2.37 crores including dividend tax of Rs.0.34 crore in the previous year on the same Equity Share Capital.

FINANCE

Your Company is rated ICRA-"A3" and ICRA-"BBB-(Negative)" Ratings for Line of Credit (Basel-II) for its Short Term and Long Term Bank Facilities respectively by ICRA Limited.

NEW PLANTS AND FACILITIES

The Company continues its efforts towards expansion of its domestic and overseas customer base by first utilizing the existing available capacities and also implementing new facilities to enhance capacity by acquiring new technologies and also de-risking its operations geographically. The Company is working for setting-up its:

A. Bawal Plant

This plant has been set up for High Tonnage High Pressure Die Casting work with full automation and controls and high precision machining for Auto parts and assembly. Production was commenced in March, 2013 and we are now gearing up for higher volumes for our esteemed customers Eaton, Renault and Tata Motors.

B. Chennai Plant

The Company has been awarded orders for manufacturing of automotive parts from Renault-Nissan in Chennai. Manufacturing equipments are under installation and commissioning. Commercial Production is planned to start in the last quarter of this financial year.

C. Pathredi (Bhiwadi) Plant

Site development work has been completed. The building construction is deferred and is now expected to commence in the financial year 2015-16.

D. Sanand Plant

At present, in view of low demand by Tata Motors Limited for the components for the Nano Car, supply is being made from the Company''s Gurgaon Plant. Efforts are being made to add more customers so the Plant capacity can be utilized. Re-starting of the Sanand Plant by last quarter of this financial year is under discussion with Tata Motors in lieu of application of parts for their running Ace Pick up model.

Further discussions are in progress with M/s. Hero Motocorp and Maruti Suzuki for supplies to their up-coming plants in Gujarat and other states.

SUBSIDIARY COMPANIES

Your Company has Wholly Owned Subsidiaries (Unlisted):

A. Rico Auto Industries Inc., USA

This Company is engaged in the business of trading of Auto Components and providing warehousing and logistics support to our OEMs and Tier-I Customers in the North American and Brazilian Markets. The Company earned total revenues of Rs.85.44 crores during the financial year ended 31st March, 2014 as against Rs.78.89 crores in the previous year. The Company earned a net profit of Rs.1.02 crores in the financial year ended 31st March, 2014 as against Rs.0.80 crore in the previous year. The Company has not declared any dividend for the financial year ended 31st March, 2014.

This Subsidiary has achieved a turnover of Rs.22.29 crores for the first quarter ended 30th June, 2014 as against Rs.18.57 crores in the corresponding quarter of the previous year, an increase of 20 per cent. During the financial year and period under review, your Company has not made any additional investment in this Subsidiary.

The Subsidiary is expecting significant growth during the remaining part of the current financial year based on the demand of our OEMs and Teir-I Customers.

B. Rico Auto Industries (UK) Limited, U.K.

This Company is engaged in the business of trading of Auto Components and providing warehousing and logistics support to our OEMs and Tier-I Customers for the European Markets. The Company earned total revenues of Rs.56.45 crores during the financial year ended 31st March, 2014 as against Rs.50.75 crores in the previous year. The Company earned a net profit of Rs.0.35 crores in the financial year ended 3181 March, 2014 as against Rs.0.72 crore in the previous year. The Company has not declared any dividend for the financial year ended 31st March, 2014.

This Subsidiary has recorded a turnover of Rs.12.17 crores for the first quarter ended 30th June, 2014 as against Rs.14.18 crores in the corresponding quarter of the previous year, a decrease of 14 per cent. During the financial year and period under review, your Company has not made any additional investment in this Subsidiary.

The Subsidiary, despite decrease in turnover in first quarter, is expecting significant growth during the remaining part of the current financial year based on the demand of our OEMs and Teir-I Customers.

C. Rasa Autocom Limited

This Company is engaged in the business of manufacturing of high pressure and gravity die cast Auto Components. Its plant is being equipped for automation and better controls to produce high quality parts in large volume for export. The Company has recorded a turnover of Rs.16.89 crores during the financial year ended 31st March, 2014 as against Rs.10.94 crores in the previous year. The Company has incurred loss of Rs.7.52 crores in the financial year ended 31st March, 2014 as against the loss of Rs.8.63 crores in the previous year.

This Subsidiary has achieved a turnover of Rs.2.01 crores for the first quarter ended 30th June, 2014 as against Rs.7.17 crores in the corresponding quarter of the previous year. During the financial year and period under review, your Company has not made any additional investment in this Subsidiary.

D. Uttarakhand Automotives Limited

During the year under review, this Company has not started any manufacturing activities. The Company has incurred expenses of Rs.0.35 lac towards administrative and other operating expenses during the financial year 2013-14. The Company has accumulated loss of Rs.10.68 crores as on 31st March, 2014. During the financial year and period under review, your Company has not made any additional investment in this Subsidiary.

E. RAA Autocom Limited

During the year under review, this Company has not started any manufacturing activities. The Company has incurred expenses of Rs.0.31 lac towards administrative and other operating expenses during the financial year 2013-14. The Company has accumulated loss of Rs.1.86 crores as on 31st March, 2014. During the financial year and period under review, your Company has not made any additional investment in this Subsidiary.

F. AAN Engineering Industries Limited

This Company has been set-up to focus on, non-automotive components business, especially for manufacturing and supplying of technical and engineering equipment required for Defence i.e. Army, Aerospace, Navy and Homeland Security. The Company is now registered with the Directorate General of Supplies & Disposals (DGS&D) and the National Small Industries Corporation (NSIC). This Company is in the process of getting AS 9100C Certification for manufacture of aerospace components. This Company has also signed an International Distributor & Representation Agreement with a foreign company.

During the year under review, this Company has not started any manufacturing activities. The Company has incurred expenses of Rs.0.12 crore towards administrative and other operating expenses during the financial year 2013-14. The Company has accumulated loss of Rs.0.84 crore as on 31st March, 2014. During the financial year and period under review, your Company has not made any additional investment in this Subsidiary.

JOINT VENTURE COMPANY WHICH IS ALSO SUBSIDIARY

Rico Jinfei Wheels Limited

This Company earned total revenues of Rs.63.41 crores during the financial year ended 31st March, 2014 as against Rs.61.46 crores in the previous year. This Company has incurred a loss of Rs.12.81 crores in the financial year ended 31st March, 2014 as against Rs.14.02 crores in the previous year.

Further, this Company has achieved a gross turnover (excluding other income) of Rs.20.56 crores for the quarter ended 30th June, 2014 as against Rs.14.94 crores in the corresponding quarter of the previous year, an increase of 38 per cent.

During the financial year and period under review, your Company has not made any additional investment in this Subsidiary.

JOINT VENTURE COMPANIES

A. FCC Rico Limited

FCC Rico recorded a gross turnover (excluding other income) of Rs.1089.22 crores for the financial year ended 31st March, 2014 as against Rs.958.03 crores in the previous year, a growth of 14 per cent.

Further, this Company has achieved a gross turnover (excluding other income) of Rs.297.02 crores for the quarter ended 30th June, 2014 as against Rs.245.06 crores in the corresponding quarter of the previous year, an increase of 21 per cent.

B. Magna Rico Powertrain Private Limited

Magna Rico recorded a turnover of Rs.51.36 crores in the financial year ended 3181 March, 2014 as against Rs.38.75 crores in the previous year, a growth of 32 per cent. The Company has earned a net profit of Rs.1.74 crores in the financial year ended 31st March, 2014 as against Rs.0.54 crore in the previous year. The Company has not declared any dividend for the financial year ended 31a March, 2014. During the financial year under review, your Company has invested Rs.1.50 crores in the Equity Share Capital and as on date our investment in the Equity Share Capital stood at Rs.21.12 crores.

Further, this Company has achieved a gross turnover (excluding other income) of Rs.12.93 crores for the quarter ended 30th June, 2014 as against Rs.10.32 crores in the corresponding quarter of the previous year, an increase of 25 per cent.

FINANCIAL STATEMENTS

Pursuant to the Listing Agreements, the appended Audited Consolidated Financial Statements of the Subsidiaries and the Joint Venture Companies, in accordance with Accounting Standards issued by the Institute of Chartered Accountants of India form a part of the Annual Report.

In terms of circular issued by the Ministry of Corporate Affairs, general exemption has been granted from the provisions of Section 212 of the Companies Act, 1956 to Companies in relation to attaching accounts and other documents pertaining to its subsidiaries subject to fulfillment of the conditions mentioned in the circular. The Board of Directors have, vide their resolution passed on 28th May, 2014, consented not to attach the accounts and other documents pertaining to Company''s Subsidiaries. The Company will make available these documents upon request by any member of the Company interested in obtaining the same. However, as directed by the Central Government, the financial data of the subsidiaries have been disclosed under "Statement pursuant to section 212 and financial summary related to Subsidiary Companies" forming part of the Annual Report.

FIXED DEPOSITS

The Company has not accepted deposits from the public during the year under review.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT (MDA)

Pursuant to Clause 49 of the Listing Agreement, MDA which forms part of this Report is annexed.

CORPORATE GOVERNANCE

A separate report on Corporate Governance along with General Shareholders information as prescribed under the Listing Agreement is annexed as a part of this Report, along with the Certificate from the Practicing Company Secretary regarding compliance of conditions of Corporate Governance as stipulated in Clause 49 of the Listing Agreement with the Stock Exchanges.

AUDIT COMMITTEE

Your Company has an Audit Committee to meet the requirements of the Companies Act, 2013 and Listing Agreement with the Stock Exchanges. Details of the Audit Committee are given under the Corporate Governance Report.

CORPORATE SOCIAL RESPONSIBILITY (CSR)

The Board of your Company has constituted Corporate Social Responsibility Committee comprising Shri Rajeev Kapoor as Chairman, Dr. Ashok Seth, Shri Arun Kapur and Shri Rakesh Kapur as its members to comply with the Section 135 of the Companies Act, 2013 and the rules made thereunder. The Committee has been entrusted with the responsibility to recommend and monitor the CSR activities of the Company.

LISTING OF EQUITY SHARES

The Equity Shares of your Company are presently listed on BSE Limited and the National Stock Exchange of India Limited. The Annual Listing Fees have been paid for the financial year 2014-15.

DIRECTORS'' RESPONSIBILITY STATEMENT

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

i) in the preparation of the annual accounts for the financial year ended 31st March, 2014 the applicable accounting standards have been followed and there are no material departures;

ii) appropriate accounting policies have been selected and applied consistently and have 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, 2014 and of the profit for the year 1st April, 2013 to 31st March, 2014;

iii) proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and preventing and detecting fraud and other irregularities; and

iv) the annual accounts for the financial year ended 31st March, 2014 have been prepared on a going concern basis.

DIRECTORS

Shri Rajeev Kapoor and Shri Vinod Kumar Nagar have been appointed as Additional Independent Directors of the Company w.e.f.

13th November, 2013. They hold office upto the date of the ensuing Annual General Meeting.

Independent Directors may be appointed for a term upto 5 (Five) consecutive years as per Section 149 read with Section 152 of the Companies Act, 2013 (the Act). Accordingly resolutions are placed for your approval to appoint Shri Amarjit Chopra, Shri Kanwal Monga, Dr. Ashok Seth, Shri Satish Sekhri, Shri Rajeev Kapoor and Shri Vinod Kumar Nagar as Independent Directors for a term upto 5 (Five) consecutive years from the date of this Annual General Meeting. The Board has received declarations from all the above Independent Directors of the Company confirming that they meet with the criteria of independence as prescribed under the Act and the Clause 49 of the Listing Agreement. The Company has also received proposals for their appointment as Independent Directors from the members as required by the Act.

Shri Arun Kapur, Joint Managing Director of the Company who was appointed as Director not liable to retire by rotation as per Article 121 of the Articles of Association of the Company in the Annual General Meeting held on 30th September, 2009 has opted to retire by rotation to fulfill the requirements of the Act.

Brief resume relating to Directors who are being re-appointed/ appointed are given in the Notice of the Annual General Meeting.

AUDITORS

M/s. Walker Chandiok & Co LLP (Formerly Walker, Chandiok & Co), Chartered Accountants (Firm Registration No.001076N/N500013) are eligible, as per the provisions of Section 139 of the Companies Act, 2013 (the Act) read with Rules framed thereunder, to be appointed for a period of three years. The Company has received a certificate under Section 141 of the Act from the Auditors confirming their eligibility for re-appointment. The Board recommends their re-appointment as Auditors for the period upto 34th Annual General Meeting and to fix their remuneration for the financial year 2014-15.

Auditors have made some observations by way of disclaimer pertaining to the Joint Venture Company namely FCC Rico Limited contained in their Report on consolidated financial statements for the financial year 2013-14, which stated that the Company has considered the Unaudited Financial Statements of FCC Rico Limited in absence of the Audited Financial Statements. The management of your Company is of the view that there will not be any material change to the reported numbers. The management of FCC Rico Limited has informed that they are in the process of adopting the financial statements. Accordingly, impact, if any, will be taken by your Company in the current financial year 2014-15 in the consolidated financial statements.

The other observations in the Auditors'' Report are dealt within the notes to accounts at appropriate places and being self-explanatory, need no further comments.

COST AUDITORS

The Board in its meeting held on 30th May, 2013 has appointed M/s. J.K. Kabra & Co., Cost Accountants, New Delhi as Cost Auditors to carry out the cost audit of the Company for the financial year 2013-2014. The Cost Audit Report for the year 2013-14 would be filed with Hon''ble Ministry of Corporate Affairs, New Delhi within stipulated time.

TRANSFER OF UNCLAIMED AMOUNTS TO INVESTOR EDUCATION AND PROTECTION FUND (IEPF)

Pursuant to the provisions of Section 205A(5) of the Companies Act, 1956, the declared dividends, which remained unpaid/unclaimed for a period of seven years have been transferred by the Company to the IEPF established by the Central Government pursuant to Section 205C of the said Act.

CONSERVATION OF ENERGY, RESEARCH & DEVELOPMENT, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS & OUTGO

As required by the provisions of Section 217(1)(e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988, the relevant information is given in the annexure forming part of this report.

PERSONNEL

In terms of the provisions of Section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975 as amended, the names and other particulars of the employees are set out in the Annexure to the Directors'' Report. However, as per the provisions of Section 219(1)(b)(iv) of the said Act, the Annual Report excluding the aforesaid information is being sent to all the Members of the Company and others entitled thereto. Member who is interested in obtaining such particulars may write to the Company Secretary at the Corporate Office of the Company. The said information is also available for inspection at the Corporate Office and Registered Office of the Company during working hours up to the date of the Annual General Meeting.

During the year under report, the Industrial relations with personnel remained cordial, at all Plants. Your Directors wish to place on record their appreciation of the sincere and unstinted support provided to the Company by its employees at all levels.

COMPANIES ACT, 2013

During the current financial year the Companies Act, 1956 has been replaced by the Companies Act, 2013 which became applicable for every Company from 1st April, 2014. Your Company has been regular in keeping pace with the changes that have become applicable and initiated necessary actions accordingly to comply with the same.

ACKNOWLEDGEMENTS

The Board wishes to place on record its sincere appreciation for the continued assistance and support extended to the Company by Financial Institutions, Banks and various departments of Central and State Governments. Your Directors acknowledge with gratitude the encouragement and support extended by our valued customers, business associates and shareholders.

On behalf of the Board of Directors

Arvind Kapur

Place : Gurgaon Chairman, CEO & MD

Dated : 11th August, 2014 DIN: 00096308


Mar 31, 2013

To the Shareholders,

The Directors have pleasure in presenting the 30th Annual Report of your Company, together with the Audited Accounts for the year ended 31st March, 2013.

FINANCIAL RESULTS

(Rs. in Crores) Year Ended Year Ended Particulars 31/03/2013 31/03/2012

Gross Sales and other Income 1185.87 1225.48

Net Sales and other Income 1090.30 1136.64

Profit before Interest & Depreciation 137.23 123.95

Interest & Financial Charges 63.08 67.87

Profit before Depreciation and Tax 74.15 56.08

Depreciation 64.94 56.35

Profit before Tax (PBT) 9.21 (0.27)

Provision for Income Tax 4.77 0.08

Provision for Deferred Tax (5.72) 3.59

Net Profit/(Loss) 10.16 (3.94)

Surplus brought forward from previous years 73.58 79.87

Amount available for appropriations 83.74 75.93

Appropriations:

Proposed Dividend on Equity Shares @15% 2.03

Dividend on Equity Shares @15% I 2.03

Corporate Dividend Tax 0.34 0.32

Transferred to General Reserve I 0.51

Balance carried to Balance Sheet I 80.86 73.58

83.74 75.93

Your Company has recorded a turnover of Rs.1185.87 crores in the year under report as against Rs.1225.48 crores in the previous year. Your Company has earned a Profit after Tax (PAT) of Rs.10.16 crores during the year under report over the previous year''s loss of Rs.3.94 crores. The loss in the previous year was due to adjustment of exceptional items loss of Rs.11.24 crores and other tax liabilities.

OUTLOOK FOR CURRENT YEAR

The Unaudited Financial Results for the quarter ended 30th June, 2013, already announced, show a turnover of Rs.293.19 crores for the first quarter of the current year against a turnover of Rs.318.97 crores of the corresponding quarter of the previous year. Your Directors are taking steps to improve the turnover and margin during the remaining part of the year.

RESERVES

The reserves of your Company after proposed appropriations shall stand at Rs.307.64 crores as against Rs.299.85 crores in the previous year.

EXPORT

The export turnover of your Company during the period under review was Rs.181.99 crores as against Rs.200.76 crores in the previous year. The export turnover includes sale to wholly owned subsidiaries amounting to Rs.116.56 crores as against Rs.141.08 crores in the previous year. Our wholly owned subsidiaries in United Kingdom and United States of America provide last mile sales and customer support.

During the quarter ended 30th June, 2013 of current year, export turnover was Rs.52.77 crores as against Rs.49.66 crores in the corresponding quarter of the previous year. Further details as regards efforts of your Company on this front have been dealt with in the Management Discussion and Analysis section of this report.

DIVIDEND

Your Directors have recommended a Dividend @15 per cent i.e. Re.0.15 per Equity Share of Re.1/- each for the financial year 2012-13, amounting to Rs.2.37 crores including dividend tax of Rs.0.34 crore on the Equity Share Capital of Rs.13.53 crores as against a dividend of same percentage i.e. Re.0.15 per Equity Share of Re.1/- each aggregating to Rs.2.35 crores including dividend tax of Rs.0.32 crore in the previous year.

FINANCE

Your Company is rated "A3 " and "BBB" Ratings for Line of Credit (Basel-II) for its Short Term and Long Term Bank Facilities respectively by ICRA Limited. The outlook on the long term rating remains "Stable". Your Company uses long/short term facilities from the Banks on most favourable terms.

NEW PLANTS AND FACILITIES

Your Company is in the continuous process of expansion of its domestic and overseas customers base by first utilising the current available capacities and also implementing new facilities to enhance capacity in New Technologies which the Company does not have and also geographically de-risking our operations. Your Company has started work for setting-up its:

A. Bawal Plant

The plant has been set up for New High Tonnage High pressure Die Casting and Machining for Auto parts and assembly. Production has commenced in March, 2013.

B. Chennai Plant

The Company has been awarded orders for manufacturing of automotive parts and assembly from Automobile OEMs in Chennai. Manufacturing equipments are under planning and ordering. It is planned to start the production in the financial year 2014-15.

C. Pathredi (Bhiwadi) Plant

Site development work is completed. Building construction is deferred to next financial year.

D. Sanand Plant

At present, in view of low demand by Tata Motors Limited for the component for the Nano Car, the supply is being made from the Company''s Gurgaon Plant. Efforts are being made to add more customers so the Plant capacity can be better utilised.

Further discussions are in progress with M/s. Hero Motocorp Limited for supplies to their up-coming plant at Halol in Gujarat.

This Plant, when set-up, will have an annual installed capacity of 1.2 Million units in the initial phase and will ramp up to 1.8 Million units in the next phase.

SUBSIDIARY COMPANIES

Your Company has Wholly Owned Subsidiaries (Unlisted):

A. Rico Auto Industries Inc., USA

This Company is engaged in the business of trading of Auto Components and providing last mile support to customers in the North American and Brazilian Markets.

The Company earned total revenues of Rs.78.89 crores during the financial year ended 31st March, 2013 as against Rs.94.61 crores in the previous year. The Company earned a net profit of Rs.0.80 crore in the financial year ended 31st March, 2013 as against Rs.0.98 crore in the previous year. This Company has not declared any dividend for the financial year ended 31st March, 2013.

This Subsidiary has achieved a turnover of Rs.18.57 crores for the first quarter ended 30th June, 2013 as against Rs.26.64 crores in the corresponding quarter of the previous year, a decrease of 30 per cent. During the financial year and period under review, your Company has not made any additional investment in this Subsidiary.

The Subsidiary is expecting significant growth during the remaining part of the current financial year.

B. Rico Auto Industries (UK) Limited, U.K.

This Company is engaged in the business of trading of Auto Components and providing last mile support to customers for the European Markets.

The Company earned total revenues of Rs.50.75 crores during the financial year ended 31st March, 2013 as against Rs.55.87 crores in the previous year. The Company earned a net profit of Rs.0.72 crore in the financial year ended 31st March, 2013 as against Rs.0.91 crore in the previous year. This Company has not declared any dividend for the financial year ended 31st March, 2013.

This Subsidiary has achieved a turnover of Rs.14.18 crores for the first quarter ended 30th June, 2013 as against Rs.13.46 crores in the corresponding quarter of the previous year, an increase of 5 per cent. During the financial year and period under review, your Company has not made any additional investment in this Subsidiary.

The Subsidiary is expecting significant growth during the remaining part of the current financial year.

C. Rasa Autocom Limited

This Company is engaged in the business of manufacturing of Auto Components and recorded a turnover of Rs.10.94 crores during the financial year ended 31st March, 2013 as against Rs.19.78 crores in the previous year. The Company has incurred loss of Rs.8.63 crores in the financial year ended 31st March, 2013 as against the loss of Rs.7.24 crores in the previous year.

Your Company has invested Rs.19.92 crores in the Equity Share Capital during the financial year ended 31st March, 2013 and as on date our investment in Equity Share Capital stood at Rs.20.00 crores.

D. Uttarakhand Automotives Limited

During the year under review, this Company has not started any manufacturing activities. The Company has incurred expenses of Rs.2.71 crores towards administrative and other operating expenses during the financial year 2012-13. The Company has accumulated loss of Rs.10.67 crores as on 31st March, 2013. During the financial year and period under review, your Company has not made any additional investment in this Subsidiary.

E. RAA Autocom Limited

During the year under review, this Company has not started any manufacturing activities. The Company has incurred expenses of Rs.0.21 crore towards administrative and other operating expenses during the financial year 2012-13. The Company has accumulated loss of Rs.1.86 crores as on 31st March, 2013. During the financial year and period under review, your Company has not made any additional investment in this Subsidiary.

F. AAN Engineering Industries Limited

This Company has been set-up to focus on, non-automotive components business, especially for manufacturing and supplying of technical and engineering equipments required for defence, aerospace and homeland security. This Company is in the process of getting AS 9100C Certification for manufacture of aerospace components.

During the year under review, this Company has not started any manufacturing activities. The Company has incurred expenses of Rs.0.32 crore towards administrative and other operating expenses during the financial year 2012-13. The Company has accumulated loss of Rs.0.72 crore as on 31st March, 2013. During the financial year and period under review, your Company has not made any additional investment in this Subsidiary.

JOINT VENTURE COMPANY WHICH IS ALSO SUBSIDIARY

Rico Jinfei Wheels Limited

This Company earned total revenues of Rs.61.46 crores during the financial year ended 31st March, 2013 as against Rs.43.33 crores in the previous year. This Company has incurred a loss of Rs.14.02 crores in the financial year ended 31st March, 2013 as against Rs.8.69 crores in the previous year.

Your Company has invested Rs.21.28 crores in the Equity Share Capital on 11th July, 2012 and as on date our investment in Equity Share Capital stood at Rs.30.53 crores.

JOINT VENTURE COMPANIES

A. FCC Rico Limited

FCC Rico recorded a gross turnover (excluding other income) of Rs.958.03 crores for the financial year ended 31st March, 2013 as against Rs.839.19 crores in the previous year, a growth of 14 per cent. The Board of this Company has recommended a dividend of 75 per cent for the year ended 31st March, 2013. Your Company expects to receive an amount of Rs.2.96 crores by way of dividend on its investment.

Further, this Company has achieved a gross turnover (excluding other income) of Rs.245.06 crores for the quarter ended 30th June, 2013 as against Rs.228.68 crores in the corresponding quarter of the previous year, an increase of 7 per cent.

B. Magna Rico Powertrain Private Limited

Magna Rico recorded a turnover of Rs.38.75 crores in the financial year ended 31st March, 2013 as against Rs.21.66 crores in the previous year. The Company has earned a net profit of Rs.0.54 crore in the financial year ended 31st March, 2013 as against loss of Rs.2.52 crores in the previous year. During the financial year under review, your Company has invested Rs.2.50 crores in the Equity Share Capital and as on date our investment in the Equity Share Capital stood at Rs.19.62 crores.

FINANCIAL STATEMENTS

Pursuant to the Listing Agreements, the appended Audited Consolidated Financial Statements of the Subsidiaries and the Joint Venture Companies, in accordance with Accounting Standards issued by the Institute of Chartered Accountants of India form a part of the Annual Report.

In terms of circular issued by the Ministry of Corporate Affairs, general exemption has been granted from the provisions of Section 212 of the Companies Act, 1956 to Companies in relation to attaching accounts and other documents pertaining to its subsidiaries subject to fulfillment of the conditions mentioned in the circular. The Board of Directors have, vide their resolution passed on 30th May, 2013, consented not to attach the accounts and other documents pertaining to Company''s Subsidiaries. The Company will make available these documents upon request by any member of the Company interested in obtaining the same. However, as directed by the Central Government, the financial data of the subsidiaries have been disclosed under "Statement pursuant to section 212 and financial summary related to Subsidiary Companies" forming part of the Annual Report.

FIXED DEPOSITS

During the year, the Company has not accepted deposits from the public under section 58A of the Companies Act, 1956.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT (MDA)

Pursuant to Clause 49 of the Listing Agreement, MDA which forms part of this Report is annexed.

CORPORATE GOVERNANCE

A separate report on Corporate Governance alongwith General Shareholders information as prescribed under the Listing Agreement is annexed as a part of this Report, alongwith the Certificate from the Practising Company Secretary regarding the compliance of conditions of Corporate Governance as stipulated in Clause 49 of the Listing Agreement with the Stock Exchanges.

AUDIT COMMITTEE

Your Company has an Audit Committee to meet the requirement of the Companies Act, 1956 and Listing Agreement with the Stock Exchanges. The details of the Audit Committee are given under the Corporate Governance Report.

LISTING OF EQUITY SHARES

The Equity Shares of your Company are presently listed on Bombay Stock Exchange Limited and the National Stock Exchange of India

Limited. The Annual Listing Fees have been paid for the financial year 2013-14.

UNCLAIMED SHARES SUSPENSE ACCOUNT

Your Company has complied with the requirements of Clause 5A of the Listing Agreement upon transferring the 1523500 Unclaimed Equity Shares of Rupee One each belonging to 6596 folios, into a separate demat account opened with the ICICI Bank Limited in the name of "Rico Auto Industries Limited - Unclaimed Suspense Account". These shares were issued pursuant to the Public Issue, Right Issue, Bonus Issue, on merger of Rico Agroils Limited and sub-division of shares from face value of Rs.10/- each into Re.1/- each. The voting rights on these shares shall remain frozen till the rightful owners of such shares claim the same. The Company will transfer shares from this Suspense Account to the rightful owners as and when they will approach.

DIRECTORS'' RESPONSIBILITY STATEMENT

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

i) in the preparation of the annual accounts for the financial year ended 31st March, 2013 the applicable accounting standards have been followed and there are no material departures;

ii) appropriate accounting policies have been selected and applied consistently and have 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, 2013 and of the profit for the year 1st April, 2012 to 31st March, 2013;

iii) proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and preventing and detecting fraud and other irregularities; and

iv) the annual accounts for the financial year ended 31st March, 2013 have been prepared on a going concern basis.

DIRECTORS

With profound grief, we inform the sad and sudden demise of Prof. Vinod Kumar Bhalla on 6th August, 2013. He was an Independent Director of the Company. The Board of your Company placed on record its appreciation for the valuable guidance received from him during his association with the Company.

Shri Chandra Mohan, Non-Executive Chairman and an Independent Director of the Company since 30th January, 1985, has retired at the conclusion of the last Annual General Meeting held on 29th September, 2012 on completing the age of 75 years as per the policy for retirement age approved by the Board of Directors. The Board of your Company placed on record its appreciation for the valuable guidance received from him during his tenure as a Chairman of the Company.

In accordance with the provisions of the Companies Act, 1956 and the Articles of Association of your Company, Dr. Ashok Seth and Shri Satish Sekhri, Directors will retire by rotation at the forthcoming Annual General Meeting and being eligible, offer themselves for re-appointment.

Brief resume relating to Directors who are being re-appointed are given in the Notice of the Annual General Meeting.

AUDITORS

M/s. Walker, Chandiok & Co (Firm Registration No.001076N), Chartered Accountants, Statutory Auditors of the Company hold office till the conclusion of the forthcoming Annual General Meeting and being eligible offer themselves for re-appointment. They have given a certificate under section 224(1B) of the Companies Act, 1956 to the effect that their re-appointment as Auditors of the Company, if made, would be in accordance with the said section. The Board recommends their re-appointment.

The observations in the Auditors'' Report are dealt within the notes to accounts at appropriate places and being self-explanatory, need no further comments.

COST AUDITORS

The Board in its meeting held on 30th May, 2013 has appointed M/s. J.K. Kabra & Co., Cost Accountants, New Delhi as Cost Auditors to carry out the cost audit of the Company for the financial year 2013-14. The Cost Audit Report for the year 2012-13 would be filed with Hon''ble Ministry of Corporate Affairs, New Delhi within stipulated time.

TRANSFER OF UNPAID/UNCLAIMED AMOUNTS TO INVESTOR EDUCATION AND PROTECTION FUND (IEPF)

Pursuant to the provisions of Section 205A(5) of the Companies Act, 1956, the declared dividends, which remained unpaid/ unclaimed for a period of seven years have been transferred by the Company to the IEPF established by the Central Government pursuant to Section 205C of the said Act.

CONSERVATION OF ENERGY, RESEARCH & DEVELOPMENT, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS & OUTGO

As required by the provisions of Section 217(1)(e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988, the relevant information is given in the annexure forming part of this report.

PERSONNEL

In terms of the provisions of Section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975 as amended, the names and other particulars of the employees are set out in the Annexure to the Directors'' Report. However, as per the provisions of Section 219(1)(b)(iv) of the said Act, the Annual Report excluding the aforesaid information is being sent to all the Members of the Company and others entitled thereto. Member who is interested in obtaining such particulars may write to the Company Secretary at the Corporate Office of the Company. The said information is also available for inspection at the Corporate Office and Registered Office of the Company during working hours upto the date of the Annual General Meeting.

During the year under report, the Industrial relations with personnel remained cordial, at all Plants. Your Directors wish to place on record their appreciation of the sincere and unstinted support provided to the Company by its employees at all levels.

ACKNOWLEDGEMENTS

The Board wishes to place on record its sincere appreciation for the continued assistance and support extended to the Company by Financial Institutions, Banks and various departments of Central and State Governments. Your Directors acknowledge with gratitude the encouragement and support extended by our valued customers, business associates and shareholders.

On behalf of the Board of Directors

Place : Gurgaon Arvind Kapur

Dated : 12th August, 2013 Chairman, CEO & MD

 
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