Directors Report of Rico Auto Industries Ltd.
Mar 31, 2023
The Directors present the 40th Annual Report of your Company, together with the Audited Financial Statements for the year ended 31st March, 2023.
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(Rs. in Crores) |
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Standalone |
Consolidated |
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Particulars |
Current Year 2022-23 |
Previous Year 2021-22* |
Current Year 2022-23 |
Previous Year 2021-22* |
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Total Revenue |
1896.65 |
1625.59 |
2321.54 |
1881.26 |
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Profit before Interest, Depreciation and Exceptional Items |
201.04 |
153.09 |
240.61 |
177.20 |
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Interest and Financial charges |
43.42 |
36.41 |
54.07 |
43.79 |
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Profit before Depreciation, Exceptional Items and Tax |
157.62 |
116.68 |
186.54 |
133.41 |
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Depreciation |
96.50 |
80.96 |
111.82 |
91.28 |
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Profit before Exceptional Items and Tax |
61.12 |
35.72 |
74.72 |
42.13 |
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Exceptional Items |
1.12 |
6.15 |
1.12 |
6.15 |
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Profit/(Loss) before Tax (PBT) |
60.00 |
29.57 |
73.60 |
35.98 |
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Tax Expense |
17.83 |
10.45 |
22.57 |
12.26 |
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Profit after Tax |
42.17 |
19.12 |
51.03 |
23.72 |
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Other Comprehensive Income (net of tax) |
1.78 |
4.13 |
3.84 |
5.27 |
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Total Comprehensive Income |
43.95 |
23.25 |
54.87 |
28.99 |
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* Restated the figures for the financial year 2021-22 pursuant to Scheme of Amalgamation |
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OPERATIONS AND THE STATE OF COMPANYâS AFFAIRS
Your Company has recorded a Total Revenue of ''1896.65 crores in the year under report as against ''1625.59 crores in the previous year with a growth of 16.67 per cent. Your Company has earned a profit after tax of ''42.17 crores during the year under report over the previous yearâs profit of ''19.12 crores.
The export turnover of your Company during the year under review was ''503.90 crores as against ''455.08 crores in the previous year.
Your Company has been one of the pioneers in exporting critical components based on the established quality systems and delivery experience of over 25 years. The Company has established a network of warehousing and local business representatives to support and manage its overseas customers. Since 2018, the Company has been focusing on the emerging Electric Vehicles and Hybrid Vehicle Components and have started supplying to BMW and STELLANTIS (PSA).
Further details as regards efforts of your Company on this front have been dealt within the Management Discussion and Analysis section of this report.
Your Directors are pleased to recommend for your approval a Dividend @ 75 percent i.e. ''0.75 per Equity Share of ''1/- each for the financial year 2022-23 amounting to ''10.15 crores on the equity share capital of ''13.53 crores as against a dividend of 40 percent i.e. ''0.40 per Equity Share of ''1/- each amounting to ''5.41 crores in the previous year on the same Equity Share Capital. The dividend payout is as per Dividend Distribution Policy which is available on the website of the Company at https://ricoauto.com/Mles/Dividend%20Distribution%20Policv.pdf
During the year under review, no amount has been transferred to the Reserves.
The Paid-up Share Capital as on 31st March, 2023 was ''13,52,85,000/- divided into 13,52,85,000 equity shares of ''1/- each. During the year under review, your Company has neither issued shares with Differential Voting Rights nor granted Stock Options or Sweat Equity. The Authorised Share Capital of your Company stands increased to ''270.00 Crores from ''54.00 Crores consequent to merger of the three Subsidiary Companies namely Rasa Autocom Limited, Rico Aluminium and Ferrous Auto Components Limited and Rico Investments Limited.
Your Company anticipate good growth in the business of the Company over the next few years driven by the increase in demand of components for Electric Vehicles as well as for ICE Engines both for Domestic and Export market. We are confident that our commitment to quality and excellence will lead us to our vision of becoming the preferred supplier across the globe especially for Electric Vehicles, Electrified Vehicles and ICE Engines.
The first quarter ended 30thJune, 2023, recorded a total revenue of ''437.37 crores as against the total revenue of ''474.13 crores in the corresponding quarter of the previous year. Consequently, the profit after tax stood at ''5.59 crores for the first quarter as against the profit of ''8.13 crores in the corresponding quarter of the previous year. The Company is confident to improve the turnover and margin during the remaining part of the year.
The Company continues its efforts towards expansion of its domestic and overseas customer base by optimizing utilization of existing available capacities that have been set-up, expansion of existing facilities and setting up new facilities, wherever required, to enhance the Customer reach. The Company is using its geographical spread to strategically locate its operations for de-risking.
Your Company is a major supplier of high technology components to BMW, TOYOTA, STELLANTIS (PSA), RENAULT, AISIN and MUSASHI for Motor and Transmissions.
The details of Plants and Facilities are given in the Corporate Governance Report.
Your Company has Seven (7) Subsidiaries.There was no material change in the nature of the business of any Subsidiary Company. Pursuant to SEBI (LODR) Regulations, 2015, Rico Jinfei Wheels Limited is 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, logistics and last mile support to our OEM and Tier-I Customers in North America, Mexico and Brazil for goods manufactured by your Company. The Company has recorded a total turnover of ''238.22 crores during the financial year ended 31st March, 2023 as against ''168.89 crores in the previous year.
The Company earned a net profit after tax of ''1.71 crores in the financial year ended 31st March, 2023 as against ''1.23 crores in the previous year. The Company has not declared any dividend for the financial year ended 31 st March, 2023.
This Subsidiary has achieved a total turnover of ''49.00 crores for the first quarter ended 30th June, 2023 as against ''58.47 crores in the corresponding quarter of the previous year. The Company earned a profit after tax of ''0.29 crore for the first quarter ended 30th June, 2023 as against a profit after tax of ''0.76 crore in the corresponding quarter of the previous year. During the financial year and period under review, your Company has not made additional investment in this Subsidiary. The Subsidiary is expecting a moderate growth during 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 warehousing, logistics and last mile support to our OEM and Tier-I Customers for the European Markets for goods manufactured by your Company.
There is a change of Business Model where Rico Auto has started direct supplies to many of the European Customers. As a result of which sales from this Company has reduced substantially.
The Company has recorded a total turnover of ''0.43 crore during the financial year ended 31 st March, 2023 as against ''5.20 crores in the previous year. The Company incurred a loss of ''0.28 crore in the financial year ended 31st March, 2023 as against loss of ''0.22 crore in the previous year.
This Subsidiary has not made any sales in the first quarter ended 30th June, 2023 as against ''0.16 crore in the corresponding quarter of the previous year. The Company incurred a loss of ''0.13 crore for the first quarter ended 30th June, 2023 as against loss of ''0.01 crore in the corresponding quarter of the previous year. During the financial year and period under review, your Company has not made additional investment in this Subsidiary.
C. AAN Engineering Industries Limited
AAN Engineering Industries Limited (AAN), an AS 9100D Certified Company, which defines it as a âManufacturer of Precision Machined Components & Assembliesâ for the Aerospace and Defence Industry.
AAN offers an extensive array of services for the manufacture of components/sub-systems within the Defence & Aerospace Industry. These include Design & Development of Tooling, Casting, Machining and Assembly, supported by CAD, CAM, CAE and R&D testing facilities. AAN works with a wide range of Raw Materials - namely Aluminium Alloy, Alloy Steel & High Manganese Steel & Raw Material/Castings as required by Client.
AAN currently manufactures machined metal components for Mechanical and Electronic Fuse Assembly. In the current year the Company has been marked and shortlisted as a new supplier by BEML to bid for supply of Track Link Assembly for T-72 tanks. This particular technical engagement places the Company favorably for manufacturing and servicing this specific need for Ministry of Defence over next several years. The Company is also one of the shortlisted engineering firms by DRDO lab for the key Make in India program for indigenization of Inflatable Decoy for Indian Defence forces. AAN Engineering has inked a transfer of technology agreement with Global leader of Inflatable Decoy manufacturer for the same.
AAN Engineering as part of consortium has partnered with a leading OEM of Containerized Shooting Ranges and is one of the key shortlisted company by Ministry of Defence permitted to participate in the tender which are being handled through Fast Track Process (FTP).
The Company is also in consideration as one of the shortlisted Indian companies for supply of power train components for Tatra Truck to India Army Central Ordnance Depot (COD).
In the current year the Company has signed Memorandum of Understanding (MOU) with Global Vehicle OEM for Assembly and Supply of Special Mobility Vehicle (SMV) to the Infantry wing of Indian Army. This particular technical engagement for Make In India procurement places the company as a preferred OEM for Indian Army.
AAN is empaneled and registered with the Special Products division of Electronics Corporation of India Limited (ECIL), Hyderabad, Bharat Electronics Limited (BEL), Pune, Bharat Earth Movers Limited (BEML), Bangalore, Engine Divisions of Hindustan Aeronautical Limited (HAL) (Bangalore, Nasik and Koraput), Heavy Vehicles Factory (HVF) Avadi, Army Base Workshop and Army Directorate of Indigenization and various Ordnance Factories.
AAN embodies your Companyâs Defence Outfit and a Strategic Investment. With the mission Atma Nirbhar Bharat, more involvement with Defence Sector is foreseen.
During the year under review, the Company has recorded a total revenue of ''15.73 crores as against ''11.65 crores in the previous year. During the year, the Company has earned a profit of ''1.30 crores as against a loss of ''0.60 crore in the previous year.
This Subsidiary has recorded a total revenue of ''4.13 crores in the first quarter ended 30th June, 2023 as against ''4.01 crores in the corresponding quarter of the previous year. The Company earned a profit after tax of ''0.47 crore for the first quarter ended 30th June, 2023 as against ''0.10 crore in the corresponding quarter of the previous year.
During the financial year and period under review your Company has not made additional investment in this Subsidiary.
D. Rico Fluidtronics Limited
This Company, during the year under review, has recorded a total revenue of ''138.29 crores as against ''68.01 crores in the previous year. This Company has earned a profit after tax of ''8.16 crores in the financial year ended 31st March, 2023 as against profit after tax of ''5.92 crores in the previous year.
Your Company has received a dividend of ''7.60 crores (18 per cent) of ''1.80 per Equity Share of ''10/- each for the financial year 2022-23 as against dividend of ''4.22 crores in the previous year on the same Equity Share Capital.
This Company has recorded a total revenue of ''45.17 crores for the quarter ended 30th June, 2023 as against ''23.92 crores in the corresponding quarter of the previous year. The Company has earned a profit after tax of ''4.86 crores for the quarter ended 30th June, 2023 as against profit after tax of ''1.01 crores in the corresponding quarter of the previous year.
With reference to previous yearâs business realization, development of MSIL Engine K15C Oil Pump & Water Pumps have been completed and these products have been launched in serial production from March, 2022 onwards.
During the financial year and period under review your Company has not made additional investment in this Subsidiary.
E. Rico Jinfei Wheels Limited (Subsidiary and Joint Venture)
This Company has now become a direct Subsidiary after merger of its holding Company namely Rico Investments Limited with your Company.
This Company has recorded a total turnover of ''302.81 crores during the financial year ended 31st March, 2023 as against ''232.92 crores in the previous year. This Company has incurred a loss of ''0.20 crore in the financial year ended 31st March, 2023 as against the profit after tax of ''0.78 crore in the previous year.
Further, this Company has recorded a total turnover of ''77.37 crores for the quarter ended 30th June, 2023 as against ''72.54 crores in the corresponding quarter of the previous year. The Company has earned a profit of ''0.74 crore for the quarter ended 30th June, 2023 as against a loss of ''0.87 crore in the corresponding quarter of the previous year.
Rico Jinfei Wheels Limited (RJWL), has in its Board Meeting held on 26th July, 2021 approved the Scheme of Amalgamation (âSchemeâ) for merger of Rico Castings Limited (âTransfer or Companyâ) with RJWL, pursuant to Sections 230 to 232 of the Companies Act, 2013, with effect from Appointed Date i.e. 1st April, 2021. The Honâble NCLT after necessary statutory and regulatory approvals including the shareholders and creditors of the respective Companies have approved the Scheme of Amalgamation, consequently the Transferor Company has been dissolved without winding-up.
During the financial year and period under review your Company has not made additional investment in this Subsidiary.
F. Rico Friction Technologies Limited
This Company has recorded a total turnover of ''3.97 crores during the financial year ended 31st March, 2023 as against ''3.03 crores in the previous year. This Company has earned a profit after tax of ''0.60 crore in the financial year ended 31st March, 2023 as against the profit after tax of ''0.39 crore in the previous year. This Company has not recommended any dividend for the financial year 2022-23.
Further, this Company has recorded a total turnover of ''0.79 crore for the quarter ended 30th June, 2023 as against ''1.01 crores in the corresponding quarter of the previous year. The Company has earned a profit after tax of ''0.06 crore for the quarter ended 30thJune, 2023 as against the profit after tax of ''0.20 crore in the corresponding quarter of the previous year.
During the financial year and period under review your Company has not made additional investment in this Subsidiary.
Your Companyâs investment in this Company stands at ''2,99,000/- (59.80% of the total paid-up capital) as on 31st March, 2023 after merger of its Subsidiary Companies with itself. The Company is registered under Section 8 of the Companies Act, 2013 and will undertake Corporate Social Responsibility (CSR) activities on behalf of Rico Group Companies.
NOTES ON ASSOCIATE COMPANIES A. Roop Ram Industries Private Limited
As per the terms and conditions of Power Purchase Agreement (PPA) for solar power, your Company, on 23rd August, 2021, invested an amount of ''2.43 crores by way of purchase of 24,34,640 fully paid-up equity shares of ''10/- each (26% of the total paid-up capital) of M/s. Roop Ram Industries Private Limited and from 17th February, 2022, your Company started procuring 1.40 crore units per year of solar power from the said Company resulting in an approximate savings of ''1.80 crores annually.
The financials of the aforesaid Associate Company has not been considered for consolidation in the accounts of your Company. CONSOLIDATED FINANCIAL STATEMENTS Pursuant to Section 129(3) of the Companies Act, 2013 read with rules made thereunder the appended Audited Consolidated Financial Statements of the Subsidiaries and the Joint Venture Company forms part of the Annual Report.
A Statement containing salient features of the financial statements of Subsidiaries and Joint Venture Company has been provided in Form AOC-1 which is annexed and forms part of this Report.
Further, audited financial statements of the Subsidiaries and Joint Venture Company have also been placed on the website link of the Company https://www.ricoauto.in/investor-relation.html.
The Company will make available these documents upon request by any member of the Company interested in obtaining the same.
MATERIAL CHANGES AND COMMITMENTS
There was no change in the nature of the business of the Company. As reported last year, the Honâble National Company Law Tribunal, Bench at Chandigarh (âNCLTâ) have considered and approved the Scheme of Amalgamation (âSchemeâ) for merger of the Subsidiary Companies namely Rasa Autocom Limited, Rico Aluminium and Ferrous Auto Components Limited and Rico Investments Limited (âTransferor Companiesâ) with your Company, with effect from Appointed Date i.e. 1st April, 2021. Consequently the Transferor Companies have been dissolved without winding-up process.
There were no other material changes and commitments affecting the financial position of the Company occurring between 31st March, 2023 and the date of this Report.
CRISIL Ratings Limited, Credit Rating Agency has assigned its âCRISIL A/Stable/CRISIL A1â ratings to the bank facilities of Rico Auto Industries Limited based on a consolidated view of the Company and its Subsidiaries business on the back of their similar business profile, Common Treasury and Management Team and the instrument wise rating actions are given below:
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Total Bank Loan Facilities Rated |
Rs.615.00 Crores |
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Long Term Rating |
CRISIL A/Stable (Assigned) |
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Short Term Rating |
CRISIL A1 (Assigned) |
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Above specified ratings being latest one are published on 6th July, 2023. The above credit ratings are being reviewed at regular intervals. |
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The Company has not accepted deposits from the public during the year under review.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT (MDA)
Pursuant to Regulation 34(2) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, MDA is annexed which forms part of this Report.
Business risk evaluation and its management is an ongoing process within the Company. The same is further discussed in Management Discussion and Analysis, which forms part of this Report.
Details of the Risk Management Committee are given in the Corporate Governance Report. The policy is available on the website link of the Company https://ricoauto.in/tiles/Kev%20Policies.pdf.
The Company is in compliance with the applicable Secretarial Standards issued by the Institute of Company Secretaries of India.
INTERNAL CONTROL SYSTEM AND THEIR ADEQUACY
The adequacy of Internal Financial Controls is discussed in Management Discussion and Analysis, which forms part of this Report.
A separate report on Corporate Governance containing General Shareholders information, along with the Certificate from Practicing Company Secretary regarding compliance of conditions of Corporate Governance as stipulated under the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 is annexed as a part of this Report
Your Company has an Audit Committee to meet the requirements of the Companies Act, 2013 and Regulation 18 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. 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 in place a duly constituted Nomination and Remuneration Committee to meet the requirements of the Companies Act, 2013 and Regulation 19 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. Details of the Nomination and Remuneration Committee are given under the Corporate Governance Report.
The Board has framed (i) Policy on Board Diversity; and (ii) Nomination & Remuneration Policy which lays down a framework in relation to the remuneration of Directors, Key Managerial Personnel and Senior Management of the Company. This policy also lays down criteria for selection and appointment of Board Members. This Policy is placed on the website link of the Company https://ricoauto.in/files/Key%20PoMcies.pdf.
CORPORATE SOCIAL RESPONSIBILITY (CSR)
In accordance with the requirements of Section 135 of the Companies Act, 2013, after adjusting the amount of CSR required to be spent by Subsidiary Companies amalgamated with your Company (''27.02 lakhs) and the excess amount spent by your Company in the previous year (''23.00 lakhs) the amount to be spent during the financial year
2022-23, worked out to be ''4.02 lakhs. The Company has spent an amount of ''4.31 lakhs including ''0.29 lakhs on voluntary basis towards the CSR activities/projects as specified in CSR policy of the Company during the financial year 2022-23. The CSR activities of the Company are being monitored by the CSR Committee. The focus area of CSR activities is as per Schedule VII of the Companies Act, 2013.
The details about the policy on Corporate Social Responsibility (âCSRâ) including initiatives taken on CSR, the 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 link of the Company https://ricoauto.in/files/Key%20Policies.pdf.
The Company has established Vigil Mechanism/Whistle Blower Policy for Directors, Employees, Clients, Vendors, Suppliers and Contractors as an avenue to report concerns including unethical behavior, actual or suspected, frauds or violation of the Companyâs code of conduct. The same meets the requirements of Section 177(9) of the Companies Act, 2013 and Regulation 22 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and is available on the website link of the Company https://ricoauto.in/files/Key%20Policies.pdf. During the year under review, no matter has been received under this policy.
RELATED PARTY TRANSACTIONS AND MATERIAL SUBSIDIARIES
The Company has duly approved policies for determining the Material Subsidiaries and Material Related Party Transactions. These Policies are available on the website link of the Company https://ricoauto.in/files/Key%20Policies.pdf. All contracts/ arrangements/ transactions entered by the Company during the financial year with related parties were in the ordinary course of business and on armâs length basis and prior approval of the Audit Committee was sought for entering into related party transactions. No material related transactions were entered during the financial year under report, accordingly there are no particulars to report in Form AOC-2 which is annexed and forms part of this Report. As required by SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, a return has been filed with BSE/NSE. Please also refer note 38 to the standalone financial statements for related party disclosures.
The Equity Shares of your Company are presently listed on the BSE Limited and National Stock Exchange of India Limited. The Annual Listing Fees have been paid for the financial year 2023-24.
The Annual Return of the Company as on 31st March, 2023 is available on the website link of the Company https://ricoauto.in/files/Annual%20Return.pdf.
PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS
The particulars of investments made, loans and guarantees given are provided in the standalone financial statements. (Please refer to note 7, 8 and 36 of the standalone financial statements).
BOARD OF DIRECTORS AND KEY MANAGERIAL PERSONNEL (KMP)
In accordance with the provisions of the Companies Act, 2013, Shri Samarth Kapur (DIN:01525517), Executive Director of the Company will retire by rotation at the forthcoming AGM and who being eligible, has offered himself for re-appointment. A brief resume of Shri Samarth Kapur is given in the Notice of the AGM.
Shri Yogesh Kapur (DIN:00070038), has been appointed as an Additional Director in the category of Independent Director w.e.f. 26th August, 2023 and the resolution for regularization of his appointment for five years has been proposed for your approval at this AGM.
DECLARATION BY INDEPENDENT DIRECTORS AND STATEMENT ON COMPLIANCE OF THE CODE OF CONDUCT
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 the Listing Regulations, 2015 and they have further confirmed compliance with the code for Independent Directors as prescribed in the Schedule IV of the Companies Act, 2013.
Further a declaration has been received from all Independent Directors pursuant to Rule 6 of the Companies (Appointment and Qualification of Directors) Rules, 2014, affirming that they have registered themselves with the Indian Institute of Corporate Affairs in the Independent Directorâs Data Bank. In the opinion of the Board, all the Independent Directors are proficient and have requisite experience and expertise to undertake the responsibilities conferred on them.
During the year under review, five Board Meetings were held and one separate meeting of Independent Directors was held, the details of which forms part of Corporate Governance Report.
Pursuant to the provisions of the Companies Act, 2013 and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Board of Directors have carried out the annual evaluation of its own performance, the Individual Directors including the Chairman as well as the evaluation of the working of its Committees. The evaluation of Board as a whole and Non-Independent Directors including Chairman was done by the Independent Directors in their meeting held on 24th March, 2023. The manner, in which the evaluation has been carried out, has been explained in the Corporate Governance Report.
BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORT (BRSR)
The Business Responsibility and Sustainability Report (BRSR) as prescribed by the SEBI Listing Regulations, 2015 has been prepared and forms part of this Annual Report for the financial year 2022-23.
DIRECTORSâ 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, 2023, 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, 2023 and of the profit for the year 1st April, 2022 to 31st March, 2023;
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 31 st March, 2023 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 are adequate and operating effectively.
M/s. B S R & Co. LLP, Chartered Accountants (Firm Registration No.101248W/W-100022) were appointed as Statutory Auditors of your Company at the 39th Annual General Meeting (AGM) held on 30th September, 2022, to hold office for a term of five consecutive years till the conclusion of 44th AGM to be held in the year 2027.
The Company has received a certificate from M/s. B S R & Co. LLP, Chartered Accountants confirming their eligibility to continue as Auditors of the Company.
As required under Regulation 33 of the SEBI (LODR) Regulations, 2015, the Statutory Auditors have confirmed that they hold a valid certificate issued by the Peer Review Board of the Institute of Chartered Accountants of India.
The Reports given by the Statutory Auditors on the financial statements (Standalone and Consolidated) of the Company for the financial year 2022-23 are forming parts of this Annual Report. The said Reports are unmodified and there are no qualifications, reservations, adverse remarks or disclaimer.
M/s. Protiviti India Member Private Limited, the Internal Auditors (CIN:U93000HR2009PTC057389) retired on completion of Internal Audit for the financial year 2022-23. The Board places on record its appreciation for valuable contribution made by them during their association with the Company.
The Board on the recommendation of the Audit Committee has appointed M/s. Grant Thornton Bharat LLP (LLPIN: AAA-7677) as the Internal Auditors of the Company for the Financial Year 2023-24.
APPOINTMENT OF COST AUDITORS AND MAINTENANCE OF COST RECORDS
The cost records as required under section 148 of the Companies Act, 2013 read with Companies (Cost Records and Audit) Rules, 2014 are being prepared and maintained by the Company in order to ensure proper compliance.
The Board, on the recommendation of Audit Committee, has re-appointed M/s. MM & Associates, Cost Accountants (Firm Registration No.000454) as Cost Auditors to carry out the cost audit of the Company for the financial year 2023-24. In terms of Section 148 of the Companies Act, 2013 and the rules made thereunder, remuneration of Cost Auditors is to be ratified by members of the Company. Accordingly, a resolution is included in the Notice of ensuing Annual General Meeting for your approval. The Cost Audit Report for the financial year 2022-23 would be filed with the Ministry of Corporate Affairs, Delhi within the stipulated time.
The Secretarial Audit Report for the financial year ended 31 st March, 2023 is enclosed and forms part of this report. There is no secretarial audit qualification for the year under review.
The Board has approved re-appointment of Shri Vimal Chadha of M/s. Vimal Chadha & Associates, Company Secretaries (C.P. No.18669, FCS No. 5758), as Secretarial Auditors to carry out the Secretarial Audit of the Company for three financial years from 2022-23 to 2024-25.
SECRETARIAL AUDIT OF MATERIAL UNLISTED INDIAN SUBSIDIARY
The Secretarial Audit of Rico Jinfei Wheels Limited, Material Subsidiary of the Company for the Financial Year 2022-23 was carried out pursuant to Section 204 of the Companies Act, 2013 and Regulation 24A of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The Secretarial Audit Reports of the Subsidiary do not contain any qualification, reservation or adverse remark or disclaimer. The report is annexed to this report.
ANNUAL SECRETARIAL COMPLIANCE REPORT
The Company has undertaken an audit for the Financial Year 202223 for all applicable compliances as per Securities and Exchange Board of India Regulations and Circulars/Guidelines issued thereunder. The Annual Secretarial Compliance Report has been submitted to the Stock Exchanges timely for the Financial Year 2022-23.
DETAILS IN RESPECT OF FRAUDS REPORTED BY AUDITORS
The Statutory Auditors, Internal Auditors, Cost Auditors and Secretarial Auditors of the Company have not reported any frauds to the Audit Committee or to the Board of Directors under Section 143(12) of the Companies Act, 2013, including rules made there under.
TRANSFER OF UNCLAIMED AMOUNTS TO INVESTOR EDUCATION AND PROTECTION FUND (IEPF)
Pursuant to the provisions of Section 124(5) and other applicable provisions of the Companies Act, 2013 (the Act), read with rules made thereunder, the declared dividends, which remained unpaid/ unclaimed (''0.23 crore) for a consecutive period of seven years have been transferred by the Company to the IEPF established by the Central Government pursuant to Section 125 of the Act.
Pursuant to the provisions of Section 124(6) of the Companies Act, 2013, read with Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 (the Rules) a Company is required to transfer to the DEMAT Account of IEPF Authority all shares in respect of which dividends have not been paid or claimed for seven consecutive years or more. In accordance with the aforesaid provisions of the Act read with the rules, your Company, during the financial year 2022-23, had transferred 26017 shares pertaining to the financial year 2014-15 to the Demat Account of IEPF Authority within the stipulated time period.
CONSERVATION OF ENERGY, RESEARCH AND DEVELOPMENT, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
The relevant information as required by the provisions of Section 134(3)(m) of the Companies Act, 2013 read with the Companies (Accounts) Rules, 2014, 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 the financial year 2022-23 impacting the going concern status and Companyâs operations in future.
APPLICATION/PROCEEDING UNDER THE INSOLVENCY AND BANKRUPTCY CODE, 2016
During the year, the Company has not made any application under the Insolvency and Bankruptcy Code, 2016 (IBC) and there is no proceeding pending under IBC.
ONE-TIME SETTLEMENT WITH ANY BANK OR FINANCIAL INSTITUTION
There was no instance of one-time settlement with any Bank or Financial Institution.
PREVENTION OF SEXUAL HARASSMENT AT WORKPLACE
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 and has in place an Internal Complaint Committee to redress the complaints and circumstances regarding the behavior of sexual harassment at workplace. The Policy for the same is placed on the intranet for the benefit of its employees. There were no complaints received from any employee during the year under review.
PERSONNEL
The information required under Section 197(12) of the Companies Act, 2013 read with Rule 5(1), Rule 5(2) and Rule 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, as amended and forming part of this Report for the year ended 31st March, 2023 are set out in the Annexure of this Report.
However, the Annual Report, excluding the Annexure is being sent to the Members of the Company in terms of the provisions of Section 136 of the Companies Act, 2013. A Member who is interested in obtaining these particulars may write to the Company Secretary at the Registered Office of the Company.
During the year under report, the Industrial relations with personnel remained cordial, at all Plants.
ACKNOWLEDGEMENTS
The Board wishes to place on record its sincere appreciation for the continued assistance and support extended to the Company by Banks & Financial Institutions and various departments of Central & State Governments. Your Directors acknowledge with gratitude the encouragement and support extended by Companyâs valued shareholders, customers, business associates and other stakeholders. The Directors also place on record their appreciation of the sincere and unstinted support provided to the Company by its employees at all levels.
On behalf of the Board of Directors
Arvind Kapur
Chairman, CEO &
Place : Gurugram Managing Director
Date : August 25, 2023 (DIN: 00096308)
Mar 31, 2018
To the Shareholders,
The Directors have pleasure in presenting the 35th Annual Report of your Company, together with the Audited Financial Statements for the year ended 31st March, 2018.
FINANCIAL HIGHLIGHTS
Your Company has, for the first time, adopted Indian Accounting Standards (Ind AS) while preparing its Financial Statements for the financial year 2017-18 and accordingly corresponding previous yearâs figures were restated with a transition date as 1st April, 2016. The Financial Statements are prepared in terms of the Companies (Indian Accounting Standards) Rules, 2015, as amended, and other accounting principles generally accepted in India.
The financial results for the year ended 31st March, 2018 are summarized below:
(Rs. in Crores)
|
Standalone |
Consolidated |
|||
|
Particulars |
Current Year 2017-18 |
Previous Year 2016-17 |
Current Year 2017-18 |
Previous Year 2016-17 |
|
Net Revenue and Other Income |
1118.25 |
1042.17 |
1245.79 |
1127.19 |
|
Profit before Interest, Depreciation and Exceptional Items |
128.00 |
113.66 |
150.18 |
127.73 |
|
Interest and Financial charges |
17.16 |
16.01 |
18.74 |
16.71 |
|
Profit before Depreciation, Exceptional Items and Tax |
110.84 |
97.65 |
131.44 |
111.02 |
|
Depreciation |
40.92 |
35.56 |
53.90 |
46.29 |
|
Profit before Exceptional Items and Tax |
69.92 |
62.09 |
77.54 |
64.73 |
|
Exceptional Items |
6.80 |
0.66 |
7.43 |
1.36 |
|
Profit before Tax (PBT) |
63.12 |
61.43 |
70.11 |
63.37 |
|
Tax Expense |
13.48 |
13.72 |
12.11 |
11.72 |
|
Profit after Tax |
49.64 |
47.71 |
58.00 |
51.65 |
|
Other Comprehensive Income/(Loss) (net of tax) |
(0.45) |
(0.90) |
0.57 |
(2.58) |
|
Total Comprehensive Income |
49.19 |
46.81 |
58. 57 |
49.07 |
OPERATIONS AND THE STATE OF COMPANYâS AFFAIRS
Your Company has recorded a gross turnover of Rs.1118.25 crores in the year under report as against Rs.1042.17 crores in the previous year. Your Company has earned a Profit after Tax (PAT) of Rs.49.64 crores during the year under report over the previous yearâs profit of Rs.47.71 crores.
Your Company has entered the two-wheeler aftermarket segment in May, 2017 and achieved a turnover of Rs.9.66 crores in the first year. After a successful year in the two-wheeler aftermarket segment, your Company in August, 2018 has entered into the four-wheeler aftermarket segment with an optimistic target of achieving sales of over Rs.100.00 crores by 2020. The Company has established a strong network of 42 dealers and distributors across 22 States in India while also marking a footprint in Nepal and Sri Lanka.
Your Company has entered into a Joint Venture Agreement with M/s. Ultra Fairwood PTE Limited, Singapore on 12th December, 2017 to manufacture PODs (Autonomous Electric Vehicles to be run on a dedicated track) for PRT (Personal Rapid Transport), GRT (Group Rapid Transport) or any variant thereof.
Your Company has also been focusing on tapping the vast opportunities in manufacturing components of Electric Vehicles (EVs). To meet this futuristic demand, the Company is all set to invest in new technology adoption required for the same. The Company has also been nominated by global clients for critical components for their new electric vehicle programs.
DIVIDEND
During the financial year ended 31st March, 2018, your Company has paid an Interim Dividend @ 40 per cent i.e. Rs.0.40 per Equity Share of Rs.1/- each, amounting to Rs.6.51 crores including dividend tax of Rs.1.10 crores which was declared by the Board of Directors on 9th February, 2018 and paid on 28th February, 2018. In addition, the Board has recommended a Final Dividend @ 40 per cent i.e. Rs.0.40 per Equity Share of Rs.1/- each for the financial year 2017-18. If approved, the total dividend (interim and final) will amount to Rs.13.02 crores including dividend tax of Rs.2.20 crores as against a dividend of 75 per cent i.e. Rs.0.75 per Equity Share of Rs.1/- each aggregating to Rs.12.22 crores including dividend tax of Rs.2.07 crores in the previous year on the same Equity Share Capital.
RESERVES AND SURPLUS
During the financial year 2017-18, no amount was transferred to general reserves. The reserves and surplus of your Company stood at Rs.530.73 crores as against Rs.500.44 crores in the previous year.
SHARE CAPITAL
The paid-up share capital as on 31st March, 2018 was Rs.13,52,85,000 divided into 13,52,85,000 equity shares of Rs.1/- each. During the year under review, your Company has neither issued shares with Differential Voting Rights nor granted Stock Options nor Sweat Equity.
EXPORTS
The export turnover of your Company during the year under review was Rs.268.85 crores as against Rs.253.59 crores in the previous year.
The export turnover includes sales to wholly owned subsidiaries amounting to Rs.213.14 crores as against Rs.198.48 crores in the previous year. The wholly owned subsidiaries of your Company in United Kingdom and United States of America are engaged in providing last mile sales and customer support in their respective regions.
During the quarter ended 30th June, 2018 of the current year, export turnover was Rs.83.72 crores as against Rs.63.93 crores in the corresponding quarter of the previous year. Further details as regards to the 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, 2018, already announced, show a gross turnover of Rs.311.89 crores for the first quarter of the current year as against a turnover of Rs.270.27 crores in the corresponding quarter of the previous year.
The Profit after Tax stood at Rs.13.57 crores for the first quarter ended 30th June, 2018 as against Rs.11.33 crores over the corresponding quarter of the previous year. The Earning per Share (EPS) is Rs.1.00 for the quarter ended 30th June, 2018 as against Rs.0.84 over the corresponding quarter of the previous year. The Company is confident to maintain the trend to improve the turnover and margin during the remaining part of the year.
PLANTS AND FACILITIES
The Company continues its efforts towards the expansion of its domestic and overseas customer base by 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 to augment existing facilities and set up new facilities at the following locations:
A. Bawal Plant
This plant has been set up for High-Tonnage High-Pressure Die Casting production with state-of-the-art facility having a high level of Automation, Quality Control and Precision Machining for critical Parts and Assemblies. The Company is now gearing up for higher volumes for its esteemed customers namely BMW, GKN, Renault, PSA, Cummins and Eaton. The Company has also added new customers like Daimler and Punch Powertrain. The production lines for these new customers will start in the 4th quarter of this financial year.
B. Chennai Plant
The Company has set up a manufacturing plant at Chennai for the supply of Machined Aluminum Auto Components to Renault-Nissan.
The Plant was commissioned and started commercial production in 2016. At present, the plant has installed capacity of 1,50,000 sets for cylinder block and over 3,00,000 sets of other components like Oil Pan, Timing cases etc., which are in production. The Company has also added KIA Motor and PSA-Avtec as new customers and production will start in the 4th quarter of this financial year.
The Company is also targeting other south based customers for domestic and export programs to further enhance the business from this Plant.
C. Pathredi (Bhiwadi) Plant
The Company laid the foundation stone for a new manufacturing plant at Pathredi, Bhiwadi (Rajasthan) on 7th July, 2016 for manufacturing of Auto Components.
The Company is expected to start commercial production at the new plant in the 4th quarter of this financial year.
D. Sanand Plant
In view of low demand by Tata Motors Limited for the components of the Nano Car, supply is being made from the Companyâs Gurugram Plant. Efforts are being made to add more customers so that 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 plants in Gujarat and other states. The expected production of Hero components will start from end of the 3rd quarter of this financial year.
SUBSIDIARY COMPANIES
Your Company has three Wholly Owned Subsidiaries, one Subsidiary Company and three Step-down Subsidiary Companies.
There was no material change in the nature of the business of any Subsidiary Company. Pursuant to SEBI (LODR) Regulations, 2015, Rico Aluminium and Ferrous Auto Components Limited and Rico Investments Limited are material subsidiaries of the Company.
A. Rico Auto Industries Inc., USA
This Company is engaged in the business of trading of Auto Components and providing warehousing, logistics and last mile support to our OEM and Tier-I Customers in North America, Mexico and Brazil. The Company has recorded a gross turnover of Rs.140.67 crores during the financial year ended 31st March, 2018 as against Rs.151.83 crores in the previous year.
The Company earned a net profit after tax of Rs.1.79 crores in the financial year ended 31st March, 2018 as against Rs.1.58 crores in the previous year. The Company has not declared any dividend for the financial year ended 31st March, 2018.
This Subsidiary has achieved a gross turnover of Rs.37.24 crores for the first quarter ended 30th June, 2018 as against Rs.38.86 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.
The Subsidiary is expecting a moderate growth during 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 warehousing, logistics and last mile support to our OEM and Tier-I Customers for the European Markets.
The Company has recorded a gross turnover of Rs.84.71 crores during the financial year ended 31st March, 2018 as against Rs.52.25 crores in the previous year. The Company earned a net profit of Rs.0.50 crore in the financial year ended 31st March, 2018 as against Rs.0.31 crore in the previous year. The Company has not declared any dividend for the financial year ended 31st March, 2018.
This Subsidiary has achieved a gross turnover of Rs.26.36 crores for the first quarter ended 30th June, 2018 as against Rs.19.24 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.
C. AAN Engineering Industries Limited
AAN Engineering Industries Limited (AAN) is an AS 9100C Certified Company, which defines it as a âManufacturer of Precision Machined Components & Assembliesâ for the Aerospace and Defence Industry.
AAN offers an extensive array of services for the manufacture of components/subsystems within the Defence & Aerospace Industry. These include Design & Development of Tooling, Casting (Aluminum, Ferrous & High Manganese Steel), Machining and Assembly, supported by CAD, CAM, CAE and R&D testing facilities.
AAN currently manufactures and assembles Mechanical Fuses and metal parts for Electronic Fuses with an installed capacity of producing 25000 Fuse body component per month with scalability up to 75000 per month.
AAN works with a wide range of Raw Materials - namely Aluminum Alloy, Alloy Steel & High Manganese Steel & Raw Material/Castings as required by Client. Supplied Track Links for one of the prestigious Tracked Fighting vehicle - T72 in High Manganese Steel grade. The Companyâs capability has been assessed and passed for supplies of Air Force Ammunition.
AAN is empanelled and registered with the Special Products division of Electronics Corporation of India Limited (ECIL), Hyderabad, Bharat Electronics Limited (BEL), Pune, Engine Divisions of Hindustan Aeronautical Limited (HAL) (Bangalore, Nasik and Koraput), Heavy Vehicles Factory (HVF) Avadi, Army Base Workshop and Army Directorate of Indigenization and various Ordnance Factory Board factories.
AAN Engineering is one of the leading participating companies in the largest ammunition tender taken out by Ministry of Defence in the year 2018. The company has signed Strategic Transfer of Technology with leading OEMs across the globe. During the year under review, the Company has earned a total revenue of Rs.4.08 crores against Rs.4.15 crores in the last year. During the year, the Company has incurred a loss of Rs.0.25 crore against a profit of Rs.0.01 crore in the previous year.
This Subsidiary has achieved a gross turnover of Rs.1.89 crores for the first quarter ended 30th June, 2018 as against Rs.1.60 crores in the corresponding quarter of the previous year. The Company earned a net profit of Rs.0.03 crore for the first quarter ended 30th June, 2018 as against Rs.0.06 crore profit in the previous year. During the financial year and period under review, your Company has not made any additional investment in this Subsidiary.
D. Rico Investments Limited
During the year under review, this Company has recorded a gross revenue of Rs.4.92 crores as against Rs.4.86 crores in the previous year. This Company has earned a profit of Rs.3.54 crores in the financial year ended 31st March, 2018 as against Rs.3.72 crores in the previous year.
This Company has earned a total revenue of Rs.1.23 crores and a net profit of Rs.0.79 crore for the quarter ended 30th June, 2018. The Board of this Company has recommended a maiden dividend of 2 per cent for the financial year ended 31st March, 2018 and your Company expects to receive an amount of Rs.2.30 crores by way of dividend on its investment.
This Company has not made any additional investment in its Subsidiary Companies. This Company has the following subsidiaries:
i) Rico Aluminium and Ferrous Auto Components Limited
During the year under review, this Company has recorded a gross turnover of Rs.246.40 crores as against Rs.272.97 crores in the previous year. This Company has incurred a loss of Rs.0.13 crore as on 31st March, 2018 as against the profit of Rs.0.90 crore in the previous year. Further, this Company has achieved a gross turnover of Rs.64.41 crores and earned a profit of Rs.0.79 crore for the quarter ended 30th June, 2018.
ii) Rasa Autocom Limited
This Company is engaged in the business of manufacturing of High Pressure, Gravity and Low Pressure Die Cast Auto Components. Its plant is equipped with Automation and better controls to produce high quality parts in large volume for export. This Company has recorded a gross turnover of Rs.32.74 crores during the financial year ended 31st March, 2018 as against Rs.27.54 crores in the previous year. The Company has earned a profit of Rs.2.63 crores in the financial year ended 31st March, 2018 as against the profit of Rs.3.21 crores in the previous year.
This Subsidiary has achieved a gross turnover of Rs.14.75 crores for the first quarter ended 30th June, 2018 as against Rs.6.32 crores in the corresponding quarter of the previous year. The Company has earned a profit of Rs.0.35 crore for the quarter ended 30th June, 2018.
iii) Rico Jinfei Wheels Limited
This Company has recorded a gross turnover of Rs.112.83 crores during the financial year ended 31st March, 2018 as
against Rs.87.54 crores in the previous year. This Company has earned a profit of Rs.0.13 crore in the financial year ended 31st March, 2018 as against the loss of Rs.2.43 crores in the previous year.
Further, this Company has recorded a gross turnover of Rs.36.61 crores for the quarter ended 30th June, 2018 as against Rs.24.88 crores in the corresponding quarter of the previous year. The Company has incurred a loss of Rs.0.95 crore for the quarter ended 30th June, 2018.
E. Uttarakhand Automotives Limited and Scheme of Amalgamation
Uttarakhand Automotives Limited, a Wholly Owned Subsidiary has been amalgamated with the Company w.e.f. the appointed date i.e. 1st April, 2015 as per the Scheme of Amalgamation approved by the Honâble National Company Law Tribunal, Chandigarh Bench vide its order dated 14th December, 2017. The certified copy of the order was received by the Company on 9th January, 2018 and the same was filed with the Registrar of Companies, NCT of Delhi and Haryana on 11th January, 2018. Uttarakhand Automotives Limited has been dissolved w.e.f. 11th January, 2018 without undergoing the process of winding up and its entire assets, liabilities, rights, powers and duties stand transferred to Rico Auto Industries Limited with effect from the appointed date. The Scheme did not involve allotment of shares. The Authorised Share Capital of Rico Auto Industries Limited has increased from Rs.30,00,00,000 (Rupees Thirty crores only) to Rs.54,00,00,000 (Rupees Fifty four crores only) consequent to this Scheme of Amalgamation.
JOINT VENTURE COMPANY
Magna Rico Powertrain Private Limited
Magna Rico has recorded a gross turnover of Rs.92.44 crores in the financial year ended 31st March, 2018 as against Rs.90.10 crores in the previous year. This Company has earned a profit of Rs.5.70 crores in the financial year ended 31st March, 2018 as against Rs.6.21 crores in the previous year. The Board of this Company has recommended a maiden dividend of 7.5 per cent for the financial year ended 31st March, 2018 and your Company expects to receive Rs.1.58 crores by way of dividend on its investment. During the financial year and period under review, your Company has not made any additional investment in this Joint Venture.
CONSOLIDATED FINANCIAL STATEMENTS
Pursuant to Section 129(3) of the Companies Act, 2013 read with rules made thereunder the appended Audited Consolidated Financial Statements of the Subsidiaries and the Joint Venture Company forms part of the Annual Report.
A Statement containing salient features of the financial statements of Subsidiaries and Joint Venture Company has been provided in Form AOC-1 which is annexed and forms part of this Report.
Further, audited financial statements of the Subsidiaries and Joint Venture Company have also been placed on the website of the Company i.e. http://www.ricoauto.in/investor-relation.html.
The Company will make available these documents upon request by any member of the Company interested in obtaining the same.
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, 2018 and the date of this Report.
CREDIT RATING
The India Ratings and Research Private Limited - a Credit Rating Agency, has maintained the credit ratings on 28th March, 2018, based on a consolidated view of the Company and its Subsidiaries business on the back of their similar business profile, Common Treasury and Management Team and the same are given below:
Credit Ratings:
|
Particulars |
Ratings |
|
Long Term Issuer Ratings |
IND A-/Stable |
|
INR 1891.90m Term Loans/Letter of Credit |
IND A-/Stable |
|
INR 2150m Fund and Non-Fund Based Working |
IND A-/Stable |
|
Capital Limits |
|
|
Short Term |
IND A1 |
The above credit ratings are being reviewed and revised ratings would be available by the end of August, 2018.
FIXED DEPOSITS
The Company has not accepted deposits from the public during the year under review.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT (MDA)
Pursuant to Regulation 34(2) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, MDA is annexed which forms part of this Report.
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.
SECRETARIAL STANDARDS
The Company is in compliance with the Secretarial Standards issued by the Institute of Company Secretaries of India.
INTERNAL CONTROL SYSTEM AND THEIR ADEQUACY
The adequacy of Internal Financial Controls is discussed in Management Discussion and Analysis, which forms part of this Report.
CORPORATE GOVERNANCE
A separate report on Corporate Governance along with General Shareholders information is annexed as a part of this Report, along with the Certificate from the Practising Company Secretary regarding compliance of conditions of Corporate Governance as stipulated under the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.
AUDIT COMMITTEE
Your Company has an Audit Committee to meet the requirements of the Companies Act, 2013 and Regulation 18 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.
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 Regulation 19 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. Details of the Nomination and Remuneration Committee are given under the Corporate Governance Report.
The Board has framed a Nomination and Remuneration Policy which lays down a framework in relation to the remuneration of Directors, Key Managerial Personnel and Senior Management of the Company. This policy also lays down criteria for selection and appointment of Board Members. This Policy is placed on the website of the Company i.e. http://www.ricoauto.in/investor-relation.html.
CORPORATE SOCIAL RESPONSIBILITY (CSR)
In pursuance of the provisions of Section 135 of the Companies Act, 2013, the amount to be spent during the financial year 2017-18, as per computation worked out to be Rs.17.72 lakhs. During the year, a wholly owned subsidiary namely Uttarakhand Automotives Limited was amalgamated with the Company and its CSR obligation was Rs.13.48 lakhs. The Company therefore has spent an aggregate amount towards the CSR activities/projects as specified in CSR policy of the Company during the financial year 2017-18. The CSR activities of the Company are being monitored by the CSR Committee.
The details about the policy on Corporate Social Responsibility (âCSRâ) including initiatives taken on CSR, the 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 i.e. http://www.ricoauto.in/investor-relation.html.
VIGIL MECHANISM
The Company has established Vigil Mechanism/Whistle Blower Policy for Directors, Employees, Clients, Vendors, Suppliers and Contractors as an avenue to report concerns including unethical behaviour, actual or suspected, frauds or violation of the Companyâs code of conduct. The same meets the requirements of Section 177(9) of the Companies Act, 2013 and Regulation 22 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and is available on the website of the Company i.e http://www.ricoauto.in/ investor-relation.html.
RELATED PARTY TRANSACTIONS AND MATERIAL SUBSIDIARIES
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 i.e. http://www.ricoauto.in/investor-relation.html. All contracts/ arrangements/transactions entered by the Company during the financial year with related parties were in the ordinary course of business and on armâs length basis and prior approval of the Audit Committee was sought for entering into related party transactions. The details are provided in Form AOC-2 which is annexed and forms part of this Report. Please also refer Note 42 to the standalone financial statements for related party disclosures.
LISTING OF EQUITY SHARES
The Equity Shares of your Company are presently listed on the BSE Limited and National Stock Exchange of India Limited. The Annual Listing Fees have been paid for the financial year 2018-19.
EXTRACT OF ANNUAL RETURN
In accordance with the provisions of the Companies Act, 2013, the extract of Annual Return in Form MGT-9 is enclosed and forms part of this report.
PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS
The particulars of investments made, loans and guarantees given are provided in the standalone financial statements. (Please refer to note 06, 07 & 35 of the standalone financial statements).
BOARD OF DIRECTORS AND KEY MANAGERIAL PERSONNEL (KMP)
In accordance with the provisions of the Companies Act, 2013, Smt. Upasna Kapur, Director (DIN: 00327461), of the Company will retire by rotation at the forthcoming AGM and who being eligible, offers herself for re-appointment. A brief resume of Smt. Upasna Kapur is given in the Notice of the AGM.
There is no change in the KMPs of the Company during the year under report.
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 the Listing Regulations, 2015.
BOARD MEETINGS
During the year under review, four Board Meetings were held and one separate meeting of Independent Directors was held, the details of which form part of Corporate Governance Report.
BOARD EVALUATION
Pursuant to the provisions of Companies Act, 2013 and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Board of Directors have carried out the annual evaluation of its own performance, the Individual Directors including the Chairman as well as the evaluation of the working of its Committees. The manner, in which the evaluation has been carried out, has been explained in the Corporate Governance Report.
DIRECTORSâ RESPONSIBILITY STATEMENT
Pursuant to Section 134 of the Companies Act, 2013, your Directors confirm that:
i) i n the preparation of the annual accounts for the financial year ended 31st March, 2018, 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, 2018 and of the profit for the year 1st April, 2017 to 31st March, 2018;
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) t he annual accounts for the financial year ended 31st March, 2018 have been prepared on a going concern basis;
v) i nternal 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 are adequate and operating effectively.
STATUTORY AUDITORS
M/s. Walker Chandiok & Co LLP, Chartered Accountants (Firm Registration No. 001076N/N500013) were re-appointed as Statutory Auditors of your Company at 34th Annual General Meeting (AGM) held on 22nd September, 2017 for a term of five consecutive years till the conclusion of 39th AGM schedule in the year 2022 subject to annual ratification by the Members at every AGM.
The Companies (Amendment) Act, 2017, notified on 7th May, 2018 by the Ministry of Corporate Affairs has dispensed with the requirement of annual ratification of the Statutory Auditorâs appointment. Accordingly, no resolution is proposed for ratification of the appointment of Auditors. The Company has received a certificate from M/s. Walker Chandiok & Co LLP, Chartered Accountants confirming their eligibility to continue as Auditors of the Company in terms of the provisions of Section 141 of the Companies Act, 2013 and rules framed thereunder.
As required under Regulation 33 of the SEBI (LODR) Regulations, 2015, the Statutory Auditors have confirmed that they hold a valid certificate issued by the Peer Review Board of the Institute of Chartered Accountants of India.
During the year under report, there were no revisions in the financial statements of the Company. The observations in the Auditorâs Report on Standalone and Consolidated Financial Statements are dealt within the notes to accounts at appropriate places and being self-explanatory, need no further comments.
INTERNAL AUDITORS
The Board on the recommendation of Audit Committee has reappointed M/s. SCV & Co. LLP, (formerly M/s S.C Vasudeva & Co.) Chartered Accountants (Firm Registration No.000235N/N500089), New Delhi as the Internal Auditors of the Company for the financial year 2018-19.
APPOINTMENT OF COST AUDITOR AND MAINTENANCE OF COST RECORDS
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 2018-19. In terms of Section 148 of the Companies Act, 2013 and the rules made thereunder, remuneration of Cost Auditors is to be ratified by members of the Company. Accordingly, a resolution is included in the Notice of ensuing Annual General Meeting for your approval. The Cost Audit Report for the financial year 2017-18 would be filed with the Ministry of Corporate Affairs, New Delhi within the stipulated time.
The cost records as required under section 148 of the Companies Act, 2013 read with Companies (Cost Records and Audit) Rules, 2014 are being prepared and maintained by the Company in order to ensure proper compliance.
SECRETARIAL AUDITORS
The Board has appointed Shri K. K. Sachdeva of M/s. K.K. Sachdeva & Associates, Company Secretaries (C.P. No. 4721, FCS No. 7153), as Secretarial Auditors to carry out the secretarial audit of the Company for the financial year 2018-19. The Secretarial Audit Report for the financial year ended 31st March, 2018 is enclosed and forms part of this report. There is no secretarial audit qualification for the year under review.
DETAILS IN RESPECT OF FRAUDS REPORTED BY AUDITORS
The Statutory Auditors, Internal Auditors, Cost Auditors and Secretarial Auditors of the Company have not reported any frauds to the Audit Committee or to the Board of Directors under Section 143(12) of the Companies Act, 2013, including rules made thereunder.
TRANSFER OF UNCLAIMED AMOUNTS TO INVESTOR EDUCATION AND PROTECTION FUND (IEPF)
Pursuant to the provisions of Section 124(5) and other provisions of the Companies Act, 2013 (the Act), read with rules made thereunder, 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 125 of the said Act.
Pursuant to the provisions of the section 124(6) of the Companies Act, 2013, read with Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 (the Rules) a company is required to transfer to the DEMAT Account of IEPF Authority all shares in respect of which dividends have not been paid or claimed for 7 (seven) consecutive years or more. In accordance with the aforesaid provisions of the Act read with the rules, your Company, during the financial year 2017-18, had transferred 38492 shares pertaining to the financial year 2009-10 to the Demat Account of IEPF Authority within the stipulated time period.
CONSERVATION OF ENERGY, RESEARCH AND DEVELOPMENT, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
The relevant information as required by the provisions of Section 134(3)(m) of the Companies Act, 2013 read with the Companies (Accounts) Rules, 2014, 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 the financial year 2017-18 impacting the going concern status and Companyâs operations in future.
PREVENTION OF SEXUAL HARASSMENT AT WORKPLACE
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 and has in place an Internal Complaint Committee to redress the complaints and circumstances regarding the behaviour of sexual harassment at workplace. The Policy for the same is placed on the intranet for the benefit of its employees. There were no complaints received from any employee during the year under review.
PERSONNEL
The information required under Section 197(12) of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is given in the Annexure forming part of this Report. The information required under Section 197(12) of the Companies Act, 2013 read with Rule 5(2) and Rule 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, as amended and forming part of this Report for the year ended 31st March, 2018 are set out in the Annexure of this Report.
However, the Annual Report, excluding the Annexure is being sent to the Members of the Company in terms of the provisions of Section 136 of the Companies Act, 2013. A Member who is interested in obtaining these particulars may write to the Company Secretary at the Registered Office of the Company. The said information is also available for inspection by Members at the Registered Office of the Company during working hours upto the date of the ensuing Annual General Meeting.
Your Company has initiated the process of partial closure of its non-operational loss-making undertaking (Machine Shop-I) situated at Dharuhera (Haryana). Consequent upon the permission of Principal Secretary to Government, Haryana, Labour Department vide its Order dated 25th May, 2018 and Review Order dated 21st June, 2018 and after completion of necessary formalities in accordance with the provisions of the Industrial Disputes Act, 1947, your Company has closed the said loss-making undertaking (Machine Shop-I) in Dharuhera Plant (Haryana) w.e.f. 26th June, 2018 and settled the accounts of 104 workers after paying their legal/statutory dues. The production lines that have been closed will not impact the turnover adversely rather will have a positive impact on overall performance and profitability.
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 Companyâs valued customers, business associates and shareholders.
On behalf of the Board of Directors
Arvind Kapur
Chairman, CEO &
Place : New Delhi Managing Director
Date : August 03, 2018 (DIN: 00096308)
Mar 31, 2017
To the Shareholders,
The Directors have pleasure in presenting the 34th Annual Report of your Company, together with the Audited Financial Statements for the year ended 31st March, 2017.
FINANCIAL RESULTS
(Rs. in crores)
|
Particulars |
Year Ended 31/03/2017 |
Year Ended 31/03/2016 |
|
Gross Sales and other Income |
1036.05 |
990.05 |
|
Net Sales and other Income |
970.30 |
925.92 |
|
Profit before Interest, Depreciation and Exceptional Items |
106.07 |
93.12 |
|
Interest and Financial charges |
16.23 |
19.70 |
|
Profit before Depreciation, Exceptional Items and Tax |
89.84 |
73.42 |
|
Depreciation |
35.53 |
35.39 |
|
Profit before Exceptional Items and Tax |
54.31 |
38.03 |
|
Exceptional Items |
(0.66) |
(2.85) |
|
Profit before Tax (PBT) |
53.65 |
35.18 |
|
Tax expense |
11.06 |
8.11 |
|
Profit after Tax |
42.59 |
27.07 |
|
Profit brought forward |
219.48 |
202.19 |
|
Amount available for appropriation |
262.07 |
229.26 |
OPERATIONS AND THE STATE OF COMPANYâS AFFAIRS
Your Company has recorded a gross turnover of Rs.1036.05 crores in the year under report as against Rs.990.05 crores in the previous year. Your Company has earned a Profit after Tax (PAT) of Rs.42.59 crores during the year under report over the previous yearâs profit of Rs.27.07 crores.
DIVIDEND
During the financial year ended 31st March, 2017, your Directors have recommended a Dividend @ 75 percent i.e. Rs.0.75 per Equity Share of Rs.1/- each for the financial year 2016-17 amounting to Rs.12.22 crores including dividend tax of Rs.2.07 crores as against a dividend of 60 percent (50% Interim and 10% Final) i.e. Rs.0.60 per Equity Share of Rs.1/- each aggregating to Rs.9.78 crores including dividend tax of Rs.1.66 crores in the previous year on the same Equity Share Capital.
RESERVES AND SURPLUS
During the financial year 2016-17, no amount was transferred to general reserves. The reserves and surplus of your Company stood at Rs.488.85 crores as against Rs.445.01 crores in the previous year.
SHARE CAPITAL
The paid-up share capital as on 31st March, 2017 was Rs.13,52,85,000 divided into 13,52,85,000 equity shares of Rs.1/-each. During the year under review, your Company has neither issued shares with Differential Voting Rights nor granted Stock Options nor Sweat Equity.
EXPORTS
The export turnover of your Company during the year under review was Rs.253.59 crores as against Rs.249.04 crores in the previous year. The export turnover includes sales to wholly owned subsidiaries amounting to Rs.198.48 crores as against Rs.186.24 crores in the previous year. The wholly owned subsidiaries of your Company in United Kingdom and United States of America are engaged in providing last mile sales and customer support in their respective regions.
During the quarter ended 30th June, 2017 of current year, export turnover was Rs.63.93 crores as against Rs.69.15 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, 2017, already announced, show a gross turnover of Rs.270.27 crores for the first quarter of the current year as against a turnover of Rs.269.40 crores in the corresponding quarter of the previous year. The Profit after Tax stood at Rs.11.33 crores for the first quarter ended 30th June, 2017 as against Rs.14.07 crores over the corresponding quarter of previous year. The Earning per Share (EPS) is Rs.0.84 for the quarter ended 30th June, 2017 as against Rs.1.04 over the corres po nding quarter of the previous year . Ste ps a re be i n g taken to improve the turnover and margin during the remaining part of the year.
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 to augment existing facilities and setting-up new facilities at following locations:
A. Bawal Plant
This plant has been set up for High Tonnage High Pressure Die Casting work with state-of-the-art facility with full Automation, control and High Precision Machining for Auto Parts and Assembly. The Company is now gearing up for higher volumes for our esteemed customers namely BMW, GKN, Renault, Audi, PSA, Volkswagen and Eaton.
B. Chennai Plant
The Company has set up a manufacturing plant at Chennai for supply of Machined Aluminium Auto Components to Renault-Nissan.
The Plant has been commissioned and has started commercial production. At present, the plant has installed capacity of 1,50,000 sets per annum for making Engine Parts which includes Fully Automatic Cylinder Block Die Casting Line. The Ramp up is taking place and plant would start running on full capacity by the 3rd quarter of this financial year.
The Company is also targeting other south based customers for domestic and export programs to further enhance the business from this Plant.
C. Pathredi (Bhiwadi) Plant
The Company has laid the foundation stone for a new manufacturing plant at Pathredi, Bhiwadi (Rajasthan) on 7th July, 2016 for manufacturing of Auto Components.
The Company is expected to start commercial production at the new plant during the next financial year.
D. Sanand Plant
In view of low demand by Tata Motors Limited for the components of the Nano Car, supply is being made from the Companyâs Gurugram Plant. Efforts are being made to add more customers so that 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 plants in Gujarat and other states.
SUBSIDIARY COMPANIES
Your Company has four Wholly Owned Subsidiaries, 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 Aluminium and Ferrous Auto Components Limited and Rico Investments Limited have become material subsidiaries 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 OEM and Tier-I Customers in the North American and Brazilian Markets. The Company has recorded a gross turnover of Rs.151.83 crores during the financial year ended 31st March, 2017 as against Rs.145.00 crores in the previous year. The Company earned a net profit after tax of Rs.1.58 crores in the financial year ended 31st March, 2017 as against Rs.1.80 crores in the previous year. The Company has not declared any dividend for the financial year ended 31st March, 2017.
This Subsidiary has achieved a gross turnover of Rs.38.86 crores for the first quarter ended 30th June, 2017 as against Rs.43.75 crores in the corresponding quarter of the previous year, a decrease of 11 percent. During the financial year and period under review, your Company has not made any additional investment in this Subsidiary.
The Subsidiary is expecting a moderate growth during 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 warehousing and logistics support to our OEM and Tier-I Customers for the European Markets. The Company has recorded a gross turnover of Rs.52.25 crores during the financial year ended 31stMarch, 2017 as against Rs.40.77 crores in the previous year. The Company earned a net profit of Rs.0.31 crore in the financial year ended 31st March, 2017 as against Rs.0.29 crore in the previous year. The Company has not declared any dividend for the financial year ended 31st March, 2017.
This Subsidiary has achieved a gross turnover of Rs.19.24 crores for the first quarter ended 30th June, 2017 as against Rs.11.10 crores in the corresponding quarter of the previous year, an increase of 73 percent. During the financial year and period under review, your Company has not made any additional investment in this Subsidiary.
C. AAN Engineering Industries Limited
AAN Engineering Industries Limited (AAN) is an AS 9100C Certified Company, which defines it as a âManufacturer of Precision Machined Components & Assembliesâ for the Aerospace and Defence Industry.
AAN offers an extensive array of services for the manufacture of components/sub systems within the Defence & Aerospace Industry. These include Design & Development, Tooling, Casting (Aluminium, Ferrous & High Manganese Steel), Machining and Assembly, supported by CAD, CAM, CAE and R&D testing facilities.
AAN has developed its own in-house state-of-the-art-facility to manufacture and assemble Mechanical Fuzes and metal parts for Electronic Fuzes with installed capacity of producing 25000 Fuze body components per month with scalability up to 50000 per month.
AAN works with a wide range of Raw Materials - namely Aluminium Alloy, Alloy Steel & High Manganese Steel & Raw Material/Castings as required by Client.
AAN is empaneled and registered with the Special Products division of Electronics Corporation of India Limited (ECIL), Hyderabad, Bharat Electronics Limited (BEL), Pune, Engine Divisions of Hindustan Aeronautical Limited (HAL) (Bangalore, Nasik and Koraput), Heavy Vehicles Factory (HVF) Avadi, Army Base Workshop and Army Directorate of Indigenization and various ordnance factory board factories.
The Company is in advanced talks with a prestigious Korean Co. for setting up a co-operation model for niche machining requirements of the OFB, besides being involved in taking on various machining requirements under the âMake in Indiaâ program with a host of prospective European Partners.
During the year under review, the Company has earned total revenue of Rs.4.18 crores against Rs.0.33 crore in last year. During the year, the Company has earned a profit of Rs.0.19 crore against a loss of Rs.0.16 crore in the previous year.
This Subsidiary has achieved a gross turnover of Rs.1.60 crores for the first quarter ended 30th June, 2017 as against Rs.0.85 crore in the corresponding quarter of the previous year, an increase of 94 percent. The Company earned a net profit of Rs.0.09 crore for the first quarter ended 30th June, 2017 as against Rs.0.35 crore loss in the previous year. During the financial year and period under review, your Company has not made any additional investment in this Subsidiary.
D. Rico Investments Limited
During the year under review, this Company has recorded a gross revenue of Rs.4.86 crores as against Rs.5.85 crores in previous year. This Company has earned a profit of Rs.1.15 crores in the financial year ended 31st March, 2017.
This Company has earned a total revenue of Rs.1.21 crores and net profit of Rs.0.31 crore for the quarter ended 30th June, 2017.
This Company has not made any additional investment in its Subsidiary Companies. This Company has the following subsidiaries:
i) Rico Aluminium and Ferrous Auto Components Limited
During the year under review, this Company has recorded a gross turnover of Rs.272.97 crores as against Rs.295.25 crores in the previous year. This Company has earned a profit of Rs.0.47 crores as on 31st March, 2017 as against the profit of Rs.1.71 crores in the previous year. Further, this Company has achieved a gross turnover of Rs.64.69 crores and incurred a loss of Rs.0.57 crore for the quarter ended 30th June, 2017.
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 equipped with Automation and better controls to produce high quality parts in large volume for export. This Company has recorded a gross turnover of Rs.27.54 crores during the financial year ended 31st March, 2017 as against Rs.45.59 crores in the previous year. The Company has earned a profit of Rs.4.44 crores in the financial year ended 31st March, 2017 as against the profit of Rs.1.29 crores in the previous year.
This Subsidiary has achieved a gross turnover of Rs.6.32 crores for the first quarter ended 30th June, 2017 as against Rs.8.02 crores in the corresponding quarter of the previous year.
iii) Rico Jinfei Wheels Limited
This Company has recorded a gross turnover of Rs.87.73 crores during the financial year ended 31st March, 2017 as against Rs.83.37 crores in the previous year. This Company has incurred a loss of Rs.0.06 crore in the financial year ended 31st March, 2017 as against the loss of Rs.0.33 crore in the previous year.
Further, this Company has recorded a gross turnover of Rs.24.88 crores for the quarter ended 30th June, 2017 as against Rs.19.09 crores in the corresponding quarter of the previous year.
E. Uttarakhand Automotives Limited and Scheme of Amalgamation
During the year under review, this Company has not started any manufacturing activities. This Company has not earned any revenue during the financial year 2016-17. During the financial year and period under review, your Company has not made any additional investment in this Subsidiary.
This Company is in the process of being merged with your Company. The Board of your Company in their meeting held on 5th February, 2016 have approved the Draft Scheme of Amalgamation of Uttarakhand Automotives Limited, the Wholly Owned Subsidiary with the Company.
Your Company, after obtaining necessary approval from the National Stock Exchange of India Limited, BSE Limited and the members, had filed an application with Honâble High Court of Punjab & Haryana at Chandigarh. The matter was later on, due to constitution of National Company Law Tribunal, transferred to Honâble National Company Law Tribunal (NCLT), Chandigarh Bench.
At present, the matter is pending for approval with Honâble NCLT. The next hearing is fixed for 31st August, 2017.
JOINT VENTURE COMPANY
Magna Rico Powertrain Private Limited
Magna Rico has recorded a gross turnover of Rs.90.82 crores in the financial year ended 31st March, 2017 as against Rs.71.33 crores in the previous year. This Company has earned profit of Rs.8.90 crores in the financial year ended 31st March, 2017 as against the loss of Rs.1.48 crores in the previous year. This Company has not declared any dividend for the financial year ended 31st March, 2017. During the financial year and period under review, your Company has not made any additional investment in this Joint Venture.
Further, this Company has achieved a gross turnover of Rs.23.33 crores for the quarter ended 30th June, 2017 as against Rs.21.44 crores in the corresponding quarter of the previous year, an increase of 8.80 percent.
CONSOLIDATED FINANCIAL STATEMENTS
Pursuant to Section 129(3) of the Companies Act, 2013 read with rules made thereunder the appended Audited Consolidated Financial Statements of the Subsidiaries and the Joint Venture Company forms part of the Annual Report.
A Statement containing salient features of the financial statements of Subsidiaries and Joint Venture Company has been provided in Form AOC-1 which is annexed and forms part of this Report. Further, audited financial statements of the Subsidiaries and Joint Venture Company have also been placed on the website of the Company i.e. http://www.ricoauto.com/investor-relation.html. The Company will make available these documents upon request by any member of the Company interested in obtaining the same.
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, 2017 and the date of this Report.
CHANGE IN REGISTERED OFFICE
During the year under review, the Registered Office of your Company has been shifted from 69 KM Stone, Delhi-Jaipur Highway, Dharuhera, Distt. Rewari - 122106, Haryana to 38 KM Stone, Delhi-Jaipur Highway, Gurugram - 122001, Haryana.
CREDIT RATING
The India Ratings and Research Private Limited - a Credit Rating Agency, has upgraded the credit ratings, based on a consolidated view of the Company and its Subsidiaries business on the back of their similar business profile, Common Treasury and Management Team, are given below:
Credit Ratings:
|
Particulars |
Ratings |
|
Long Term Issuer Ratings |
IND A-/Stable |
|
INR 1600m Term Loans |
IND A-/Stable |
|
- INR 1800m Fund and non-fund based |
IND A-/Stable |
|
working capital limits - Short Term |
IND A1 |
|
- INR 450m Non-fund based limits |
IND A-/Stable |
|
- Short Term |
IND A1 |
FIXED DEPOSITS
The Company has not accepted deposits from the public during the year under review.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT (MDA)
Pursuant to Regulation 34(2) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, MDA is annexed which forms part of this Report.
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.
SECRETARIAL STANDARDS
The Company is in compliance with the Secretarial Standards of ICSI pertaining to Board Meetings and General Meetings.
INTERNAL CONTROL SYSTEM AND THEIR ADEQUACY
The adequacy of Internal Financial Controls is discussed in Management Discussion and Analysis, which forms part of this Report.
CORPORATEGOVERNANCE
A separate report on Corporate Governance along with General Shareholders information is annexed as a part of this Report, along with the Certificate from the Practising Company Secretary regarding compliance of conditions of Corporate Governance as stipulated under the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.
AUDIT COMMITTEE
Your Company has an Audit Committee to meet the requirements of the Companies Act, 2013 and Regulation 18 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. 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 Regulation 19 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. Details of the Nomination and Remuneration Committee are given under the Corporate Governance Report. The Nomination and Remuneration Policy is annexed and forms part of this Report.
CORPORATE SOCIAL RESPONSIBILITY (CSR)
The CSR activities of the Company are monitored by the CSR Committee. In pursuance to the provisions of Section 135 of the Companies Act, 2013, the amount to be spent during the financial year 2016-17, as per computation worked out to be nil. The Company, therefore, was not required to spend mandatorily on CSR Activities. Your Company, however has on voluntary basis spent Rs.0.48 crore towards the CSR activities/projects as specified in CSR Policy of the Company during the financial year 2016-17.
The details about the policy on Corporate Social Responsibility (âCSRâ) 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 i.e. http://www.ricoauto.com/investor-relation.html.
VIGIL MECHANISM
The Company has established Vigil Mechanism/Whistle Blower Policy for Directors, Employees, Clients, Vendors, Suppliers and Contractors as an avenue to report concerns including unethical behaviour, actual or suspected, frauds or violation of the Companyâs code of conduct. The same meets the requirements of section 177(9) of the Companies Act, 2013 and Regulation 22 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and is available on the website of the Company i.e http://www.ricoauto.com/investor-relation.html.
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 i.e. http://www.ricoauto.com/investor-relation.html. All contracts/arrangements/transactions entered by the Company during the financial year with related parties were in the ordinary course of business and on armâs length basis and prior approval of the Audit Committee was sought for entering into related party transactions. The details are provided in Form AOC-2 which is annexed and forms part of this Report. Please also refer Note 45 to the standalone financial statements for related party disclosures.
LISTING OF EQUITY SHARES
The Equity Shares of your Company are presently listed on the BSE Limited and National Stock Exchange of India Limited. The Annual Listing Fees have been paid for the financial year 2017-18.
EXTRACT OF ANNUAL RETURN
In accordance with Section 134(3)(a) of the Companies Act, 2013, the extract of Annual Return in Form MGT-9 is enclosed and forms part of this report.
PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS
The particulars of investments made, loans and guarantees given are provided in the standalone financial statements. (Please refer to note 14, 15, 17, 21 & 33 of the standalone financial statements).
BOARD OF DIRECTORS AND KEY MANAGERIAL PERSONNEL (KMP)
In accordance with the provisions of the Companies Act, 2013, Shri Rakesh Kapur, Director (DIN: 00100359) of the Company will retire by rotation at the forthcoming AGM and being eligible, offers himself for re-appointment. Brief resume of Shri Rakesh Kapur is given in the Notice of the AGM.
Shri Rakesh Kumar Sharma is appointed as the Chief Financial Officer (CFO) of the Company w.e.f 4th August, 2017, in place of Shri Sanjay Syal, who has resigned as CFO of the Company from close of business hours on 7th February, 2017.
Apart from this, there is no other change in the KMPs of the Company during the year under report.
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 the Listing Regulations, 2015.
BOARD MEETINGS
During the year under review, four Board Meetings were held and one separate meeting of Independent Directors was held, the details of which forms part of Corporate Governance Report.
BOARD EVALUATION
Pursuant to the provisions of Companies Act, 2013 and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Board of Directors have carried out annual evaluation of its own performance, the individual Directors as well as the evaluation of the working of its Committees. The manner, in which the evaluation has been carried out, has been explained in the Corporate Governance Report.
DIRECTORSâ 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, 2017, 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, 2017 and of the profit for the year 1stApril, 2016 to 31st March, 2017;
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, 2017 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 are adequate and operating effectively.
STATUTORY AUDITORS
M/s. Walker Chandiok & Co LLP, Chartered Accountants, (Firm Registration No. 001076N / N500013) were appointed as Statutory Auditors of the Company for a period of three years at 31st Annual General Meeting (AGM) of the Company held on 30th September, 2014 and will complete three years as Statutory Auditors of the Company at this ensuing AGM. Before this term, they have served as Statutory Auditors for two years, which were completed at 31st AGM held on 30th September, 2014. Therefore, in aggregate they have completed their first term of five years as the Statutory Auditors of the Company.
As per Section 139 of the Companies Act, 2013 (the Act), no listed Company can re-appoint an audit firm as Statutory Auditors for more than two terms of five consecutive years each. Being eligible for re-appointment for second term of five years and based upon the recommendations of Audit Committee, the Board of Directors recommends their re-appointment as Statutory Auditors for a period of five years from the conclusion of ensuing AGM till the conclusion of 39th AGM, subject to the annual ratification by the shareholders every year. The Company has received a certificate to the effect that their re-appointment, if made, shall be in accordance with the conditions laid down in the Act and they satisfy the criteria provided under Section 141 of the Act.
The other observations in the Auditorsâ Report are dealt within the notes to accounts at appropriate places and being self-explanatory, need no further comments.
INTERNAL AUDITORS
The Board on the recommendation of Audit Committee has reappointed M/s. S.C. Vasudeva & Co., Chartered Accountants, New Delhi as the Internal Auditors of the Company for the financial year 2017-18.
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 2017-18. In terms of Section 148 of the Companies Act, 2013 and the rules made thereunder, remuneration of Cost Auditors is to be ratified by members of the Company. Accordingly, a resolution is included in the Notice of ensuing Annual General Meeting for your approval. The Cost Audit Report for the financial year 2016-17 would be filed with Ministry of Corporate Affairs, New Delhi within stipulated time.
SECRETARIAL AUDITORS
The Board has appointed Shri K. K. Sachdeva of M/s. K.K. Sachdeva & Associates, Company Secretaries (C.P. No. 4721, FCS No. 7153), as Secretarial Auditors to carry out the secretarial audit of the Company for the financial year 2017-18. The Secretarial Audit Report for the financial year ended 31st March, 2017 is enclosed and forms part of this report.
DETAILS IN RESPECT OF FRAUDS REPORTED BY AUDITORS
The Statutory Auditors, Internal Auditors, Cost Auditors and Secretarial Auditors of the Company have not reported any frauds to the Audit Committee or to the Board of Directors under Section 143(12) of the Companies Act, 2013, including rules made thereunder.
TRANSFER OF UNCLAIMED AMOUNTS TO INVESTOR EDUCATION AND PROTECTION FUND (IEPF)
Pursuant to the provisions of Section 124(5) and other provisions of the Companies Act, 2013 (the Act), read with rules made thereunder, 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 125 of the said Act.
Pursuant to the provisions of the section 124(6) of the Companies Act, 2013, read with Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 (the Rules) requires a company to transfer to the DEMAT Account of IEPF authority all shares in respect of which dividends has not been paid or claimed for 7 (seven) consecutive years or more. In accordance with the aforesaid provisions of the Act read with the rules, your Company has already intimated those shareholders who had not encashed any dividend warrant for seven consecutive years or more, that their shares are liable to be transferred to DEMAT Account of IEPF Authority.
CONSERVATION OF ENERGY, RESEARCH AND DEVELOPMENT, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
The relevant information as required by the provisions of Section 134(3)(m) of the Companies Act, 2013 read with the Companies (Accounts) Rules, 2014, 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 the financial year 2016-17 impacting the going concern status and Companyâs operations in future.
GOODS AND SERVICE TAX (GST)
Your Company has implemented the GST, a landmark reform which will have a lasting impact on the economy and a significant growth stimulus to the business.
PERSONNEL
The information required under Section 197(12) of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is given in the Annexure forming part of this Report.
The information required under Section 197(12) of the Companies Act, 2013 read with Rule 5(2) and Rule 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, as amended and forming part of this Report for the year ended 31st March, 2017 are set out in the Annexure of this Report. However, the Annual Report excluding the Annexure is being sent to the Members of the Company in terms with the provisions of Section 136 of the Companies Act, 2013. Member who is interested in obtaining these particulars may write to the Company Secretary at the Registered Office of the Company. The said information is also available for inspection by Members at the Registered Office of the Company during working hours upto the date of the ensuing Annual General Meeting.
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 for the benefit of its employees. There were no complaints received from any employee during the year under review.
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
Arvind Kapur
Chairman, CEO &
Place : Delhi Managing Director
Date : 4th August, 2017 (DIN: 00096308)
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
Mar 31, 2012
The Directors have pleasure in presenting the 29th Annual Report of
your Company, together with the Audited Accounts for the year ended
31st March, 2012.
FINANCIAL RESULTS
(Rs. in Crores)
Current Year Previous Year
Particulars 31/03/2012 31/03/2011
Gross Sales and other Income 1225.95 1085.21
Net Sales and other Income 1137.11 1006.00
Profit before Interest & Depreciation 123.95 134.59
Less : Interest & Financial charges 67.87 51.62
Profit before Depreciation and Tax 56.08 82.97
Depreciation 56.35 53.94
Profit before Tax (PBT) (0.27) 29.03
MAT Credit Receivable à (1.45)
Provision for Income Tax 0.08 4.84
Provision for Deferred Tax 3.59 (0.87)
Net Profit/(Loss) (3.94) 26.51
Add: Surplus brought forward
from previous years 79.87 58.51
Amount available for
appropriations 75.93 85.02
Appropriations:
Proposed Dividend on Equity
Shares @15% 2.03 Ã
Dividend on Equity Shares @20% Ã 2.71
Corporate Dividend Tax 0.32 0.44
Transferred to General Reserve à 2.00
Balance carried to Balance Sheet 73.58 79.87
75.93 85.02
Your Company has recorded a turnover of Rs.1225.95 crores in the year
under report as against Rs.1085.21 crores in the previous year.
Although your Company has earned a profit before exceptional items and
tax liabilities of Rs.10.97 crores over the previous year's profit of
Rs.9.92 crores, but after adjusting exceptional items loss of Rs.11.24
crores and other tax liabilities the Company incurred a net loss of
Rs.3.94 crores during the year under report as compared to the previous
year's Profit after Tax (PAT) of Rs.26.51 crores which includes amount
of Rs.10.61 crores and Rs.9.29 crores being the profit on transfer of
leasehold rights/interests of the Company in the immovable properties
at Ambernath, Mumbai and Bommasandra, Bangalore respectively.
OUTLOOK FOR CURRENT YEAR
The Unaudited Financial Results for the quarter ended 30th June, 2012,
already announced, show a turnover of Rs.318.97 crores for the first
quarter of the current year against a turnover of Rs.286.87 crores of
the corresponding quarter of the previous year, an increase in turnover
by 11 per cent. Your Directors are taking steps to improve the turnover
and margin during the remaining part of the year.
RESERVES
In the absence of profits for the year under review no transfer to
general reserve has been made. The reserves of your Company after
proposed appropriations for dividend shall stand at Rs.299.85 crores as
against Rs.306.12 crores in the previous year.
EXPORT
The export turnover of your Company during the period under review was
Rs.200.76 crores as against Rs.202.30 crores in the previous year. The
export turnover includes sale to wholly owned subsidiaries amounting to
Rs.141.08 crores as against Rs.146.86 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, 2012 of current year export
turnover was Rs.49.66 crores as against Rs.41.67 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, from the surplus available in the
Profit & Loss Account, a Dividend @15 per cent i.e. Re.0.15 per Equity
Share of Re.1/- each for the financial year 2011-12, amounting to
Rs.2.35 crores including dividend tax of Rs.0.32 crore on the Equity
Share Capital of Rs.13.53 crores as against a dividend of 20 per cent
i.e. Re.0.20 per Equity Share of Re.1/- each aggregating to Rs.3.15
crores including dividend tax of Rs.0.44 crore in the previous year.
FINANCE
Your Company continue to enjoy "A2 " and "LA-" Ratings for Line of
Credit (Basel-II) for its Short Term and Long Term Bank Facilities
respectively by ICRA Limited. Your Company uses long/short term
facilities from the Banks on most favourable terms.
NEW PLANTS AND FACILITIES
Your Company is undertaking continuous endeavors for expansion of its
domestic and overseas customers by implementing new facilities to
enhance capacity and also geographically de-risk our operations. Your
Company has started work for setting-up its:
A. Sanand Plant
The plant is catering to the current requirements of Tata Motors
Limited for its Nano Car plant at Sanand, Ahmedabad.
Further, discussions are in progress with M/s. Hero MotoCorp Limited
for setting up the manufacturing facilities for their up-coming project
at Halol, Gujarat.
B. Chennai Plant
Building and civil work is under completion. Utilities and power
connection being applied for set-up manufacturing facilities for
supplies to automotive OEMs.
C. Haridwar Plant
The plant has commenced manufacturing operation and supplies of auto
components to Hero MotoCorp Limited,
Haridwar in the current financial year. It is in the process of
acquiring a built-up shed in the adjacent plot to cater to additional
requirements of its customer.
D. Bawal Plant
The plant is under construction for High Tonnage High Pressure Die
Casting and Machining facility for auto components. Production activity
will start in last quarter of this financial year.
E. Pathredi (Bhiwadi) Plant
Site development work is completed. Building plans are under
finalization and will start the construction work in the next financial
year.
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
in the North American and Brazilian Markets.
The Company earned a total revenue of Rs.94.61 crores during the
financial year ended 31st March, 2012 as against Rs.99.94 crores in the
previous year, a marginal decrease of 5 per cent. The Company earned a
net profit of Rs.0.98 crore as against Rs.1.08 crores in the previous
year a decrease of 9 per cent. This Company has not declared any
dividend for the financial year ended 31st March, 2012.
This Subsidiary has achieved a turnover of Rs.26.64 crores for the
first quarter ended 30th June, 2012 as against Rs.23.27 crores in the
corresponding quarter of the previous year, an increase of 14.5 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.
B. Rico Auto Industries (UK) Limited, U.K.
This Company is engaged in the business of trading of Auto Components
for the European Markets.
The Company earned a total revenue of Rs.55.99 crores during the
financial year ended 31st March, 2012 as against Rs.50.10 crores in the
previous year. The Company earned a net profit of Rs.0.91 crore as
against Rs.1.27 crores in the previous year. This Company has not
declared any dividend for the financial year ended 31st March, 2012.
This Subsidiary has achieved a turnover of Rs.13.46 crores for the
first quarter ended 30th June, 2012 as against Rs.10.42 crores in the
corresponding quarter of the previous year an increase of 29 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
During the year under review, this Company has started manufacturing
activities and recorded a turnover of Rs.19.78 crores. The Company has
incurred loss of Rs.7.72 crores against the net loss of Rs.0.05 crore
during 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.2.40
crores towards administrative and other operating expenses. The Company
sustained a net loss of Rs.2.40 crores during the year under report.
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, the Company has transferred the Plot No.
23 measuring 20475 Sq. Mtrs. situated at Phase II, Sector 5, GC Bawal,
Haryana to the holding Company against the consideration of Rs.4.07
crores. The Company has incurred expenses of Rs.0.56 crore towards
administrative and other operating expenses. The Company suffered a net
loss of Rs.0.06 crore during the year under report. During the
financial year and period under review your Company has not made any
additional investment in this Subsidiary.
F. AAN Engineering Industries Limited
As reported earlier, your Company took over Rupak Automotive Industries
Limited by acquiring its entire paid-up Equity Capital of Rs.5.00 lacs
on 8th April, 2011 as a consequence it became our Wholly Owned
Subsidiary Company. It was renamed as AAN Engineering Industries
Limited. During the financial year and period under review your Company
has not made any additional investment in this Subsidiary.
JOINT VENTURE COMPANIES WHICH ARE ALSO SUBSIDIARIES
A. Rico Jinfei Wheels Limited
The Company earned a total revenue of Rs.43.33 crores during the
financial year ended 31st March, 2012 as against Rs.42.40 crores in the
previous year. This Company has incurred a loss of Rs.9.16 crores in
the financial year ended 31st March, 2012 as against Rs.5.53 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.
B. KRP Auto Industries Limited
During the year under report, the Company has sold the entire 475680
fully paid-up equity shares of Rs.100/- each of the Joint Venture and
Subsidiary Company namely KRP Auto Industries Limited to its other
Joint Venture Partner namely Kailash Royal Premium Projects Private
Limited. The entire consideration of Rs.20.30 crores (including the
amount of premium) towards our investment has been received and
consequently KRP Auto Industries Limited has ceased to be Subsidiary
Company w.e.f. 12th December, 2011. This transaction does not impact on
business operation of the Company.
JOINT VENTURE COMPANIES
A. FCC Rico Limited
FCC Rico recorded a gross turnover (excluding other income) of
Rs.839.19 crores for the financial year ended 31st March, 2012 as
against Rs.700.67 crores in the previous year, a growth of 20 per cent.
The Board of this Company has recommended a dividend of 75 per cent for
the year ended 31st March, 2012. Your Company expects to receive an
amount of Rs.2.96 crores by way of dividend on its investment.
Further, the Company has achieved a gross turnover (excluding other
income) of Rs.228.68 crores for the quarter ended 30th June, 2012 as
against Rs.182.98 crores in the corresponding quarter of the previous
year, an increase of 25 per cent.
The Company's new plant at Bangalore has commenced commercial
production in the month of July, 2012 which caters to the needs of TVS
Motor Company Limited for its plant at Hosur, Mysore.
B. Magna Rico Powertrain Private Limited
Magna Rico recorded a turnover of Rs.21.70 crores in the financial year
ended 31st March, 2012 as against Rs.15.42 crores in the previous year.
During the financial year under review your Company has invested
Rs.3.50 crores in the Equity Share Capital and as on date our
investment in the Equity Share Capital stood at Rs.17.12 crores.
C. Continental Rico Hydraulic Brakes India Private Limited
During the year under report, the Company has sold the entire
5,50,00,000 fully paid-up equity shares of Rs.10/- each of the Joint
Venture Company namely Continental Rico Hydraulic Brakes India Private
Limited to its Joint Venture Partner Group Company namely, Continental
Automotive Holding Netherlands BV. The entire consideration of Rs.48.61
crores towards our investment has been received and consequently
Continental Rico Hydraulic Brakes India Private Limited has ceased to
be our Joint Venture Company w.e.f. 9th March, 2012.
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, 2012,
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 elsewhere 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 along with General
Shareholders information as prescribed under the Listing Agreement is
annexed as a part of this Report, along with the Auditors' Certificate
thereon.
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, 2012 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, 2012 and of the profit for the year
1st April, 2011 to 31st March, 2012;
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, 2012
have been prepared on a going concern basis.
AUDIT COMMITTEE
Your Company has an Audit Committee to meet the requirement of the
Companies Act, 1956 as well as of 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 & The National Stock Exchange of India Limited. The
Annual Listing Fees have been paid for the financial year 2012-13.
DIRECTORS
In accordance with the provisions of the Companies Act, 1956 and the
Articles of Association of your Company, Prof. Vinod Kumar Bhalla and
Shri Rakesh Kapur, Directors will retire by rotation at the forthcoming
Annual General Meeting and being eligible, offer themselves for
re-appointment.
Shri Anup Singh has not sought re-election at the ensuing Annual
General Meeting and will cease to be Director on the Board at the
conclusion of the ensuing Annual General Meeting of the Company. The
Board of your Company placed on record their sincere appreciation for
the valuable services rendered by Shri Anup Singh during his tenure as
a Director of the Company.
Brief resume relating to Directors who are being re-appointed are given
in the Notice of the Annual General Meeting.
AUDITORS
M/s. Gupta Vigg & Co. (Firm Registration No. 001393N), Chartered
Accountants, Statutory Auditors of the Company will retire at the
conclusion of the ensuing Annual General Meeting and are eligible for
re-appointment. They have, however, expressed their unwillingness to
continue as Auditors after the conclusion of this Annual General
Meeting. The Board of your Company placed on record their appreciation
of the services rendered by them during their association with the
Company as its Auditors. The Board has recommended M/s. Walker,
Chandiok & Co (Firm Registration No.001076N), Chartered Accountants to
be appointed as Auditors from the conclusion of the ensuing Annual
General Meeting to the conclusion of next Annual General Meeting. M/s.
Walker, Chandiok & Co has furnished a Certificate to the effect that
the proposed appointment, if made, will be in accordance with
Sub-section (1B) of Section 224 of the Companies Act, 1956.
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
In compliance with the Central Government Notification No.
52/26/CAB-2010 dated 24th January, 2012 pertaining to appointment of
Cost Auditors, the Board has appointed M/s. J.K. Kabra & Co., Cost
Accountants, New Delhi to carry out the cost audit of the Company for
the financial year 2012-2013. The necessary application for appointment
of Cost Auditors has been filed with Hon'ble Ministry of Corporate
Affairs, New Delhi.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE
EARNINGS AND 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.
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 7 years have been transferred by the Company to the IEPF
established by the Central Government pursuant to Section 205C of the
said Act.
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 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.
On behalf of the Board of Directors
Place : Gurgaon Chandra Mohan
Dated : 12th August, 2012 Chairman
Mar 31, 2011
To the Shareholders,
The Directors have pleasure in presenting the 28th Annual Report of
your Company, together with the Audited Accounts for the year ended
31st March, 2011.
FINANCIAL RESULTS
(Rs. in Crores)
Current Year Previous Year
31/03/2011 31/03/2010
Gross Sales and other Income 1096.19 837.03
Net Sales and other Income 1016.98 784.82
Profit before Interest &
Depreciation 126.65 87.74
Less : Interest & Financial
charges 43.65 35.14
Profit before Depreciation and Tax 83.00 52.60
Depreciation 53.94 47.62
MAT Credit Receivable (1.45) Ã
Provision for Income Tax 4.87 0.04
Provision for Deferred Tax (0.87) (1.13)
Net Profit 26.51 6.07
Appropriations:
Proposed Dividend on Equity 2.71 Ã
Shares @20%
Dividend on Equity Shares @15% Ã 1.93
Corporate Dividend Tax 0.44 0.32
Transferred to General Reserve 2.00 0.38
Balance carried to Balance Sheet 21.36 3.44
26.51 6.07
Your Company has recorded a turnover of Rs.1096.19 crores in the year
under report as against Rs.837.03 crores in the previous year. Your
Company has earned a Profit after Tax (PAT) of Rs.26.51 crores which
includes amount of Rs.10.61 crores and Rs.9.29 crores being the profit
on transfer of leasehold rights/interests of the Company in the
immovable properties at Ambernath, Mumbai and Bommasandra, Bangalore
respectively over the previous year's PAT of Rs.6.07 crores.
OUTLOOK FOR CURRENT YEAR
The Unaudited Financial Results for the quarter ended 30th June, 2011,
already announced, show a turnover of Rs.286.95 crores for the first
quarter of the current year against a turnover of Rs.248.93 crores of
the corresponding quarter of the previous year, an increase in turnover
by 15.27 percent. Your Directors are taking steps to improve the
turnover and margin during the remaining part of the year despite the
recessionary trends in the economy.
RESERVES
The reserves of your Company after proposed appropriations shall stand
at Rs.306.12 crores (including premium of Rs.10.61 crores received on
conversion of warrants into equity shares) as against Rs.272.15 crores
(including premium of Rs.5.40 crores received on conversion of warrants
into equity shares) in the previous year.
EXPORT
The export turnover of your Company during the period under review was
Rs.202.30 crores as against Rs.147.84 crores in the previous year. The
export turnover includes sale to wholly owned subsidiaries amounting to
Rs.146.86 crores as against Rs.114.14 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, 2011 of current year export
turnover was Rs.41.67 crores as against Rs.55.00 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 @20 percent i.e. Re.0.20
per Equity Share of Re.1/- each for the financial year 2010-11,
amounting to Rs.3.15 crores including dividend tax of Rs.0.44 crore on
the enhanced Equity Share Capital of Rs.13.53 crores as against a
dividend of 15 percent i.e. Re.0.15 per Equity Share of Re.1/- each
aggregating to Rs.2.25 crores including dividend tax of Rs.0.32 crore
in the previous year on the Equity Share Capital of Rs.12.89 crores.
SHARE CAPITAL
The Company has made preferential allotment of 97,00,000 warrants
convertible in one or more tranches within 18 months from the date of
allotment date i.e. 11th July, 2009 into equal number of Equity Shares
of Rupee One each at a premium of Rs.16.50 per share to the Promoter
Group Company. An upfront payment has been received @Rs.4.40 per
warrant aggregating to Rs.4.27 crores and balance amount will be
received at the time of conversion of the warrants. During the
financial year under report remaining 64,30,000 warrants out of the
aforesaid 97,00,000 warrants, have been converted by way of second and
final tranche into 64,30,000 Equity Shares of Re.1/- each at a premium
of Rs.16.50 per share after receipt of balance amount aggregating to
Rs.8.42 crores. The amount collected has been utilized for the purpose
it was raised. The Paid-up Equity Share Capital has increased to
Rs.13.53 crores from Rs.12.89 crores after this allotment.
FINANCE
Your Company has been affirmed "A2 " and "LA-" Ratings for Line of
Credit (Basel-II) for its Short Term and Long Term Bank Facilities
respectively by ICRA Limited. Your Company uses long/short term
facilities from the Banks on most favourable terms.
NEW PLANTS AND FACILITIES
Your Company is undertaking continuous endeavours for expansion of its
domestic and overseas customers by implementing new facilities to
enhance capacity and also geographically de-risk our operations. Your
Company has started work for its:
A. Sanand Plant
This plant has commenced commercial production in the last quarter of
financial year under report and caters to the needs of current
requirements of Tata Motors Limited for its Nano Car Plant at Sanand,
Ahmedabad in the state of Gujarat. Strategically located, this plant
will provide a very good launch pad to supply components to the
customers like Ford India, Maruti Suzuki and Peugeot who are firming up
plans to set up their manufacturing facilities in the region.
B. Chennai Plant
The civil work to establish a Plant to manufacture Auto Components is
in progress at Oragadam, Chennai on the land allotted by SIPCOT
Industrial Growth Centre in the state of Tamil Nadu to cater to the
customers in South India and export.
C. Haridwar Plant
This Plant is in full operation and has commenced supplies of
components to Hero MotoCorp Limited's plant located in the region. Your
Company is exploring the possibilities to further enhance capacity to
cater to the growing demand for its products.
D. Bawal Plant
The Company had set up a plant in HSIIDC, Phase II, Bawal (Haryana)
during the year under report to produce High Pressure Die Casting and
Gravity Die Casting and fully machined components for its expanding
customer base. It has already started commercial production in the
current year and will witness growth in its revenues. Further, there is
plan to set up High Tonnage High Pressure Die Casting and machining
facility for Auto Components which will achieve start of production in
the next financial year. The civil construction activity has already
commenced.
E. Bhiwadi Plant
Site development work is in progress for setting up an Auto Components
Manufacturing Plant at Industrial Area, Pathredi, Bhiwadi, Distt. Alwar
(Rajasthan).
SUBSIDIARY COMPANIES
Your Company has Unlisted Wholly Owned Subsidiaries:
A. Rico Auto Industries Inc. USA
This Company is engaged in the business of trading of Auto Components
in the North American and Brazil Markets.
The Company earned a total revenue of Rs.99.94 crores during the
financial year ended 31st March, 2011 as against Rs.100.16 crores in
the previous year, a marginal decrease of 0.21 percent. The Company
earned a net profit of Rs.1.08 crores as against Rs.0.20 crore in the
previous year thus experiencing expanding margins. This Company has not
declared any dividend for the financial year ended 31st March, 2011.
This Subsidiary has achieved a turnover of Rs.23.27 crores for the
first quarter ended 30th June, 2011 as against Rs.22.87 crores in the
corresponding quarter of the previous year, an increase of 1.75 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
for the European Markets.
The Company earned a total revenue of Rs.50.10 crores during the
financial year ended 31st March, 2011 as against Rs.31.54 crores in the
previous year. The Company earned a net profit of Rs.1.27 crores as
against Rs.0.52 crore in the previous year. This Company has not
declared any dividend for the financial year ended 31st March, 2011.
This Subsidiary has achieved a turnover of Rs.10.42 crores for the
first quarter ended 30th June, 2011 as against Rs.13.08 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.
The Subsidiary is expecting significant growth during the remaining
part of the current financial year.
C. Rasa Autocom Limited
During the year under review, this Company has not started any
manufacturing activities. The Company has earned an interest income of
Rs.0.46 lac on the fixed deposit with Banks and incurred expenses of
Rs.5.23 lacs towards administrative and other operating expenses. The
Company sustained a net loss of Rs.4.97 lacs during the year under
report. A loan of Rs.19.47 crores has been given to this Company as on
30th June, 2011. The Company has commenced manufacturing of auto
components and recorded a turnover of Rs.1.17 crores during the first
quarter of financial year 2011-12.
D. Uttarakhand Automotives Limited
During the year under review, this Company has not started any
manufacturing activities. The Company has incurred expenses of Rs.2.05
crores towards administrative and other operating expenses. The Company
sustained a net loss of Rs.2.05 crores during the year under report. A
loan of Rs.15.91 crores has been given to this Company as on 30th June,
2011 towards the cost of land.
E. RAA Autocom Limited
During the year under review, this Company has not started any
manufacturing activities. The Company has incurred expenses of Rs.0.59
crore towards administrative and other operating expenses. The Company
suffered a net loss of Rs.0.59 crore during the year under report. A
loan of Rs.5.92 crores has been given to this Company as on 30th June,
2011.
F. AAN Engineering Industries Limited
Your Company took over Rupak Automotive Industries Limited by acquiring
its entire paid-up equity capital of Rs.5.00 lacs on 8th April, 2011 as
a consequence it became our wholly owned subsidiary Company. It was
renamed as AAN Engineering Industries Limited. This Company has taken
new initiatives to set up a State of the art unit for manufacturing for
the Aerospace, Defence, Railways and Security Equipments at Gurgaon, in
the premises taken on lease from us.
SUBSIDIARY & JOINT VENTURE COMPANIES
A. Rico Jinfei Wheels Limited
The Company earned a total revenue of Rs.42.40 crores during the
financial year ended 31st March, 2011 as against Rs.8.65 crores in the
previous year. This Company has incurred a loss of Rs.5.53 crores in
the financial year ended 31st March, 2011 as against PAT of Rs.0.05
crore in the previous year.
Your Company has invested Rs.9.25 crores in the Equity Share Capital
and given a loan of Rs.42.36 crores as on 30th June, 2011.
B. KRP Auto Industries Limited
During the year under review, the Company has acquired the Leasehold
Rights in the Industrial Plot measuring about 89937 sq. mtrs. situated
at Plot No. 283, Bommasandra-Jigani Link Road Industrial Area,
Bangalore from our Company and has allotted 4,70,930 Equity shares of
Rs.100/- each at a premium of Rs.330/- to the Company, towards the
agreed consideration of Rs.20.25 crores. After the allotment of these
shares, our Company holds 99.95 percent in the paid-up equity share
capital in this Joint Venture Company. The Joint Venture Company has
taken initiatives to set up the industrial project in the above said
industrial plot for the manufacture of auto components. It is expected
that the manufacturing activities will start in the third quarter of
the current fiscal.
During the period under review, the Company has earned an income of
Rs.0.89 lac from trading activities. The Company has incurred a net
loss of Rs.4.27 lacs during the financial I year 2010-11.
JOINT VENTURE COMPANIES
A. FCC Rico Limited
FCC Rico recorded a turnover of Rs.702.93 crores for the financial year
ended 31st March, 2011 as against Rs.512.17 crores in the previous
year, a growth of 37 percent. The Board of this Company has
recommended a dividend of 75 percent for the year ended 31st March,
2011. Your Company expects to receive an amount of Rs.2.96 crores by
way of dividend on its investment.
B. Continental Rico Hydraulic Brakes India Private Limited
Continental Rico recorded a turnover of Rs.11.78 crores in the
financial year ended 31st March, 2011 as against Rs.13.24 crores in the
previous year. Your Company has so far invested Rs.55.00 crores in the
Equity Share Capital as on 30th June, 2011.
C. Magna Rico Powertrain Private Limited
Magna Rico recorded a turnover of Rs.15.42 crores in the financial year
ended 31st March, 2011 as against Rs.1.74 crores in the previous year.
Your Company has so far invested Rs.16.12 crores in the Equity Share
Capital as on 30th June, 2011.
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 21st May, 2011,
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 elsewhere 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 Auditors' Certificate
thereon.
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, 2011 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, 2011 and of the profit for the year
1st April, 2010 to 31st March, 2011;
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, 2011
have been prepared on a going concern basis.
AUDIT COMMITTEE
Your Company has an Audit Committee to meet the requirement of the
Companies Act, 1956 as well as of 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 & The National Stock Exchange of India
Limited. The Annual Listing Fees have been paid for the financial year
2011-12.
DIRECTORS
In accordance with the provisions of the Companies Act, 1956 and the
Articles of Association of your Company, Shri Kanwal Monga and Shri
Amarjit Chopra, 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. Gupta Vigg & Co. (Firm Registration No. 001393N), 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.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE
EARNINGS AND 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.
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 7 years have been transferred by the Company to the IEPF
established by the Central Government pursuant to Section 205C of the
said Act.
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 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.
On behalf of the Board of Directors
Anup Singh Arvind Kapur
Director-in-Chair Vice Chairman,
Place : Gurgaon CEO &
Dated : 11th August, 2011 Managing Director
Mar 31, 2010
The Directors have pleasure in presenting the 27th Annual Report of
your Company, together with the Audited Accounts for the year ended
31st March, 2010.
FINANCIAL RESULTS
(Rs. in Crores)
Current Year Previous Year
31/03/2010 31/03/2009
Gross Sales and other Income 842.89 844.41
Net Sales and other Income 790.68 765.67
Profit before Interest
& Depreciation 93.60 98.36
Less : Interest &
Financial charges 41.00 45.47
Profit before
Depreciation and Tax 52.60 52.89
Depreciation 47.62 50.02
Fringe Benefit Tax - 0.62
Provision for Income Tax 0.04 0.05
Provision for Deferred Tax (1.13) (2.55)
Net Profit 6.07 4.75
Appropriations:
Proposed Dividend on Equity 1.93 -
Shares @15%
Dividend on Equity Shares @15% - 1.88
Corporate Dividend Tax 0.32 0.32
Transferred to General Reserve 0.38 0.24
Balance carried to
Balance Sheet 3.44 2.31
6.07 4.75
Your Company has recorded a turnover of Rs.842.89 crores in the year
under report as against Rs.844.41 crores in the previous year. Your
Company has earned a Profit after Tax (PAT) of Rs.6.07 crores over the
previous years PAT of Rs.4.75 crores despite the labour unrest at the
Gurgaon Plant during the period from 21st September, 2009 to 5th
November, 2009. There was a production loss of around Rs.42.00 crores
both for domestic and overseas customers. An amount of Rs.9.56 crores
have been spent on account of Air Freight mainly for exports to meet
the commitment of our OEM Customers in USA and Europe.
OUTLOOK FOR CURRENT YEAR
The Unaudited Financial Results for the quarter ended 30th June, 2010,
already announced, show a turnover of Rs.248.93 crores for the first
quarter of the current year against a turnover of Rs.197.21 crores of
the corresponding quarter of the previous year, an increase in turnover
by 26.23 per cent. 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.272.15 crores (including premium of Rs.5.40 crores received on
conversion of warrants into equity shares) as against Rs.260.13 crores
in the previous year.
EXPORT
The export turnover of your Company during the period under review was
Rs.147.84 crores as against Rs.125.68 crores in the previous year. The
export turnover includes sale to Wholly Owned Subsidiaries amounting to
Rs.114.03 crores as against Rs.120.80 crores in the previous year.
During the quarter ended 30th June, 2010 of current year export
turnover was Rs.55.00 crores as against Rs.29.02 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 2009-10,
amounting to Rs.2.25 crores including dividend tax of Rs.0.32 crore on
the enhanced Equity Share Capital of Rs.12.89 crores as against a
dividend of same percentage i.e. Re.0.15 per Equity Share of Re.1/-
each aggregating to Rs.2.20 crores including dividend tax of Rs.0.32
crore in the previous year on the Equity Share Capital of Rs.12.56
crores.
SHARE CAPITAL
The Company has made preferential allotment of 97,00,000 Warrants
convertible in one or more tranches within 18 months from the date of
allotment date i.e. 11th July, 2009 into equal number of Equity Shares
of Rupee One each at a premium of Rs.16.50 per share to the Promoter
Group Company. An upfront payment has been received @Rs.4.40 per
warrant aggregating to Rs.4.27 crores and balance amount will be
received at the time of conversion of the warrants. During the
financial year under report 32,70,000 warrants out of the aforesaid
97,00,000 warrants, have been converted by way of first tranche into
32,70,000 Equity Shares of Re.1/- each at a premium of Rs.16.50 per
share after receipt of balance amount aggregating to Rs.4.28 crores.
The amount collected has been utilized for the purpose it was raised.
The paid- up Equity Share Capital has increased to Rs.12.89 crores from
Rs.12.56 crores after this allotment.
FINANCE
Your Company has been affirmed ÃA2+Ã and ÃLA-Ã Ratings for Line of
Credit (Basel-II) for its Short Term and Long Term Bank Facilities
respectively by ICRA Limited. Your Company uses long/short term
facilities from the Banks on most favourable terms.
NEW PLANTS
Your Company is undertaking continuous endeavours for expansion of its
domestic and overseas customers by implementing new facilities. For
establishing manufacturing facilities, your Company has started work
for its:
A. Haridwar Plant
This plant has commenced commercial production in the last quarter of
financial year under report and caters to the needs of Hero Honda
Motors for its plant at Haridwar, Uttarakhand.
B. Sanand Plant, Ahmedabad
Your Company has been allotted land at Sanand by TATA Motors against
deferred payments. This Plant is being established for supplies to TATA
Motors for its Nano Car and is expected to commence commercial
production during the financial year 2010-11. At present, the required
components for Nano Car project are being supplied from the Gurgaon
Plant.
C. Chennai Plant
The civil work to establish a Plant to manufacture Auto Components has
started at Oragadam, Chennai on the land allotted by SIPCOT Industrial
Growth Centre in the state of Tamil Nadu.
D. Bhiwadi Plant
In the state of Rajasthan, approx. 45500 Sqm. land has been allotted by
Rajasthan State Industrial Development & Investment Corporation Limited
(RIICO) at Industrial Area, Pathredi, Bhiwadi, Distt. Alwar for setting
up a Auto Components Manufacturing Plant.
SUBSIDIARY COMPANIES
Your Company has Unlisted Wholly Owned Subsidiaries:
A. Rico Auto Industries Inc., USA
This Company is engaged in the business of trading of Auto Components
in the North American and Brazil Markets.
The Company earned a total revenue of Rs.100.16 crores during the
financial year ended 31st March, 2010 as against Rs.106.13 crores in
the previous year, a decrease of 6 per cent. The Company earned a net
profit of Rs.0.20 crore as against Rs.3.04 crores in the previous year.
This Company has not declared any dividend for the financial year ended
31st March, 2010.
This Subsidiary has achieved a turnover of Rs.22.02 crores for the
quarter ended 30th June, 2010 as against Rs.21.27 crores in the
corresponding quarter of the previous year, an increase of 3.52 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
for the European Markets.
The Company earned a total revenue of Rs.31.54 crores during the
financial year ended 31st March, 2010 as against Rs.39.58 crores in the
previous year. The Company earned a net profit of Rs.0.52 crore as
against loss of Rs.0.38 crore in the previous year. This Company has
not declared any dividend for the financial year ended 31st March,
2010.
This Subsidiary has achieved a turnover of Rs.13.07 crores for the
quarter ended 30th June, 2010 as against Rs.8.38 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.
The Subsidiary is expecting significant growth during the remaining
part of the current financial year.
C. Rasa Autocom Limited
Rasa Autocom Limited was incorporated on 5th September, 2007. Your
Company has invested Rs.0.08 crore in the entire Equity Share Capital
of this Company and consequently it became Wholly Owned Subsidiary
Company. A loan of Rs.8.71 crores has also been given to this Company
as on 30th June, 2010. The Company is nearing completion of civil work
of its plant being established at Bawal, District Rewari (Haryana) to
manufacture auto components and is expected to start the commercial
production during the financial year 2010-11.
D. Uttarakhand Automotives Limited
Uttarakhand Automotives Limited was incorporated on 4th June, 2007.
Your Company has invested Rs.0.41 crore in the entire Equity Share
Capital of this Company and consequently it became Wholly Owned
Subsidiary Company. A loan of Rs.16.72 crores has also been given to
this Company as on 30th June, 2010 towards the cost of land.
E. RAA Autocom Limited
RAA Autocom Limited was incorporated on 27th May, 2008. Your Company
has invested Rs.0.05 crore in the entire Equity Share Capital of this
Company and consequently it became Wholly Owned Subsidiary Company. A
loan of Rs.3.92 crores has also been given to this Company as on 30th
June, 2010.
SUBSIDIARY & JOINT VENTURE COMPANIES
A. Rico Jinfei Wheels Limited
Rico Jinfei Wheels Limited has started trading of Alloy Wheels and
earned an income of Rs.8.65 crores for the financial year ended 31st
March, 2010. This Company has earned a Profit after Tax (PAT) of
Rs.0.05 crore in the financial year ended 31st March, 2010 as against a
loss of Rs.0.40 crore in the previous year. This Company expects to
commence the commercial production by September, 2010.
Your Company has invested Rs.9.25 crores in the Equity Share Capital
and given a loan of Rs.16.07 crores towards the financing of the
project as on 30th June, 2010.
B. KRP Auto Industries Limited
Your Company has entered into an agreement with M/s. Kailash Royal
Premium Projects Private Limited on 23rd December, 2009 for promotion
of a Joint Venture Company for manufacturing of automobile components
at Bangalore. This Joint Venture Company has equity participation of 95
per cent from Rico Auto and the balance by M/s. Kailash Royal Premium
Projects Private Limited. The Joint Venture Company namely M/s. KRP
Auto Industries Limited was incorporated on 15th January, 2010 and is
in the process of establishing its plant on the land which has been
allotted by Karnataka Industrial Area Development Board (KIADB) at
Bommasandra Jigani Link Road Industrial Area, Bangalore.
Your Company has invested Rs.0.05 crore in the Equity Share Capital of
this Joint Venture Company as on 31st March, 2010 consequently it has
become Subsidiary Company. The first financial year of this Company
would close on 31st March, 2011.
JOINT VENTURE COMPANIES
A. FCC Rico Limited
FCC Rico recorded a turnover of Rs.512.17 crores for the financial year
ended 31st March, 2010 as against Rs.411.06 crores in the previous
year, a growth of 24.60 per cent. The Board of this Company has
recommended a dividend of 121 per cent for the year ended 31st March,
2010. Your Company expects to receive an amount of Rs.4.78 crores by
way of dividend on its investment.
B. Continental Rico Hydraulic Brakes India Private Limited
Continental Rico recorded a turnover of Rs.14.03 crores in the
financial year ended 31st March, 2010 as against Rs.2.74 crores in the
previous year. Your Company has so far invested Rs.46.75 crores in the
Equity Share Capital as on 30th June, 2010.
C. Magna Rico Powertrain Private Limited
Magna Rico recorded a turnover of Rs.1.74 crores in the financial year
ended 31st March, 2010 as against Rs.0.34 crore in the previous year.
Your Company has so far invested Rs.9.62 crores in the Equity Share
Capital as on 30th June, 2010.
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.
The Statement required under section 212 of the Companies Act, 1956 in
respect of the Subsidiaries of the Company is annexed to this Report
alongwith a summary of their financial performance. An exemption has
been received from Ministry of Corporate Affairs, Government of India
from annexing the accounts and other documents pertaining to the
subsidiaries, under section 212(8) of the Companies Act, 1956.
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 Auditors Certificate
thereon.
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, 2010 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, 2010 and of the profit for the year
1st April, 2009 to 31st March, 2010;
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, 2010
have been prepared on a going concern basis.
AUDIT COMMITTEE
Your Company has an Audit Committee to meet the requirement of the
Companies Act, 1956 as well as of 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 & The National Stock Exchange of India Limited. The
Annual Listing Fees have been paid for the financial year 2010-11.
DIRECTORS
In accordance with the provisions of the Companies Act, 1956 and the
Articles of Association of your Company, Shri Chandra Mohan and Dr.
Ashok Seth, Directors will retire by rotation at the forthcoming Annual
General Meeting and being eligible, offer themselves for
re-appointment.
Shri Satish Sekhri has been appointed as an Additional Director by the
Board of Directors on 28th May, 2010. He holds office upto the date of
the ensuing Annual General Meeting of the Company. The Board
recommends the proposal for his appointment as Director of the Company
which is included in the notice of the ensuing Annual General Meeting
for your approval.
Brief resume relating to Directors who are being re-appointed are given
in the Notice of the Annual General Meeting.
AUDITORS
M/s. Gupta Vigg & Co. (Firm Registration No. 001393N), 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.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE
EARNINGS AND 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.
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 7 years have been transferred by the Company to the IEPF
established by the Central Government pursuant to Section 205C of the
said Act.
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 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 except at the Gurgaon Plant where a
labour disturbance had erupted among a section of employees and was
later on resolved amicably. The settlement has been signed by the
Management and the Workers Representatives in the presence of Labour
Department Officials.
Your Company keeping in view to streamline and re-structure the
manpower for optimum utilization, reduce fixed cost, improve
productivity, ensure greater operational efficiency has announced a
Voluntary Retirement Scheme (VRS) for its employees during the quarter
ended 30th June, 2010 and an amount of Rs.3.30 crores have been paid to
them towards their full & final settlement.
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.
On behalf of the Board of Directors
Anup Singh Arvind Kapur
Director-in-Chair Vice Chairman,
Place :Gurgaon CEO &
Dated : 12th August, 2010 Managing Director
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