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Recapitalisation puts Ricoh India on recovery track; announces Q3 and Q4 FY 2015-16 results

2016-11-18

New Delhi, 18thNovember,2016:Ricoh India Limited (Ricoh India or the Company), todayannounced its quarterly results for the period ended 31st December, 2015 and 31st March, 2016. Coming soon after the recapitalisation of the company, this marks a key turning point in the recovery of Ricoh India for all of our stakeholders.

 

Following the approval from the National Company Law Tribunal, Ricoh India held its EGM on 14th October, 2016 and received shareholder approval for a recapitalisation. On 15th October 2016, NRG Group Limited (a subsidiary of Ricoh Company Limited and Co promotor) infused INR 1,123 crores into Ricoh India, to support in the recovery and business stability. The infused cash was immediately used to repay debt and reduce the Company’s interest burden.

 

The Company has been investigating thefalsification of its accounts. Following extensive investigation, the accounts filed today disclose the full extent of the losses suffered by the Company and the underlying business performance. The loss for the year ended 31st March 2016 is INR 1,118 crores,and since this is less than the infusion by NRG Group Limited there will be no further infusion by either NRG Group Limited or Ricoh Company Limited, on the terms for recapitalisation approved by the National Company Law Tribunal.

 

Of thereported loss of INR 1,118 crores for the year ended 31st March, 2016, the Company has identified one off / exceptional items relating to the falsification of INR 683 crores. This means, the normalised loss for the year ended 31st March, 2016 is INR 435 crores.

 

The Company has accounted for INR 683 crores as one off / exceptional items in its financial results for the quarter ended 31st March, 2016. Excluding these one off/ exceptional items the normalised loss for the quarter ended 31st March 2016 is INR 176 crores, vis-à-vis a normalised loss of INR 102 crores in the quarter ended 31st December, 2015.

 

Based on the investigations, the Company has identifiedthe main causes of thefalsification of accounts (disclosed as one off / exceptional items). These include fictitious sales that inflate revenues; potentialbad debts that relate to fictitious sales;unsupported adjustments that have inflated profits;inappropriate revenue and profit recognition; inventory provisions; and adjustments to balance sheet items for which inadequate accounting or controls or falsification resulted in irrecoverable balances.

 

Under thesecircumstances the statutory auditors have issued a disclaimer in their audit opinion. Whilst the Directors recognise the statutory auditor’s concerns they believe that the balance sheetat 31st March, 2016 materially shows a true and fair view and have filed the appropriate disclosure to this effect with the Bombay Stock Exchange (BSE). This balance sheet now represents the base for all future financial reporting.The Company does not expect any further cost or liabilities in respect of the falsification in the periods to 31st March 2016 except in so far as any liabilities are imposed by way of investigation by any authorities. No provision has been made for such liabilities as the directors believe, based on their investigations, noneare expected toarise.

 

Meanwhile, the Directors have put in place various mechanisms to prevent any recurrence of any such incidentsor falsification. The Company has instituted enhanced policies, processes and controls and is committed to the highest standard of ethics and integrity.

 

Ricoh India is now working to file the financial results for the quarter ended 30th June 2016 and 30th September 2016, expeditiously. This will enable the Company to meet the remaining reporting obligations to BSE and all stakeholders. As soon as these are completed,the Company will initiate the process to enable share tradingto resume.

 

Announcement of financial results, with such a significant loss is exceptional and rightly would raise questions on Company’s future. However, with the recapitalisation, a clear view on the challenges faced, improved processes and controls and the support of all of its people the Company is committed to return toprofitability at the earliest.

 

Today marks a significant milestonein restoring Ricoh India’s presence in the market. Ricoh India willcontinue its business operations delivering innovative products with cutting edge technologies, and exceptional service standards to all of its customers.

 

About Ricoh

Ricoh is a global technology company that has been transforming the way people work for more than 80 years. Under its corporate tagline – imagine. change. – Ricoh continues to empower companies and individuals with services and technologies that inspire innovation, enhance sustainability and boost business growth. These include document management systems, IT services, production print solutions, visual communications systems, digital cameras, and industrial systems.

 

Headquartered in Tokyo, Ricoh Group operates in approximately 200 countries and regions. In the financial year ending March 2016, Ricoh Group had worldwide sales of 2,209 billion yen (approx. 19.6 billion USD).

 

For further information, please visit www.ricoh.com /www.ricoh.co.in

Contact

Rafi Khan/ Reegal Jayani                                                                                                     Arem Mukim

Weber Shandwick                                                                                                                 Corporate Communications

M: 9910049810/ 9999976533                                                                                              Ricoh India

Email: rkhan@webershandwick.com / Rjayani@webershandwick.com                             arem.mukim@ricoh.co.in