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Rico Auto Industries Ltd.

BSE: 520008 Sector: Auto
NSE: RICOAUTO ISIN Code: INE209B01025
BSE 00:00 | 26 Jul 58.95 3.05
(5.46%)
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56.55

HIGH

61.10

LOW

55.90

NSE 00:00 | 26 Jul 58.95 3.00
(5.36%)
OPEN

56.50

HIGH

61.20

LOW

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OPEN 56.55
PREVIOUS CLOSE 55.90
VOLUME 783684
52-Week high 61.10
52-Week low 26.40
P/E
Mkt Cap.(Rs cr) 798
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 56.55
CLOSE 55.90
VOLUME 783684
52-Week high 61.10
52-Week low 26.40
P/E
Mkt Cap.(Rs cr) 798
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Rico Auto Industries Ltd. (RICOAUTO) - Director Report

Company director report

To the Shareholders

Your Directors have pleasure in presenting the 37th Annual Report of your Companytogether with the Audited Financial Statements for the year ended 31st March 2020.

FINANCIAL RESULTS

(Rs in Crores)

Standalone Consolidated
Particulars Current Year Previous Year Current Year Previous Year
2019-20 2018-19 2019-20 2018-19
Total Revenue 1226.27 1224.50 1423.78 1412.06
Profit before Interest Depreciation and Exceptional Items 106.00 142.53 136.46 166.22
Interest and Financial charges 27.18 23.14 31.20 26.79
Profit before Depreciation Exceptional Items and Tax 78.82 119.39 105.26 139.43
Depreciation 59.96 43.83 79.57 57.70
Profit before Exceptional Items and Tax 18.86 75.56 25.69 81.73
Exceptional Items 5.21 9.13 6.79 9.60
Profit before Tax (PBT) 13.65 66.43 18.90 72.13
Tax Expense (2.93) 17.67 2.22 21.10
Profit after Tax 16.58 48.76 16.68 51.03
Other Comprehensive Income/(Loss) (net of tax) (5.64) (0.45) (4.36) 0.90
Total Comprehensive Income 10.94 48.31 12.32 51.92

OPERATIONS AND THE STATE OF COMPANY'S AFFAIRS

Your Company has recorded a Total Revenue of `1226.27 crores in the year under reportas against `1224.50 crores in the previous year. Your Company has earned a Profit afterTax (PAT) of `16.58 crores during the year under report over the previous year's profit of`48.76 crores.

The Aftermarket Division of your Company caters the two-wheeler and four-wheelersegment. The Company has established a strong network of dealers and distributors inIndia Nepal Sri Lanka and Bangladesh. During the financial year 2019-20 a turnover of`23.00 crores has been achieved by this Division. In spite of two months lockdown due toCOVID-19 Aftermarket Division has an optimistic target to achieve sales of `30.00 croresin the current financial year 2020-21.

DIVIDEND

Your Directors have recommended a Dividend @ 30 per cent i.e. `0.30 per Equity Share of`1/- each for the financial year 2019-20 amounting to `4.06 crores on the equity sharecapital of `13.53 crores as against a dividend of 80 per cent (40% Interim and 40% Final)i.e. `0.80 per Equity Share of `1/- each aggregating to `12.33 crores including dividendtax of `1.51 crores in the previous year on the same Equity Share Capital.

TRANSFER TO RESERVES

The Company proposes to retain the entire amount of profits in the Profit and LossAccount.

SHARE CAPITAL

The Paid-up Share Capital as on 31st March 2020 was `135285000 divided into135285000 equity shares of `1/- each. During the year under review your Company hasneither issued shares with Differential Voting Rights nor granted Stock Options nor SweatEquity.

EXPORTS

The export turnover of your Company during the year under review was `310.49 crores asagainst `298.39 crores in the previous year. The export turnover includes sales to whollyowned subsidiaries amounting to `131.04 crores as against `198.51 crores in the previousyear. The wholly owned subsidiaries of your Company in United Kingdom and United States ofAmerica are engaged in providing last mile sales and customer support in their respectiveregions.

Further details as regards to the efforts of your Company on this front have been dealtwithin the Management Discussion and Analysis section of this report.

OUTLOOK FOR CURRENT YEAR

Your Company's operations were impacted during the lockdown imposed from 21st March2020 by the State Government and nationwide lockdown imposed from 25th March 2020 up toend of April 2020 by the Central Government due to unprecedent conditions of Covid-19Pandemic. The operations of the Company were resumed in the month of May 2020 in phasedmanner after adhering the safety norms prescribed by Central Government State Governmentand the concerned Local Authorities. The sales started picking up in the month of June2020 accordingly the first quarter ended 30th June 2020 recorded a gross revenue of`131.12 crores as against the gross revenue of `312.11 crores in the corresponding quarterof the previous year. Consequently the Loss stood at `14.70 crores for the first quarteras against Profit after Tax of `6.27 crores in the corresponding quarter of the previousyear.

On account of demand recovery in Rural and Semi-urban markets the current volume ofauto sales has ramped up from June 2020 onwards which resulted in increase of productionvolumes and the sales of the Company in first two months of the second quarter. In linewith increased demand a recovery is expected in the remaining period of FY 2020-21 tooffset the 1st quarter business loss. The Company is confident to improve the turnover andmargin during the remaining part of the year.

PLANTS AND FACILITIES

The Company continues its efforts towards expansion of its domestic and overseascustomer base by optimizing utilization of existing available capacities expansion ofexisting facilities and setting up new facilities wherever required to enhance thecapacity. The Company is using its geographical spread to strategically locate itsoperations for de-risking.

The Board of Directors have approved investment in M/s. Metalart Friction PrivateLimited (CIN: U29100HR2018PTC073338) which is in the business of manufacturing FrictionMaterials for Clutch and other applications up to an amount of `76.80 lakhs by way ofpurchasing Equity Shares from its existing promoter shareholders and also by subscribingto the future issues of Equity Share Capital by the Company to the extent of its 80percent of the Equity Share Capital. Consequent to the aforesaid Investment it willbecome a subsidiary of your Company and the control will vest with your Company. Thedetails of Plant and Facilities are given in the Corporate Governance Report.

SUBSIDIARY COMPANIES

Your Company has three Wholly Owned Subsidiaries two Subsidiary Companies and threeStep-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 ComponentsLimited 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 providingwarehousing logistics and last mile support to our OEM and Tier-I Customers in NorthAmerica Mexico and Brazil. The Company has recorded a gross turnover of `138.54 croresduring the financial year ended 31st March 2020 as against `140.47 crores in the previousyear.

The Company earned a net profit after tax of `1.22 crores in the financial year ended31st March 2020 as against `1.54 crores in the previous year. The Company has notdeclared any dividend for the financial year ended 31st March 2020. This Subsidiary hasachieved a gross turnover of `17.24 crores for the first quarter ended 30th June 2020 asagainst `34.27 crores in the corresponding quarter of the previous year. The Companyincurred a loss of `0.65 crore for the first quarter ended 30th June 2020 as against`0.15 crore profit in the corresponding quarter of the previous year. During the financialyear and period under review your Company has not made any additional investment in thisSubsidiary.

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 providingwarehousing logistics and last mile support to our OEM and Tier-I Customers for theEuropean Markets.

The Company has recorded a gross turnover of `5.85 crores during the financial yearended 31st March 2020 as against `97.34 crores in the previous year. This drop in salesis primarily due to direct billing to customers which was started to counter the impact ofduties and taxes after removal of Generalized System of Preferences (GSP) on Indian AutoParts. The sales to European Union (EU) which were earlier routed through this Company hasactually grown in this period by almost 9 per cent to `106.00 crores. The Companytherefore incurred a loss of `0.34 crore in the financial year ended 31st March 2020 asagainst profit of `0.60 crore in the previous year. The Company has not declared anydividend for the financial year ended 31st March 2020.

This Subsidiary has achieved a gross turnover of `1.22 crores for the first quarterended 30th June 2020 as against `2.34 crores in the corresponding quarter of the previousyear. The Company earned a profit of `0.06 crore for the first quarter ended 30th June2020 as against `0.01 crore loss in the corresponding quarter of the previous year. Duringthe financial year and period under review your Company has not made any additionalinvestment in this Subsidiary.

C. AAN Engineering Industries Limited

AAN Engineering Industries Limited (AAN) is an AS 9100D Certified Company whichdefines it as a "Manufacturer of Precision Machined Components & Assemblies"for the Aerospace and Defence Industry.

AAN offers an extensive array of services for the manufacture of components/sub-systemswithin the Defence & Aerospace Industry. These include Design & Development ofTooling Casting Machining and Assembly supported by CAD CAM CAE and R&D testingfacilities. AAN works with a wide range of Raw Materials - namely Aluminum Alloy AlloySteel & High Manganese Steel & Raw Material/Castings as required by Client.

AAN currently manufactures machined metal components for Mechanical and Electronic FuseAssembly having installed capacity of 25000 units per month. In the current year companywon a prestigious tender with Ordnance Factory Board for supply of High Grade ManganeseCasting for ammunition and is currently servicing the order. This particular order placesthe Company favorably for manufacturing and servicing this specific need for Ministry ofDefence over next several years.

AAN is empaneled and registered with the Special Products division of ElectronicsCorporation of India Limited (ECIL) Hyderabad Bharat Electronics Limited (BEL) PuneEngine Divisions of Hindustan Aeronautical Limited (HAL) (Bangalore Nasik and Koraput)Heavy Vehicles Factory (HVF) Avadi Army Base Workshop and Army Directorate ofIndigenization and various Ordnance Factories. The Company is in advance stage ofobtaining preferred vendor certification from Defence Research and DevelopmentOrganization (DRDO) lab. AAN Engineering is one of the leading participating companies inthe largest ammunition tender taken out by Ministry of Defence in the year 2018. TheCompany has signed Strategic Transfer of Technology with leading OEMs across the globe.AAN is our Defence Outfit and a Strategic Investment. With Atma Nirbhar Bharat Abhiyan weare confident of getting more involvement with Defence Sector.

During the year under review the Company has earned a total revenue of `1.97 croresagainst `4.19 crores in the last year. During the year the Company has incurred a loss of`1.95 crores as against a loss of `1.40 crores in the previous year. This Subsidiary hasearned a total revenue of `0.52 crore in the first quarter ended 30th June 2020 asagainst `1.89 crores in the corresponding quarter of the previous year. The Companyincurred a loss of `0.38 crore for the first quarter ended 30th June 2020 as against`0.55 crore loss in the corresponding quarter of the previous year. During the financialyear and period under review your Company has not made any additional investment in thisSubsidiary.

D. Rico Fluidtronics Limited

This Company during the year under review has recorded a total revenue of `80.85crores as against `94.15 crores in the previous year. This Company has earned a profit of`7.18 crores in the financial year ended 31st March 2020 as against `6.31 crores in theprevious year. This Company has paid an Interim Dividend of Thirty paisa (`0.30) perEquity Share of `10/- each amounting to `1.27 crores excluding dividend tax of `0.26crore on 3rd August 2019. In addition the Board of this Company has recommended a FinalDividend of `1.00 per Equity Share of `10/- each for the financial year 2019-20. Ifapproved total dividend (interim and final) will amount to `5.49 crores excludingdividend tax of `0.26 crore as against dividend of `5.28 crores excluding dividend tax of`1.09 crores in the previous year on the same Equity Share Capital. Your Company and stepdown subsidiary namely Rasa Autocom Limited expects to receive an amount (after TDS) of`1.99 crores and `1.92 crores respectively by way of dividend on their investment.

This Company has recorded a total revenue of `6.07 crores for the quarter ended 30thJune 2020 as against `20.64 crores in the corresponding quarter of the previous year. TheCompany has incurred a loss of `0.60 crore for the quarter ended 30th June 2020 asagainst `1.75 crores profit in the corresponding quarter of the previous year.

Further this Company has made an investment of `9.50 crores by way of 95 lakhs equityshares having face value of `10/- each at par in the equity share capital of Rico JinfeiWheels Limited. Consequently it has become an associate of this Company. This Company hasreceived new business from Maruti Suzuki for supplies from FY 2021-22.

E. Rico Investments Limited

During the year under review this Company has recorded a total revenue of `5.94 croresas against `5.90 crores in the previous year. This Company has earned a profit of `4.24crores in the financial year ended 31st March 2020 as against `4.04 crores in theprevious year.

This Subsidiary has achieved a total revenue of `1.29 crores for the first quarterended 30th June 2020 as against `1.23 crores in the corresponding quarter of the previousyear. The Company earned a profit of `0.85 crore for the first quarter ended 30th June2020 as against `0.79 crore profit in the corresponding quarter of the previous year.

This Company has recommended a Dividend @ 3 per cent i.e. @ `0.30 per Equity Share of`10/- each for the financial year 2019-20. If approved the total dividend will amount to`3.56 crores as against a dividend of 2 per cent (interim and final) i.e. `0.20 per EquityShare of `10/- each aggregating to `2.48 crores including dividend tax of `0.29 crore inthe previous year on the same Equity Share Capital. Your Company expects to receive anamount of `3.48 crores by way of dividend on its investment.

During the period under review your Company has purchased 1000000 equity shares of`10/- each of this Subsidiary Company from its existing shareholder. After this purchasethe total stake of the Company stood at 97.73 percent in the total paid-up Equity ShareCapital of this Subsidiary Company. This Company has not made any additional investment inits 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 total revenue of `193.63crores as against `253.54 crores in the previous year. This Company has incurred a loss of`9.18 crores as on 31st March 2020 as against the profit of `1.09 crores in the previousyear. Further this Company has recorded a total revenue of `13.98 crores for the quarterended 30th June 2020 as against `52.99 crores in the corresponding quarter of theprevious year. The Company has incurred a loss of `6.34 crores for the quarter ended 30thJune 2020 as against the loss of ` 2.33 crores in the corresponding quarter of theprevious year. This Company has not recommended any dividend for the financial year2019-20. However this Company has paid a dividend (2% Interim and 2% Final) @ 4 percenti.e. `0.40 per Equity Share of `10/- each amounting to `2.22 crores including dividendtax of `0.38 crore for the financial year 2018-19. To achieve synergy in operations thisCompany shifted its manufacturing facility from Manesar Plant which was running in arented premises and the machines therein have been shifted to its Gurugram Plant andsurplus machines were disposed off to Group Companies in December 2019.

ii) Rasa Autocom Limited

This Company is engaged in the business of manufacturing of High Pressure Gravity andLow Pressure Die Cast Auto Components. Its plant is equipped with Automation and bettercontrols to produce high quality parts in large volume for export. This Company hasrecorded a gross turnover of `72.54 crores during the financial year ended 31st March2020 as against `53.14 crores in the previous year. The Company has earned a profit of`6.57 crores in the financial year ended 31st March 2020 as against the profit of `1.52crores in the previous year. The Company has received an Interim Dividend of `0.62 croreon 3rd August 2019 and expects to receive a final dividend of `1.92 crores on itsinvestment from Rico Fluidtronics Limited for the financial year 2019-20.

This Subsidiary has achieved a gross turnover of `9.57 crores for the first quarterended 30th June 2020 as against `14.81 crores in the corresponding quarter of theprevious year. The Company has incurred a loss of `0.17 crore for the quarter ended 30thJune 2020 as against `2.30 crores profit in the corresponding quarter of the previousyear. iii) Rico Jinfei Wheels Limited (Subsidiary and Joint

Venture)

This Company has recorded a gross turnover of `119.73 crores during the financial yearended 31st March 2020 as against `136.54 crores in the previous year. This Company hasearned a profit of `0.61 crore in the financial year ended 31st March 2020 as against theloss of `7.62 crores in the previous year.

Further this Company has recorded a gross turnover of `10.30 crores for the quarterended 30th June 2020 as against `33.06 crores in the corresponding quarter of theprevious year. The Company has incurred a loss of `2.62 crores for the quarter ended 30thJune 2020 as against `0.22 crore profit in corresponding quarter of the previous year.This Company has received new orders from Hero Motocorp Limited to supply alloy wheels.This will help to almost double the turnover and better utilization of current equipmentswithout major investment.

CONSOLIDATED FINANCIAL STATEMENTS

Pursuant to Section 129(3) of the Companies Act 2013 read with rules made thereunderthe appended Audited Consolidated Financial Statements of the Subsidiaries and the JointVenture Company forms part of the Annual Report.

A Statement containing salient features of the financial statements of Subsidiaries andJoint Venture Company has been provided in Form AOC-1 which is annexed and forms part ofthis Report.

Further audited financial statements of the Subsidiaries and Joint Venture Companyhave 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 theCompany interested in obtaining the same.

MATERIAL CHANGES AND COMMITMENTS

There was no change in the nature of the business of the Company. There were nomaterial changes and commitments affecting the financial position of the Company occurringbetween 31st March 2020 and the date of this Report.

CREDIT RATING

The India Ratings and Research Private Limited – a Credit Rating Agency hasupgraded the credit ratings on 11th May 2020 based on a consolidated view of the Companyand its Subsidiaries business on the back of their similar business profile CommonTreasury and Management Team and the same are given below:

Credit Ratings:

Particulars Ratings
Long Term Issuer Ratings IND A-/RWN
INR 3330m Term Loans/Letter of Credit IND A-/RWN
INR 2450m Fund and Non-Fund Based Working Capital Limits IND A-/RWN
Short Term IND A2+/RWN

RWN = Rating Watch Negative

Above specified ratings being latest one and published on 11th May 2020.

The above credit ratings are being reviewed.

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 DisclosureRequirements) Regulations 2015 MDA is annexed which forms part of this Report.

RISK MANAGEMENT

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 ofthis Report.

SECRETARIAL STANDARDS

The Company is in compliance with the applicable Secretarial Standards issued by theInstitute of Company Secretaries of India.

INTERNAL CONTROL SYSTEM AND THEIR ADEQUACY

The adequacy of Internal Financial Controls is discussed in Management Discussion andAnalysis which forms part of this Report.

CORPORATE GOVERNANCE

A separate report on Corporate Governance containing General Shareholders informationalong with the Certificate from Practicing Company Secretary regarding compliance ofconditions of Corporate Governance as stipulated under the SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 is annexed as a part of this Report.

AUDIT COMMITTEE

Your Company has an Audit Committee to meet the requirements of the Companies Act 2013and Regulation 18 of the SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015. Details of the Audit Committee are given under the Corporate GovernanceReport. There are no recommendations of the Audit Committee which were not accepted by theBoard.

NOMINATION AND REMUNERATION COMMITTEE

Your Company has a Nomination and Remuneration Committee to meet the requirements ofthe Companies Act 2013 and Regulation 19 of the SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015. Details of the Nomination and Remuneration Committee aregiven under the Corporate Governance Report. The Board has framed a Nomination andRemuneration Policy which lays down a framework in relation to the remuneration ofDirectors Key Managerial Personnel and Senior Management of the Company. This policy alsolays down criteria for selection and appointment of Board Members. This Policy is placedon the website link of the Company https://www.ricoauto.in/investor-relation.html.

CORPORATE SOCIAL RESPONSIBILITY (CSR)

In accordance with the requirements of Section 135 of the Companies Act 2013 theamount to be spent during the financial year 2019-20 worked out to be `122.48 lakhs. TheCompany has spent an amount of `140.13 lakhs including `17.65 lakhs on voluntary basistowards the CSR activities/projects as specified in CSR policy of the Company during thefinancial year 2019-20. The CSR activities of the Company are being monitored by the CSRCommittee. The focus area of CSR activities is as per Schedule VII of the Companies Act2013.

The details about the policy on Corporate Social Responsibility ("CSR")including initiatives taken on CSR the annual report on CSR activities and thecomposition of CSR Committee are annexed and forms part of this report. The Policy isavailable on the website link of the Company https://www.ricoauto.in/investor-relation.html.VIGIL MECHANISM

The Company has established Vigil Mechanism/Whistle Blower Policy for DirectorsEmployees Clients Vendors Suppliers and Contractors as an avenue to report concernsincluding unethical behavior actual or suspected frauds or violation of the Company'scode of conduct. The same meets the requirements of Section 177(9) of the Companies Act2013 and Regulation 22 of the SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 and is available on the website link of the Company https://www.ricoauto.in/investor-relation.html.

RELATED PARTY TRANSACTIONS AND MATERIAL SUBSIDIARIES

The Company has duly approved policies for determining the Material Subsidiaries andMaterial Related Party Transactions. These Policies are available on the website link ofthe Company https://www.ricoauto.in/investor-relation.html. All contracts/arrangements/ transactions entered by the Company during the financial year with relatedparties were in the ordinary course of business and on arm's length basis and priorapproval 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. Asrequired by SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 areturn has been filed with BSE/NSE. Please also refer Note 42 to the standalone financialstatements for related party disclosures.

LISTING OF EQUITY SHARES

The Equity Shares of your Company are presently listed on the BSE Limited and NationalStock Exchange of India Limited. The Annual Listing Fees have been paid for the financialyear 2020-2021.

EXTRACT OF ANNUAL RETURN

In accordance with the provisions of the Companies Act 2013 the extract of AnnualReturn 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 thestandalone financial statements. (Please refer to note 06 07 & 36 of the standalonefinancial statements).

BOARD OF DIRECTORS AND KEY MANAGERIAL PERSONNEL (KMP)

The Directors regret to inform about the sad and sudden demise of Shri Rakesh KapurNon-Executive Director of the Company on 30th December 2019. The Directors record theirvery sincere appreciation of the valuable services rendered by him during his long tenure.

In accordance with the provisions of the Companies Act 2013 Smt. Upasna KapurDirector (DIN: 00327461) of the Company will retire by rotation at the forthcoming AGMand who being eligible offers herself for re-appointment. A brief resume of Smt. UpasnaKapur is given in the Notice of the AGM.

The Board based on the recommendation of Nomination and Remuneration Committee hasappointed Ms. Sarita Kapur (DIN: 08848507) as an Additional Independent Director of theCompany w.e.f. 28th August 2020 for a term of five years not liable to retire byrotation. The Resolution pertaining to her appointment is being placed for your approvalin the ensuing Annual General Meeting.

The Board has re-appointed Shri Arun Kapur (DIN: 00100270) as Joint Managing Directorfor a further period of five years commencing from 2nd May 2020 up to 1st May 2025 andterms of remuneration for further period of three years effective from 2nd May 2020 up to1st May 2023. The Resolution for his re-appointment and remuneration is being placed foryour approval in the ensuing Annual General Meeting.

There is no change in the KMPs of the Company during the year under report.

DECLARATION BY INDEPENDENT DIRECTORS AND STATEMENT ON COMPLIANCE OF THE CODE OF CONDUCT

All Independent Directors of the Company have given declarations confirming that theymeet the criteria of independence as laid down under Section 149(6) of the Companies Act2013 and the Listing Regulations 2015 and they have further confirmed compliance with thecode for Independent Directors as prescribed in the Schedule IV to the Companies Act2013.

Further a declaration has been received from all Independent Directors pursuant to Rule6 of the Companies (Appointment and Qualification of Directors) Rules 2014 affirmingthat they have registered themselves with the Indian Institute of Corporate Affairs in theIndependent Director's Data Bank. As per the said Rule 6 all the Independent Directors areexempted from passing the online proficiency self-assessment test except Shri Vinod KumarNagar who has yet to pass the same by 23rd February 2021.

BOARD MEETINGS

During the year under review four Board Meetings were held and one separate meeting ofIndependent Directors was held the details of which forms part of Corporate GovernanceReport.

BOARD EVALUATION

Pursuant to the provisions of the Companies Act 2013 and the SEBI (Listing Obligationsand Disclosure Requirements) Regulations 2015 the Board of Directors have carried outthe annual evaluation of its own performance the Individual Directors including theChairman as well as the evaluation of the working of its Committees. The evaluation ofBoard as a whole and Non-Independent Directors including Chairman was done by theIndependent Directors in their meeting held on 12th February 2020. The manner in whichthe evaluation has been carried out has been explained in the Corporate GovernanceReport.

BUSINESS RESPONSIBILITY REPORT

Business Responsibility Report for the Year under review as stipulated underregulation 34 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations2015 in the prescribed format is annexed and forms part of this report.

DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to Section 134 of the Companies Act 2013 your Directors confirm that: i) inthe preparation of the annual accounts for the financial year ended 31st March 2020 theapplicable accounting standards have been followed and there are no material departures;ii) appropriate accounting policies have been selected and applied consistently and havemade judgements and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the Company as at 31st March 2020 and of the profitfor the year 1st April 2019 to 31st March 2020; iii) proper and sufficient care has beentaken for the maintenance of adequate accounting records in accordance with the provisionsof the Companies Act 2013 for safeguarding the assets of the Company and preventing anddetecting fraud and other irregularities; iv) the annual accounts for the financial yearended 31st March 2020 have been prepared on a going concern basis; v) internal financialcontrols have been laid down to be followed by the Company and that such internalfinancial controls are adequate and were operating effectively; and vi) proper systemshave been devised to ensure compliance with the provisions of all applicable laws and thatsuch 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 AnnualGeneral Meeting (AGM) held on 22nd September 2017 for a term of five consecutive yearstill the conclusion of 39th AGM to be held in the year 2022.

The requirement of annual ratification of the Statutory Auditor's appointment has beendispensed with accordingly no resolution is proposed for ratification of theirappointment. The Company has received a certificate from M/s. Walker Chandiok & CoLLP Chartered Accountants confirming their eligibility to continue as Auditors of theCompany.

As required under Regulation 33 of the SEBI (LODR) Regulations 2015 the StatutoryAuditors have confirmed that they hold a valid certificate issued by the Peer Review Boardof the Institute of Chartered Accountants of India.

During the year under report there were no revisions in the financial statements ofthe Company. The observations in the Auditor's Report on Standalone and ConsolidatedFinancial Statements are dealt within the notes to accounts at appropriate places andbeing self-explanatory need no further comments.

INTERNAL AUDITORS

M/s. SCV & Co. LLP Chartered Accountants (Firm Registration No. 000235N/ N500089)the Internal Auditors retired on completion of Internal Audit for the financial year2019-20. The Board places on record its appreciation for valuable contributions made bythem during their long association of eight years with your Company. The Board on therecommendation of the Audit Committee has appointed M/s. Protiviti India Member PrivateLimited as the Internal Auditors of the Company for the Financial Year 2020-21.

APPOINTMENT OF COST AUDITORS AND MAINTENANCE OF COST RECORDS

The Board on the recommendation of Audit Committee has appointed M/s. J.K. Kabra& Co. Cost Accountants Delhi as Cost Auditors to carry out the cost audit of theCompany for the financial year 2020-21. In terms of Section 148 of the Companies Act 2013and the rules made thereunder remuneration of Cost Auditors is to be ratified by membersof the Company. Accordingly a resolution is included in the Notice of ensuing AnnualGeneral Meeting for your approval. The Cost Audit Report for the financial year 2019-20would be filed with the Ministry of Corporate Affairs Delhi within the stipulated time.

The cost records as required under section 148 of the Companies Act 2013 read withCompanies (Cost Records and Audit) Rules 2014 are being prepared and maintained by theCompany in order to ensure proper compliance.

SECRETARIAL AUDITORS

The Board has appointed Shri K. K. Sachdeva of M/s. K.K. Sachdeva & AssociatesCompany Secretaries (C.P. No. 4721 FCS No. 7153) as Secretarial Auditors to carry outthe secretarial audit of the Company for the financial year 2020-21. The Secretarial AuditReport for the financial year ended 31st March 2020 is enclosed and forms part of thisreport. There is no secretarial audit qualification for the year under review.

SECRETARIAL AUDIT OF MATERIAL UNLISTED INDIAN SUBSIDIARY

Rico Investments Limited (RIL) and Rico Aluminium and Ferrous Auto Components Limited(RAFA) material subsidiaries of the Company undertake Secretarial Audit every year. TheSecretarial Audit of RIL and RAFA for the Financial Year 2019-20 was carried out pursuantto Section 204 of the Companies Act 2013 and Regulation 24A of the SEBI (ListingObligations and Disclosure Requirements) Regulations 2015. The Secretarial Audit Reportof RIL and RAFA submitted by Shri Deepak Bansal Practicing Company Secretary do notcontain any qualification reservation or adverse remark or disclaimer.

ANNUAL SECRETARIAL COMPLIANCE REPORT

The Company has undertaken an audit for the Financial Year 2019-20 for all applicablecompliances as per Securities and Exchange Board of India Regulations andCirculars/Guidelines issued thereunder. The Annual Secretarial Compliance Report dulysigned by Shri K.K. Sachdeva Practicing Company Secretary has been submitted to the StockExchanges timely for the Financial Year 2019-20.

DETAILS IN RESPECT OF FRAUDS REPORTED BY AUDITORS

The Statutory Auditors Internal Auditors Cost Auditors and Secretarial Auditors ofthe Company have not reported any frauds to the Audit Committee or to the Board ofDirectors under Section 143(12) of the Companies Act 2013 including rules madethereunder.

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 Act2013 (the Act) read with rules made thereunder the declared dividends which remainedunpaid/unclaimed (`0.04 crore) for a consecutive period of seven years have beentransferred by the Company to the IEPF established by the Central Government pursuant toSection 125 of the Act.

Pursuant to the provisions of the section 124(6) of the Companies Act 2013 read withInvestor 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 IEPFAuthority all shares in respect of which dividends have not been paid or claimed for sevenconsecutive years or more.

In accordance with the aforesaid provisions of the Act read with the rules yourCompany during the financial year 2019-20 had transferred 103544 shares pertaining tothe financial year 2011-12 to the Demat Account of IEPF Authority within the stipulatedtime period.

CONSERVATION OF ENERGY RESEARCH AND DEVELOPMENT TECHNOLOGY ABSORPTION AND FOREIGNEXCHANGE EARNINGS AND OUTGO

The relevant information as required by the provisions of Section 134(3)(m) of theCompanies Act 2013 read with the Companies (Accounts) Rules 2014 is given in theAnnexure 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 theregulators or courts or tribunals during the financial year 2019-20 impacting the goingconcern status and Company's operations in future.

PREVENTION OF SEXUAL HARASSMENT AT WORKPLACE

The Company has zero tolerance for sexual harassment at workplace and has adopted apolicy on prevention prohibition and redressal of sexual harassment at workplace and hasin place an Internal Complaint Committee to redress the complaints and circumstancesregarding the behavior of sexual harassment at workplace. The Policy for the same isplaced on the intranet for the benefit of its employees. There were no complaints receivedfrom any employee during the year under review.

PERSONNEL

The information required under Section 197(12) of the Companies Act 2013 read withRule 5(1) of the Companies (Appointment and

Remuneration of Managerial Personnel) Rules 2014 is given in the Annexure forming partof this Report. The information required under Section 197(12) of the Companies Act 2013read with Rule 5(2) and Rule 5(3) of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 as amended and forming part of this Report for the yearended 31st March 2020 are set out in the Annexure of this Report.

However the Annual Report excluding the Annexure is being sent to the Members of theCompany in terms of the provisions of Section 136 of the Companies Act 2013. A Member whois interested in obtaining these particulars may write to the Company Secretary at theRegistered Office of the Company. During the year under report the Industrial relationswith personnel remained cordial at all Plants. Your Directors wish to place on recordtheir appreciation of the sincere and unstinted support provided to the Company by itsemployees at all levels.

ACKNOWLEDGEMENTS

The Board wishes to place on record its sincere appreciation for the continuedassistance and support extended to the Company by Financial Institutions Banks andvarious departments of Central and State Governments. Your Directors acknowledge withgratitude the encouragement and support extended by Company's valued customers businessassociates other stakeholders and shareholders.

On behalf of the Board of Directors

Arvind Kapur
Chairman CEO &
Place: Gurugram Managing Director
Date : August 28 2020 (DIN: 00096308)

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