Ricoh India Ltd
The shares of Ricoh India Ltd are locked up at Upper circuit at a price of Rs 273 before hitting a Lower circuit early in the day. The share price has been vacillating between Lower circuits and Upper circuits alternatively for a number of days. The share price has fallen by 75% from its 52 week high of Rs 1072 made in July 2015.
Ricoh India is a subsidiary of Japanese multinational imaging and electronics company Ricoh Company, which directly holds 46.04% stake in its Indian arm. The parent company holds another 27.56% of Ricoh India through NRG Group, thus taking total holding to 73.6% in Ricoh India.
The Company has now filed a police against “suspected wrong-doers” ~ Ricoh files police complaint against suspected wrong-doers
The company has not yet reported it Quarter 2 results for the Financial Year ending 2016. The reason for the delay has been stated as a change of auditors which happened last year. Ricoh India’s auditors were originally a local firm called “M/s Sahni Natarajan and Bahl”. They were replaced by M/s BSR & Co. LLP, the Indian avatar of KPMG. The problems seem to be having started from then. Subsequently the company has also further delayed its reporting of quarter 3 results for FY16. Whereas when its parent company in Japan announced its third quarter results it sounded very much positive on the performance of its Indian IT service operations.
In January this year, India Ratings, a unit of Fitch, had upgraded its rating for Ricoh India’s Rs 200 Crs Long Ter Non-Convertible Debentures to Ind AA – from Ind A with a stable outlook and also that of Long Term Issuer Rating of Ricoh India to Ind AA- from Ind A with a stable outlook. Later, on March 15, the ratings agency placed the Company’s Long Term Issuer Rating, its Rs 200 Crs NCDs and its Commercial Papers on a Negative rating. The stock reacted by falling over 100 points from its day’s high of Rs 580.25 to Rs Rs 479.75 on March 16th 2016.
In February it won an order worth Rs 344 Crs from Kerala State Electronics Development Corporation Ltd for Supply, Installation and Commissioning of Computer Hardware, Connected Accessories, Software, Maintenance of Equipments and provision of Computer Education Services in 2000 Government & Government Aided High Schools in the State of Odisha on 5 Years BOOT Model Project under ICT School Scheme.
In its March 29th notification to the Stock exchange, the company communicated that it has “not yet received the signed limited review report from the auditors and the audit committee would take up again the matter with the Statutory Auditors to submit their limited review report on an immediate basis.” The notification also mentioned that “In order to assist the audit committee, the audit committee has sought the opinion of an Independent Agency in this regard”.
It is evident from the communication that the auditors have finished the audit but are refusing to issue a limited review report. A possible explanation to this could be that auditors must have pointed out severe objections on the accounts and are demanding a proper disclosure from Ricoh India. The communication also revealed that the “the review process is being coordinated by employees other than those who have been involved in the preparation, review, approval and signatures of the books and accounts.” and the excuse for this is “some of the employees in the latter category have been requested to avail leave with pay with effect on and from the 30th day of March, 2016”. The Company has called this a “standard practice” but the standard practice is that employees who prepare the accounts are at the forefront are supposed to answer the auditor’s queries. On April 1st, the Company notified that it has appointed an independent agency, an independent Law firm and accountants to assist the Auditor committee. Further, Ricoh India has requested its Mr Manoj Kumar, MD and CEO, Mr Arvind Singhal, CFO and Mr anil Saini, Senior VP and COO to take leave with pay during the review process. On behalf of the above officers, Mr A.T Rajan would be in charge of CEO and COO duties and Mr Bibek Chowdhury would be in charge of CFO functions. Later on April 4th Mr Manoj Kumar resigned from the Board of Directors with effect from April 2, 2016.
The scrip was transferred to ‘Z’ group from ‘B’ group on BSE due to non-compliance issues with effect from March 28th. The trades in these scrips executed in ‘Z’ group will be settled on trade for trade basis. If a company is shifted for settlement on trade-to-trade basis, selling or buying of shares in that scrip results into giving or taking delivery of shares at the gross level and no intra-day netting off/squaring off is permitted. The scrips which form part of the ‘Z’ group are compulsorily settled on a trade-to-trade basis.
The Company is now under regulatory glare amid allegations of financial irregularities that recently led to its top officials stepping down. The Securities and Exchange Board of India is looking into complaints including the lag in announcement of results by the company and the reasons that caused the delay.
Now, the BSE has issued notification on May 4th that trading in Ricoh India will be suspended from May 26, 2016 on account of non –compliance with Regulation 33 of SEBI Listing Regulations, 2015 for two consecutive quarters. And the most recent update being Ricoh India’s board will meet on May 17, 2016 to discuss Q2 FY16 results.
| Month | Open | High | Low | Close | No. of Shares |
No. of Trades |
Total Turnover | Deliverable Quantity | % Deli. Qty to Traded Qty | * Spread | |
| H-L | C-O | ||||||||||
| Jul 15 | 1,037.00 | 1,072.25 | 930.00 | 1,024.50 | 8,58,902 | 26,219 | 86,80,75,472 | 4,51,644 | 52.58 | 142.25 | -12.50 |
| Aug 15 | 1,033.00 | 1,069.00 | 635.25 | 737.25 | 9,59,746 | 29,014 | 82,03,08,882 | 5,64,440 | 58.81 | 433.75 | -295.75 |
| Sep 15 | 721.00 | 940.00 | 580.00 | 905.50 | 11,75,697 | 37,479 | 89,13,73,396 | 6,89,430 | 58.64 | 360.00 | 184.50 |
| Oct 15 | 915.00 | 960.00 | 835.00 | 899.00 | 4,56,031 | 11,859 | 41,48,01,329 | 3,22,233 | 70.66 | 125.00 | -16.00 |
| Nov 15 | 900.00 | 970.00 | 807.25 | 945.25 | 7,20,493 | 21,851 | 63,28,85,402 | 4,84,365 | 67.23 | 162.75 | 45.25 |
| Dec 15 | 947.50 | 958.75 | 702.00 | 788.75 | 10,99,503 | 24,282 | 89,34,09,682 | 7,43,278 | 67.60 | 256.75 | -158.75 |
| Jan 16 | 790.75 | 800.00 | 590.00 | 595.75 | 4,94,864 | 14,653 | 34,25,49,794 | 3,44,843 | 69.68 | 210.00 | -195.00 |
| Feb 16 | 610.00 | 671.00 | 490.00 | 533.25 | 8,55,951 | 21,551 | 48,73,76,422 | 5,48,539 | 64.09 | 181.00 | -76.75 |
| Mar 16 | 530.00 | 647.00 | 422.00 | 422.00 | 9,44,904 | 21,605 | 52,26,52,754 | 6,11,494 | 64.71 | 225.00 | -108.00 |
| Apr 16 | 413.00 | 413.00 | 304.30 | 332.40 | 24,00,905 | 8,845 | 83,58,99,658 | 24,00,905 | 100.00 | 108.70 | -80.60 |
| May 16 | 330.00 | 330.00 | 240.10 | 273.00 | 8,35,309 | 3,059 | 22,69,84,330 | 8,35,309 | 100.00 | 89.90 | -57.00 |
Standalone Financial Results – Amt in Rs Crs
| Particulars | Q1 FY16 | FY 15 | FY 14 | FY 13 | FY 12 | FY 11 |
| Equity Paid Up | 39.77 | 39.77 | 39.77 | 39.77 | 39.77 | 39.77 |
| Networth | 169 | 169 | 140 | 123 | 124 | 132 |
| Long Term Debt | 200 | 200 | – | – | – | – |
| Total Sales | 442 | 1638 | 1049 | 633 | 432 | 297 |
| PAT | 0.4 | 34 | 17 | -1.3 | -2.6 | 16 |
| EPS (Rs) | 12.47* | 8.55 | 4.27 | -0.33 | -0.65 | 4.02 |
| Book Value (Rs) | 42 | 42 | 35 | 31 | 31 | 33 |
*TTM EPS for Q1 FY16
The Company has issued – Debentures from Related Party – Unsecured Redeemable Non Convertible Debentures in FY 15 – 2,000 units of 7.8% Debentures unsecured, non-cumulative, redeemable, taxable, listed, rated non-convertible of a face value of Rs. 10 lacs each privately placed at par during the year is redeemable in Financial Year 2017-18 for cash at par.
Trade Receivables for FY 15 have almost doubled to Rs 662 Crs from Rs 319 Crs in FY 14.
Cash and Cash equivalents have doubled as well for FY 15 to Rs 70 Crs from Rs 38 Crs. Balances with banks in this case have reduced to Rs 17 Crs from Rs 27 Crs, Cheques on hand have increased to Rs 40 Crs from Rs 2 Crs and Margin Money has also increased to Rs 13 Crs from Rs 9 Crs. Banks with balances includes blocked accounts amounting to Rs 3.17 Lakhs at the pre-devaluation rates of exchange.
Other short term loans and advances for FY 15 have increased 2.5 times to Rs 50 Crs from Rs 20 Crs in FY 14.
Ricoh India’s delisting offer had failed in 2014. Its Japanese parent had announced for delisting of the Indian arm in November 2013. The Share price had tripled in months after the news. The offer failed later on as the company’s Japanese promoters rejected the price discovered through the reverse book building (RBB) process and said Ricoh India would continue to remain listed. The share price then dropped by 40% on the news. Ricoh India dips 36% in two sessions after delisting bid fails
