Tokyo, July 19, 2016 — We are in the process of filing a petition to the National Company Law Tribunal in India regarding a capital increase for our consolidated subsidiary, Ricoh India Limited (Headquarters: Mumbai, Bombay Stock Exchange – referred to as Ricoh India from here).
Subject to the approval of the National Company Law Tribunal, Ricoh Company, Ltd. or its subsidiary company NRG Group Limited, or a combination of Ricoh Company, Ltd and NRG Group Limited, will have their existing shareholding cancelled and will effect a capital increase in Ricoh India by purchasing the same number of shares at a price agreed with the National Company Law Tribunal.
|(1) Firm Name||Ricoh India Limited|
|(2) Date of Establishment||October, 1993|
|(3) Registered Office||801, 8th Floor, Ackruti Star, MIDC Central Road, Near Marol Telephone Exchange, MIDC, Andheri - East, Mumbai-400 093|
|(4) Representative||A.T. Rajan (Managing Director and CEO)|
|(5) Stated Capital||398 million rupees|
|(6) Description of Busines||Sales of office equipment|
|(7) Our Investment Ratio||73.6%
46.04%...Ricoh Company, Ltd.
27.56%...NRG Group Limited
Note: The information above may change as this process will be carried out only after approval from the National Company Law Tribunal.
Following the filing of its first quarter financial results ended June 30, 2015 to the Bombay Stock Exchange, Ricoh India, in line with good governance, changed its auditors. The auditors undertook a limited review of the results for the second quarter ended September 30, 2015, which was required for filing with the Bombay Stock Exchange, and as part of their new auditor processes. During this review the auditors raised concerns with Ricoh India's management and Ricoh India's audit committee regarding financial irregularities. Ricoh India's audit committee commissioned various investigations which have been undertaken by Ricoh India and independent parties. As a result of these, today, Ricoh India disclosed an estimate of the fiscal year ended March 31, 2016, which has reflected the financial irregularities. It is estimated that the unaudited loss after tax for the fiscal year ended March 31, 2016 amounts to 11.2 billion Indian rupees (17.1 billion yen).
This marks an important milestone for Ricoh India since it is now in a position to finalize its results, bring its reporting obligations up to date and move forward with growing the business.
The proposed capital increase reflects that the Indian market has immense potential, and Ricoh Company, Ltd. is keen to support and ensure the business continuity of its subsidiary and grow its presence in the market. Ricoh India is now implementing measures to ensure there is no recurrence of such event in the future, and is reinforcing its management systems. Ricoh Company, Ltd. is, and will be, reinforcing its global governance to ensure that this remains an isolated instance.
We do not anticipate any revision to the already published consolidated results for the fiscal year ended March 31, 2016. However, in the outlook for the fiscal year ending March 31, 2017, we have recognized an additional cost of 6.5 billion yen in after tax profit to reflect the aforementioned event. Going forward we are looking to see Ricoh India return to growth and profitability as it refocuses on business. We will announce further details on or before August 5, when we will announce the first quarter results ended June 30, 2016.
If there is any information that should be disclosed with regard to Ricoh India as the situation develops, it will be shared promptly.