To,
The Members of
Banco Products (India) Limited
Your directors have the pleasure in presenting the 62nd Annual Report
together with the Audited Financial Statements of Banco Products (India) Limited
("the Company") and its subsidiaries for the financial year ended on 31.03.2023
with the mission:
- To safeguard health, safety and well-being of employees and of the communities around.
- To initiate effective measures towards minimum disruption of the operations and thus
ensuring smooth business continuity and sustainable growth.
- As ever, adversities test every organization's resilience and true strength - At
Banco Products, we have been engaged in taking extensive measures to emerge more
resilient, post the current crisis by enhancing in- house capabilities.
- Overview of the Company's Performance:
During the year under review, India once again showcased its
resolve and resilience to report healthy economic growth despite the gloom prevailing in
the external world; Persistent inflation, political developments and the continuing impact
of geopolitical. The government's strong capex disbursals, recovery in auto
industrial and agricultural equipment sales, and improving capacity utilisation at a macro
level played an essential role in India's economic progress. The economic scenario
during 2022-23 remained positive.
We have seen a recovery in OEM business, (volume wise) during the
second half of FY 21-22 as compared to FY 20-21, as first half had Covid disruptions.
As ever, the executive team at Banco Products and its subsidiaries
strived to deliver their best in terms of their core strengths i.e. innovation and
customer service, be it developing new designs or delivering the products at short
notices.
Changes in emission norms to BS-VI and BS6 phase 2 RDE (real driving
emissions) norms have come into effect in India from April 1, 2023 in the automotive
industry and CPCB-IV in the construction machinery and off-highway sectors, led to a large
number of new opportunities, for which your Company has been managing successfully
on-going basis.
In general, the OEM customer expectations in respect to product thermal
efficiency, compact packaging of cooling modules, lower weight targets for saving fuel and
increased product reliability, has taken us to newer vistas of business development and
achievement.
Our R&D teams have been responding to these challenges through our
bespoke engineering approach by continuously improving, testing and proving the efficiency
of cooling elements. We have delivered to our customers optimized solutions by use of
advanced software tools - which delivers best in class field performance. In EV mobile
sector, we have begun participation in product development and supply to selected
customers in Cooling as well as in Gasket Sealing segments and that includes expanding
customer bases both in domestic and global arena.
In the export markets, the Company's sales growth remained
positive during the year. We will continue to focus on expanding our business in export
markets. New product additions were at all time high in Engine cooling segment for both
Aftermarket and OEMs segments.
Business at subsidiaries – Banco Gaskets and NRF b.v. continue to
follow same trend as Banco Products. Focus at Banco Gaskets continues to be in developing
new technologies in elastomeric solutions for automotive customers and we are observing
encouraging long term growth in both, tier one and tier two OEM segments. Aftermarket
market segment, also enjoyed better sales growth rate over previous years as brand enjoys
strong popularity across India.
NRF b.v. had one of the strongest sales growth compared to previous
years in aftermarket especially in European market. NRF has been investing heavily in
brand development as well as introduction of wide range of ‘under bonnet'
Cooling and HVAC parts. Going forward, the product line expansion will continue to serve
clients with products which offers highest reliability and value. We continue to invest
into better logistical capabilities to enhance customer experience and to improve loyalty
towards NRF brand. NRF continues to invest for enhancing technical facilities to introduce
wider range of products for aftermarket, beyond its traditional products in cooling.
- Financial Summary/Highlights:
At a glance, the summarized Standalone and Consolidated results of your Company are
given below:
(` in Crores)
| PARTICULARS |
STANDALONE
|
CONSOLIDATED
|
|
Year ended on 31.03.2023
|
Year ended on 31.03.2022
|
Year ended on 31.03.2023
|
Year ended on 31.03.2022
|
| Total Turnover |
979.00 |
772.00 |
2301.00 |
1927.00 |
| Profit Before Taxation |
280.00 |
110.00 |
311.00 |
224.00 |
| Less:-Tax Expenses |
35.00 |
24.00 |
76.00 |
72.00 |
| Profit After Tax |
245.00 |
86.00 |
235.00 |
152.00 |
| Balance Brought forward from P.Y. |
538.00 |
466.00 |
660.00 |
522.00 |
| Profit available for Appropriation |
783.00 |
552.00 |
895.00 |
674.00 |
| Appropriations: |
|
|
|
|
| Investment measured at FVTOCI |
- |
- |
- |
- |
| Dividend |
200.00 |
14.00 |
200.00 |
14.00 |
| Balance Carried to Balance Sheet |
583.00 |
538.00 |
695.00 |
660.00 |
- Dividend:
Your Directors had declared and paid Interim Dividend during the year 2022-23 at
400% i.e. ` 8/- per Equity Shares of
` 2 each absorbing ` 57.21 Crores (gross) and have recommended dividend at 700% i.e `
14 /- per equity share of
` 2/- each for the financial year ended on 31.03.2023 (total Dividend 1100%) as
compared to ` 20/- per equity share of
` 2.00 each (1000% during previous year).
- Reserve:
The Company is not required to transfer any amount to reserves.
Accordingly, the Company has not transferred any amount to reserve.
- Operations and State of Affairs:
The Company continued its initiatives during the year, to upgrade
technology and quality at its plants. As pioneers in the country, your Company invests in
best in class technology and has lined up an accelerated investment plan to retain its
technology leadership position.
Our Research and Development capabilities, including test equipments
and design software are being improved in line with modern practices. Our R & D spend,
during the year was placed at 0.55% of turnover.
Sales and Profit for Banco Products (India) Ltd. stood at: (` In
Crores)
| Particulars |
Year ended on
31.03.2023 |
Year ended on
31.03.2022 |
| Sales (Net) |
979 |
772 |
| Profit after Tax (PAT) |
245 |
86 |
Domestic Sales:
During the period under review, the Company's Domestic sales
stood at ` 709/- crores as against ` 531/- crores in the previous year representing a 34%
increase.
Export Sales:
During the period under review, the Company's Export sales
stood at ` 270/- crores as against ` 241/- crores in the previous year, despite growing
global competition.
Overall sales mix was placed at Domestic 72% (previous year 69 %) and
Export 28% (previous year 31%).
- Management Discussion and Analysis:
The Report on Management's Discussion and Analysis as required
under the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015
("LODR") forms part of this report as per Annexure "A".
- Business Responsibility and Sustainability Report:
The business responsibility and sustainability report as required
under LODR forms part of this Annual Report.
- Corporate Social Responsibility:
Your Directors believe that it is vital for surrounding communities
and stakeholders to progress with the Company.
In compliance with the requirements of Section 135 of the Companies
Act, 2013 (‘the Act') read with the Companies (Corporate Social Responsibility
Policy) Rules, 2014 (CSR Rules), the Board of Directors have constituted a Corporate
Social Responsibility Committee. Annual Report on CSR containing particulars specified in
Annexure II to the CSR Rules is forming part of the Board's Report as per Annexure
"B".
The contents of the CSR Policy of the Company as approved by the Board
on the recommendation of the Corporate Social Responsibility Committee and other details
are available on the website of the Company as per the web link provided in the report on
Corporate Social Responsibility Activities.
- Conservation of Energy, Technology Absorption and Foreign exchange:
In accordance with the provisions of Section 134(3)(m) of the Act,
read with Rule 8 of The Companies (Accounts) Rules, 2014, the relevant information
pertaining to Conservation of Energy, Technology Absorption and Forei gn Exchange Earnings
and Outgo is annexed as per Annexure "C" to this Report.
- Directors' Responsibility Statement:
In terms of Section 134(3) (c) of the Act, your directors would
like to state:
- that in the preparation of the annual financial statements for the year ended 31st
March, 2023, the applicable accounting standards have been followed along with proper
explanation relating to material departures, if any;
- that such accounting policies have been selected and applied them consistently and 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 for the year ended 31st March, 2023 and
of the profit and loss of the Company for that period;
- that the 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 for preventing and detecting fraud and other
irregularities;
- that the annual financial statements have been prepared on a going concern basis;
- that the proper internal financial controls were in place and that the financial
controls were adequate and were operating effectively;
- that the proper systems have been devised to ensure compliance with the provisions of
all applicable laws and that such systems were adequate and operating effectively.
- Directors and Key Managerial Personnel:
11.A STATEMENT WITH REGARD TO INTEGRITY, EXPERTISE AND EXPERIENCE OF THE
INDEPENDENT DIRECTORS
Your directors are of the opinion that Independent Directors of the
Company are of high integrity, suitable expertise and experience (including proficiency).
The Independent Directors have given declaration under sub section (6) of Section 149 of
the Act. The tenure of Independent Directors is in compliance of provisions of Section
149(10).
- Performance Evaluation:
Pursuant to the provisions of the Act and LODR, the Board has
carried out an annual performance evaluation of its own performance, the directors
individually as well as the evaluation of the working of its requisite Committees.
The evaluation has been carried out with a well structured
questionnaires taking into consideration various aspects and roles of the Board and its
Committees such as knowledge, skills, conduct, integrity, contribution in setting up and
achieving goals etc. The Board of Directors expressed their satisfaction with the
evaluation process.
- Policy on Directors' Nomination, Appointment and Remuneration:
The Board has, on the recommendation of the Nomination &
Remuneration Committee framed a policy in relation to remuneration of Directors. The
policy also laid down the criteria for selection and appointment of Directors, Senior
Management and their remuneration. The detailed Remuneration Policy is stated in the
Corporate Governance Report.
The details regarding the composition and Role of Nomination and
Remuneration Committee are provided in the report on Corporate Governance and forms part
of this report.
- Disclosure of Remuneration paid to Directors:
The details of remuneration paid to the Directors is given in the Report on
Corporate Governance.
- Change in Directors/KMP:
In accordance with the provisions of the Act and rules made there
under Mr. Sharan M. Patel (DIN: 09151194) retires by rotation at the 62nd
Annual General Meeting and being eligible offers himself for re-appointment.
The Board of Directors has appointed Mr. Shivam M. Patel on 7th August,
2023 as an Additional Director (Non Executive - Non Independent Director) to hold office
upto next Annual General Meeting, subject to approval of the members of the Company.
- Number of Board Meetings:
The details of 04 Board Meetings held during the financial year
2022-23 are provided in the Report on Corporate Governance and forms part of this report.
- Audit Committee:
The details regarding the Composition, power and role of Audit
Committee are provided in Report on Corporate Governance and forms part of this report.
- Vigil Mechanism / Whistle Blower Policy:
The Company is committed to adhere to the highest standards of
ethical, moral and legal conduct of business operations. To maintain these standards, the
Company encourages its employees who have concerns about suspected misconduct to come
forward and express their concerns without fear of punishment or unfair treatment. A Vigil
Mechanism provides a channel to the employees and Directors to report to the management
concerns about unethical behavior, actual or suspected fraud or violation of the Codes of
Conduct or policy. The mechanism provides for adequate safeguards against victimization of
employees and Directors to avail the mechanism and also provides for direct access to the
Chairman of the Company / Chairman of the Audit Committee in exceptional cases. The Vigil
Mechanism / Whistle Blower Policy are available on Company's website at -
http://www.bancoindia.com/investor-relations/#1497261700893-eb0e6e05-b833
- Risk Management:
Pursuant to the requirement of LODR, the Company has formed Risk
Management Policy to ensure appropr iate risk management within its systems and culture.
The Company operates in a competitive environment and is generally exposed to various
risks at different times such as technological risks, business risks, operational risks,
financial risks, etc. The Board of Directors and the Audit Committee of the Company
periodically review the Risk Management Policy of the Company so that the Management can
control the risk through properly defined network.
The Company has a system based approach to business risk management
backed by strong internal control systems.
The Corporate Governance Policy clearly lays down the roles and
responsibilities of the various entities in relation to risk management. A range of
responsibilities, from strategic to the operational is specified in the Governance Policy.
These role definition, inter-alia aims at ensuring formulation of appropriate risk
management policies and procedures, their effective implementation and independent
monitoring and reporting by Internal Audit.
A strong independent Internal Audit Function at the corporate level
carries out risk focused audits across all businesses, enabling identification of areas
where risk managements processes may need to be improved.
The Board reviews internal audit findings and provides strategic
guidance on internal controls, moni tors the internal control, environment within the
Company and ensures that Internal Audit recommendations are effectively implemented.
The combination of policies and procedures adequately addresses the
various risks associated with your Company's businesses.
The details regarding the composition and Role of Risk Management
Committee are provided in report on Corporate Governance and forms part of this report.
- Corporate Governance:
Pursuant to LODR, the Report on Corporate Governance forms an
integral part of this Report. The requisite certificate confirming compliance with the
conditions of corporate governance is attached to the Report on Corporate Governance.
- Extract of Annual Return:
A copy of the Annual Return as required under section 92(3) and
Section 134(3)(a) of the Companies Act, 2013 has been placed on the website of the
Company. The web- link as required under the act is as under- http://mail.bancoradiator.com/upload/annual_return_2023.pdf
- Auditors:
- Statutory Auditors:
M/s. Parikh Shah Chotalia & Associates, Chartered Accountants
(PSCA), Vadodara (Firm Registration No. 118493W), were appointed as Statutory Auditors of
the Company for a term of Five consecutive years from conclusion of 58th Annual
General Meeting held on 23rd September, 2019 till the conclusion of 63rd
Annual General Meeting. The Auditor's Report for financial year 2022-23 does not
contain any qualification, reservation or adverse remark. The Auditors have conveyed their
confirmation about their eligibility to continue as Statutory Auditors of the Company.
- Internal Auditors:
Your Company had appointed Mr. SnehalKumar Shah, Head-Internal
Audit Department of the Company as the Internal Auditor to carry out the Internal Audit of
various operational areas of the Company.
- Secretarial Auditors:
Pursuant to the provisions of Section 204 of the Act, read with the
Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, your Company
has appointed M/s. J.J. Gandhi & Co., Practicing Company Secretaries, Vadodara as
Secretarial Auditors of the Company. The Secretarial Audit Report for the Financial Year
ended on 31.03.2023 is annexed herewith as per Annexure "D" to this Report and
it does not contain any qualification, reservation or adverse remark.
- Cost Auditors:
Your Company has appointed M/s. Y.S. Thakar & Co., Cost
Accountants, Vadodara (FRN : 000318) in terms of provisions of Section 148 and any other
provisions applicable, if any, of the Act and Rules made thereunder.
The proposals for ratification of their remuneration by way of Ordinary
Resolution, to conduct the audit of the Cost Records of the Company for the financial year
2023-24, in terms of the recommendation of the Audit Committee is included in the Notice
of the Annual General Meeting.
- Subsidiary Companies:
- Nederlandse Radiateuren Fabriek B.V -Netherlands:
Nederlandse Radiateuren Fabriek B.V, Netherlands, and its
subsidiaries, are engaged in the business of manufacturing and distribution of heat
transfer products. During the year, the Company has taken many initiatives in the areas of
production, marketing, distribution and other operational areas. We expect that these
initiatives will yield results in time to come and result in improvement in the
performance.
- Banco Gaskets (India) Limited –Vadodara:
In terms of the requisite approvals of Shareholders, the Gasket Divisions of the
Company was transferred to its Wholly Owned Subsidiary Company viz. Banco Gaskets (India)
Limited with effect from 31.03.2012 and is in operation.
Pursuant to Section 129(3) of the Act, the statement containing the salient features of
the financial statement of the Company's Subsidiaries is annexed as per Annexure
"E" to this Report.
The determination of Material Subsidiary is in compliance with LODR.
- Banco New Energy Cooling Systems Limited – Vadodara:
Banco New Energy Cooling Systems Limited, was incorporated on 17th
May, 2021 with object to carry on all type of business of manufacturing, making,
assembling, exporting and distribution of all kinds of Heat Exchangers for Electrical
Vehicles (EV) Automotive /Non Automotive and industrial applications.
- Particulars of Employees:
The Statement pursuant to Section 197(12) of the Act, and Rule 5(1)
of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2015 is
attached as per Annexure "F" to this Report.
A Statement of the details of employees covered under Rule 5(2) of the
aforesaid Rules are provided in the Annual Report. The Annual Report is being sent
excluding the aforesaid information. Such particulars will be furnished to any shareholder
on a specific request made in writing by the shareholder.
- Related Party Transactions:
All transactions entered into with the Related Parties as defined
under the Act and LODR during the financial year ended on 31.03.2023 were in the ordinary
course of business and arm's length basis and do not attract the provisions of
Section 188 of the Act, 2013. Thus disclosure in form AOC 2 is not applicable.
All the Related Party Transactions are reviewed by the Audit Committee
on quarterly basis and it has provided an omnibus approval for all Related Party
Transactions which are within its purview.
The information on Related Party Transactions, forming part of this
Report, is provided in Notes of Annual Financial Statement for the Financial Year ended on
31.03.2023.
The Board has approved a Policy on Related Party Transactions which has
been uploaded on the Company's website at http://www.bancoindia.com/investor-relations/#1497261700893-eb0e6e05-b833
- Particulars of Loans given, Guarantees given and Investments made by the Company:
During the year under review, there were no Loans and Guarantees
given / made by the Company. The Investments made under the provisions of the Act is
provided in the Note no. 04 of Notes to Standalone Financial Statements of the Company.
During the year under review, the Company has invested in Equity Shares
of Banco New Energy Cooling Systems Limited a Wholly Owned Subsidiary of the Company,
amounting to ` 4 Crores (` 2 Crore on 31.05.2022, ` 1 Crore on 08.09.2022 and ` 1 Crore on
08.10.2022) aggregating total ` 8.40 Crores and has granted a Loan of ` 8.5 Crores for its
Principal business activities out of the Company's internal sources of funds.
- Share Capital:
As on 31st March, 2023, the paid up equity share capital of your
Company was ` 14.30 crores. During the year under review, the Company has not issued any
shares.
- Change in Capital Structure:
During the year under review, the Company has not issued any Equity
Share with differential rights, Employees Stock Options and Sweat Equity Share. Hence,
details as per applicable rules of the Companies (Share Capital and Debentures) Rules,
2014 are not required to be reported.
- Disclosure under the Sexual Harassment of Women at Workplace (Prevention, Prohibition
and Redressal) Act, 2013:
The Company has in place an Anti Sexual Harassment Policy in line
with the requirements of the Sexual Harassment of Women at the Workplace (Prevention,
Prohibition and Redressal) Act, 2013. Internal Complaints Committee has been set up to
redress complaints received regarding sexual harassment. All employees (permanent,
contractual, temporary, trainees) are covered under this policy.
The summary of sexual harassment complaints received and disposed off
during the financial year 2022 -23 is as under:
-Number of Complaints Received: Nil
-Number of Complaints Disposed off: Nil
- Deposits:
The Company has neither accepted nor renewed any deposits during the year under
review.
- Insurance:
All the properties and insurable interests of the Company including
buildings, plant and machineries and stocks, have been adequately insured.
- Industrial Relations:
Overall industrial relations continued to be cordial. Your
Directors place on record their appreciation for the continued support and co-operation of
all the employees.
- Internal Financial Control:
The Company has appropriate internal financial control systems and
procedures in place with regard to effective utilization of resources, efficiency in
operation, financial reporting and compliance with various rules and regulations and
keeping in view the organization's pace of growth and increasing areas of operations.
The internal auditors conduct extensive audits throughout the year
across all locations and across all functional areas and submit their reports to the Audit
Committee of the Board of Directors.
- Details of Fraud Reporting, if any:
There has been no instance of fraud reported by the Auditors under
section 143(12) of the Act and Rules framed thereunder either to the Company or the
Central Government.
- Familiarisation Programme for Independent Directors:
The details of programmes for familiarization of Independent
Directors and training with the Company, their roles, rights, responsibilities, nature of
the industry in which the Company operates, business model of the Company and related
matters are put up on the website of the Company at-
http://www.bancoindia.com/investor-relations/#1497261700893-eb0e6e05-b833
- Human Resources:
Many initiatives have been taken to support business through
organizational efficiency and various employee engagement programmes which have helped the
Organization to achieve higher productivity levels.
Significant efforts have also been undertaken to develop leadership as
well as technical/ functional capabilities in order to meet future talent requirement.
The Company's HR processes such as hiring, fair transparent online
performance evaluation and talent management process, state-of-the-art workmen development
process and market aligned policies have been seen as benchmark practices in the Industry.
- Material changes and Commitments:
Your Directors are of the opinion that there are no material
changes and commitments affecting financial position of the Company which have occurred
between end of financial year of the Company and the date of this report.
- Safety, Health and Environment Safety:
The Company has been continuously exercising effective safety,
health and environment policies. Water and air pollution control measures are successfully
operated and industrial trade effluents are used for gardening.
The tree plantation at the factory site is maintained properly and is being duly taken
care.
- Web Links
Web links related to various policies are available in the Corporate Governance
Report.
- Change in the nature of Business:
There is no change in the nature of business during the year under review.
- Significant and material order passed by the Regulator or Court:
No order was passed by any regulator, court or tribunal impacting
the going concern status and Company's operation in future during the year under
review.
- Disclosure in respect of Cost Records:
The Company has maintained the cost accounts and records
respectively, as required under provisions of the Companies Act, 2013.
- Compliance of applicable Secretarial Standards:
Pursuant to Clause 9 of Secretarial Standards on Meetings of Board
of Directors, it is stated that the Company is compliant of applicable Secretarial
Standards during the year.
- Application made or any proceeding pending under the Insolvency and Bankruptcy Code,
2016 (31 of 2016) during the year under review -
Neither any application was made nor
any proceeding was pending in this regard.
- The details of difference between amount of the valuation done at the time of one time
settlement and the valuation done while taking loan from the Banks or Financial
Institutions -
No one time settlement.
- Acknowledgement:
Your Directors wish to convey their gratitude and place on record
their deep appreciation for the co-operation and continued support received by the Company
from Government, Customers, Shareholders, Vendors, Bankers and all other Stake Holders, as
well as Employees at all levels during the year.
By the order of the Board,