The Members of
Banco Products (India) Limited
Your Directors have the pleasure in presenting the 55th Annual Reporttogether with the Audited Financial Statements of Banco Products (India) Limited("the Company") and its subsidiaries for the financial year ended on 31.03.2016.
1. OVERVIEW OF THE COMPANY :
Banco Products (India) Limited has delivered solid sales growth by virtue of executinga sound business strategy. It continues to deliver strong delivery performance in allbusiness segments especially to various esteemed Original Equipment Clients bydesigning developing and supplying various complex Engine cooling modules RadiatorsCharged Air Coolers and Oil Coolers. By virtue of its excellent product developmentcapability and track-record the Company has become a preferred supplier to manyprestigious Original Equipment Manufacturers who have a global standing. The Company hasundertaken many initiatives to create significant value to its customers as well as toother stakeholders. The Company has continued to strengthen its market position by addingmore OEM customers in sectors like on-highway and off-highway segments power generationfarm equipment and construction machinery. In spite of turbulence in global economies andcurrency markets the Company has succeeded in improving earnings by prudent managementinitiatives.
2. FINANCIAL PERFORMANCE :
At a glance the summarized Standalone and Consolidated results of your Company aregiven below:
(Rs. in crores)
|PARTICULARS || |
| ||Year ended on 31.03.2016 ||Year ended on 31.03.2015 ||Year ended on 31.03.2016 ||Year ended on 31.03.2015 |
|Total Turnover ||484 ||410 ||1188 ||1112 |
|Profit Before Taxation ||103 ||54 ||119 ||113 |
|Less: || || || || |
|Provision for taxation ||22 ||11 ||35 ||27 |
|Deferred Tax Liability ||(1) ||1 ||(6) ||(2) |
|Profit After Tax ||82 ||42 ||90 ||88 |
|Add : || || || || |
|Balance brought forward from Previous Year ||267 ||255 ||374 ||316 |
|Profit available for Appropriation ||349 ||297 ||464 ||404 |
|Appropriations: || || || || |
|- Transfer to General Reserve ||7 ||7 ||7 ||7 |
|- Interim Dividend Paid ||4 ||4 ||4 ||4 |
|- Tax Paid on Interim Dividend ||- ||- ||- ||- |
|- Proposed Final Dividend ||29 ||18 ||29 ||18 |
|- Provision For Tax on Proposed ||6 ||1 ||6 ||1 |
|Final Dividend - Provision write back ||(1) || ||(1) || |
|Balance Carried to Balance Sheet ||304 ||267 ||419 ||374 |
3. DIVIDEND :
Your Directors had declared and paid Interim Dividend during the year at 30% i.e. Rs.0.60 per equity share of Rs. 2.00 each absorbing Rs. 4.29 crores as dividend and Rs. Nilas Tax on Dividend (as per applicable provision under Section 11 5BBD of Income Tax Act)and have recommended final dividend at 200% i.e. Rs. 4/- per equity share of Rs. 2.00 eachabsorbing Rs. 28.61 crores as dividend and provision of Rs. 5.82 crore as Tax on Dividendfor the financial year ended on 31.03.2016 as compared to Rs. 3.00 per equity share (150%)during previous year.
The total dividend for the financial year ended 31st March 2016 wouldaccordingly be Rs. 4.60 per equity share of Rs. 2.00 each i.e. 230%.
4. RESERVE :
The Company has transferred Rs. 7/- crores to reserves.
5. OPERATIONS AND STATE OF AFFAIRS :
The Company has sound manufacturing facilities which have been further upgraded tomanufacture complex cooling modules with higher quality standards. Furthermore newResearch and Development building extension together with investment in equipmentsoftware for development of advanced future engine cooling products will strengthenCompanys capabilities to take on global supply projects for international OEMs andother automotive customers and further widen scope of customer base.
During the year the Sales and Profit stood at:
(Rs. In Crores)
|Particulars ||Year ended on 31.03.2016 ||Year ended on 31.03.2015 |
|Sales (Net) ||484 ||410 |
|Profit after Tax (PAT) ||82 ||42 |
DOMESTIC SALES :
During the period under review the Companys Domestic sales stood at Rs. 338crores as against Rs. 279 crores in the previous year.
EXPORT SALES :
During the period under review the Companys Export sales stood at Rs. 146 croresas against Rs. 131 crores in the previous year.
Overall sales mix remains as Domestic 70% (previous year 68%) and Export 30% (previousyear 32%).
6. MANAGEMENTS DISCUSSION AND ANALYSIS :
The Report on Managements Discussion and Analysis as required under the SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015 ("LODR") isincluded in this report as per Annexure "A". Certain statements in this saidreport may be forward looking. Many factors may affect the actual results which could bedifferent from what the Directors envisage in terms of the future performance and outlook.The important factors that could influence the Companys operations include globaland domestic demand and supply conditions affecting selling prices of finished goodsinput availability and prices changes in government regulations tax laws economicdevelopments within the country and other factors.
7. DIRECTORS Rs. RESPONSIBILITY STATEMENT :
In terms of Section 1 34(3)(c) of the Companies Act 2013 your directors would like tostate :
i) that in the preparation of the annual financial statements for the year ended 31stMarch 2016 the applicable accounting standards have been followed along with properexplanation relating to material departures if any;
ii) that such accounting policies have been selected and applied them consistently andmade judgments and estimates that are reasonable and prudent so as to give a true and fairview of the state of affairs of the Company for the year ended 31st March 2016and of the profit and loss of the Company for that period;
iii) that the proper and sufficient care has been taken for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act 2013 forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities;
iv) that the annual financial statements have been prepared on a going concern basis;
v) that the proper internal financial controls were in place and that the financialcontrols were adequate and were operating effectively;
vi) that the proper systems have been devised to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating effectively.
8. DIRECTORS AND KEY MANAGERIAL PERSONNEL :
During the year Shri Kiran Kumar Shetty resigned as Whole time Director of your Companywith effect from 16.01.2016 and Shri Deepkumar Vaghela resigned as Company Secretary andCompliance Officer with effect from 07.10.2015. Further Shri Subhasis Dey was appointedas Additional and Managing Director of the Company with effect from 06.11.2015 for aperiod of 3 years and Shri Sagar Pandya was appointed as Company Secretary and ComplianceOfficer with effect from 06.11.201 5 on the recommendation of the Nomination &Remuneration Committee.
Shri Subhasis Dey has resigned as Managing Director w.e.f. 30.04.2016
The Board expresses its appreciation for the contribution and services rendered by ShriKiran Kumar Shetty and Shri Subhasis Dey the Directors during their tenure.
All Independent Directors have given declarations that they meet the criteria ofindependence as laid down under Section 149(6) of the Companies Act 201 3 ("theAct") and LODR.
In accordance with the provisions of the Act and rules made thereunder Shri Mehul K.Patel (DIN : 01772099) retires by rotation at the forth coming Annual General Meeting andbeing eligible offers himself for reappointment.
8.1 PERFORMANCE EVALUATION :
Pursuant to the provisions of the Act and LODR the Board has carried out an annualperformance evaluation of its own performance the directors individually as well as theevaluation of the working of its requisite Committees.
The evaluation has been carried out with a well structured questionnaires taking intoconsideration various aspects and roles of the Board and its Committees such as knowledgeskills conduct integrity contribution in setting up and achieving goals etc. The Boardof Directors expressed their satisfaction with the evaluation process.
8.2 POLICY ON DIRECTORS Rs. NOMINATION APPOINTMENT AND REMUNERATION :
The Board has on the recommendation of the Nomination & Remuneration Committeeframed a policy in relation to remuneration of Directors. The policy also laid down thecriteria for selection and appointment of Directors Senior Management and theirremuneration. The detailed Remuneration Policy is stated in the Corporate GovernanceReport.
8.3 DISCLOSURE OF REMUNERATION PAID TO DIRECTORS :
The details of remuneration paid to the Directors is given in the Report on CorporateGovernance.
9. NUMBER OF BOARD MEETINGS :
The details of five Board Meetings held during the financial year 2015 - 201 6 areprovided in the Report on Corporate Governance and forms part of this report.
10. AUDIT COMMITTEE :
The details regarding the Composition power and role of Audit Committee are providedin Report on Corporate Governance and forms part of this report.
11. RELATED PARTY TRANSACTIONS :
All transactions entered into with the Related Parties as defined under the Act andLODR during the financial year ended on 31.03.201 6 were in the ordinary course ofbusiness and on basis of arms length basis and hence do not attract the provisions ofSection 188 of the Companies Act 2013. Thus disclosure in form AOC 2 is not applicable.
All the Related Party Transactions are reviewed by the Audit Committee on quarterlybasis and they have provided an omnibus approval for all Related Party Transactions whichare in ordinary course of business and on arms length basis.
There were no materially significant transactions with related parties during thefinancial year which were in conflict with the interest of the Company. Suitabledisclosure as required by the Accounting Standards (AS18) has been made in the notes tothe Financial Statements.
The Board has approved a Policy on Related Party Transactions which has been uploadedon the Companys website at www.bancoindia.com/pdf/Policy on Related PartyTransactions.pdf.
Disclosure of Related Party Transactions are available in Note No.32 to the FinancialStatement.
12. VIGIL MECHANISM / WHISTLE BLOWER POLICY :
The Company is committed to adhere to the highest standards of ethical moral and legalconduct of business operations. To maintain these standards the Company encourages itsemployees who have concerns about suspected misconduct to come forward and express theseconcerns without fear of punishment or unfair treatment. A Vigil Mechanism provides achannel to the employees and Directors to report to the management concerns aboutunethical behavior actual or suspected fraud or violation of the Codes of Conduct orpolicy. The mechanism provides for adequate safeguards against victimization of employeesand Directors to avail of the mechanism and also provides for direct access to theChairman of the Company / Chairman of the Audit Committee in exceptional cases. The VigilMechanism / Whistle Blower Policy are available on Companys website atwww.bancoindia.com/pdf/Vigil Mechanism.pdf.
13. RISK MANAGEMENT POLICY :
Pursuant to the requirement of LODR the Company has formed Risk Management Policy toensure appropriate risk management within its systems and culture. The Company operates ina competitive environment and is generally exposed to various risks at different timessuch as technological risks business risks operational risks financial risks etc. TheBoard of Directors and the Audit Committee of the Company periodically review the RiskManagement Policy of the Company so that the Management can control the risk throughproperly defined network.
The Company has a system based approach to business risk management backed by stronginternal control systems.
The Corporate Governance Policy clearly lays down the roles and responsibilities of thevarious entities in relation to risk management. A range of responsibilities fromstrategic to the operational is specified in the Governance Policy. These role definitioninteralia are aimed at ensuring formulation of appropriate risk management policies andprocedures their effective implementation and independent monitoring and reporting byInternal Audit.
A strong independent Internal Audit Function at the corporate level carries out riskfocused audits across all businesses enabling identification of areas where riskmanagements processes may need to be improved. The Board reviews internal audit findingsand provides strategic guidance on internal controls monitors the internal controlenvironment within the Company and ensures that Internal Audit recommendations areeffectively implemented.
The combination of policies and procedures adequately addresses the various risksassociated with your Companys businesses.
14. CORPORATE GOVERNANCE :
Pursuant to LODR the Report on Corporate Governance forms an integral part of thisReport. The requisite certificate from the Auditors of the Company confirming compliancewith the conditions of corporate governance is attached to the Report on CorporateGovernance. The Company has paid the requisite Annual Listing Fees to the Stock Exchanges.
15. CORPORATE SOCIAL RESPONSIBILITY :
The Company believed that it is vital for surrounding communities and stakeholders toprogress with the Company.
In compliance with the requirements of Section 135 of the Act. read with the Companies(Corporate Social Responsibility Policy) Rules 2014 the Board of Directors haveconstituted a Corporate Social Responsibility Committee. The details of membership of theCommittee & the meetings held are detailed in the Corporate Governance Report formingpart of the Annual Report.
The contents of the CSR Policy of the Company as approved by the Board on therecommendation of the Corporate Social Responsibility Committee is available on thewebsite of the Company as per the web link provided in the report on Corporate SocialResponsibility Activities as per Annexure "B" to this Report.
16. 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 ofThe Companies (Accounts) Rules 2014 the relevant information pertaining to Conservationof Energy Technology Absorption and Foreign Exchange Earnings and Outgo is annexed as perAnnexure "C" to this Report.
17. 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 as per Annexure"G" to this Report.
The information required under Section 197(12) of the Act and Rule 5(2) of TheCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 in respect ofvarious employees of the Company forms part of this report as per Annexure "H".
18. EXTRACT OF ANNUAL RETURN :
Pursuant to Section 92(3) of the Act and Rule 1 2(1) of The Companies (Management andAdministration) Rules 201 4 extract of Annual Return as per Annexure "D" tothis Report.
19. PARTICULARS OF LOANS GIVEN GUARANTEES GIVEN AND INVESTMENTS MADE BY THE COMPANY :
The details pursuant to Section 186 of the Act regarding loans given guarantees andinvestments made by the Company are given in the the Financial Statement.
20. AUDITORS :
20.1 STATUTORY AUDITORS :
The Shareholders have approved the appointment of M/s. Manubhai & Shah CharteredAccountants Ahmedabad as Statutory Auditor. The Company has received an intimation fromthe aforesaid firm about its conversion into LLP under name & style of M/s. Manubhai& Shah LLP during the year.
The proposal for ratification of appointment of M/s. Manubhai & Shah LLP CharteredAccountants Ahmedabad is included in the Notice of Annual General Meeting. They haveconfirmed their eligibility under section 141 of the Act by furnishing requisitecertificate as well as consent and the Rules framed thereunder for ratification as Auditorof the Company.
20.2 INTERNAL AUDITORS :
Your Company has appointed M/s. Sharp & Tannan Chartered Accountants Vadodara asthe Internal Auditors to carry out the Internal Audit of various operational areas of theCompany.
20.3 SECRETARIAL AUDITORS :
Pursuant to the provisions of Section 204 of the Act and The Companies (Appointmentand Remuneration of Managerial Personnel) Rules 2014 your Company has appointed M/s.J.J. Gandhi & Co. Practising Company Secretaries Vadodara as Secretarial Auditor ofthe Company. The Secretarial Audit Report is annexed herewith as per Annexure"E" to this Report. The report is self-explanatory. The requisite explanation isprovided in Report on Corporate Governance under the heading of Dematerialization ofShares as on 31.03.2016.
21. SUBSIDIARY COMPANIES :
21.1 NEDERLANDSE RADIATEUREN FABRIEK B.V - NETHERLANDS :
Nederlandse Radiateuren Fabriek B.V Netherlands and its subsidiaries are engaged inthe business of manufacturing and distribution of heat transfer products. During the yearthe Company has taken many initiatives in the areas of production marketing distributionand other operational areas. We expect that these initiatives will yield results in timeto come and result in improvement in the performance.
21.2 LAKE MINERAL (MAURITIUS) LIMITED - MAURITIUS :
A Wholly Owned Subsidiary viz. Lake Mineral (Mauritius) Limited was incorporated duringthe year ended on 31.03.2012 and is in operation.
21.3 BANCO GASKETS (INDIA) LIMITED - VADODARA :
In terms of the requisite approvals of Shareholders the Gasket Divisions of theCompany was transferred to its Wholly Owned Subsidiary Company viz. Banco Gaskets (India)Limited with effect from 31.03.201 2 and is in operation.
Pursuant to Section 129(3) of the Act the statement containing the salient features ofthe financial statement of the Companys Subsidiaries is annexed as per Annexure"F" to this Report.
The determination of Material Subsidiary is in compliance with LODR.
22. SHARE CAPITAL :
As on 31st March 2016 the paid up equity share capital of your Company wasRs. 14.30 crores. During the year under review the Company has not issued any shares.
23. DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTIONPROHIBITION AND REDRESSAL) ACT 2013 :
The Company has in place an Anti Sexual Harassment Policy in line with the requirementsof The Sexual Harassment of Women at the Workplace (Prevention Prohibition and Redressal)Act 2013. Internal Complaints Committee has been set up to redress complaints receivedregarding sexual harassment. All employees (permanent contractual temporary trainees)are covered under this policy.
The summary of sexual harassment complaints received and disposed off during thefinancial year 201 5 - 2016 is as under:
|- Number of Complaints Received ||: Nil |
|- Number of Complaints Disposed Off ||: Nil |
24. DEPOSITS :
The Company has neither accepted nor renewed any deposits during the year under review.
25. INSURANCE :
All the properties and insurable interests of the Company including buildings plantand machineries and stocks have been adequately insured.
26. INDUSTRIAL RELATIONS :
Overall industrial relation continued to be cordial. Your Directors place on recordtheir appreciation for the continued support and co-operation of all the employees.
27. INTERNAL FINANCIAL CONTROL
The Company has appropriate internal financial control systems and procedures in placewith regard to effective utilization of resources efficiency in operation financialreporting and compliance with various rules and regulations and keeping in view theorganisation's pace of growth and increasing areas of operations. The internal auditorsconduct extensive audits throughout the year across all locations and across allfunctional areas and submit their reports to the Audit Committee of the Board ofDirectors.
28. DETAILS OF FRAUD REPORTING IF ANY.
Neither any Fraud has been reported by auditors under Section 1 43 (12) of theCompanies Act 201 3 nor there was any fraud reportable to the Central Government.
29. FAMILIARISATION PROGRAMME FOR INDEPENDENT DIRECTORS
The details of programmes for familiarization of Independent Directors and trainingwith the Company their roles rights responsibilities nature of the industry in whichthe Company operates business model of the Company and related matters are put up on thewebsite of the Company at http://www.bancoindia.com/pdf/ Familiarization Programms forIndependent Directors.pdf
30. HUMAN RESOURCES
Many initiatives have been taken to support business through organizational efficiencyand various employee engagement programmes which have helped the Organization achievehigher productivity levels.
A significant effort has also been undertaken to develop leadership as well astechnical/ functional capabilities in order to meet future talent requirement.
The Company's HR processes such as hiring fair transparent online performanceevaluation and talent management process state-of-the-art workmen development process andmarket aligned policies have been seen as benchmark practices in the Industry.
31. MATERIAL CHANGES AND COMMITMENTS
Your Directors are of the opinion that there are no material changes and commitmentsaffecting financial position of the Company which have occurred between end of financialyear of the Company and the date of this report.
32. SAFETY HEALTH AND ENVIRONMENT SAFETY
The Company has continuously exercised effective safety health and environmentpolicies. Water and air pollution control measures are successfully operated andindustrial trade effluents are used for gardening. The tree plantation at the factory siteis maintained properly and the same shall be duly taken care.
33. WEB LINKS
Web links related to various policies are available in the Corporate Governance Report.
34. CHANGE IN THE NATURE OF BUSINESS
There is no change in the nature of business during the year under review.
35. SIGNIFICANT AND MATERIAL ORDER PASSED BY THE REGULATOR OR COURT
No order was passed by any regulator court or tribunal impacting Company's operationin future during the year under review.
36. ACKNOWLEDGEMENT :
Your Directors wish to convey their gratitude and place on record its deep appreciationfor the co-operation and continued support received by the Company from GovernmentCustomers Shareholders Vendors Bankers and Employees at all levels during the year.
| ||By the order of the Board |
|Date :01.08.2016 ||Mehul K. Patel - Chairman |
|Place: Bil ||(DIN : 01772099) |