The Members of
Banco Products (India) Limited
Your Directors have the pleasure in presenting the 60th Annual Reporttogether with the Audited Financial Statements of Banco Products (India) Limited("the Company") and its subsidiaries for the financial year ended on 31.03.2021.
At the outset our best wishes for your safe health and those of your dear ones.COVID-19 pandemic has caused enormous disruption to human lives. During theseunprecedented and uncertain times your Company's immediate priorities have been to:
(a) Safeguard health safety and well-being of our employees and of communities around.
(b) to initiate effective measures towards rebooting of our operations and thusensuring business continuity. Covid19 has not just affected human health; it has causeddevastating impact on the economy disrupted supply chains and as the left a long-termshadow of uncertainty on society in general.
(c) As ever adversities test every organization's resilience and true strength - AtBanco we have taken every possible measure to emerge stronger post the current crisis.
1. Overview of the Company's Performance:
The economic scenario during FY 20-21 remained challenging. Overall the economicgrowth in India has been volatile during the year under review. Production output in theautomotive and industrial sectors - one of the largest users of your Company's productsduring the year was on decline. Production of Commercial vehicles declined by 21 %; whileother sectors namely Passenger Cars and Two Wheelers saw lesser percentage in decline inproduction with a sole exception of agricultural tractors. Compared to the previous yearthe sales of the Company were impacted due to COVID-19 advisory including lockdowns;however we made gradual recovery from June 2020 till March 2021 as lockdowns were lifted.
Total Income from operations during the year for the standalone entity was placed atINR 662 crores (previous year INR 645 crores). Net profit before tax stood at INR 104crores (previous year INR 101 crores). For the consolidated entity the total income fromoperations was placed at INR 1542 crores (previous year INR 1447 crores) while Net profitbefore tax at INR 150 crores (previous year INR 112 crores) with growth of net profit of34%.
The uncertain and challenging business environment also pushed us to deliver our bestin terms of our core strengths i.e. Innovation and customer service be it developing newdesigns or delivering products to prevent customer line stoppages. Changes in emissionnorms to BS-VI in the automotive industry and BS-IV in the construction machinery andoff-highway sectors led to large number of new opportunities which your Company hasmanaged successfully. In general the OEM customer expectations in respect to productthermal efficiency compactness lower weight and product reliability has reached new highbar which is positive of Banco.
Our R&D has been successful in responding to these challenges through our BespokeEngineering approach. By continuously improving testing and proving the efficiency ofcooling elements we have delivered to our customers optimized solutions - which deliverbest in class field performance.
It was thus heartening when two of our Key Customers recognized BANCO for itsInnovation capabilities. During the year 2019-20 Cummins India recognized BANCO PRODUCTSwith Best Supplier Innovation Award while JCB also presented us with Best Supplier Awardfor co-creating the advanced and efficient Engine Cooling Modules suitable for BS-IV normscompliant machines.
In the export markets the Company's sales growth remained positive during the year. Wewill continue to focus on expanding our product portfolio in export markets while makingsteady gains on growing global OEM business.
Your Company as a part of its strategy to be best in its class customer focus hasalways been investing ahead of time towards upgradation of Technology and productioncapacity. Continuous improvement is at the very core of your Company's culture. Qualityimprovements and efficiency improvement projects in our plants continue irrespective ofmarket conditions. With relentless focus on operational excellence. We endeavour to keepour operations flexible. During the year your Company's employees won several awards inQuality Circle Competition organized by QCFI (Quality Circle Forum India). Rapid rise ofcommodities prices and spurt in industrial inflation is of concern.
Business at subsidiaries - Banco Gaskets and NRF b.v. continue to follow same trend asBanco Products. We follow same management ethos of being customer centric and nicheproduct development for OEM and aftermarket segments. Your company is indeed global andwell placed to take advantage of opportunities with sales contribution coming from IndiaEurope and USA.
2. Financial Summary/Highlights :
At a glance the summarized Standalone and Consolidated results of your Company aregiven below:
| || || || ||(Rs. in Crores) |
|PARTICULARS || |
| ||Year ended on 31.03.2021 ||Year ended on 31.03.2020 ||Year ended on 31.03.2021 ||Year ended on 31.03.2020 |
|Total Turnover ||637.00 ||582 .00 ||1511.00 ||1400.00 |
|Profit Before Taxation ||104.00 ||101 .00 ||150.00 ||111.00 |
|Less:-Tax Expenses ||24.00 ||31.00 ||36.00 ||35.00 |
|Profit After Tax ||80.00 ||70.00 ||114.00 ||76.00 |
|Profit/(Loss) from discontinued operations || || || || |
|Balance Brought forward from P.Y. ||379.00 ||500 .00 ||401.00 ||523 .00 |
|Profit available for Appropriation ||459.00 ||570 .00 ||515.00 ||599 .00 |
|Appropriations: || || || || |
|- Reclassification of Profit on Sale of Unquoted || || || || |
|Investment measured at FVTOCI ||7.00 ||3.00 ||7.00 ||3.00 |
|Dividend and Dividend Tax ||- ||-194.00 ||- ||-198.00 |
|Balance Carried to Balance Sheet ||466.00 ||379 .00 ||522.00 ||404 .00 |
Your Directors have recommended dividend at 100% i.e Rs.2/- per equity share of Rs.2/-each for the financial year ended on 31.03.2021 as compared to Rs.20/- per equity sharesof Rs.2.00 each (1000% during previous year).
The Company is not required to transfer any amount to reserves. Accordingly theCompany has not transferred any amount to reserve.
5. Operations and State of Affairs:
The Company continued its initiatives during the year to upgrade technology andquality at its plants. As pioneers in the country your Company will invest in best inclass technology and has lined up an accelerated investment plan to retain its technologyleadership position.
Our Research and Development capabilities including test equipments and designsoftware are being improved in line with modern practices. Our R& D spend during theyear was placed at 00.70 % of turnover.
Sales and Profit for Banco Products (India) Ltd. stood at:
| || ||(Rs. In Crores) |
|Particulars ||Year ended on 31.03.2021 ||Year ended on 31.03.2020 |
|Sales (Net) ||637 ||582 |
|Profit after Tax (PAT) ||80 ||70 |
During the period under review the Company's Domestic sales stood at Rs.447/- croresas against Rs.437/- crores in the previous year representing a 2.29% increase.
During the period under review the Company's Export sales stood at Rs.190/- crores asagainst Rs.145/- crores in the previous year despite growing global competition.
Overall sales mix was placed at Domestic 70% (previous year 75%) and Export 30%(previous year 25%).
6. Management Discussion and Analysis:
The Report on Management's Discussion and Analysis as required under the SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 ("LODR") forms partof this report as per Annexure "A".
7. Business Responsibility Report:
The business responsibility report as required under SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 forms part of this Annual Report.
8. Corporate Social Responsibility:
Your Directors believe 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 Social ResponsibilityReport forming part of this 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.
9. 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.
10. Directors' Responsibility Statement:
In terms of Section 134(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 2021 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 2021 and of theprofit 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.
11. Directors and Key Managerial Personnel:
11.A STATEMENT WITH REGARD TO INTEGRITY EXPERTISE AND EXPERIENCE OF THE INDEPENDENTDIRECTORS
Your directors are of the opinion that Independent Directors of the Company are of highintegrity and suitable expertise and experience (including proficiency). The IndependentDirector have given declaration under sub section (6) of Section 149 of the Companies Act2013. The tenure of Independent Director is in compliance of provisions of Section149(10).
In accordance with the provision of the Act and rules made there under Smt. Himali H.Patel (DIN: 07081636) retires by rotation at the 60th Annual General Meetingand being eligible offers herself for re-appointment.
The Board has reappointed Smt. Himali H. Patel (DIN: 07081636) as Whole Time Director& Chief Financial Officer (CFO) for a period of 3 years effective from 13.02.2021 to12.02.2024 in terms of the Companies Act 2013 ("the Act") and Rules made thereunder and in terms of the Listing Regulations and on the recommendation of Nomination andRemuneration Committee.
The Board of Directors has appointed Shri Sharan M. Patel on 22nd April2021 as an Additional Director to hold office upto next Annual General Meeting and as aWhole Time Director w.e.f 22nd April 2021 for the period of three yearssubject to approval of the members of the Company.
Upon resignation Shri Rajendra J. Anandpara ceased to be Managing Director w.e.f 1stApril 2021 the Board placed on record its appreciation of services rendered by ShriRajendra J. Anandpara during his tenure of Directorship.
Shri Samir K. Patel resigned as Director w.e.f. 4th June 2020. The Board placed onrecord its appreciation of services rendered by Shri Samir K. Patel during his tenure ofDirectorship.
11.1 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.
11.2 Policy on Directors' 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.
11.3 Disclosure of Remuneration paid to Directors:
The details of remuneration paid to the Directors is given in the Report on CorporateGovernance.
12. Number of Board Meetings:
The details of 05 Board Meetings held during the financial year 2020 - 21 are providedin the Report on Corporate Governance and forms part of this report.
13. 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.
14. 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 theirconcerns 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 Company's website at http://www.bancoindia.com/investor-relations/#1497261700893-eb0e6e05-b833
15. Risk Management:
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 aims 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 Company's businesses.
16. Corporate Governance:
Pursuant to LODR the Report on Corporate Governance forms an integral part of thisReport. The requisite certificate confirming compliance with the conditions of corporategovernance is attached to the Report on Corporate Governance.
17. Extract of Annual Return:
A copy of the Annual Return as required under section 92(3) and Section 134(3)(a) ofthe Companies Act 2013 has been placed on the website of the Company. The web-link asrequired under the act is as under- http://www.bancoindia.com/wp-content/uploads/2021/08/DraftAnnual Return 2021.pdf
18.1 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 aterm of Five consecutive years at the conclusion of 58th Annual General Meeting till theconclusion of 63rd Annual General Meeting. The Auditor's Report for financial year 2020-21does not contain any qualification reservation or adverse remark. The Auditors haveconveyed their confirmation about their eligibility to continue as Statutory Auditors ofthe Company.
18.2 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.
18.3 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 hasappointed M/s. J.J. Gandhi & Co. Practicing Company Secretaries Vadodara asSecretarial Auditors of the Company. The Secretarial Audit Report for the Financial Yearended on 31.03.2021 is annexed herewith as per Annexure "D" to this Report andit does not contain any qualification reservation or adverse remark.
18.4 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 ifany of the Companies Act 2013 and Rules made thereunder.
The proposals for ratification of their remuneration by way of Ordinary Resolution toconduct the audit of the Cost Records of the Company for the financial year 2021-22 interms of the recommendation of the Audit Committee is included in the Notice of the AnnualGeneral Meeting.
19. Subsidiary Companies:
19.1 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.
19.2 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 31.03.2012 and is in operation.
Pursuant to Section 129(3) of the Act the statement containing the salient features ofthe 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.
20. 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 perAnnexure "F" to this Report.
A Statement of the details of employees covered under Rule 5(2) of the aforesaid Rulesare provided in the Annual Report. The Annual Report is being sent excluding the aforesaidinformation. Such particulars will be furnished to any shareholder on a specific requestmade in writing by the shareholder.
21. Related Party Transactions:
All transactions entered into with the Related Parties as defined under the Act andLODR during the financial year ended on 31.03.2021 were in the ordinary course of businessand arms 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 quarterlybasis and it has provided an omnibus approval for all Related Party Transactions which arewithin its purview.
The information on Related Party Transactions forming part of this Report is providedin Notes of Annual Financial Statement for the Financial Year ended on 31.03.2021.
The Board has approved a Policy on Related Party Transactions which has been uploadedon the Company's website athttp://www.bancoindia.com/investor-relations/#1497261700893-eb0e6e05-b833
22. Particulars of Loans given Guarantees given and Investments made by the Company:
During the year under review there were no Loans and Guarantees given and Investmentsmade by the Company.
23. Share Capital:
As on 31 st March 2021 the paid up equity share capital of your Company was Rs.14.30crores. During the year under review the Company has not issued any shares.
24. Change in Capital Structure:
During the year under review the Company has not issued any Equity Share withdifferential rights Employees Stock Options and Sweat Equity Share. Hence details as perapplicable rules of the Companies (Share Capital and Debentures) Rules 2014 are notrequired to be reported.
25. 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 2020-21 is as under:
-Number of Complaints Received : Nil
-Number of Complaints Disposed off : Nil
26. Deposits :
The Company has neither accepted nor renewed any deposits during the year under review.
27. Insurance :
All the properties and insurable interests of the Company including buildings plantand machineries and stocks have been adequately insured.
28. Industrial Relations :
Overall industrial relations continued to be cordial. Your Directors place on recordtheir appreciation for the continued support and co-operation of all the employees.
29. 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 theorganization's pace of growth and increasing areas of operations.
The internal auditors conduct extensive audits throughout the year across all locationsand across all functional areas and submit their reports to the Audit Committee of theBoard of Directors.
30. Details of Fraud Reporting if any :
Neither any Fraud has been reported by auditors under Section 143 (12) of the CompaniesAct 2013 nor there was any fraud reportable to the Central Government.
31. 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/investor-relations/#1497261700893-eb0e6e05-b833
32. Human Resources :
Many initiatives have been taken to support business through organizational efficiencyand various employee engagement programmes which have helped the Organization to achievehigher productivity levels.
Significant efforts have 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.
33. 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.
34. 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 site is maintained properly and is being duly takencare.
35. Web Links
Web links related to various policies are available in the Corporate Governance Report.
36. Change in the nature of Business :
There is no change in the nature of business during the year under review.
37. Significant and material order passed by the Regulator or Court :
No order was passed by any regulator court or tribunal impacting the going concernstatus and Company's operation in future during the year under review.
38. Disclosure in respect of Cost Records :
The Company has maintained the cost accounts and records respectively as requiredunder provisions of the Companies Act 2013.
39. Compliance of applicable Secretarial Standards :
Pursuant to Clause 9 of Secretarial Standards on Meetings of Board of Directors it isstated that the Company is compliant of applicable Secretarial Standards during the year.
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 all others Stake Holders Employees at alllevels during the year.
|By the order of the Board || |
|Sharan M. Patel ||Himali H. Patel |
|(Whole Time Director) ||(Whole Time Director & CFO) |
|DIN:09151194 ||DIN:07081636 |
|Date : 13.08.2021 || |
|Place : Bil || |