BOARD'S REPORT

To,

The Members of

Banco Products (India) Limited

Your Directors have the pleasure in presenting the 54th Annual Report together with the Audited Financial Statements of Banco Products (India) Limited ("the Company") and its subsidiaries for the financial year ended on 31.03.2015.

1. OVERVIEW OF THE COMPANY :

Banco Products (India) Limited has delivered robust performance to its customers, especially to various esteemed Original Equipment Manufacturers, by designing, developing and supplying various engine cooling modules and individual Radiators, Charged Air Coolers and Oil Coolers. By virtue of excellent product development track-record, the company has become a preferred supplier to most prestigious OEMs who have a global standing. The Company has undertaken many initiatives to create significant value to its customers as well as to other stakeholders. The company has continued to solidify its market position by almost doubling its OEM customer count in sectors like power, agricultural and construction equipment. In spite of turbulence in foreign economies and currency markets, the company has managed to maintain stable earnings in the last financial year and has created a solid foundation of enhanced growth whenever Indian manufacturing industry picks up. The company has also taken significant successful initiatives in improving its market share of radiators for the domestic aftermarket.

3. DIVIDEND :

Your Directors had declared and paid Interim Dividend during the year at 25% i.e. Rs. 0.50 per equity share of Rs. 2.00 each absorbing Rs. 4 crores as dividend and Rs. Nil as Tax on Dividend (as per applicable provision under Section 115BBD of Income Tax Act) and have decided to recommend final dividend at 125% i.e. Rs. 2.50 per equity share of Rs. 2.00 each absorbing Rs. 18 crores as dividend and provision of Rs. 1 crore as Tax on Dividend (as per applicable provision under Section 115BBD of Income Tax Act) for the financial year ended on 31.03.2015 as compared to Rs. 2.00 per equity share (100%) in previous year. The total dividend for the financial year ended 31st March, 2015 would accordingly be Rs. 3.00 per equity share of Rs. 2.00 each i.e. 150%.

4. RESERVE :

The Company proposes to carry Rs. 7 crores to reserves.

5. OPERATIONS :

The Company has sound manufacturing facilities which have been further upgraded to manufacture complex cooling modules with higher quality standards. Furthermore, new Research and Development building extension together with investment in equipment, software for development of advanced future engine cooling products will strengthen company's capabilities to take on global supply projects for international OEMs and other automotive customers and further widen scope of customer base

DOMESTIC SALES :

For the year under review, the Company’s Domestic sales stood at Rs. 279 crores as against previous year of Rs. 284 crores.

EXPORT SALES :

For the year under review, the Company’s Export sales stood at Rs. 131 crores as against previous year ofRs. 154 crores.Overall sales mix remains as Domestic 68% (previous year 65%) and Export 32% (previous year 35%).

6. MANAGEMENT'S DISCUSSION AND ANALYSIS :

The Report on Management's Discussion and Analysis as required under the Listing Agreement is included in this report as Annexure "A". The certain statements in this said report may be forward looking. Many factors may affect the actual results, which could be different from what the Directors envisage in terms of the future performance and outlook. The important factors that could influence the Company's operations include global and domestic demand and supply conditions affecting selling prices of finished goods, input availability and prices, changes in government regulations, tax laws, economic developments within the country and other factors.

7. DIRECTORS' RESPONSIBILITY STATEMENT :

In terms of Section 134(3)(c) of the Companies Act, 2013, your directors would like to state :

i) that in the preparation of the annual financial statements for the year ended 31st March, 2015, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;

ii) 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, 2015 and 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 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;

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 financial controls were adequate and were operating effectively;

vi) 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.

8. DIRECTORS AND KEY MANAGERIAL PERSONNEL :

During the year, Shri Sudesh K. Duggal and Shri Atul G. Shroff resigned as an Independent Director of your Company with effect from 23rd September, 2014 and 12th January, 2015 respectively. Further, Shri Vimal K. Patel resigned as the Chairman of the Company with effect from 1st October, 2014 and Shri Shailesh A. Thakker as Executive Director & CFO with effect from 24th September, 2014. The Board expresses its appreciation for the contribution and services rendered by the Directors, during their tenure.

The Board of Directors had on the recommendation of the Nomination & Remuneration Committee appointed Shri Devesh A. Pathak and Shri Udayan P. Patel as an Additional Non-Executive Directors of the Company in the category of Independent Directors with effect from 13th February, 2015 for a period of 5 years. All Independent Directors have given declarations that they meet the criteria of independence as laid down under Section 149(6) of the Companies Act, 2013 and Clause 49 of the Listing Agreement.

In accordance with the applicable provisions of the Companies Act, 2013 and Rules made thereunder, Shri Samir K. Patel retires by rotation at the forth coming Annual General Meeting and being eligible offers himself for reappointment.

The Board of Directors had on the recommendation of the Nomination & Remuneration Committee appointed Mrs. Himali H. Patel as the Whole time Director and Chief Financial Officer with effect from 13th February, 2015 to 12th February, 2018 for a period of 3 years. Also, Shri Deep Vaghela had been appointed as the Company Secretary with effect from 13th February, 2015 in place of previous Company Secretary.

The proposal for appointment of Shri Devesh A. Pathak and Shri Udayan P. Patel as an Independent Directors and Mrs. Himali H. Patel as the Whole time Director and Chief Financial Officer at the forthcoming Annual General Meeting is included in the Notice. There is no reappointment of any other Independent Director.

8.1 BOARD EVALUATION :

Pursuant to the provisions of the Companies Act, 2013 and Clause 49 of the Listing Agreement, 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 have been carried out with a well structured questionnaires taking into consideration various aspects and roles of the Board and its Committees. The Board of Directors expressed their satisfaction with the evaluation process.

8.2 POLICY ON DIRECTORS 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.

8.3 DISCLOSURE OF COMMISSION TO MANAGING OR WHOLE-TIME DIRECTOR

Pursuant to Section 197(14) of the Companies Act, 2013, disclosure of Commission paid to Managing Director or Whole time Director is given in the Note No. 5(b) of the Report on Corporate Governance.

9. NUMBER OF BOARD MEETINGS :

The details of eight Board Meetings held during the financial year 2014 - 2015 forms part of the Corporate Governance Report.

10. AUDIT COMMITTEE :

The details regarding the Composition, power and role of Audit Committee forms part of the Corporate Governance Report.

11. RELATED PARTY TRANSACTIONS :

All transactions entered into with the Related Parties as defined under the Companies Act, 2013 and Clause 49 of the Listing Agreement during the financial year ended on 31.03.2015 were in the ordinary course of business and on basis of arms length pricing and do not attract the provisions of Section 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 quarterly basis and they provide an omnibus approval for all Related Party Transactions which are in ordinary course of business and on arms length basis.

There were no materially significant transactions with related parties during the financial year which were in conflict with the interest of the Company. Suitable disclosure as required by the Accounting Standards (AS18) has been made in the notes to the Financial Statements.

The Board has approved a Policy on Related Party Transactions which has been uploaded on the Company's website.

12. 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 these 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 of the mechanism and also provide for direct access to the Chairman of the Company / Chairman of the Audit Committee in exceptional cases. The Vigil Mechanism / Whistle Blower Policy are there on company's website.

13. RISK MANAGEMENT POLICY :

Pursuant to the requirement of Clause 49 of the Listing Agreement, the Company has formed Risk Management Policy to ensure appropriate 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 reviews the Risk Management Policy of the Company so that the Management controls 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, interalia are aimed 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 provided strategic guidance on internal controls, monitors 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.

14. CORPORATE GOVERNANCE :

Pursuant to Clause 49 of the Listing Agreement entered into with the Stock Exchanges, the Report on Corporate Governance forms an integral part of this Report. The requisite certificate from the Auditors of the Company confirming compliance with the conditions of corporate governance is attached to the Report on Corporate Governance. The Company has paid the requisite Annual Listing Fees to the Stock Exchanges.

15. CORPORATE SOCIAL RESPONSIBILITY :

The Company believes that it is vital for surrounding communities and stakeholders to progress with the Company.

Pursuant to Section 135 of the Companies Act, 2013, and relevant rules and regulations, the report on Corporate Social Responsibility Activities is annexed at 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 Companies Act, 2013 read with rule 8 of The Companies (Accounts) Rules, 2014, the relevant information pertaining to Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo is annexed as Annexure "C" to this Report.

17. PARTICULARS OF EMPLOYEES :

The Statement pursuant to Section 197(12) of the Companies Act, 2013 and Rule 5(1) of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2015 is annexed as Annexure "G" to this Report.

The information required under Section 197(12) of the Companies Act, 2013 and Rule 5(2) of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of various employees of the Company, forms part of this report as Annexure "H".

18. EXTRACT OF ANNUAL RETURN :

Pursuant to Section 92(3) of the Companies Act, 2013 and Rule 12(1) of The Companies (Management and Administration) Rules, 2014, extract of Annual Return is annexed as Annexure "D" to this Report.

19. PARTICULARS OF LOANS GIVEN, GUARANTEES GIVEN AND INVESTMENTS MADE BY THE COMPANY :

The details pursuant to Section 186 of the Companies Act, 2013 regarding loans given, guarantees and investments made by the Company are given in the Notes No. 13, 17 and 32(c) to the Financial Statement.

20. AUDITORS : 20.1STATUTORY AUDITORS :

The proposal for ratification of appointment of M/s. Manubhai & Shah, Chartered Accountants, Ahmedabad is included in the Notice of Annual General Meeting. They have confirmed their eligibility under section 141 of the Companies Act, 2013 and the Rules framed thereunder for ratification as Auditor of the Company.

20.2INTERNAL AUDITORS :

Your Company has appointed M/s. Sharp & Tannan, Chartered Accountants, Baroda as the Internal Auditors to carry out the Internal Audit of various operational areas of the Company.

20.3SECRETARIAL AUDITORS :

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, your Company has appointed M/s. J.J. Gandhi & Co., Practising Company Secretaries as Secretarial Auditors of the Company. The Secretarial Audit Report is annexed herewith as Annexure "E" to this Report. The report is self-explanatory and do not call for any further comments.

21. SUBSIDIARY COMPANIES :

21.1 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 productions, 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.

21.2 LAKE MINERAL (MAURITIUS) LIMITED - MAURITIUS :

A Wholly Owned Subsidiary viz. Lake Mineral (Mauritius) Limited was incorporated during the year ended on 31.03.2012 and is in operations.

21.3 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 operations.

Pursuant to Section 129(3) of the Companies Act, 2013 the statement containing the salient feature of the financial statement of the Company's Subsidiaries is annexed as Annexure "F" to this Report.

The determination of Material Subsidiary is in compliance with Listing Agreement.

22. SHARE CAPITAL :

As on 31st March, 2015, the paid up equity share capital of your Company was Rs. 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 (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 2014 -2015 is as under:

24. PUBLIC 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, plant and machineries and stocks, have been adequately insured.

26. 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.

27. ACKNOWLEDGEMENT :

Your Directors wish to convey their gratitude and place on record its deep appreciation for the co-operation and continued support received by the Company from Customers, Shareholders, Vendors, Bankers and Employees at all levels during the year.

By Order of the Board,

Kiran Kumar Shetty

Director (DIN 03129699)

Himali H. Patel

Director (DIN 07081636)

Date : 04.07.2015  

Place:Bil