Banco Products (India) Ltd

To,

The Members of

Banco Products (India) Limited

Your directors have the pleasure in presenting the 63^rd Annual Report together with the audited Financial Statements of Banco Products (India) Limited ("the Company") and its subsidiaries for the financial year ended on 31.03.2024 with the mission: (a) To safeguard health, safety and well-being of employees and of the communities around.

(b) To initiate effective measures towards minimum disruption of the operations and thus ensuring smooth business continuity and sustainable growth.

(c) 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.

1. Overview of the Company's Performance:

Over the course of the year, the Indian economy has demonstrated steep growth parameters, even surpassing global GDP growth figures, despite major global disruptions in the world, the wars in Eastern Europe and Middle East. The strategic and diverse capex allocation by the government, recovery in auto industrial, agricultural equipment sales and improving capacity utilisation at a macro level has played a key role in India's economic progress. The economic and market scenario during 2023-24 has remained very positive.

We have observed an upturn in the OEM business in terms of peak volumes with some of our clients as compared to the previous fiscal year due to positive market demands amongst other factors.

Our executive leadership team at Banco Products and its subsidiaries have resiliently performed to deliver the best in their core strengths with focused, innovative and cost competitive designed products developed along with a drive to improving customer service with short development cycles.

Alterations in the emission norms for off highway and construction machinery to Bharat Stage V, alon g with new norms for air conditioned cabins for commercial vehicles and alternative fuel applications have opened up a range of new opportunities.

In general, the OEM customer expectations with respect to product thermal efficiency, compact packaging of cooling modules, lower weight targets for saving fuel and increased product reliability have taken us to newer horizons of business development and achievements.

We believe in responding to these expectations by employing our bespoke engineering approach which o ur research teams at Banco Products have taken to task, to continuously improve, test and prove the efficiency of our cooling modules. We have developed and delivered optimized solutions to our customers by the use of advanced software tools.

In EV and alternative energy applications market, we have begun participation in product development and supply to selected customers in cooling systems, gaskets and sealing solutions which includes expanding customer bases both in the domestic and global markets.

Business at subsidiaries –

Banco Gaskets (India) Limited continues to follow same growth trend 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. Company focuses on developing advanced elastomeric solutions for complex profiles for multiple end uses in automotive field. After market business is increasing and reach out to the customers, brand development is ongoing focus in countering competition which has seen good growth during the year under review.

NRF b.v. Aftermarket sales continues to grow rapidly in multiple European countries compared to previous years. Introduction of new products categories for passenger and commercial vehicle segments for end use in air-conditioning, emission control and engine cooling continues relentless. Establishment of product validation test cells in Poland and Spain locations have greatly enhanced capabilities to test and introduce new products for aftermarket. Establishment of these facilitates aid to validate and launch cooling and vehicle air-conditioning related parts of EV cars too.

Management team at NRF places great importance in brand development through active presence on digital media, participation in trade shows and end user training programs. In parallel, expansion of distribution network is showing excellent results to improve reach of NRF products.

2. Financial Summary/Highlights:

At a glance, the summarized Standalone and Consolidated results of your Company are given below:

( in Crores)

3. Dividend:

Your Directors had declared and paid Interim Dividend during the year 2023-24 at 1000% i.e. 20 per Equity Shares of 2 each absorbing 143 Crores (gross) for the financial year ended on 31.03.2024 and as compared to 22/- (Interim 8 and final 14) per equity share of 2 each (1100% during previous year). Hence the directors have not reccomended any final dividend for the year 2023-24.

4. Reserve:

The Company is not required to transfer any amount to reserves. Accordingly, the Company has not transferred any amount to reserve.

5. 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 0.58% of turnover.

Sales and Profit for Banco Products (India) Ltd. stood at: ( In Crores)

Domestic Sales:

During the period under review, the Company's Domestic sales stood at 727/- crores as against 709/-crores in the previous year representing a 2.45% increase.

Export Sales:

During the period under review, the Company's Export sales stood at 265/- crores as against 270/- crores in the previous year, despite growing global competition.

Overall sales mix was placed at Domestic 73% (previous year 72%) and Export 27% (previous year 28%).

6. Management Discussion and Analysis:

The Report on Management's Discussion and Analysis as required under the SEBI (Listing Obligations a nd Disclosure Requirements) Regulations, 2015 ("LODR") forms part of this report as per Annexure "A".

7. Business Responsibility and Sustainability Report:

The Business Responsibility and Sustainability Report as required under LODR forms part of this Annual Report.

8. 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.

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 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 per Annexure "C" to this Report.

10. Directors' Responsibility Statement:

In terms of Section 134(3) (c) of the Act, your directors would like to state: i) that in the preparation of the annual financial statements for the year ended 31^st March, 2024, 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 31^st March, 2024 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.

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).

11.1 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.

11.2 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.

11.3 Disclosure of Remuneration paid to Directors:

The details of remuneration paid to the Directors is given in the Report on Corporate Governance.

11.4 Change in Directors/KMP:

In accordance with the provisions of the Act and rules made there under Smt. Himali H. Patel (DIN 07081636) retires by rotation at the 63^rd Annual General Meeting and being eligible offers herself for reappointment.

The members of the Company through postal ballot have approved the appointment of Shri Tarak Patel (DIN: 00009568) as an Independent Director of the Company for a period of 5 years w.e.f. 5^th February, 2024, Re-appointment and Remuneration of Shri Sharan M. Patel (DIN: 09151194) as Whole Time Director for a period of 3 years w.e.f. 22^nd April, 2024 and Re-appointment and Remuneration of Smt. Himali H. Patel (DIN 07081636) as Whole Time Director for a period of 3 years w.e.f. 13^th February, 2024.

12. Number of Board Meetings:

The details of 04 Board Meetings held during the financial year 2023-24 are provided in 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 provided in 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 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 behaviour, 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

15. Risk Management:

Pursuant to the requirement of LODR, 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 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 ris k 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, 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.

The details regarding the composition and Role of Risk Management Committee are provided in report on Corporate Governance and forms part of this report.

16. 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.

17. 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 un der-http://mail.bancoradiator.com/upload/annual_return_2024.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 a term of Five consecutive years from conclusion of 58^th Annual General Meeting held on 23^rd September, 2019 till the conclusion of 63^rd Annual General Meeting. M/s. Parikh Shah Chotalia & Associates, Chartered Accountants, Vadodara have expressed their willingness for reappointment and have furnished a certificate of eligibility and consent under Section 139 and 141 of the Act. The Board, based on the recommendation of the Audit Committee, has recommended re-appointment of M/s. Parikh Shah Chotalia & Associates, Chartered Accountants, as the Statutory Auditor of the Company for a further term of five years from the conclusion of 63^rd Annual General Meeting till the conclusion of the 68^th Annual General Meeting.

The Auditor's Report for financial year 2023-24 did 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.

18.2 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.

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 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 31.03.2024 is annexed herewith as per Annexure "D" to this Report and it 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, 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.

19.1 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 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.

19.2 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.

19.3 Banco New Energy Cooling Systems Limited – Vadodara:

Banco New Energy Cooling Systems Limited, was incorporated on 17^th 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. It has commenced commercial production of its products namely Heat exchangers for Locomotives at its plant situated at Block No. 1329, Taluka Jambusar, Village Anki, Bharuch, Gujarat-392150 on 12^th October, 2023.

Pursuant to Section 129(3) of the Act, the statement containing the salient features of the financia l 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 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.

21. Related Party Transactions:

All transactions entered into with the Related Parties as defined under the Act and LODR during the financial year ended on 31.03.2024 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 31.03.2024.

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

22. Particulars of Loans given, Guarantees given and Investments made by the Company:

During the year under review, the Company has further invested in Equity Shares of Banco New Energy Cooling Systems Limited a Wholly Owned Subsidiary of the Company, amounting to 5 Crores aggregating to 13.40 Crores as on 31^st March, 2024, and has given loan of 6.50 Crores. The details of Investments made and Loan given are provided in note no. 6 and 13 respectively of notes to Standalone Financial Statements of the Company for its Principal business activities out of the Company's internal sources of funds.

23. Share Capital:

As on 31^st March, 2024, the paid up equity share capital of your Company was 14.30 crores. During the year under review, there was no change in the Share Capital of the Company.

24. 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.

25. 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 2023-24 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, plant and machineries and stocks, have been adequately insured.

28. 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.

29. 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.

30. 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.

31. 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

32. 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.

33. 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.

34. 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.

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 concern status and Compa ny'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 required under 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 is stated that the Company is compliant of applicable Secretarial Standards during the year.

40. Application made or any proceeding pending under the Insolvency and Bankruptcy Code, 2016(IBC) (31 of 2016) during the year under review -

Neither any application was made nor any proceeding was pending in this regard under IBC during the year.

41. 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.

42. Acknowledgement:

Your Directors wish to convey their gratitude and place on record their deep appreciation for the cooperation 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.