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Honeywell Automation India Ltd.

BSE: 517174 Sector: Engineering
NSE: HONAUT ISIN Code: INE671A01010
BSE LIVE 15:40 | 17 Aug 12813.80 67.60
(0.53%)
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NSE 15:32 | 17 Aug 12921.65 153.65
(1.20%)
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OPEN 12905.00
PREVIOUS CLOSE 12746.20
VOLUME 188
52-Week high 13344.00
52-Week low 8021.00
P/E 60.69
Mkt Cap.(Rs cr) 11,327
Buy Price 12850.00
Buy Qty 5.00
Sell Price 0.00
Sell Qty 0.00
OPEN 12905.00
CLOSE 12746.20
VOLUME 188
52-Week high 13344.00
52-Week low 8021.00
P/E 60.69
Mkt Cap.(Rs cr) 11,327
Buy Price 12850.00
Buy Qty 5.00
Sell Price 0.00
Sell Qty 0.00

Honeywell Automation India Ltd. (HONAUT) - Auditors Report

Company auditors report

To the Members of Honeywell Automation India Limited Report on the Financial Statements

We have audited the accompanying financial statements of HONEYWELL AUTOMATION INDIALIMITED ("the Company") which comprise the Balance Sheet as at 31st March2016 the Statement of Profit and Loss and the Cash Flow Statement for the year thenended and a summary of the significant accounting policies and other explanatoryinformation.

Management's Responsibility forthe Financial Statements

The Company's Board of Directors is responsible for the matters stated in Section134(5) of the Companies Act 2013 ("the Act") with respect to the preparation ofthese financial statements that give a true and fair view of the financial positionfinancial performance and cashflows of the Company in accordance with the accountingprinciples generally accepted in India including the Accounting Standards specified underSection 133 of the Act as applicable. This responsibility also includes maintenance ofadequate accounting records in accordance with the provisions of the Act for safeguardingof the assets of the Company and for preventing and detecting frauds and otherirregularities; selection and application of appropriate accounting policies; makingjudgments and estimates that are reasonable and prudent; and design implementation andmaintenance of adequate internal financial controls that were operating effectively forensuring the accuracy and completeness of the accounting records relevant to thepreparation and presentation of the financial statements that give a true and fair viewand are free from material misstatement whether due to fraud or error.

Auditors’ Responsibility

Our responsibility is to express an opinion on these financial statements based on ouraudit.

We have taken into account the provisions of the Act the accounting and auditingstandards and matters which are required to be included in the audit report under theprovisions of the Act and the Rules made thereunder and the Order under section 143 (11)of the Act.

We conducted our audit of the financial statements in accordance with the Standards onAuditing specified under Section 143(10) of the Act. Those Standards require that wecomply with ethical requirements and plan and perform the audit to obtain reasonableassurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts andthe disclosures in the financial statements. The procedures selected depend on theauditors’ judgment including the assessment of the risks of material misstatement ofthe financial statements whether due to fraud or error. In making those risk assessmentsthe auditor considers internal financial control relevant to the Company’spreparation of the financial statements that give a true and fair view in order to designaudit procedures that are appropriate in the circumstances. An audit also includesevaluating the appropriateness of the accounting policies used and the reasonableness ofthe accounting estimates made by the Company’s Directors as well as evaluating theoverall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the financial statements.

Opinion

In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid financial statements give the information required by the Actin the manner so required and give a true and fair view in conformity with the accountingprinciples generally accepted in India of the state of affairs of the Company as at 31stMarch 2016 and its profit and its cashflows for the year ended on that date.

Report on Other Legal and Regulatory Requirements

1. As required by Section 143 (3) of the Act we report that:

(i) We have sought and obtained all the information and explanations which to the bestof our knowledge and belief were necessary for the purposes of our audit.

(ii) In our opinion proper books of account as required by law have been kept by theCompany so far as it appears from our examination of those books.

(iii) The Balance Sheet the Statement of Profit and Loss and the Cash Flow Statementdealt with by this Report are in agreement with the books of account.

(iv) In our opinion the aforesaid financial statements comply with the AccountingStandards prescribed under section 133 of the Act as applicable.

(v) On the basis of the written representations received from the directors as on 31stMarch 2016 taken on record by the Board of Directors none of the directors isdisqualified as on 31st March 2016 from being appointed as a director in terms of Section164 (2) of the Act.

(vi) With respect to the adequacy of the internal financial controls over financialreporting of the Company and the operating effectiveness of such controls refer to ourseparate Report in "Annexure A". Our report expresses an unmodified opinion onthe adequacy and operating effectiveness of the Company’s internal financial controlsoverfinancial reporting.

(vii) With respect to the other matters to be included in the Auditors’ Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 in our opinionand to the best of our information and according to the explanations given to us:

a) The Company has disclosed the impact of pending litigations on its financialposition in its financial statements - Refer Note 32 to the financial statements;

b) The Company has made provision as required under the applicable law or accountingstandards for material foreseeable losses if any on long-term contracts includingderivative contracts - Refer Note 39 to the financial statements;

c) There has been no delay in transferring amounts required to be transferred to theInvestor Education and Protection Fund by the Company.

2. As required by the Companies (Auditors’ Report) Order 2016 ("theOrder") issued by the Central Government in terms of Section 143(11) of the Act wegive in "Annexure B" a statement on the matters specified in paragraphs 3 and 4of the Order.

For DELOITTE HASKINS & SELLS LLP
Chartered Accountants
(Firm Registration No. 117366W/W-100018)
Sunil S Kothari
Partner
Gurgaon May 17 2016 (Membership No. 208238)

Annexure 'A' to Independent Auditors' Report

(Referred to in paragraph 1 under ‘Report on Other Legal and RegulatoryRequirements’ of our report of even date)

Report on the Internal Financial Controls Over Financial Reporting under Clause (i) ofSub-section 3 of Section 143 of the Companies Act 2013 ("the Act")

We have audited the internal financial controls over financial reporting of HONEYWELLAUTOMATION INDIA LIMITED ("the Company") as of 31st March 2016 in conjunctionwith our audit of the financial statements of the Company for the year ended on that date.

Management’s Responsibility for Internal Financial Controls

The Company’s management is responsible for establishing and maintaining internalfinancial controls based on the internal control over financial reporting criteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note on Audit of Internal Financial Controls Over Financial Reportingissued by the Institute of Chartered Accountants of India. These responsibilities includethe design implementation and maintenance of adequate internal financial controls thatwere operating effectively for ensuring the orderly and efficient conduct of its businessincluding adherence to company’s policies the safeguarding of its assets theprevention and detection of frauds and errors the accuracy and completeness of theaccounting records and the timely preparation of reliable financial information asrequired under the Companies Act 2013.

Auditors’ Responsibility

Our responsibility is to express an opinion on the Company's internal financialcontrols over financial reporting based on our audit. We conducted our audit in accordancewith the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting(the "Guidance Note") issued by the Institute of Chartered Accountants of Indiaand the Standards on Auditing prescribed under Section 143(10) of the Companies Act 2013to the extent applicable to an audit of internal financial controls. Those Standards andthe Guidance Note require that we comply with ethical requirements and plan and performthe audit to obtain reasonable assurance about whether adequate internal financialcontrols over financial reporting was established and maintained and if such controlsoperated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls system over financial reporting and their operatingeffectiveness. Our audit of internal financial controls over financial reporting includedobtaining an understanding of internal financial controls over financial reportingassessing the risk that a material weakness exists and testing and evaluating the designand operating effectiveness of internal control based on the assessed risk. The proceduresselected depend on the auditors’ judgement including the assessment of the risks ofmaterial misstatement of the financial statements whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the Company’s internal financial controlssystem over financial reporting.

Meaning of Infernal Financial Controls over Financial Reporting

A company's internal financial control over financial reporting is a process designedto provide reasonable assurance regarding the reliability of financial reporting and thepreparation of financial statements for external purposes in accordance with generallyaccepted accounting principles. A company's internal financial control overfinancialreporting includes those policies and procedures that (1) pertain to the maintenance ofrecords that in reasonable detail accurately and fairly reflect the transactions anddispositions of the assets of the company; (2) provide reasonable assurance thattransactions are recorded as necessary to permit preparation of financial statements inaccordance with generally accepted accounting principles and that receipts andexpenditures of the company are being made only in accordance with authorisations ofmanagement and directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorised acquisition use or disposition of thecompany's assets that could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls Over Financial Reporting

Because of the inherent limitations of internal financial controls over financialreporting including the possibility of collusion or improper management override ofcontrols material misstatements due to error or fraud may occur and not be detected.Also projections of any evaluation of the internal financial controls over financialreporting to future periods are subject to the risk that the internal financial controlover financial reporting may become inadequate because of changes in conditions or thatthe degree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion to the best of our information and according to the explanations givento us the Company has in all material respects an adequate internal financial controlssystem over financial reporting and such internal financial controls over financialreporting were operating effectively as at 31st March 2016 based on the internal controlover financial reporting criteria established by the Company considering the essentialcomponents of internal control stated in the Guidance Note on Audit of Internal FinancialControls Over Financial Reporting issued by the Institute of Chartered Accountants ofIndia.

For DELOITTE HASKINS & SELLS LLP
Chartered Accountants
(Firm Registration No. 117366W/W-100018)
Sunil S Kothari
Partner
Gurgaon May 17 2016 (Membership No. 208238)

Annexure 'B' to Independent

Auditors' Report

(Referred to in paragraph 2 under ‘Report on Other Legal and RegulatoryRequirements’ section of our report of even date)

(i) (a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets.

(b) The Company has a program of verification of fixed assets to cover all the items ina phased manner over a period of five years which in our opinion is reasonable havingregard to the size of the Company and the nature of its assets. Pursuant to the programcertain fixed assets were physically verified by the Management during the year. Accordingto the information and explanations given to us no material discrepancies were noticed onsuch verification.

(c) According to the information and explanations given to us and the records examinedby us and based on the examination of the registered sale deed provided to us we reportthat the title deeds comprising all the immovable properties of land and buildings whichare freehold are held in the name of the Company as at the balance sheet date. TheCompany does not have any immovable properties of leasehold land and building.

(ii) As explained to us the inventories were physically verified during the year bythe Management at reasonable intervals and no material discrepancies were noticed onphysical verification.

(iii) The Company has not granted any loans secured or unsecured to companies firmsLimited Liability Partnerships or other parties covered in the register maintained undersection 189 of the Companies Act 2013.

(iv) The Company has not granted any loans made investments or provide guarantees andhence reporting under clause 3 (iv) of the Order is not applicable.

(v) According to the information and explanations given to us the Company has notaccepted any deposit and hence reporting under clause 3 (v) of the Order is notapplicable.

(vi) The maintenance of cost records has been specified by the Central Government undersection 148(1) of the Companies Act 2013. We have broadly reviewed the cost recordsmaintained by the Company pursuant to the Companies (Cost Records and Audit) Rules 2014as amended prescribed by the Central Government under subsection (1) of Section 148 of theCompanies Act 2013 and are of the opinion that prima facie the prescribed costrecords have been made and maintained. We have however not made a detailed examinationof the cost records with a view to determine whether they are accurate or complete.

(vii) According to the information and explanations given to us in respect ofstatutory dues:

(a) The Company has generally been regular in depositing undisputed statutory duesincluding Provident Fund Employees’ State Insurance Income-tax Sales Tax ServiceTax Duty of Customs Duty of Excise Value Added Tax Cess and other material statutorydues applicable to it to the appropriate authorities.

(b) There were no undisputed amounts payable in respect of Provident FundEmployees’ State Insurance Income-tax Sales Tax Service Tax Duty of Customs Dutyof Excise Value Added Tax Cess and other material statutory dues in arrears as at31stMarch2016 for a period of more than six months from the date they became payable.

(c) Details of dues of Income-tax Sales Tax Service Tax Customs Duty Excise Dutyand Value Added Tax which have not been deposited as on 31st March 2016 on account ofdisputes are given below:

Nature of Due Forum where Dispute is Pending Period to which amount relates Amount Unpaid (Lakhs) Amount paid under protest (Lakhs)
Income Tax Act 1961
Income Tax Bombay High Court (HC) 1999-00 to 2002-03 311.02 814.98
Income Tax Income Tax Appellate Tribunal (ITAT) Pune 2003-04 and 2005-06 to 2011-12 8897.24 1167.76
Income Tax Commissioner of Income Tax (A) Pune 2004-05 03.51 05.49
Respective Sales Tax Laws- Value Added Tax (VAT) Central Sales Tax (CST) Works Contract Tax (WCT) and Entry Tax
VAT and CST Additional Commissioner (Appeal) Uttar Pradesh. 2011-12 to 2015-16 405.50 NIL
VAT and CST Additional Commissioner (Appeal) Maharashtra 2010-11 to 2011-12 1491.79 NIL
VAT and CST Assistant Commissioner Jharkhand 2010-11 05.66 NIL
VAT and CST Assistant Commissioner Karnataka 2009-10 to 2012-13 346.12 125.00
VAT and CST Deputy Commissioner (Appeal) Rajasthan 2010-11 & 2011-12 56.96 NIL
VAT and CST Deputy Commissioner (Appeal) Kerala 2009-10 to 2012-13 220.45 NIL
VAT and CST Deputy Commissioner (Appeal) Karnataka 2008-09 & 2009-10 52.58 24.95
VAT and CST Deputy Commissioner (Comm tax) Kerala 2013-14 66.85 NIL
VAT and CST Deputy Commissioner Jharkhand 1997-98 to 1999-00 & 2011-12 54.55 NIL
VAT and CST Deputy Commissioner (CT) Tamilnadu 2012-13 08.05 NIL
VAT and CST Deputy Commissioner (Appeals -1) Jaipur Rajasthan 2012-13 29.04 NIL
VAT and CST Deputy Commissioner (Appeals -1) West Bengal 2009-10 00.06 NIL
Entry Tax Deputy Commissioner Uttar Pradesh 2005-06 & 2006-07 26.00 NIL
VAT CST and WCT Joint Commissioner (A) Maharashtra. 2006-07 to 2009-10 & 2001-02 2785.72 937.73
VAT and CST Joint Commissioner (A)West Bengal 2010-11 to 2012-13 240.44 28.91
VAT and CST Sales tax officer Uttar Pradesh 2010-11 13.69 16.65
VAT and CST Special Commissioner Delhi 2007-08 341.48 NIL
VAT and CST Sr. Joint Commissioner West Bengal 2007-08 19.25 NIL
VAT and CST The Assistant Commissioner Commercial Tax Circle A Jaipur Rajasthan 2006-07 to 2009-10 51.05 NIL
VAT and CST The Assistant Commissioner Commercial Tax Circle A Gujarat. 2001-02 & 2008-09 48.44 10.00
VAT and CST The Deputy Commissioner Commercial Taxes (Appeal-1) Jaipur Rajasthan 2009-10 05.71 NIL
The Customs Act 1962
Penalty CESTAT Mumbai 2006-07 06.00 NIL
Customs Duty Deputy Commissioner (Customs) Mumbai 1994-95 81.25 NIL
The Central Excise Act 1944
Excise Duty Deputy Commissioner Excise Pune 2000-01 02.40 NIL

(viii) The Company has not taken any loans or borrowings from financial institutionsbanks and government or has not issued any debentures. Hence reporting under clause 3(viii) of the Order is not applicable to the Company.

(ix) The Company has not raised moneys by way of initial public offer or further publicoffer (including debt instruments) or term loans and hence reporting under clause 3 (ix)of the Order is not applicable.

(x) To the best of our knowledge and according to the information and explanationsgiven to us no fraud by the Company and no material fraud on the Company by its officersor employees has been noticed or reported during the year.

(xi) In our opinion and according to the information and explanations given to us theCompany has paid / provided managerial remuneration in accordance with the requisiteapprovals mandated by the provisions of section 197 read with Schedule V to the CompaniesAct 2013.

(xii) The Company is not a Nidhi Company and hence reporting under clause 3 (xii) ofthe Order is not applicable.

(xiii) In our opinion and according to the information and explanations given to us theCompany is in compliance with Section 188 and 177 of the Companies Act 2013 whereapplicable for all transactions with the related parties and the details of related partytransactions have been disclosed in the financial statements etc. as required by theapplicable accounting standards.

(xiv) During the year the Company has not made any preferential allotment or privateplacement of shares or fully or partly convertible debentures and hence reporting underclause 3 (xiv) of the Order is not applicable to the Company.

(xv) In our opinion and according to the information and explanations given to usduring the year the Company has not entered into any non-cash transactions with itsdirectors or persons connected with him and hence provisions of section 192 of theCompanies Act 2013 are not applicable.

(xvi) The Company is not required to be registered under section 45-I of the ReserveBank of India Act 1934.

For DELOITTE HASKINS & SELLS LLP
Chartered Accountants
(Firm Registration No. 117366W/W-100018)
Sunil S Kothari
Partner
Gurgaon May 17 2016 (Membership No. 208238)