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Honeywell Automation India Ltd.

BSE: 517174 Sector: Engineering
NSE: HONAUT ISIN Code: INE671A01010
BSE LIVE 15:40 | 18 Aug 13005.60 191.80
(1.50%)
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NSE 15:31 | 18 Aug 12975.60 53.95
(0.42%)
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OPEN 12900.00
PREVIOUS CLOSE 12813.80
VOLUME 220
52-Week high 13344.00
52-Week low 8021.00
P/E 61.60
Mkt Cap.(Rs cr) 11,497
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 12900.00
CLOSE 12813.80
VOLUME 220
52-Week high 13344.00
52-Week low 8021.00
P/E 61.60
Mkt Cap.(Rs cr) 11,497
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Honeywell Automation India Ltd. (HONAUT) - Director Report

Company director report

Dear Members

The Directors present the THIRTY SECOND ANNUAL REPORT with the auditedstatements of accounts of the Company for the year ended March 312016.

1. FINANCIAL RESULTS:

(Rs. in lacs)

Particulars Year ended March 312016 Period ended March 312015*
Sales & Other Income 221095 242611
Operating Profit 23742 23454
Less: Interest 38 44
Depreciation 1540 1686
Profit for the year (Before Exceptional Item) 22164 21724
Exceptional Item - 4002
Profit for the year (After Exceptional Item) 22164 17721
Provision for tax 8490 7684
Deferred Tax Adjustment 168 (1382)
Deferred Tax Adjustment related to earlier year (345)
PROFIT AFTER TAX 13851 11420
Profit brought forward from the previous year 70253 61305
Profit available for appropriations 84104 72725
APPROPRIATIONS
General Reserve 1385 1142
Proposed Dividend 884 1105
Tax on proposed dividend 180 225
BALANCE CARRIED FORWARD 81655 70253

*2014-15 represents a 15 month period.

2. DIVIDEND:

Payment of final dividend @ Rs.10/- per equity share of Rs.10/- each was recommended bythe Board in their meeting held on May 172016. The dividend if approved by the membersat the ensuing Annual General Meeting (AGM) will result in a total cash pay-out of Rs.1064 lacs including dividend distribution tax.

3. TRANSFER TO RESERVES:

The Company proposes to transfer Rs.1385 lacs to the General Reserve out of the amountavailable for appropriation and an amount of Rs. 81655 lacs is proposed to be retained inthe Profit and Loss account.

4. OPERATIONS:

The Management Discussion & Analysis Report annexed herewith provides full detailsof operational performance and business analysis of the following business units.

• Honeywell Process Solutions (HPS) serves core industrial sectors ofRefining Oil & Gas Pulp & Paper Metal and Cement etc.

• Honeywell Building Solutions (HBS) provides solutions and services forCommercial & Industrial Buildings IT & ITES industry Hospitals Hotels Airportsetc.

• Environmental & Energy Solutions (E&ES) serves multiple brandsthrough channels and offers environmental and combustion products and solutions tocommercial hospitality and industrial segments.

• Sensing & Productivity Solutions (S&PS) business provides varioussensors and switches to manufacturing and automobile industry. This business servesprimarily OEMs in various manufacturing industries such as auto medical instrumentationIT etc.

• Exports - Global Services (GS) & Global Manufacturing (GM) addressesmanufacturing and engineering services needs of Honeywell along with some othernon-Honeywell customers across the globe leveraging the competitive advantage of costskills and knowledge.

5. HONEYWELL OPERATING SYSTEM (HOS):

Your company is continuing on the operational excellence journey with strong focus ondriving the Honeywell Operating System (HOS). HOS is favorably impacting Safety QualityDelivery Cost and Inventory metrics. In 201516 the major part of the GS supportingHoneywell Process Solutions has been sustained at Silver Level. The Global BusinessOperations of HBS achieved the feat of HOS Bronze certification in June-2015 and isstriving towards HOS silver certification in 2016. Honeywell Airport BusinessHBS Punecompleted their HOS Bronze certification in Aug 2015.

6. HUMAN RESOURCES:

Honeywell is committed to hiring developing and retaining the best minds in theindustry. The Company has key internal processes and initiatives that support this vision.The Company has developed a strong employee value proposition that focuses on key pillarsof challenging work that matters hiring and retaining the right people sustained focuson talent and leadership development differentiated rewards to drive exceptionalperformance and community engagement.

Talent management is a shared responsibility between business leaders and the HumanResources function at Honeywell enabling a strong focus on succession planning for keyroles and actively promoting internal move to drive career growth. Talent management issupported by a strong learning architecture that enables leadership and functionaldevelopment. This is supported by a Positive Employee Relations (PER) strategy that aimsto build an engaged and motivated workforce.

As on March 312016 the Company’s employee strength was 2930 as compared to 2842as on March 312015.

7. DIRECTORS AND KEY MANAGERIAL PERSONNEL:

During the year Mr. Surendra Rao resigned as the Chairman and Independent Directorw.e.f. the close of business hours of February 122016.

Mr. Suresh Senapaty was appointed as an Additional (Independent) Director w.e.f. March8 2016 and holds office upto the forthcoming AGM of the Company. Necessary resolution forappointment of Mr. Suresh Senapaty as Independent Director has been included in the Noticeconvening the AGM and details of the proposal are mentioned intheAnnexure to the AGMNotice.

As per the provisions of the Companies Act 2013 Ms. Nisha Gupta retires by rotationat the forthcoming AGM and being eligible offers herself for reappointment. The Boardrecommends her reappointment.

Ms. Sneha Padve resigned as the Company Secretary w.e.f. close of business hours of May4 2015. Ms. Sangeet Hunjan was appointed as the Company Secretary w.e.f. May 252015.

Mr. Vikas Chadha Managing Director Mr. Anurag Bhagania Chief Financial Officer (CFO)and Ms. Sangeet Hunjan Company Secretary are the Key Managerial Personnel (KMP) of theCompany pursuant to the provisions of Companies Act 2013 as on the date of this Report.

Mr. Anurag Bhagania will be moving to a new role within Honeywell as India FinanceLeader.and hence tendered his resignation as CFO in the Board Meeting held on May 172016 to be effective June 26 2016. Mr. R. Ravichandran was appointed as the CFO (KMP) ofthe Company in the Board Meeting of May 17 2016 and his appointment will be effectiveJune 272016.

The Board places on record its appreciation of the valuable contribution made by Mr.Surendra Rao Ms. Sneha Padve and Mr. Anurag Bhagania.

8. BOARD MEETINGS:

Four meetings of the Board of Directors were held during the year. Details about themeetings are available in the Report on Corporate Governance which forms a part of thisReport.

9. COMMITTEES OF BOARD:

The details regarding Committees of the Board of Directors of the Company are given inthe Report on Corporate Governance which forms a part of this Report.

10. DECLARATION BY INDEPENDENT DIRECTORS:

The Company has received necessary declarations from each Independent Director underSection 149(7) of the Companies Act 2013 that he meets the criteria of Independence laiddown in and Section 149(6) of the Companies Act 2013 and Regulation 25 of SEBI (ListingObligations and Disclosure Requirements) Regulations 2015

11. BOARD EVALUATION:

Pursuant to the provisions of the Companies Act 2013 and SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 the Board has carried out an annual evaluationof its own performance performance of its Committees as well as the directorsindividually.

The details regarding process and criteria for evaluation are given in the Report onCorporate Governance which forms a part of this Report.

12. CODE OF CONDUCT COMPLIANCE:

The declaration signed by the Managing Director affirming compliance with the Code ofConduct by Directors and Senior Management for the financial year ended March 312016 isgiven in Report on Corporate Governance which forms a part of this Report.

13. CORPORATE SOCIAL RESPONSIBILITY (CSR):

Your Company remains committed to making the world a better place and expandingcommunity outreach through CSR activities. As part of its initiatives under CSR theCompany in partnership with leading public and non-profit institutions has developedpowerful programs to address needs in the communities it serves. The Annual Report on CSRactivities in accordance with Section 135 of the Companies Act 2013 read with Companies(Corporate Social Responsibility Policy) Rules 2014 as amended from time to time isannexed herewith as 'Annexure-1'.

14. AUDITORS:

Statutory Audit

Pursuant to the provisions of Section 139 of the Companies Act 2013 and the rulesframed thereunder M/s Deloitte Haskins & Sells LLP (Firm Registration No.117366W/W-100018) were appointed as the Statutory Auditors for a period of 5 years to holdoffice from the conclusion of the last AGM of the Company held on July 212015 subject toratification of their appointment at every AGM.

A resolution seeking ratification of their appointment forms part of the Notice of AGM.

The Notes on financial statements referred to in the Auditors’ Report areself-explanatory and do not call for any further comments. The Auditors’ Report doesnot contain any qualification reservation or adverse remark.

Cost Audit

In terms of the provisions of Section 148 and other applicable provisions of theCompanies Act 2013 read with the Companies (Audit and Auditors) Rules 2014 Cost Auditwas not applicable to your Company for the financial year 2015-16.

Your Company filed the Cost Audit Report for the financial period ended March 312015duly audited by M/s C S Adawadkar & Co. Cost Accountants with the Ministry ofCorporate Affairs within the stipulated time period.

Secretarial Audit

In terms of the provisions of Section 204 of the Companies Act 2013 and Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the Board of Directorsof the Company appointed M/s. Bokil Punde & Associates Practising Company Secretariesas Secretarial Auditors of the Company for the financial year 2015-16. The report of theSecretarial Auditors is enclosed as ‘Annexure - 2’ to this report. TheSecretarial Audit Report does not contain any qualification reservation or adverseremark.

15. RELATED PARTY TRANSACTIONS

The particulars of contracts or arrangements with related parties referred to inSection 188(1) of the Companies Act 2013 in the prescribed Form AOC-2of Companies(Accounts) Rules 2014 are enclosed herewith as‘Annexure-3’.

16. RISK MANAGEMENT POLICY

Your Company has an Enterprise Risk Management Framework for identificationassessment monitoring and mitigation of operational financial and strategic businessrisks that are key in achieving our business objectives. Risks are identified andprioritized based on Impact and probability of occurrence. Mitigating controls areevaluated and reviewed periodically and assessed for enhancement.

17. COMPANY’S POLICY ON DIRECTORS’APPOINTMENT AND REMUNERATION

The Company’s policy on directors’ appointment and remuneration and othermatters provided in Section 178(3) of the Companies Act 2013 is enclosed herewith as‘Annexure - 4’.

18. WHISTLE BLOWER POLICY/VIGIL MECHANISM

The Company has established a vigil mechanism for its employees and Directors and toreport their genuine concerns. The details of the same are explained in the CorporateGovernance Report.

19. INTERNAL FINANCIAL CONTROLS

The Board has adopted the policies and procedures for ensuring the orderly andefficient conduct of its business including adherence to the Company’s policies thesafeguarding of its assets the prevention and detection of frauds and errors theaccuracy and completeness of the accounting records and the timely preparation ofreliable financial information.

20. HOLDING COMPANY

The Company is a subsidiary of Honeywell Asia Pacific Inc.USA the ultimate holdingCompany being Honeywell International Inc. USA

21. TRANSFER OF AMOUNTS TO INVESTOR EDUCATION AND PROTECTION FUND

As required under Section 205C of the Companies Act 1956 (Section 124 of the CompaniesAct 2013) the unclaimed dividend amount aggregating to Rs. 277690/- lying with theCompany for a period of seven years pertaining to year ended on December 312007 wastransferred during the year 2015 to the Investor Education and Protection Fundestablished by the Central Government.

22. PARTICULARS OF EMPLOYEES

A statement containing particulars of employees as required under Section 197(12) ofthe Companies Act 2013 read with Rule 5(2) of the Companies (Appointment and Remunerationof Managerial Personnel) Rules 2014 is provided in ‘Annexure - 8’ forming partof this report. Having regard to the provisions of the first proviso to Section 136(1) ofthe Act the Annual Report is being sent to the members excluding the aforesaid annexure.The said information is available for inspection at the registered office of the Companyduring working hours and any member interested in obtaining such information may write tothe Company Secretary and the same will be furnished on request. The full Annual Reportincluding the aforesaid information is available on the Company’s website.

The ratio of the remuneration of each director to the median employee’sremuneration and other details prescribed in Section 197(12) of the Companies Act 2013read with Rule 5(1) of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 are attached to this report as ‘Annexure - 5’ -Statement of Disclosure of Remuneration.

23. DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTIONPROHIBITION AND REDRESSAL) ACT 2013

Your Company respects and values diversity reflected in various backgroundsexperiences and ideas and is committed to providing employees with a workplace that isfree from discrimination or harassment. The Company has adopted a policy on preventionprohibition and redressal of sexual harassment at workplace in line with the provisions ofthe Sexual Harassment of Women at Workplace (Prevention Prohibition and Redressal) Act2013. Every employee is required to complete mandatory online training on ‘Preventionof Sexual Harassment at Workplace’. Senior employees and managers are required tocomplete two-hour live training.

The Company has Internal Complaints Committee (ICC) established in accordance with theaforesaid Act for addressing sexual harassment incidents.

No complaints on sexual harassment were received by the Company during the financialyear under review.

24. PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS UNDER SECTION 186

The Company has not made any loans guarantees or investments during the year underreview pursuant to the provisions of Section 186 of the Companies Act 2013.

25. MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY

There are no material changes and commitments affecting the financial position of theCompany which have occurred between the end of the financial year of the Company to whichthe financial statements relate and the date of the report.

26. SIGNIFICANT AND MATERIAL ORDERS

There are no significant and material orders passed by the regulators or courts ortribunals impacting the going concern status and Company’s operations.

27. DEPOSITS

The Company has not accepted any deposits from public and as such no amount on accountof principal or interest on deposits from public was outstanding as on the date of theBalance Sheet.

28. CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE

Information required under Section 134 of the Act read with Rule 8 (3) of the Companies(Accounts) Rules 2014 with respect to conservation of energy technology absorption andforeign exchange earnings/outgo is included in ‘Annexure-6’.

29. MANAGEMENT DISCUSSION & ANALYSIS/CORPORATE GOVERNANCE REPORT:

The Management Discussion and Analysis Report and Corporate Governance Report pursuantto SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 are annexedherewith and form part of the Directors Report.

30. EXTRACT OF ANNUAL RETURN

Pursuant to section 92(3) of the Companies Act 2013 and Rule 12(1) of the CompaniesManagement and Administration) Rules 2014 an extract of the Annual Return in Form No.MGT-9 is annexed herewith as‘Annexure-7’.

31. DIRECTORS’ RESPONSIBILITY STATEMENT:

Pursuant to provisions of Section 134(3)(c) and Section 134(5) of the Companies Act2013 your Directors make the following statements:

(a) in the preparation of the annual accounts the applicable accounting standards havebeen followed along with proper explanation relating to material departures if any;

(b) the Directors have selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the company as on March 312016 and of the profit forthe year April 12015 to March 312016;

(c) the Directors have taken proper and sufficient care 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;

(d) the Directors have prepared the annual accounts on a going concern basis;

(e) the Directors have laid down internal financial controls to be followed by thecompany and that such internal financial controls are adequate and were operatingeffectively; and

(f) the Directors have devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating effectively.

32. ACKNOWLEDGEMENT:

The Board of Directors would like to place on record its appreciation and thanks to allits employees for their contribution. The Board also wishes to acknowledge the support ithas received from its investors customers vendors regulatory authorities and bankers.

For and on behalf of the Board
Suresh Senapaty
Gurgaon May 17 2016 Chairman
DIN:00018711
Registered Office:
56 & 57 Hadapsar Industrial Estate
Pune 411 013