The Directors present the THIRTY THIRD ANNUAL REPORT with the audited statementsof accounts of the Company for the financial year ended March 312017.
1. FINANCIAL RESULTS:
| || ||(Rs. in lakhs) |
|Particulars ||Year ended March 312017 ||Year ended March 312016 |
|Sales & Other Income ||248275 ||224550 |
|Operating Profit ||32392 ||24194 |
|Less: Interest ||26 ||38 |
|Depreciation ||1635 ||1540 |
|Profit for the year ||30731 ||22616 |
|Income tax and Deferred Tax expenses ||13786 ||8497 |
|Profit for the period ||16945 ||14119 |
|Profit brought forward from the previous year ||83047 ||71643 |
|Profit available for Appropriations APPROPRIATIONS ||99992 ||85762 |
|General Reserve ||1694 ||1385 |
|Dividend Declared ||884 ||1105 |
|Tax on Dividend ||180 ||225 |
|BALANCE CARRIED FORWARD ||97234 ||83047 |
Revenue from Operations registered a growth of 10%. Profit before tax was 12.6% ofrevenue from operations as compared to 10.2% in previous year. Exports revenue increasedover previous year by 36%. This growth was achieved despite competitive challenges onpricing.
Payment of final dividend @ Rs. 10/- per equity share of Rs. 10/- each was recommendedby the Board of Directors at their meeting held on May 25 2017. The dividend if approvedby the Members at the ensuing Annual General Meeting will result in a total cash pay-outof Rs. 1064 Lakhs including dividend distribution tax.
3. APPROPRIATION TO GENERAL RESERVES:
The Company proposes to transfer Rs. 1694 Lakhs to the general reserve out of theamount available for appropriation and an amount of Rs. 97234 Lakhs is proposed to beretained in the profit and loss account.
The Management Discussion and Analysis Report annexed herewith provides full details ofoperational performance and business analysis of the Company.
5. INDUSTRY OUTLOOK:
The details regarding Industry Outlook are given in the Management Discussion andAnalysis Report which forms a part of this Report.
6. HONEYWELL OPERATING SYSTEM (HOS):
Your Company continues to be strongly focused on its operational excellence journeyusing the Honeywell Operating System (HOS). HOS is favorably impacting Safety QualityDelivery Cost and Inventory metrics. The Pune Integrated Supply Chain organisation hassustained its HOS Silver Excellence certification and is now pursuing the next milestoneof "World Class" in the new HOS Order-to-Cash Framework. In 2016-17 asignificant part of the Global Engineering Services supporting Process Solutions hasremained at Silver Level with the aim of sustaining the organisation's maturity level in2017. The Global Business Operations supporting Building Solutions achieved HOS Silvercertification in October 2016. The Global Engineering Services supporting ProcessSolutions already a silver certified site is driving further maturity using HOSprinciples to achieve superior quality and delivery experience for customers.
7. HUMAN RESOURCES:
Honeywell believes in the immense potential of its human capital and acknowledges thatour employees are the core growth engine for the Company. Your Company is committed tocreating an inclusive performance oriented and an entrepreneurial culture that allows usto bring the best out of every individual and team. Honeywell is committed to creating anequal opportunity workplace which promotes openness and diversity. Your Company has astrong employee value proposition that focuses on challenging work that matters hiringand retaining the right people sustained focus on talent and leadership developmentdifferentiated rewards to drive exceptional performance and community engagement.
Your Company deploys a Positive Employee Relations (PER) framework to get annualfeedback from all employees on key engagement factors to build an engaged and motivatedworkforce. Additionally a Labour and Employment Relations framework elicits feedback inall our factories and supports action planning to drive engagement at all levels in theorganisation.
As on March 312017 the Company's employee strength was 2931 as compared to 2930 as onMarch 312016. Your Company had 417 women employees which represents 14% of our workforce.The Company is fully compliant with the prevailing laws on Prevention of Sexual Harassmentof Women at Workplaces. The Internal Complaints Committee deals with all matters relatedto the subject in accordance with the tenets of the law.
8. DIRECTORS AND KEY MANAGERIAL PERSONNEL:
During the year Mr. Vikas Chadha resigned as Managing Director w.e.f. the close ofbusiness hours of July 312016. Mr. Anant Maheshwari resigned as Director w.e.f. the closeof business hours of August 10 2016. Mr. Vikas Chadha was appointed as Director witheffect from August 11 2016; in casual vacancy caused by resignation of Mr. AnantMaheshwari.
Mr. Ashish Gaikwad was appointed as Additional Director and Managing Director witheffect from October 12016 for the period of five years. His appointment as Director andManaging Director for the period of five years with effect from October 12016 was furtherapproved by shareholders pursuant to the necessary resolutions passed by Postal Ballot onDecember 9 2016.
Mr. Norman Gilsdorf resigned as Director w.e.f. the close of business hours of November9 2016. Ms. Tina Pierce was appointed as Director with effect from February 6 2017; incasual vacancy caused by resignation of Mr. Norman Gilsdorf.
Mr. Anurag Bhagania resigned as the Chief Financial Office w.e.f. the close of businesshours of June 26 2016. Mr. R. Ravichandran was appointed as the Chief Financial Officerwith effect from June 27 2016.
Ms. Sangeet Hunjan resigned as the Company Secretary w.e.f. close of business hours ofNovember 24 2016. Ms. Farah Irani was appointed as the Company Secretary w.e.f. May 162017.
As per the provisions of the Companies Act 2013 Ms. Tina Pierce who was appointed incasual vacancy of Mr. Norman Gilsdorf retires by rotation at the forthcoming AGM andbeing eligible she offers herself for re-appointment. The Board recommends herre-appointment.
Ms. Nisha Gupta continues to be Non-Executive Director and Mr. Suresh Senapaty and Mr.N. Srinath continue as Independent Directors on the Board.
Mr. Ashish Gaikwad Managing Director Mr. R. Ravichandran Chief Financial Officer(CFO) and Ms. Farah Irani 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.
The Board places on record its appreciation of the valuable contributions made by Mr.Norman Gilsdorf Mr. Anant Maheshwari Mr. Anurag Bhagania and Ms. Sangeet Hunjan.
9. 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.
10. 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.
11. 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.
12. BOARD EVALUATION:
Pursuant to the provisions of the Companies Act 2013 and SEBI (Listing Obligationsand Disclosure Requirements) Regulations 2015 the Board has carried out an annualevaluation of its own performance its Committees as well as the Directors individually.
The outcome of the Board evaluation was discussed by the Nomination & RemunerationCommittee and at the Board Meeting held on February 6 2017.
Details regarding process and criteria for evaluation are given in the Report onCorporate Governance which forms a part of this Report.
13. 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 31 2017 isgiven in Report on Corporate Governance which forms a part of this Report.
14. CORPORATE SOCIAL RESPONSIBILITY:
Your Company remains committed to making the world a better place and expandingcommunity outreach through CSR activities. As part of its initiatives under"Corporate Social Responsibility" (CSR) the Company in partnership withleading public and non-profit institutions has developed powerful programs to addressneeds in the communities it serves. The Annual Report on CSR activities in accordancewith Section 135 of the Companies Act 2013 read with Companies (Corporate SocialResponsibility Policy) Rules 2014 as amended from time to time is annexed herewith as"Annexure - 1" and the copy of the CSR Policy is also available on the Company'website.
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 AGM of the Company held on July 212015 subject toratification of their appointment at every subsequent AGM. A resolution seekingratification of their appointment forms part of the Notice of AGM and the same isrecommended for your consideration and approval.
The Notes on financial statements referred to in the Auditors' Report areself-explanatory and do not call for any further comments. The Auditors' Report does notcontain any qualification reservation or adverse remark.
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 2016-17.
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 Practicing Company Secretariesas Secretarial Auditors of the Company for the financial year 2016-17. The report of theSecretarial Auditors is enclosed as Annexure - 2' to this report. The SecretarialAudit Report does not contain any qualification reservation or adverse remark.
16. RELATED PARTY TRANSACTIONS
The particulars of contracts or arrangements with related parties referred to inSection 188(1) of the Companies Act 2013 Read with 8(2) of Companies (Accounts) Rules2014 are enclosed herewith as Annexure - 3'.
17. RISK MANAGEMENT
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.
Your Company has put in place an Enterprise Risk Management framework administered bythe Risk Committee to develop implement and monitor the effectiveness of risk managementprocesses for the company. This framework enables identification assessment monitoringand mitigation of strategic operational compliance and financial risks that are key inachieving our business objectives. Risks are evaluated and prioritised based on theirlikelihood of occurrence and severity of business Impact. Major risks identified by thebusinesses and functions are systematically addressed through mitigation and governance.
18. COMPANY POLICY ON DIRECTORS' APPOINTMENT AND REMUNERATION
The Company policy on Directors' appointment and remuneration and other matters asprovided in Section 178(3) of the Companies Act 2013 is enclosed herewith asAnnexure - 4'.
19. WHISTLE BLOWER POLICY / VIGIL MECHANISM
In line with requirement under Section 177 (9) and (10) and Regulation 22 of Securitiesand Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations2015 your Company has established a whistle blower/vigil mechanism for its employees andDirectors to report their genuine concerns. The details of the same are explained in theCorporate Governance Report.
20. 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.
21. HOLDING COMPANY
The Company is a subsidiary of Honeywell Asia Pacific Inc. USA the ultimate holdingCompany being Honeywell International Inc. USA.
22. TRANSFER OF AMOUNTS TO INVESTOR EDUCATION AND PROTECTION FUND
There was no dividend declared pertaining to financial year ended December 312008 andhence no unclaimed dividend was required to be transferred by the Company in 2016 to theInvestor Education and Protection Fund established by the Central Government.
Pursuant to the provisions of the Investor Education and Protection Fund Authority(Accounting Audit Transfer and Refund) [IEPF] Rules 2016 notified by Ministry ofCorporate Affairs effective 7th September 2016 the Company had dispatched thecommunication individually to the concerned shareholders whose equity share/s were liableto be transferred to IEPF under the Rules for taking appropriate action(s). The Companyhad also issued public notice in the Newspapers as required under the IEPF Rules.
The Company has uploaded the full details of such shareholders and shares due fortransfer to IEPF on its website at the following link:
Shareholders are requested to refer the link to verify the details of the shares thatare liable to be transferred to IEPF. The status of Unclaimed Shares liable to betransferred to IEPF as on March 312017 is as follows:
|No. of Shares that are dormant and due to transfer to IEPF: December 5 2016 (opening balance) ||10859 Shares [Pay date 17.04.2008] |
|No of claims received during the period ended March 312017 ||2 Investors for 300 Shares |
|No. of Shares Outstanding as on March 312017 ||10559 Shares |
23. 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 andRemuneration of Managerial Personnel) Rules 2014 is provided in Annexure 9'forming part of this Report. As per the first proviso to Section 136(1) of the Act theAnnual Report is being sent to the members excluding the aforesaid annexure. The saidinformation is available for inspection at the registered office of the Company duringworking hours. Any member interested in obtaining such information may write to theCompany 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's remunerationand other details prescribed in Section 197(12) of the Companies Act 2013 read with Rule5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014are attached to this report as Annexure 5' - Statement of Disclosure ofRemuneration.
24. 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 earlier adopted a policy onprevention prohibition and redressal of sexual harassment at workplace in line with theprovisions of the Sexual Harassment of Women at Workplace (Prevention Prohibition andRedressal) Act 2013. Every employee is required to complete mandatory online training onPrevention of Sexual Harassment at Workplace'.
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.
25. 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.
26. 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.
27. SIGNIFICANT AND MATERIAL ORDERS
There are no significant and material orders during the financial year ended March312017 passed by the regulators or courts or tribunals impacting the going concern statusand Company's operations.
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.
29. 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'.
30. 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 annexedand form part of the Directors Report.
31. 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'.
32. LEGAL COMPLIANCE REPORTING
The Head - Legal the Company Secretary and Chief Financial Officer of the Companymonitor the legal compliance reporting process and advise the Company on compliance issueswith respect to the laws of various jurisdictions in which the Company has its businessactivities.
The Company has a practice of obtaining quarterly compliance certificates from variousfunctional heads for compliance with laws applicable to the respective function. Aconsolidated report on compliance with applicable laws is presented to the Board everyquarter. To take care of the continuously evolving compliance scenario the Company isconstantly striving to strengthen the compliance reporting framework.
33. 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 312017 and of the profit forthe year April 12016 to March 312017;
(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.
34. DIVIDEND DISTRIBUTION POLICY:
The SEBI (Listing Obligations and Disclosure Requirements) (Second Amendment)Regulations 2016 read with Notification dated July 8 2016 mandates formulation ofDividend Distribution policy by Top 500 Listed Entities based on market capitalisation. Incompliance with the Regulation the Company has formulated dividend distribution policyprescribing the parameters for the dividend distribution and the same is disclosed inAnnexure 8' to this Report and forms part of this Report. The policy is alsoavailable on the Company's website at the following link-
35. BUSINESS RESPONSIBILITY REPORT:
The SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 mandatesinclusion of the Business Responsibility Report (BRR) as a part of Annual Report for Top500 Listed Entities based on market capitalization. In compliance with the Regulation theBRR forms part of this Annual Report.
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 of Directors of |
| ||Honeywell Automation India Limited |
| ||Suresh Senapaty |
| ||Chairman |
|Gurugram May 25 2017 || |
|Registered Office: || |
|56 & 57 Hadapsar Industrial Estate || |
|Pune 411 013 || |
A) CONSERVATION OF ENERGY:
Your Company continues to make every effort to conserve energy required for all itsoperations. Some of the key initiatives undertaken during the year ended March 312017 forthe same are as under:
Technical staff monitoring electrical load within the facility by touring thefacility at regular intervals.
AC and lighting are operated within office hours and the use is regulated afteroffice hours and holidays.
Heat Ventilation Air Conditioner STL (Thermal Storage Plant) used to reduce theload during peak hours.
Thermo conductive oil is used for all domestic air-conditioning units tominimize the power/cost.
Air-conditioner system revamped to support non-working hours so as to eliminatethe usage of Heat Ventilation Air Conditioner.
The Company has currently taken an Energy Project for Hadapsar facility.
The Company also received power factor credit time of day credit and promptdiscount during the year.
B) TECHNOLOGY ABSORPTION:
Your Company continues to have access to some of the latest products and technology ofHoneywell International Inc. the ultimate holding Company and roll out new products andtechnology in the Indian markets.
C) FOREIGN EXCHANGE EARNINGS AND OUTGO:
| ||(Rs. In Lakhs) |
|(i) Foreign exchange earned ||114350 |
|(ii) Foreign exchange used ||86011 |
| ||For and on behalf of the Board of Directors of |
| ||Honeywell Automation India Limited |
| ||Suresh Senapaty |
| ||Chairman |
|Gurugram May 25 2017 || |