The Directors present the THIRTY SEVENTH ANNUAL REPORT with the auditedfinancial statements of the Company for the financial year ended March 31 2021.
Key highlights of financial performance of your Company for the financial year 2020-21are provided below:
1. FINANCIAL RESULTS:
(INR in lakhs)
|Particulars ||Year ended March 31 2021 ||Year ended March 31 2020 ||Year on Year Change |
|Sales & Other Income ||312675 ||338766 ||(26091) |
|Operating pro t ||67289 ||73477 ||(6188) |
|Less: Interest ||621 ||687 ||(66) |
|Less: Depreciation ||4866 ||4135 ||731 |
|Pro t before tax for the year ||61802 ||68655 ||(6853) |
|Less: Income tax and deferred tax expenses ||15798 ||19507 ||(3709) |
|Pro t after tax for the year ||46004 ||49148 ||(3144) |
|Pro t brought forward from the previous year ||197967 ||153616 ||44351 |
|Pro t available for appropriations ||243971 ||202764 ||41207 |
Revenue from operations registered a decline of 7.5% Pro t before tax is 20.3% ofrevenue from operations as compared to 20.9% in previous year. Exports revenue decreasedover previous year by 4%.
Payment of nal dividend @ INR 85/- per equity share of face value of INR 10/- each wasrecommended by the Board of Directors at their meeting held on May 31 2021 (PreviousYear: INR 75/- per equity share). The dividend if approved by the Members at the ensuingAnnual General Meeting will result in a total cash pay-out of NR 7514 lakhs. YourCompany is in compliance with its Dividend Distribution Policy as approved by the Board.
The closing balance of the retained earnings of the Company for FY 2020-21 after allappropriation and adjustments was INR 237340 Lakhs.
Pursuant to Section 134 (3)(j) there is no amount to be transferred to reserve duringthe period under review.
The Management Discussion and Analysis Report annexed herewith provides full details ofoperational performance and business analysis of the Company.
4. INDUSTRY OUTLOOK:
The details regarding Industry Outlook are given in the Management Discussion andAnalysis Report which forms a part of this report.
5. HONEYWELL OPERATING SYSTEM (HOS):
Your Company continues to be focused on Honeywell Operating System (HOS) whichencompasses end-to-end business system institutionalisation to enable and sustainexceptional growth along with productivity improvements through Total Customer ExperienceNew Product Introduction Order to Cash and Integrated Business Planning. The foundationof HOS is Lean/Six Sigma Order to Cash Velocity Product Development Agile CMMIHoneywell User Experience Commercial Excellence and Working Capital.
The Pune Fulgaon Factory and Global Services are at Silver level. Your Company isaspiring for higher level of
HOS maturity allowing them to be competitive by improving Total Customer Experiencethrough demonstrating agility of a small company and benefits of the scale of largerorganisation excellence in Key Business Processes Functional Transformation andFoundational initiatives.
6. 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 entrepreneurial culture that allows us tobring 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 Labour and Employment Relations framework which elicits feedbackin our factory and supports action planning to drive engagement at all levels in theorganisation.
As on March 31 2021 the Companys employee strength was 3175 as compared to 3310(full-time employees) as on March 31 2020. Women employees represent 17.9% of ourworkforce. The Company is fully compliant with the prevailing law namely Sexual Harassmentof Women at Workplace (Prevention Prohibition and Redressal)
7. DIRECTORS AND KEY MANAGERIAL PERSONNEL:
During the period under review and till date of this Report the following changes havetaken place in the composition of the Board of Directors:
1. Expiration of tenure of Mr. Suresh Senapaty (DIN: 00018711) as an IndependentDirector and Chairman effective close of business hours on March 7 2021 (from March 82016 to March 7 2021).
2. Appointment of Dr. Ganesh Natarajan (DIN: 00176393) as an Independent(Non-Executive) Director for a term of 5 ( ve) years with effect from March 8 2021 toMarch 7 2026. The said appointment is subject to approval of the shareholders at the 37thAnnual General Meeting (AGM) of the Company. Further appointment of Dr. Ganesh Natarajanas a Chairman of the Board of Directors of the Company effective March 8 2021.
3. Resignation of Ms. Nisha Gupta (DIN: 02331771) as a Director with effect from closeof business hours on May 12 2020 due to other professional commitments and appointment ofMr. Davies Walker (DIN: 08737978) (Additional Director) with effect from May 13 2020.Further Mr. Davies Walker who was appointed as a Director at the 36th AnnualGeneral Meeting held on August 18 2020 resigned as a Director with effect from end of dayNovember 8 2020 due to other professional commitments.
4. Appointment of Mr. Atul Pai (DIN: 02704506) as an Additional Director (Non-ExecutiveDirector) of the Company with effect from November 9 2020. The said appointment as aDirector is subject to approval of the shareholders at the 37th Annual GeneralMeeting of the Company.
The Board places on record its appreciation of the valuable contribution made by Mr.Suresh Senapaty Ms. Nisha Gupta and Mr. Davies Walker during their tenure as a Directorson the Board.
As per the provisions of the Companies Act 2013 Mr. Ashish Modi (DIN: 07680512)retires by rotation at the forthcoming AGM and being eligible offers himself forre-appointment. The Board recommends his re-appointment.
Mr. Ashish Gaikwad Managing Director Mr. Amit Tantia Chief Financial Of cer and Ms.Farah Irani Company Secretary are the Key Managerial Personnel (KMP) of the Companypursuant to the provisions of Companies Act 2013 as on the date of this Report.
8. BOARD MEETINGS:
During the financial year under review the Board of Directors of your Company duly metsix times on May 22 2020; August 6 2020; November 9 2020; February 4 2021 February 52021 and March 4 2021. The intervening period between two Board meetings was well withinthe maximum gap of 120 days as prescribed under the provisions of the Companies Act 2013.
Details of attendance at the Board Meetings is provided in the Corporate GovernanceReport which forms part of this Annual Report.
9. COMMITTEES OF BOARD:
The Companys Board has the following committees as per the requirements of theListing Regulations and
Companies Act 2013:
1. Audit Committee
2. Nomination and Remuneration Committee
3. Corporate Social Responsibility Committee
4. Stakeholders Relationship Committee
5. Risk Management Committee
Details of terms of reference of the Committees Committee membership and attendance atmeetings are provided in the Corporate Governance Report which forms part of this AnnualReport.
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/she meets the criteria of Independencelaid down in and Section 149(6) of the Companies Act 2013 and Regulation 25 of SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015.
11. 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 at the Board
Meeting held on February 4 2021 and improvement areas were discussed as well asreviewed the agreed action plan of previous year.
Details regarding process and criteria for evaluation are given in the Report onCorporate Governance which forms a part of this Annual Report.
12. CODE OF CONDUCT COMPLIANCE:
The declaration signed by the Managing Director af rming compliance with the Code ofConduct by Directors and Senior Management for the financial year ended March 31 2021 isgiven in Report on Corporate Governance which forms a part of this Annual Report.
13. CORPORATE SOCIAL RESPONSIBILITY:
Your Company remains committed to making the world a better place and expandingcommunity outreach. As part of its initiatives under Corporate Social Responsibility(CSR) the Company in partnership with leading non-pro t institutions has developedeffective programmes to address the needs in the communities it serves. The Annual Reporton CSR activities in accordance with Section 135 of the Companies Act 2013 read withCompanies (Corporate Social Responsibility Policy) Rules 2014 as amended from time totime is annexed herewith as "Annexure - 1" and a copy of the CSR Policy is alsoavailable on the Companys website at the following link:https://www.honeywell.com/content/dam/honeywellbt/en/documents/downloads/india-hail/policies/corporate-social-responsibility-policy.pdf
14. AUDITORS: Statutory Audit:
Pursuant to the provisions of Section 139 of the Companies Act 2013 and the rulesframed thereunder Deloitte Haskins & Sells LLP (Firm RegistrationNo.117366W/W-100018) were re-appointed as the Statutory Auditors for a period of 5 yearsat the 36th Annual General Meeting of the Company to hold office from the conclusion ofthe 36th Annual General Meeting (AGM) up to the conclusion of the 41stAGM of the Company and on such remuneration as approved by the shareholders at 36thAGM which is re-produced below. The remuneration payable to the Statutory Auditor for theaforesaid term on an annual basis is as under:
|Particulars ||Proposed per annum* 2020-21 to 2025-26 |
|Statutory Audit Fees and Limited Review Fees ||INR 3632000 |
* Subject to addition or reduction upto 10% with prior approval of Audit Committeeand Board.
Further in addition to the above the Statutory Auditors are also entitled to fees forothers service like Audit of Internal Financial Controls Tax Audit and Certificates etc.subject to prior approval of Audit Committee and Board.
Statutory Auditors Report:
There are no quali cations reservations or adverse remarks made by Deloitte Haskins& Sells LLP (Firm Registration No.117366W/W-100018) Statutory Auditors in theirreport for the financial year ended March 31 2021. The Notes on financial statementsreferred to in the Auditors Report are self-explanatory.
Pursuant to provisions of section 143 (12) of the Companies Act 2013 the StatutoryAuditors have not reported any incident of fraud to the Audit Committee during the yearunder review.
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 applicable to your Company for the financial year 2020-21. The Cost Audit Report forthe financial year ended March 31 2021 is due to be led on September 27 2021.
In terms of the provisions of Section 148 and other applicable provisions of theCompanies Act 2013 read with Rule 14 of the Companies (Audit and Auditors) Rules 2014Cost Audit is applicable to your Company for the financial year 2021-22. The Board ofDirectors at its meeting held on May 31 2021 pursuant to recommendation of the AuditCommittee appointed C S Adawadkar & Co. as the Cost Auditor for the financial yearending March 31 2022 at a remuneration of INR 700000/- plus GST and re-imbursement ofout-of-pocket expenses. The remuneration is placed before the Annual General Meeting forrati cation of the members.
The Company has maintained the cost accounts and records as specified by the CentralGovernment under sub-section (1) of section 148 of the Companies Act 2013 for thefinancial year ended March 31 2021.
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 J B Bhave & Co Practicing Company Secretaries as SecretarialAuditors of the Company for the financial year 2020-21. The report of the SecretarialAuditors is enclosed as "Annexure - 2" to this report. The Secretarial AuditReport does not contain any quali cation reservation or adverse remark.
15. 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". https://www.honeywell.com/content/dam/honeywellbt/en/documents/downloads/india-hail/policies/Related%20Party%20Transactions%20Policy%202019.pdf
16. RISK MANAGEMENT:
Your Company has an Enterprise Risk Management framework administered by the RiskManagement Committee to develop implement and monitor the effectiveness of riskmanagement processes for the Company. This framework enables identi cation assessmentmonitoring and mitigation of strategic operational compliance and financial risks thatare key to achieving our business objectives. Risks are identified evaluated andprioritised based on their likelihood of occurrence and severity of business impact. Majorrisks identified by the businesses and functions are systematically addressed throughmitigation plan and governance and reviewed by the Risk Management Committee and AuditCommittee/Board.
17. 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 available on the website of theCompany https://www.honeywell.com/in/en/hail
18. WHISTLE BLOWER POLICY / VIGIL MECHANISM:
In line with requirement under Section 177(9) and (10) and Regulation 22 of SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015 your Company hasestablished a whistle blower/vigil mechanism for its employees and Directors to reporttheir genuine concerns. The details of the same are explained in the Corporate GovernanceReport.
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 Companys 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:
During the financial year under review the Company is a subsidiary of HAIL MauritiusLimited the ultimate holding Company being Honeywell International Inc. USA. The Companydoes not have any Joint Venture(s) or Associate Company(s) or Subsidiary Company(s).
21. TRANSFER OF AMOUNTS TO INVESTOR EDUCATION AND PROTECTION FUND
As required under Section 124 of the Companies Act 2013 the unclaimed dividend lyingwith the Company for a period of seven years pertaining to the financial year endedDecember 31 2012 amounting to INR 242980/- was transferred during the financial year2020-21 to Investor Education and Protection Fund established by the Central Government.
Pursuant to the Investor Education and Protection Fund Authority (Accounting AuditTransfer and Refund) Second Amendment Rules 2017 for the dividend declared for thefinancial year ended December 31 2013 there were no shareholders whose equity share(s)were liable to be transferred to IEPF under the rules for taking appropriate action(s).
Members who have not encashed the dividend warrant(s) so far for the financial yearending December 31 2013 or any subsequent years are requested to make their claim byemailing the signed documents at firstname.lastname@example.org and courier/post the originalsigned documents at the Company(s) Registered office or to the Office of the Registrar andTransfer Agents: TSR Darashaw Consultants Pvt. Ltd. (previously TSR Darashaw Ltd.). Itshall be noted that once the dividend is transferred to the Investor Education andProtection Fund as above no claim shall lie with the Company in respect of such amount.
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 andRemuneration of Managerial Personnel) Rules 2014 is provided in "Annexure 6"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 ratio of the remuneration of each Director to the median employeesremuneration 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 4" - Statementof Disclosure of Remuneration.
The Nomination and Remuneration Policy of the Company is available on the website ofthe Company at the weblink https://www.honeywell.com/content/dam/honeywellbt/en/documents/downloads/india-hail/policies/Nomination-and-Remuneration-Policy.pdf
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 provisionsof the Sexual Harassment of Women at Workplace (Prevention Prohibition and Redressal)Act 2013. Every employee is required to complete mandatory online training on Preventionof Sexual Harassment at Workplace.
The Company has Internal Complaints Committees (IC) established in accordance with theaforesaid Act for addressing sexual harassment incidents.
No complaint on sexual harassment was received by the Company during the financial yearunder 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 during the financial year ended March 312021 passed by the regulators or courts or tribunals impacting the going concern statusand Companys 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 in accordance with the Companies Act 2013 read with Companies (Acceptanceof Deposits) Rules 2014 and amendments thereto.
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 5".
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 annexedand form part of the Annual Report.
30. ANNUAL RETURN:
Pursuant to Section 92 (3) of the Companies Act 2013 and Rule 12 (1) of the CompaniesManagement and Administration) Rules 2014 the annual return is available on the websiteof the Company at the weblink: https://www.honeywell.com/content/dam/honeywellbt/en/documents/downloads/india-hail/financials/annual-reports/Annual-Return-2020-21.pdf
31. LEGAL COMPLIANCE REPORTING:
The Head Legal the Company Secretary and Chief Financial Of cer 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 compliance management tool to review and monitor compliances withlaws applicable to the respective function. Additionally the Company has a practice ofobtaining quarterly compliance certificates from various functional heads for compliancewith laws applicable to the respective function. A consolidated report on compliance withapplicable laws is presented to the Board every quarter for review. To take care of thecontinuously evolving compliance scenario the Company is constantly striving tostrengthen the compliance reporting framework.
32. CORPORATE GOVERNANCE REPORT:
Your Company believes in adopting best practices of corporate governance.
As per regulation 34 of the Listing Regulations a separate section on corporategovernance practices followed by your Company together with a certificate from BokilPunde & Associates Company Secretaries on compliance with corporate governance normsunder the Listing Regulations is provided in Corporate Governance Report which forms apart of this Annual Report.
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 31 2021 and of the profitfor the year April 1 2020 to March 31 2021;
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;
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. COMPLIANCE WITH SECRETARIAL STANDARDS:
Your Directors con rm that the Secretarial Standards issued by the Institute ofCompanies Secretaries of India as applicable to the Company have been duly compliedwith.
35. DIVIDEND DISTRIBUTION POLICY:
The SEBI (Listing Obligations and Disclosure Requirements) (Second Amendment)Regulations 2016 read with Noti cation dated July 8 2016 mandate formulation of adividend distribution policy by Top 500 listed entities based on market capitalisation. Incompliance with the Regulation the Company has formulated a dividend distribution policyprescribing the parameters for the dividend distribution. The policy is also available onthe Companys website at the following link:https://www.honeywell.com/content/dam/honeywellbt/en/documents/downloads/india-hail/policies/dividend-distribution-policy.pdf
36. BUSINESS RESPONSIBILITY REPORT:
The SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 mandatesinclusion of the Business Responsibility Report (BRR) as a part of the annual report forTop 500 listed entities based on market capitalisation. In compliance with the Regulationthe BRR 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 places on record its appreciation ofthe valuable contributions made by
Mr. Suresh Senapaty Ms. Nisha Gupta and Mr. Davies Walker during their tenure asDirectors. The Board wishes to acknowledge the support it has received from itsshareholders investors customers vendors regulatory authorities and bankers.
| ||For and on behalf of Board of Directors of |
| ||Honeywell Automation India Limited |
| ||Dr. Ganesh Natarajan |
|Pune May 31 2021 ||Chairman |
56 & 57 Hadapsar Industrial Estate
Pune 411 013 Maharashtra
CIN: L29299PN1984PLC017951 Tel: +91 20 7114 8888