The Directors present the THIRTY FOURTH ANNUAL REPORT with the audited financialstatements of the Company for the financial year ended March 31 2018.
1. FINANCIAL RESULTS:
| || ||(Rs. in lakhs) |
|Particulars ||Year ended March 312018 ||Year ended March 312017 |
|Sales & Other Income ||273126 ||248275 |
|Operating profit ||39671 ||32392 |
|Less: interest ||28 ||26 |
|Depreciation ||1520 ||1635 |
|Profit for the year ||38123 ||30731 |
|Income tax and deferred tax expenses ||13150 ||13786 |
|Profit for the period ||24973 ||16945 |
|Profit brought forward from the previous year ||97234 ||83047 |
|Profit available for appropriations ||122207 ||99992 |
Revenue from operations registered a growth of 10.4%. Profit before tax was 14.1% ofrevenue from operations as compared to 12.6% in previous year. Exports revenue increasedover previous year by 14.6%. This growth was achieved despite competitive challenges onpricing.
Payment of final dividend @ Rs. 32/- per equity share of Rs. 10/- each was recommendedby the Board of Directors at their meeting held on May 14 2018 (Previous Year : Rs. 10/-per equity share). The dividend if approved by the Members at the ensuing Annual GeneralMeeting will result in a total cash pay-out of Rs. 3411 lakhs including dividenddistribution tax.
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 strongly focused on its operational excellence journeyusing the Honeywell Operating System (HOS). HOS is favorably impacting safety qualitydelivery cost and inventory matrices. 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 Services supporting Honeywell Process Solutions hasremained at Silver Level with the aim of sustaining the organisation's maturity level in2018. The Global Services supporting Process Solutions business already a Silvercertified site is driving further maturity using HOS principles to achieve superiorquality and delivery experience for Honeywell customers.
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 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 inour factory and supports action planning to drive engagement at all levels in theorganization.
As on March 31 2018 the Company's employee strength was 3205 as compared to 2931(full-time employees) as on March 312017. Your Company had 455 women employees whichrepresents 14.2% of our workforce. The Company is fully compliant with the prevailing lawson Prevention of Sexual Harassment of Women at Workplaces. The Internal ComplaintsCommittee deals with all matters related to the subject in accordance with the tenets ofthe law.
7. DIRECTORS AND KEY MANAGERIAL PERSONNEL:
During the year under review Ms. Tina Pierce (Non-Executive Director) resigned as aDirector with effect from the close of business hours of February 12 2018.
The Board of Directors at its meeting held on February 12 2018 appointed Mr. BrianBuffington (Non-Executive Director) as an Additional Director effective February 13 2018and Mr. Buffington holds office upto the forthcoming Annual General Meeting (AGM) of theCompany. Necessary resolution for appointment of Mr. Brian Buffington as a Director hasbeen included in the Notice convening the AGM and the details of the proposal arementioned in the Annexure to AGM Notice. The Board recommends his appointment.
Ms. Farah Irani was appointed as the Company Secretary with effect from May 16 2017.
As per the provisions of the Companies Act 2013 Mr. Vikas Chadha who was appointedin casual vacancy of Mr. Anant Maheshwari retires by rotation at the forthcoming AGM andbeing eligible he offers himself for re-appointment. The Board recommends hisre-appointment.
Mr. Ashish Gaikwad continues as the Managing Director Ms. Nisha Gupta and Mr. VikasChadha continue as Non-Executive Director and Mr. Suresh Senapaty and Mr. N. Srinathcontinue as Independent Directors on the Board.
Mr. Ashish Gaikwad Managing Director Mr. R. Ravichandran Chief Financial Officer andMs. 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.
Mr. R. Ravichandran would move to a new role within Honeywell Group Company and hencetendered his resignation as Chief Financial Officer of the Company in the Board Meetingheld on February 12 2018 effective close of business hours of May 15 2018.
Mr. Amit Kumar Tantia was appointed as Chief Financial Officer (KMP) of the Company inthe Board Meeting held on May 14 2018 with effect from May 16 2018.
The Board places on record its appreciation of the valuable contributions made by Ms.Tina Pierce and Mr. R. Ravichandran.
8. BOARD MEETINGS:
Six 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 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 12 2018.
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 31 2018 isgiven in Report on Corporate Governance which forms a part of this 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-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" and the copy of the CSR Policy is alsoavailable on the Company' website.
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 AGM of the Company held on July 21 2015 subject toratification of their appointment at every subsequent AGM. A resolution seekingratification of their appointment till 36th AGM forms part of the Notice of AGMand the same is recommended for your consideration and approval.
The Notes on financial statements referred to in the Auditors' Report areself-explanatory. The Auditors' Report does not contain any qualification reservation oradverse 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 2017-18.
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 2017-18. 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 Read with 8(2) of Companies (Accounts) Rules2014 are enclosed herewith as "Annexure - 3".
16. RISK MANAGEMENT
Your Company has an Enterprise Risk Management framework administered by the RiskCommittee 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 toachieving our business objectives. Risks are identified evaluated and prioritised basedon their likelihood of occurrence and severity of business impact. Major risks identifiedby the businesses and functions are systematically addressed through mitigation andgovernance.
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 enclosed herewith as"Annexure - 4".
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 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 124 of the Companies Act 2013 the unclaimed dividend lyingwith the Company for a period of seven years pertaining to the financial year endedDecember 312009 was transferred during the year 2017 to Investor Education andProtection Fund established by the Central Government.
The Ministry of Corporate Affairs (MCA) on October 16 2017 had notified the amendmentto Investor Education and Protection Fund Authority (Accounting Audit Transfer andRefund) Second Amendment Rules 2017 ("the IEPF Rules'') wherein the Company wasrequired to transfer Investor Education and Protection Fund all the shares whose dividendis lying in the Unpaid Dividend Account'' of the Company as unpaid orunclaimed for a period of seven consecutive years from the date of its transfer to thesaid Unpaid Dividend Account. The requisite transfer of shares to IEPF was required to becompleted by November 30 2017 and the Company has complied with the same and theaforesaid shares have been transferred by the Company to IEPF. The Company has uploadedthe details of the aforesaid transfer of shares on the website of IEPF (www.iepf.gov.in)and on the website of the Company at the following link:https://www.honeywell.eom/-/media/Honeywell_com/Files/en-in/Unclaimed-Dividends/Unclaimed-shares-trasnferred-to-IEPF-as-on-November-30-2017.pdf
Pursuant to the IEPF Rules for the dividend declared for the financial year endedDecember 31 2010 the Company had dispatched the communication individually to theconcerned shareholders whose equity share(s) were liable to be transferred to IEPF underthe rules for taking appropriate action(s). The Company had also issued public notice innewspapers as required under the IEPF Rules. The Company had uploaded the full details ofsuch shareholders and shares due for transfer to IEPF on the website of the Company at thefollowing link: https://www.honeywell.eom/-/media/Honeywell_eom/Files/en-in/Unelaimed-Dividends/Unelaimed-Shares-for-Tranfer-to-IEPF-as-on-February-21-2018.pdf
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 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.
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 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 Committees (ICC) established in accordance with theaforesaid Act for addressing sexual harassment incidents.
One complaint on sexual harassment was received by the Company during the financialyear under review and the matter was investigated and closed as on date of this report asper required process.
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 312018 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.
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 annexedand form part of the Board's 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. 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.
32. 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 312018 and of the profit forthe year April 12017 to March 312018;
(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.
33. COMPLIANCE WITH SECRETARIAL STANDARDS
Your Directors confirm that the Secretarial Standards issued by the Institute ofCompanies Secretaries of India as applicable to the Company have been duly compliedwith.
34. DIVIDEND DISTRIBUTION POLICY:
The SEBI (Listing Obligations and Disclosure Requirements) (Second Amendment)Regulations 2016 read with Notification 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 and the same is disclosed in"Annexure 8" to this Report and forms part of this Report. The policy is alsoavailable on the Company's website at the following link:https://www.honeywell.eom/-/media/Honeywell_com/Files/en-in/Policies/Dividend-Distribution-Policy.pdf
35. 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 wishes to acknowledge the support ithas received from its investors customers vendors regulatory authorities and bankers.
| ||For and on behalf of Board of Directors of |
| ||Honeywell Automation India Limited |
| ||Suresh Senapaty |
|Pune May 14 2018 ||Chairman |
|Registered Office: || |
|56 & 57 Hadapsar Industrial Estate || |
|Pune - 411 013 Maharashtra || |
|CIN: L29299PN1984PLC017951 || |
|Tel: +91 20 6603 9400; Fax: +91 20 6603 9800 || |
|Email: HAIL.InvestorServices@Honeywell.com || |
|Website: https://honeywell.com/country/in/Pages/hail.aspx || |