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Honeywell Automation India Ltd.

BSE: 517174 Sector: Engineering
NSE: HONAUT ISIN Code: INE671A01010
BSE 00:00 | 20 Mar 34896.25 -94.25
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NSE 00:00 | 20 Mar 34852.95 -166.40
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OPEN 35449.00
PREVIOUS CLOSE 34990.50
VOLUME 114
52-Week high 44322.70
52-Week low 30162.00
P/E 77.38
Mkt Cap.(Rs cr) 30,848
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 35449.00
CLOSE 34990.50
VOLUME 114
52-Week high 44322.70
52-Week low 30162.00
P/E 77.38
Mkt Cap.(Rs cr) 30,848
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 EIGHT ANNUAL REPORT with the audited financialstatements of the Company for the financial year ended March 31 2022.

Key highlights of financial performance of your Company for the financial year 2021-22are provided below:

1. FINANCIAL RESULTS:

Particulars Year ended March 31 2022 Year ended March 31 2021 Year on Year Change
Sales & Other Income 303066 312675 (9609)
Operating profit 51557 67289 (15732)
Less: Interest 549 621 (72)
Less: Depreciation 5246 4866 380
Profit before tax for the year 45762 61802 (16040)
Less: Income tax and deferred tax expenses 11849 15798 (3949)
Profit after tax for the year 33913 46004 (12091)
Profit brought forward from the previous year 237340 197967 39373
Profit available for appropriations 271253 243971 27282

Revenue from operations registered a decline of 3.1% Profit before tax is 15.5% ofrevenue from operations as compared to 20.3% in previous year. Exports revenue decreasedover previous year by 19.6%.

2. DIVIDEND:

Payment of final dividend @INR 90/- per equity share of face value of INR 10/- each wasrecommended by the Board of Directors at their meeting held on May 12 2022 (PreviousYear: INR 85/- 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 7957 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 2021-22 after allappropriation and adjustments was INR 263738 Lakhs.

Pursuant to Section 134 (3)(j) there is no amount to be transferred to reserve duringthe period under review.

3. OPERATIONS:

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 improvingTotal Customer Experience through demonstrating agility of a small company and benefits ofthe scale of larger organisation excellence in Key

Business Processes Functional Transformation and Foundational 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 2022 the Company’s employee strength was 2950 as compared to3175 (full-time employees) as on March 31 2021. Women employees represent 16.9% of ourworkforce. The Company is fully compliant with the prevailing law namely Sexual Harassmentof Women at Workplace (Prevention

Prohibition and Redressal) Act 2013.

7. DIRECTORS AND KEY MANAGERIAL PERSONNEL:

As on March 31 2022 the Board of Directors comprises of Dr. Ganesh NatarajanChairman Independent

(Non-Executive Director) Ms. Neera Saggi Independent (Non-Executive Director) Mr.Ashish Gaikwad Managing Director (Executive Director) Dr. Akshay BellareNon-Independent (Non-Executive Director) Mr. Ashish Modi Non-Independent (Non-ExecutiveDirector) and Mr. Atul Pai Non-Independent (Non-Executive Director).

There was no change in the Composition of the Board during the period under review. Thefollowing change have taken place in the composition of Key Managerial Personnel:

At the Board Meeting held on February 11 2022 the Board of Directors took note ofthe resignation of Mr. Amit Kumar Tantia Chief Financial Officer of the Company witheffect from close of business hours of February 11 2022 since he has moved to a new rolewithin Honeywell Group Company and appointed

Mr. Pulkit Goyal as Chief Financial Officer (KMP) of the Company with effect fromFebruary 12 2022.

The Board places on record its appreciation of the valuable contribution made by Mr.Amit Kumar Tantia during his tenure as a Key Managerial Personnel.

As per the provisions of the Companies Act 2013 Mr. Atul Pai (DIN: 02704506)) retiresby rotation at the forthcoming AGM and being eligible offers himself forre-appointment. The Board recommends his re-appointment.

Mr. Ashish Gaikwad Managing Director Mr. Pulkit Goyal Chief Financial Officer andMs. Farah Irani Company

Secretary are the Key Managerial Personnel (KMP) of the Company pursuant to theprovisions of Companies Act 2013 as on the date of this Report.

The Board is of the opinion that the Independent Directors of the Company havefulfilled the conditions as specified in SEBI Listing Regulations are independent of themanagement possess requisite qualifications experience and expertise in the fields ofindustry knowledge board governance financials strategy leadership and they holdhighest standards of integrity.

8. BOARD MEETINGS:

During the financial year under review the Board of Directors of your Company duly metfour times on May 31 2021; August 5 2021; November 13 2021 and February 11 2022. Theintervening period between two Board meetings was well within the maximum gap of 120 daysas 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 Company’s 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 11 2022 and improvement areas were discussed as well asthe agreed action plan of previous year was reviewed.

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 affirming compliance with the Code ofConduct by Directors and Senior Management for the financial year ended March 31 2022 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-profit 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 Company’s website athttps://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 41st AGM ofthe Company and on such remuneration as approved by the shareholders at 36thAGMwhich 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 qualifications 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 2022. 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.

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 applicable to your Company for the financial year 2021-22. The Cost Audit Report forthe financial year ended March 31 2022 is due to be filed on September 27 2022. The CostAudit Report for the financial year ended March 31 2021 was filed on August 30 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 2022-23. The Board ofDirectors at its meeting held on May 12 2022 pursuant to recommendation of the AuditCommittee appointed C S Adawadkar & Co. as the Cost Auditor for the financial yearending March 31 2023 at a remuneration of INR 700000/- plus GST and re-imbursement ofout-of-pocket expenses. The remuneration is placed before the Annual General Meeting forratification 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 2022.

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

J B Bhave & Co Practicing Company Secretaries as Secretarial Auditors of theCompany for the financial year 2021-22. The report of the Secretarial Auditors is enclosedas "Annexure - 2" to this report. The Secretarial Audit Report does not containany qualification 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) Rules 2014 are enclosed herewith as"Annexure- 3".

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 identification 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 at 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 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:

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 2013 amounting to INR 253910/- was transferred during the financial year2021-22 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 theperiod ended March 31 2015 the

Company has dispatched the communication individually to the concerned shareholderswhose equity share(s) were liable to be transferred to IEPF under the rules for takingappropriate action(s).

Members who have not encashed the dividend warrant(s) so far for the period ended

March 31 2015 or any subsequent financial years are requested to make their claim byemailing the signed documents at csg-unit@tcplindia.co.in and courier/post the originalsigned documents at the Company(s) Registered office or to the Office of the Registrar andTransfer Agents: TSR Consultants Pvt. Ltd. (previously TSR Darashaw Consultants Pvt. Ltd).It shall be noted that once the dividend is transferred to the Investor

Education and Protection Fund as above no claim shall lie with the Company in respectof 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 and Remuneration of ManagerialPersonnel)

Rules 2014 is provided in "Annexure 6" forming part of this Report. As perthe first proviso to Section 136(1) of the Act the Annual Report is being sent to themembers excluding the aforesaid annexure. The said information is available for inspectionat the registered office of the Company during working hours. Any member interested inobtaining such information may write to the Company Secretary and the same will befurnished on request.

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 Managerial Personnel) Rules 2014 are attached tothis Report as

"Annexure 4" - Statement of Disclosure of Remuneration.

The Nomination and Remuneration Policy of the Company is available on the website ofthe Company at 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 (PREVENTION

PROHIBITION 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 312022 passed by the regulators or courts or tribunals impacting the going concern statusand 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 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 annexed andform 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 https://www.honeywell.com/content/dam/honeywellbt/en/documents/downloads/india-hail/financials/annual-reports/draft-annual-return-2021-22.pdf

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 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 a part 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 2022 and of the profitfor the year April 1 2021 to March 31 2022;

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 confirm 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 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. The policy is also available onthe

Company’s website athttps://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.

37. GENERAL DISCLOSURES:

Your Directors state that no disclosure or reporting is required in respect of thefollowing items as there were no transactions on these items during the year under review:

1. Issue of Equity Shares with differential rights as to dividend voting or otherwise.

2. Issue of Equity Shares (including Sweat Equity Shares) to employees of your Companyunder any scheme.

3. Your Company has not resorted to any buy back of its Equity Shares during the yearunder review.

4. Your Company does not have any subsidiaries. Hence neither the Managing Directornor the Whole-time Directors of your Company received any remuneration or commissionduring the year from any of its subsidiaries.

5. No significant or material orders were passed by the Regulators or Courts orTribunals which impact the going concern status and your Company’s operations infuture.

6. No fraud has been reported by auditors under sub-section (12) of section 143.

7. The details of difference between amount of the valuation done at the time ofone-time settlement and the valuation done while taking loan from the Banks or FinancialInstitutions along with the reasons thereof - Not Applicable 8. The details of applicationmade or any proceeding pending under the Insolvency and Bankruptcy Code 2016 (31 of 2016)during the year along with their status as at the end of the financial year - Not

Applicable

38. ACKNOWLEDGMENT:

The Board of Directors would like to place on record its appreciation and thanks to allits employees for their contribution. The Board wishes to acknowledge the support it hasreceived from its shareholders investors customers vendors regulatory authorities andbankers.

For and on behalf of Board of Directors of
Honeywell Automation India Limited
Dr. Ganesh Natarajan
Chairman
Pune May 12 2022

.