Honeywell Automation India Limited
The Directors present the THIRTY SIXTH ANNUAL REPORT with the audited nancialstatements of the Company for the nancial year ended March 31 2020.
Key highlights of nancial performance of your Company for the nancial year 2019-20 areprovided below:
1. FINANCIAL RESULTS:
|Particulars ||Year ended March 31 2020 ||Year ended March 31 2019 ||Year on Year Change |
|Sales & Other Income ||338766 ||324561 ||4% |
|Operating pro t ||73400 ||57426 ||28% |
|Less: Interest ||687 ||348 ||97% |
|Less: Depreciation ||4058 ||1589 ||155% |
|Pro t before tax for the year ||68655 ||55489 ||24% |
|Less: Income tax and deferred tax expenses ||19507 ||19605 ||0% |
|Pro t after tax for the year ||49148 ||35884 ||37% |
|Pro t brought forward from the previous year ||153616 ||121143 ||27% |
|Pro t available for appropriations ||202764 ||157027 ||29% |
Revenue from operations registered a growth of 3.6% Pro t before tax is 20.9% ofrevenue from operations as compared to 17.5% in previous year. Exports revenue decreasedover previous year by 1.3%. This growth was achieved despite competitive challenges onpricing and COVID -19 pandemic.
Payment of nal dividend @ INR 75/- per equity share of face value of INR 10/- each wasrecommended by the Board of Directors at their meeting held on May 22 2020 (PreviousYear: INR 45/- per equity share). The dividend if approved by the Members at the ensuingAnnual General Meeting will result in a total cash pay-out of INR 6631 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 19-2020 after allappropriation and adjustments was INR 197967 Lakhs.
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 bene ts ofthe scale of larger organisation excellence in Key Business Processes FunctionalTransformation 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 the organisation.
As on March 31 2020 the Company's employee strength was 3310 as compared to 3251(full-time employees) as on March 31 2019. The women employee represents 17.2% 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:
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. Resignation of Mr. Vikas Chadha (DIN:06624266) and Mr. Brian Buf ngton(DIN:08060965) (Non-Executive Directors) with effect from close of business hours onOctober 21 2019 as they moved to a different role within Honeywell Group Company. TheBoard places on record its appreciation of the valuable contribution made by Mr. VikasChadha and Mr. Brian Buf ngton during their tenure as Directors.
2. Appointment of Mr. Akshay Bellare (DIN:07914236) and Mr. Ashish Modi (DIN:07680512)(Additional Directors) with effect from October 22 2019 subject to the approval ofshareholders at the forthcoming Annual General Meeting. Necessary resolution forappointment of Mr. Akshay Bellare and Mr. Ashish Modi as Directors has been included inthe Notice convening the AGM and the details of the proposal are mentioned in theAnnexure to AGM Notice. The Board recommends appointment of Mr. Akshay Bellare and Mr.Ashish Modi as Directors.
3. Expiration of tenure of Mr. N. Srinath (DIN:00058133) as an Independent Directoreffective close of business hours as on December 14 2019 (from December 15 2014 toDecember 14 2019). The Board places on record its appreciation of the valuablecontribution made by Mr. N. Srinath during his tenure as a Director.
4. Resignation of Ms. Nisha Gupta (DIN:02331771) (Director) with effect from close ofbusiness hours on May 12 2020 due to other professional commitments. The Board places onrecord its appreciation of the valuable contribution made by Ms. Nisha Gupta during hertenure as a Director.
5. Appointment of Mr. Davies Walker (DIN: 08737978) (Additional Director) with effectfrom May 13 2020 subject to the approval of shareholders at the forthcoming AnnualGeneral Meeting. Necessary resolution for appointment of Mr. Davies Walker has beenincluded in the Notice convening the AGM and the details of the proposal are mentioned inthe Annexure to AGM Notice. The Board recommends appointment of Mr. Davies Walker as aDirector.
As per the provisions of the Companies Act 2013 Mr. Ashish Gaikwad (DIN: 07585079)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 nancial year under review the Board of Directors of your Company duly metve times on May 13 2019; August 9 2019; October 25 2019; February 3 2020 and February4 2020. The intervening period between two Board meetings was well within the maximum gapof 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 Company's Board has the following committees as per the requirements of the ListingRegulations 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 and at the Board Meeting held on February 3 2020 and improvement areas werediscussed as well as reviewed 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 nancial year ended March 31 2020 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 Company's website at the following link: https://www.honeywell.com/content/dam/honeywell/les/india-hail/policies/corporate-social-responsibility-policy.pdf
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 appointed as the Statutory Auditors for a period of 5 years tohold of ce from the conclusion of the Annual General Meeting (AGM) of the Company held onJuly 21 2015 subject to rati cation of their appointment at every subsequent AGM. Aresolution seeking
rati cation of their appointment till the 36 AGM was approved at the Annual GeneralMeeting held on August 6 2018.
Pursuant to the recommendation by the Audit Committee and subject to approval ofmembers at the 36 Annual General Meeting of the Company the Board recommends there-appointment of Deloitte Haskins & Sells LLP
(FRN: 117366W/W-100018) Chartered Accountants as Statutory Auditors of the Company fora term of 5 years
from the conclusion of the 36 Annual General Meeting (AGM) up to the conclusion of the41 Annual General
Meeting of the Company. The details of the proposed remuneration is provided in theNotice of the 36 AGM.
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 their report for thenancial year ended March 31 2020. The Notes on nancial statements referred to in theAuditors' 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 nancial year 2019-20. The Cost Audit Report for thenancial year ended March 31 2020 is due to be led by September 27 2020.
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 nancial year 2020-21. The Board ofDirectors at its meeting held on May 22 2020 pursuant to recommendation of the AuditCommittee appointed C S Adawadkar & Co. as the Cost Auditor for the nancial yearending March 31 2021 at a remuneration of INR 665000/- 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 speci ed by the CentralGovernment under subsection (1) of section 148 of the Companies Act 2013 for the nancialyear ended March 31 2020.
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 Bokil Punde & Associates Practicing Company Secretaries asSecretarial Auditors of the Company for the nancial year 2019-20. The report of theSecretarial Auditors is enclosed as "Annexure - 2" to this report. TheSecretarial Audit Report 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".
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 identi cation assessment monitoringand mitigation of strategic operational compliance and nancial risks that are key toachieving our business objectives. Risks are identi ed evaluated and prioritised based ontheir likelihood of occurrence and severity of business impact. Major risks identi ed bythe businesses and functions are systematically addressed through mitigation plan andgovernance and reviewed by the Risk Management Committee and Audit Committee/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/en-us/global/en-in/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 and ef cientconduct of its business including adherence to the Company's policies the safeguardingof its assets the prevention and detection of frauds and errors the accuracy andcompleteness of the accounting records and the timely preparation of reliable nancialinformation.
20. HOLDING COMPANY:
During the nancial 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 nancial year ended December31 2011 amounting to INR 257500/- was transferred during the year 2019 to InvestorEducation 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 thenancial year ended December 31 2012 the Company had dispatched the communicationindividually to the concerned shareholders whose equity share(s) were liable to betransferred to IEPF under the rules for taking appropriate action(s). The Company had alsoissued public notice in newspapers as required under the IEPF Rules. The Company haduploaded the full details of such shareholders and shares due for transfer to IEPF on itsCompany's website at the following link: https://www.honeywell.com/content/dam/honeywell/les/india-hail/unclaimed-dividends/Unclaimed-Shares-for-Transfer-to-IEPF-as-on-February-2020.pdf.The full details of shareholders and shares transferred to IEPF in the years 20172018 and 2019 is available on the Company's website at the following link: https://www.honeywell.com/en-us/global/en-in/hail.
Members who have not encashed the dividend warrant(s) so far for the nancial year endedDecember 31 2012 or any subsequent years are requested to make their claim by emailingthe signed documents at firstname.lastname@example.org on or before August 21 2020 andcourier/post the original signed documents at the Company(s) Registered of ce or to the Ofce of the Registrar and Transfer Agents: TSR Darashaw Consultants Pvt. Ltd. (previouslyTSR Darashaw Ltd.) 6-10 Haji Moosa Patrawala Ind. Estate 20 Dr. E. Moses RoadMahalaxmi Mumbai-400011. It shall be noted that once the dividend is transferred to theInvestor Education and Protection Fund as above no claim shall lie with the Company inrespect 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 7"forming part of this Report. As per the rst 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 of ce 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 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 4" - Statement of Disclosure ofRemuneration.
23. DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION
PROHIBITION AND REDRESSAL) ACT 2013:
Your Company respects and values diversity re ected 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 nancial 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 nancial position of theCompany which have occurred between the end of the nancial year of the Company to whichthe nancial statements relate and the date of the Report.
26. SIGNIFICANT AND MATERIAL ORDERS:
There are no signi cant and material orders during the nancial year ended March 312020 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 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. 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 6". The Annual Return of the Company asrequired under the Companies Act 2013 will be available on the website of the Company athttps://www.honeywell.com/en-us/global/en-in/hail
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 certi cates 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 certi cate from J B Bhave& Co. Company Secretaries on compliance with corporate governance norms under theListing Regulations is provided in Corporate Governance Report which forms a part of thisAnnual 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 consistently andmade judgments and estimates that are reasonable and prudent so as to give a true and fairview of the state of affairs of the Company as on March 31 2020 and of the pro t for theyear April 1 2019 to March 31 2020;
c) The Directors have taken proper and suf cient 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 nancial controls to be followed by the Companyand that such internal nancial controls are adequate and were operating effectively;
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 complied with.
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 Company's website at the following link:https://www.honeywell.com/content/dam/honeywell/les/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. N. Srinath Mr. Vikas Chadha Mr. Brian Buf ngtonand Ms. Nisha Gupta during their tenure as Directors. The Board wishes to acknowledge thesupport it has received from its shareholders investors customers vendors regulatoryauthorities and bankers.
Pune May 22 2020
Registered Of ce:
56 & 57 Hadapsar Industrial Estate Pune 411 013 Maharashtra CIN:L29299PN1984PLC017951 Tel: +91 20 7114 8888
For and on behalf of Board of Directors of