Honeywell Automation Directors Report, Honeywell Autom Reports by Directors

Honeywell Automation

BSE: 517174|NSE: HONAUT|ISIN: INE671A01010|SECTOR: Telecommunications - Equipment
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Directors Report Year End : Mar '15    « Dec 13
Dear Members,
 The Directors present the THIRTY FIRST ANNUAL REPORT with the audited
 statements of accounts of the Company for the period ended March
 31,2015 .
 Particulars                          Period ended   Year ended
                                      March 31,2015  December 31,2013
                                      (Rs. in lacs)  (Rs. in lacs)
 Sales & Other Income                      242,611     172,563
 Operating Profit                          106,868      73,110
 Less: Interest                                 44          39
 Depreciation                                 1686       1,392
 Profit for the year 
 (Before Exceptional Item)                  21,724      12,278
 Exceptional Item                            4,002           -
 Profit for the year 
 (After Exceptional Item)                   17,722      12,278
 Provision for tax                           7,684       5,390
 Deferred Tax Adjustment                    (1,382)     (1,728)
 PROFIT AFTER TAX                           11,420       8,616
 Profit brought forward from the 
 previous year                              61,305      54,585
 Profit available for 
 appropriations                             70,253      61,305
 General Reserve                             1,142         862
 Proposed Dividend                           1,105         884
 Tax on proposed dividend                      225         150
 BALANCE CARRIED FORWARD                    70,253      61,305
 Final dividend @ Rs.12.50/- per share of Rs.10/- each was recommended
 by the Board in their meeting held on May 25, 2015.
 The Management Discussion & Analysis Report annexed herewith provides
 full details of operational performance and business analysis of these
 business units.
 - Honeywell Process Solutions (HPS) serves core industrial sectors of
 Refining, Oil & Gas, Pulp & Paper, Metal and Cement etc.
 - Honeywell Building Solutions (HBS) provides solutions and services
 for facilities such as Commercial & Industrial Buildings, IT & ITES
 industry, Hospitals, Hotels, Airports etc.
 - Environment and Combustion Control (ECC) serves multiple brands
 through channels and offers environmental and combustion products and
 solutions to commercial, hospitality and industrial segments.
 - Sensing & Control (S&C) business provides various sensors and
 switches to manufacturing and automobile
 industry. This business serves primarily OEMs in various manufacturing
 industries such as auto, medical instrumentation, IT, etc.
 - Exports Business Group (EBG) addresses manufacturing and
 engineering services needs of Honeywell along with some other non
 Honeywell customers across the globe, leveraging the cost, skills and
 knowledge arbitrage.
 Your Company remains committed to making the world a better place and
 expanding community outreach through CSR activities As part of its
 initiatives under CSR, the Company has partnered with Safe Kids
 Foundation India, a not- for-profit Trust, that aims to protect
 children in India from injuries and death in the home. The Annual
 Report on CSR activities, in accordance with Section 135 of the
 Companies Act, 2013, read with Companies (Corporate Social
 Responsibility Policy) Rules, 2014, is annexed herewith as 
 Annexure A.
 Your company is continuing on the operational excellence journey with
 strong focus on driving the Honeywell Operating System (HOS). HOS is
 favorably impacting Safety, Quality, Delivery, Cost and Inventory
 metrics. During 2014 Pune factory achieved the advanced level of HOS
 Silver Excellence and the Global Engineering Services (GES) supporting
 Honeywell Building Solutions (HBS) business achieved Silver level. In
 2015 the main focus is on achieving Bronze level for manufacturing
 facility of Environmental and Combustion Controls (ECC) business at
 Vadodara, Gujarat and global back office of Honeywell Building
 Solutions in Pune. Further, the businesses have started contributing to
 the HOS Gold initiative to achieve next level of overall business
 As per the provisions of the Companies Act, 2013 and Articles of
 Association of the Company, Mr. Anant Maheshwari, retires by rotation
 and is eligible for reappointment.
 Honeywell''s Positive Employee Relationships (PER) strategy aims at
 engaged and motivated workforce and to create a positive and productive
 work environment.
 Honeywell''s Global PER Assessment Process outlines the Communication,
 Action Planning, Surveys (Employee and Manager Survey) and Focus Groups
 to make it more effective.
 Honeywell has also made great strides to get the Employee Value
 Proposition (EVP) in place. It focuses on 5 key themes i.e. 1.
 Challenging work that matters 2. Right People 3.Talent and Leader
 Development 4. Differentiated Rewards and 5. Community Engagement.
 As on March 31,2015, the Company''s employee strength was 2842 as
 compared to 2713 as on December 31,2013.
 As per Clause 49 of the Listing Agreement with the Stock Exchanges
 (Revised w.e.f. October 1,2014), Management Discussion and Analysis
 Report and Corporate Governance Report are annexed and form part of the
 Directors Report.
 As per Clause 49 of the Listing Agreement with the Stock Exchanges, the
 declaration signed by the Managing Director affirming compliance with
 the Code of Conduct by Directors and Senior Management, for the
 Financial period ended March 31,2015 is annexed and forms part of the
 Directors Report.
 Statutory Audit
 M/s. Price Waterhouse & Co Bangalore LLP has completed 10 years as
 Statutory Auditors of your Company. The provisions regarding rotation
 of auditors, as prescribed under the Companies Act, 2013 are applicable
 to the Company. It is, hence, proposed to appoint M/s Deloitte Haskins
 & Sells LLP (Firm Registration No. 117366W/W- 100018) as the Statutory
 Auditors for a period of 5 years to hold office from the conclusion of
 the ensuing Annual General Meeting (2015) till the Sixth following
 Annual General Meeting (2020), subject to ratification of their
 appointment at every AGM, during the term of their office. They have
 confirmed their eligibility and willingness for appointment as
 Statutory Auditors for the aforesaid period, as per Section 141 of the
 Companies Act, 2013. The Board of Directors recommends their
 appointment to the shareholders.
 Cost Audit
 The Central Government has approved the appointment of M/s C S
 Adawadkar & Co.,Cost Accountants as Cost Auditor for conducting Cost
 Audit of the Company for the Financial Year ending December 31,2013 and
 December 31,2014. The Company changed the Financial year ending from
 December 31,2014 to March 31,2015 and as such the Cost Audit report
 will be submitted for 15 months period of January 1,2014 to March
 The due date for filing the Cost Audit Report for the Financial Year
 ended March 31,2015 is September 27, 2015.
 The due date for filing the Cost Audit Report of the Company for the
 Financial Year ended December 31,2013 was June 29, 2014 and the Cost
 Audit Report was filed by the Cost Auditor M/s C S Adawadkar & Co.,Cost
 Accountants, on May 26, 2014 in XBRL mode as mandated by the Ministry
 of Corporate Affairs.
 Pursuant to Section 217(2AA) of the Companies Act, 1956 the Directors,
 based on the representations received from the Operating Management,
 confirm that-
 (i) In the preparation of these accounts, the applicable accounting
 standards have been followed and that there was no material departure
 from the accounting standards;
 (ii) They have, in the selection of the accounting policies, applied
 them consistently and made judgments and estimates that are reasonable
 and prudent so as to give a true and fair view of the state of affairs
 of the Company at the end of the accounting year and of the profit of
 the Company for that period;
 (iii) Read with paragraph on Internal Control in the Management
 Discussion & Analysis Report and paragraph 12(B) of this Report, they
 have taken proper and sufficient care, to the best of their knowledge
 and ability, for the maintenance of adequate accounting records in
 accordance with the provisions of the Companies Act, 1956, for
 safeguarding the assets, for adequacy of financial controls and
 controls for preventing and detecting fraud and other irregularities;
 (iv) They have prepared the annual accounts on a going concern basis.
 (A) Comments regarding paragraph 8(b) of the Auditors'' Report:
 The Company maintains and periodically updates the back up of Books of
 Account. However, as pointed out in the Auditors'' Report, the back up
 is not maintained on servers physically located in India. The Company
 is in the process of evaluating technology options to maintain the back
 up on servers physically located in India.
 (B) Comments regarding paragraph iv and xxi of Annexure to Auditors''
 As discussed in Note 41 of the Notes forming part of financial
 statements for the accounting year ended March 31,2015, the Company
 determined that certain projects in the HPS business units had costs
 that had been recorded to incorrect projects. At the request of Senior
 Management and with oversight by the Audit Committee, the Company has
 conducted an objective and independent review (review) to
 determine the impact of the
 same. On conclusion and as a result of this review, adjustments have
 been made for certain projects for the period ended March 31,2015 to
 reduce revenue by Rs. 3095 lacs and reduce profit before tax for the
 period by Rs. 4002 lacs. This reduction in profit before tax includes
 an impact of Rs. 907 lacs for provision for future losses in accordance
 with Accounting Standard 7 - Accounting for construction contracts.
 The Company is in the process of enhancing internal controls to
 minimize the risk of such incorrect recording of costs in the future.
 Information as per Section 217 (2A) of the Companies Act, 1956, read
 with the Companies (Particulars of Employees) Rules, 1975 pertaining to
 absorption of technology, foreign exchange earnings, is given as an
 Annexure B to this Report and forms part of it. As per provisions of
 Section 219(1)(b)(iv) of the Act, the Directors'' Report and Accounts
 are being sent to the shareholders excluding the statement giving
 particulars of employees under Section 217(2A) of the Act. Any
 Shareholder interested in obtaining a copy of the statement may write
 to the Company Secretary at the Registered Office of the Company.
 The Ministry of Corporate Affairs, Government of India, has, vide its
 General Circular number 08/2014 issued on April 4, 2014, clarified that
 the financial statements (and documents required to be attached
 thereto), Auditors report and Board''s report in respect of financial
 years that commenced earlier than April 1,2014 shall be governed by the
 relevant provisions/schedules/rules of the Companies Act, 1956 and that
 in respect of financial years commencing on or after April 1,2014, the
 provisions of the new Act shall apply. This Directors'' Report is in
 relation with the financial year commencing on January 1,2014 and has
 been prepared in accordance with the requirements of the Companies Act
 The Board would like to place on record its appreciation and thanks to
 all its employees for their contribution. The Board also wishes to
 acknowledge the support it has received from its investors, customers,
 vendors, regulatory authorities and bankers.
 Gurgaon, May 25, 2015
 Registered Office:
 56 & 57, Hadapsar Industrial Estate, 
 Pune 411 013
                                       For and on behalf of the Board
                                                      Surendra L. Rao
                                                        DIN : 00005675
Source : Dion Global Solutions Limited
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