DIRECTORS1 REPORT DEAR MEMBERS, The Directors present the THIRTY SECOND ANNUAL REPORT with the audited statements of accounts of the Company for the year ended March 31,2016. 2. DIVIDEND: Payment of final dividend @ Rs.10/- per equity share of Rs.10/- each was recommended by the Board in their meeting held on May 17,2016. The dividend, if approved by the members at the ensuing Annual General Meeting (AGM), will resuit in a total cash pay-out of Rs. 1,064 lacs including dividend distribution tax. 3. TRANSFER TO RESERVES: The Company proposes to transfer Rs.1,385 lacs to the General Reserve out of the amount available for appropriation and an amount of Rs. 81,655 lacs is proposed to be retained in the Profit and Loss account. 4. OPERATIONS: The Management Discussion & Analysis Report annexed herewith provides full details of operational performance and business analysis of the following business units. • Honeywell Process Solutions (HPS) serves core industrial sectors of Refining, Oil & Gas, Pulp & Paper, Metal and Cernent etc. • Honeywell Building Solutions (HBS) provides solutions and services for Commercial & Industrial Buildings, IT & ITES industry, Hospitals, Hotels, Airports etc. • Environmental & Energy Solutions (E&ES) serves multiple brands through channels and offers environmental and combustion products and solutions to commercial, hospitality and industrial segments. • Sensing & Productivity Solutions (S&PS) 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 - Global Services (GS) & Global Manufacturing (GM) addresses manufacturing and engineering services needs of Honeywell along with some other non-Honeywell customers across the globe, leveraging the competitive advantage of cost, skills and knowledge. 5. HONEYWELL OPERATING SYSTEM (HOS): 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. In 201516 the major part of the GS supporting Honeywell Process Solutions has been sustained at Silver Level. The Global Business Operations of HBS, achieved the feat of HOS Bronze certification in June-2015 and is striving towards HOS silver certification in 2016. Honeywell Airport Business.HBS, Pune completed their HOS Bronze certification in Aug 2015. 6. HUMAN RESOURCES: Honeywell is committed to hiring, developing and retaining the best minds in the industry. The Company has key internal processes and initiatives that support this vision. The Company has developed a strong employee value proposition that focuses on key pillars of challenging work that matters, hiring and retaining the right people, sustained focus on talent and leadership development, differentiated rewards to drive exceptional performance and community engagement. Talent management is a shared responsibility between business leaders and the Human Resources function at Honeywell, enabling a strong focus on succession planning for key roles and actively promoting internal move to drive career growth. Talent management is supported by a strong learning architecture that enables leadership and functional development. This is supported by a Positive Employee Relations (PER) strategy that aims to build an engaged and motivated workforce. As on March 31,2016, the Company's employee strength was 2930 as compared to 2842 as on March 31,2015. 7. DIRECTORS AND KEY MANAGERIAL PERSONNEL: During the year, Mr. Surendra Rao resigned as the Chairman and Independent Director w.e.f. the close of business hours of February 12,2016. Mr. Suresh Senapaty was appointed as an Additional (Independent) Director w.e.f. March 8, 2016 and holds office up to the forthcoming AGM of the Company. Necessary resolution for appointment of Mr. Suresh Snippety as Independent Director has been included in the Notice convening the AGM, and details of the proposai are mentioned in the Annexure to the AGM Notice. As per the provisions of the Companies Act, 2013, Ms. Nisha Gupta, retires by rotation at the forthcoming AGM and being eligible, offers herself for reappointment. The Board recommends her reappointment. Ms. Sneha Padve resigned as the Company Secretary w.e.f. close of business hours of May 4, 2015. Ms. Sangeet Hunjan was appointed as the Company Secretary w.e.f. May 25,2015. Mr. Vikas Chadha, Managing Director, Mr. Anurag Bhagania, Chief Financial Officer (CFO) and Ms. Sangeet Hunjan, Company Secretary are the Key Managerial Personnel (KMP) of the Company, pursuant to the provisions of Companies Act, 2013, as on the date of this Report. Mr. Anurag Bhagania will be moving to a new role within Honeywell as India Finance Leader.and hence tendered his resignation as CFO in the Board Meeting held on May 17, 2016, to be effective June 26, 2016. Mr. R. Ravichandran was appointed as the CFO (KMP) of the Company in the Board Meeting of May 17, 2016 and his appointment will be effective June 27,2016. The Board places on record its appreciation of the valuable contribution made by Mr. Surendra Rao, Ms. Sneha Padve and Mr. Anurag Bhagania. 8. BOARD MEETINGS: Four meetings of the Board of Directors were held during the year. Details about the meetings are available in the Report on Corporate Governance, which forms a part of this Report. 9. COMMITTEESOF BOARD: The details regarding Committees of the Board of Directors of the Company are given in the 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 under Section 149(7) of the Companies Act, 2013, that he meets the criteria of Independence laid 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 Obligations and Disclosure Requirements) Regulations, 2015, the Board has carried out an annual evaluation of its own performance, performance of its Committees as well as the directors individually. The details regarding process and criteria for evaluation are given in the Report on Corporate Governance, which forms a part of this Report. 12. CODEOFCONDUCTCOMPLIANCE: The declaration signed by the Managing Director affirming compliance with the Code of Conduct by Directors and Senior Management, for the financial year ended March 31,2016 is given in Report on Corporate Governance, which forms a part of this Report. 13. CORPORATE SOCIAL RESPONSIBILITY (CSR) : 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 in partnership with leading public and non-profit institutions, has developed powerful programs to address needs in the communities it serves. 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 as amended from time to time, is annexed herewith as 'Annexure-1'. 14. AUDITORS: Statutory Audit Pursuant to the provisions of Section 139 of the Companies Act, 2013 and the rules framed there under 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 hold office from the conclusion of the last AGM of the Company held on July 21, 2015, subject to ratification of their appointment at every AGM. A resolution seeking ratification of their appointment forms part of the Notice of AGM. The Notes on financial statements referred to in the Auditors' Report are self-explanatory and do not call for any further comments. The Auditors' Report does not contain any qualification, reservation or adverse remark. Cost Audit In terms of the provisions of Section 148 and other applicable provisions of the Companies Act, 2013, read with the Companies (Audit and Auditors) Rules, 2014, Cost Audit was not applicable to your Company for the financial year 2015-16. Your Company filed the Cost Audit Report for the financial period ended March 31, 2015, duly audited by M/s C S Adawadkar & Co.,Cost Accountants, with the Ministry of Corporate Affairs within the stipulated time period. 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 Directors of the Company appointed M/s. Bokil Punde & Associates, Practising Company Secretaries as Secretarial Auditors of the Company for the financial year 2015-16. The report of the Secretarial Auditors is enclosed as 'Annexure - 2' to this report. The Secretarial Audit Report does not contain any qualification, reservation or adverse remark. 15. RELATEDPARTY TRANSACTIONS The particulars of contracts or arrangements with related parties referred to in Section 188(1) of the Companies Act, 2013, in the prescribed Form AOC-2of Companies (Accounts) Rules, 2014 are enclosed herewith as'Annexure-3'. 16. RISK MANAGEMENT POLICY Your Company has an Enterprise Risk Management Framework, for identification, assessment, monitoring and mitigation of operational, financial and strategie business risks that are key in achieving our business objectives. Risks are identified and prioritized based on Impact, and probability of occurrence. Mitigating controls are evaluated and reviewed periodically, and assessed for enhancement. 17. COMPANY'S POLICY ON DIRECTORS'APPOINTMENT AND REMUNERATION The Company's policy on directors' appointment and remuneration and other matters provided in Section 178(3) of the Companies Act, 2013 is enclosed herewith as 'Annexure - 4'. 18. WHISTLE BLOWER POLICY/VIGIL MECHANISM The Company has established a vigil mechanism for its employees and Directors and to report their genuine concerns. The details of the same are explained in the Corporate Governance Report. 19. INTERNAL FINANCIAL CONTROLS The Board has adopted the policies and procedures for ensuring the orderly and efficient conduct of its business, including adherence to the Company's policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information. 20. HOLDING COMPANY The Company is a subsidiary of Honeywell Asia Pacific Inc.USA, the ultimate holding Company being Honeywell International Inc. USA 21. TRANSFER OF AMOUNTS TO INVESTOR EDUCATION AND PROTECTION FUND As required under Section 205C of the Companies Act, 1956 (Section 124 of the Companies Act, 2013), the unclaimed dividend amount aggregating to Rs. 277,690/- lying with the Company for a period of seven years pertaining to year ended on December31,2007, was transferred during the year 2015, to the Investor Education and Protection Fund establishedby the Central Government. 22. PARTICULARSOF EMPLOYEES A statement containing particulars of employees as required under Section 197(12) of the Companies Act, 2013 read with Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is provided in 'Annexure - 8' forming part of this report. Having regard to the provisions of the first proviso to Section 136(1) of the Act, the Annual Report is being sent to the members excluding the aforesaid annexure. The said information is available for inspection at the registered office of the Company during working hours and any member interested in obtaining such information may write to the Company Secretary and the same will be furnished on request. The full Annual Report including the aforesaid information is available on the Company's website. The ratio of the remuneration of each director to the median employee's remuneration and other details prescribed in Section 197(12) of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, are attached to this report as 'Annexure - 5' - Statement of Disclosure of Remuneration. 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 backgrounds, experiences, and ideas and is committed to providing employees with a workplace that is free from discrimination or harassment. The Company has adopted a policy on prevention, prohibition and redressai of sexual harassment at workplace in line with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressai) Act, 2013. Every employee is required to complete mandatory online training on 'Prevention of Sexual Harassment at Workplace'. Senior employees and managers are required to complete two-hour live training. The Company has Internal Complaints Committee (ICC) established in accordance with the aforesaid Act for addressing sexual harassment incidents. No complaints on sexual harassment were received by the Company during the financial year under review. 24. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS UNDER SECTION 186 The Company has not made any loans, guarantees or investments during the year under review, 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 the Company which have occurred between the end of the financial year of the Company to which the financial statements relate and the date of the report. 26. SIGNIFICANT AND MATERIAL ORDERS There are no significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and Company's operations. 27. DEPOSITS The Company has not accepted any deposits from public and as such, no amount on account of principal or interest on deposits from public was outstanding as on the date of the Balance 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 and foreign 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 pursuant to SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 are annexed herewith and form part of the Directors Report. 30. EXTRACT OF ANNUAL RETURN Pursuant to section 92(3) of the Companies Act, 2013 and Rule 12(1) of the Companies Management and Administration) Rules, 2014, an extract of the Annual Return in Form No. MGT-9 is annexed herewith as'Annexure-7'. 31. DIRECTORS' RESPONSIBILITY STATEMENT: Pursuant to provisions of Section 134(3)(c) and Section 134(5) of the Companies Act, 2013, your Directors make the following statements: (a) in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any; (b) the Directors have selected such accounting policies and 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 as on March 31,2016 and of the profit for the year April 1,2015 to March 31,2016; (c) the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities; (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 the company and that such internal financial controls are adequate and were operating effectively; and (f) the Directors have devised proper Systems to ensure compliance with the provisions of ail applicable laws and that such Systems were adequate and operating effectively. 32. ACKNOWLEDGEMENT: The Board of Directors would like to place on record its appreciation and thanks to ail 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. For and on behalf of the Board Suresh Senapaty Chairman DIN:00018711 Registered Office: 56 & 57, Hadapsar Industrial Estate, Pune411 013 Place : Gurgaon, date : May 17, 2016 |