A Oneindia Venture
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Notes to Accounts of Honeywell Automation India Ltd.
Mar 31, 2026
L. Provisions and Contingencies
Provisions: Provisions are recognised when there is a
present obligation (legal or constructive) as a result of
a past event, it is probable that an outflow of resources
embodying economic benefits will be required to settle the
obligation and there is a reliable estimate of the amount
of the obligation. Provisions are measured at the best
estimate of the expenditure required to settle the present
obligation at the Balance sheet date and are discounted to
its present value as appropriate.
Provisions for onerous contracts are recognized when the
expected benefits to be derived by the Company from a
contract are lower than the unavoidable costs of meeting
the future obligations under the contract. Provisions for
onerous contracts are measured at the present value of
lower of the expected net cost of fulfilling the contract and
the expected cost of terminating the contract.
Provisions for the expected cost of warranty obligations
are recognised at the time of sale of the relevant products,
at the best estimate of the expenditure required to settle
the Companyâs obligation.
Contingent Liabilities: Contingent liabilities are disclosed
when there is a possible obligation arising from past
events, the existence of which will be confirmed only by the
occurrence or non occurrence of one or more uncertain
future events not wholly within the control of the Company
or a present obligation that arises from past events where
it is either not probable that an outflow of resources will
be required to settle or a reliable estimate of the amount
cannot be made, is termed as a contingent liability.
Contingent assets are disclosed where an inflow of
economic benefits is probable.
Provisions, contingent liabilities and contingent assets
are reviewed at each Balance Sheet date. Where the
unavoidable costs of meeting the obligations under the
contract exceed the economic benefits expected to be
received under such contract, the present obligation under
the contract is recognised and measured as a provision.
M. Leases
At the inception of a contract, the Company assesses
whether the contract is, or contains, a lease. The
assessment is based on:
(1) whether the contract involves the use of a distinct
identified asset,
(2) whether the Company obtains the right to substantially
all the economic benefit from the use of the asset
throughout the period, and
(3) whether the Company has the right to direct the use of
the asset.
The Company has hired office premises under non¬
cancellable operating lease arrangements at stipulated
rentals.
Right-of-use assets represent right to use an underlying
asset during the reasonably certain lease term, and lease
liabilities represent obligation to make lease payments
arising from the lease. The lease terms include options to
extend or terminate the lease when it is reasonably certain
that the Company will exercise that option.
The Company measures the lease liability at the present
value of the lease payments that are not paid at the
commencement date of the lease. The lease liability is
subsequently remeasured by increasing the carrying
amount to reflect interest on the lease liability, reducing
the carrying amount to reflect the lease payments made
and remeasuring the carrying amount to reflect any
reassessment or lease modifications or to reflect revised
in-substance lease payments.
The right-of-use assets are initially recognized at cost,
which comprises the initial amount of the lease liability
adjusted for any lease payments made at or prior to the
commencement date of the lease plus any initial direct
costs less any lease incentives. They are subsequently
measured at cost less accumulated depreciation and
impairment losses.
The Company primarily uses incremental borrowing rate,
which is based on the information available at the lease
commencement date, in determining the present value of
the lease payments.
A right-of-use asset and corresponding lease liability are
not recorded for leases with an initial term of 12 months
or less (short-term leases) and low value leases. For these
short-term and low value leases, the Company recognizes
lease payments as operating expense as incurred over the
lease term.
The Company has also elected practical expedient
available within the standard:
⢠not to separate non-lease components from lease
components, and instead account for each lease
component and any associated non-lease components
as a single lease component.
⢠using hindsight in determining the lease term where
the contract contains options to extend or terminate
the lease.
N. Financial Instruments
Financial assets and financial liabilities are recognised
when a company becomes a party to the contractual
provisions of the instruments.
Financial assets and financial liabilities are initially
measured at fair value, except for trade receivables that
do not have a significant financing component which are
measured at transaction price. Transaction costs that are
directly attributable to the acquisition or issue of financial
assets and financial liabilities (other than financial assets
and financial liabilities at fair value through profit and loss)
are added to or deducted from the fair value of the financial
assets or financial liabilities, as appropriate, on initial
recognition. Transaction costs directly attributable to the
acquisition of financial assets or financial liabilities at fair
value through profit and loss are recognised immediately
in Statement of Profit and Loss.
For financial reporting purposes, fair value measurements
are categorised into Level 1, 2, or 3 based on the degree
to which the inputs to the fair value measurements are
observable and the significance of the inputs to the fair
value measurement in its entirety, which are described as
follows:
Level 1 inputs are quoted prices (unadjusted) in active
markets for identical assets or liabilities that the entity can
access at the measurement date;
Level 2 inputs are inputs, other than quoted prices
included within Level 1, that are observable for the asset or
liability, either directly or indirectly;
Level 3 inputs are unobservable inputs for the asset or
liability.
Financial Assets
All purchases or sales of financial assets are recognised
and derecognised on a trade date basis including delivery
of assets within the time frame established by regulation
or convention in the marketplace.
All recognised financial assets are subsequently measured
in their entirety at either amortised cost or fair value,
depending on the classification of the financial assets
i. Classification of financial assets
All financial assets are subsequently measured at
amortised cost except derivative financial instruments.
ii. Impairment of financial assets
The Company applies the expected credit loss model
for recognising impairment loss on financial assets
measured at amortised cost trade receivables, other
contractual right to receive cash or other financial
asset.
Expected credit losses are the weighted average
of credit losses with the respective risks of default
occurring as the weights. Credit loss is the difference
between all contractual cash flows that are due to
the company in accordance with the contract and all
the cash flows that the company expects to receive,
discounted at the original effective interest rate (or
credit-Adjusted effective interest rate for purchased
or originated credit-impaired financial assets). The
Company estimates cash flows by considering all
contractual terms of the financial instrument (for
example, prepayment, extension, call and similar
options) through the expected life of that financial
instrument.
The Company measures the loss allowance for a
financial instrument at an amount equal to the
lifetime expected credit losses if the credit risk on
that financial instrument has increased significantly
since initial recognition. If the credit risk on a financial
instrument has not increased significantly since initial
recognition, the company measures the loss allowance
for that financial instrument at an amount equal to
12 month expected credit losses. 12 month expected
credit losses are portion of the life-time expected credit
losses and represent the lifetime cash shortfalls that
will result if default occurs within the 12 months after
the reporting date and thus, are not cash shortfalls
that are predicted over the next 12 months.
If the Company measured loss allowance for a
financial instrument at lifetime expected credit loss
model in the previous period, but determines at the
end of a reporting period that the credit risk has not
increased significantly since initial recognition due
to improvement in credit quality as compared to the
previous period, the company again measures the loss
allowance based on 12 month expected credit losses.
When making the assessment of whether there has
been a significant increase in credit risk since initial
recognition, the Company uses the change in the risk of
a default accruing over the expected life of the financial
instrument instead of the change in the amount of
expected credit losses. To make that assessment, the
Company compares the risk of a default occurring
on the financial instrument as at the reporting date
with the risk of a default occurring on the financial
instrument as at the date of initial recognition and
considers reasonable and supportable information,
that is available without undue cost or effort, that is
indicative of significant increases in credit risk since
initial recognition.
For trade receivables or any contractual right to
receive cash or another financials asset that results
from transactions that are within the scope of Ind AS
115, the Company measures the loss allowance at an
amount equal to lifetime expected credit losses.
Further, for the purpose of measuring lifetime expected
credit loss allowance for trade receivables, the
Company has used a practical expedient as permitted
under Ind AS 109. This expected credit loss allowance
is computed based on a provision matrix based on
judgement considering past experience.
The impairment requirements for the recognition and
measurement of a loss allowance are equally applied
to other financials assets.
iii. Derecognition of financial assets
The Company derecognises a financial asset when
the contractual rights to the cash flow from the asset
expired or when it transfers the financial asset and
substantially all the risks and rewards of ownership
of the asset to another party. If the Company neither
transfers nor retains substantially all the risks and
rewards of ownership and continues to control the
transferred assets the Company recognises its retained
interest in the asset and then associated liability for
amounts it may have to pay.
On derecognition of a financial asset in its entirety, the
difference between (a) the carrying amount (measured
at the date of derecognition) and (b) the consideration
received (including any new asset obtained less any
new liability assumed) shall be recognised in profit or
loss.
If the transferred asset is part of a larger financial
asset (eg when an entity transfers interest cash
flows that are part of a debt instrument, and the
part transferred qualifies for derecognition in its
entirety, the previous carrying amount of the larger
financial asset shall be allocated between the part
that continues to be recognised and the part that
is derecognised, on the basis of the relative fair
values of those parts on the date of the transfer.
For this purpose, a retained servicing asset shall be
treated as a part that continues to be recognised.
The difference between (a) the carrying amount
(measured at the date of derecognition) allocated
to the part derecognised and (b) the consideration
received for the part derecognised (including any new
asset obtained less any new liability assumed) shall be
recognised in profit or loss.
iv. Derivative financial instruments and hedge accounting
In the ordinary course of business, the Company uses
certain derivative financial instruments to reduce
business risks which arise from its exposure to foreign
exchange fluctuations. The instruments are confined
principally to foreign exchange forward contracts. The
instruments are employed as hedges of transactions
included in the financial statements or for highly
probable forecast transactions/firm contractual
commitments.
Derivatives are initially accounted for and measured
at fair value from the date the derivative contract is
entered into and are subsequently re-measured to
their fair value at the end of each reporting period
The Company adopts hedge accounting for forward
contracts. At the inception of each hedge, there is
a formal, documented designation of the hedging
relationship. This documentation includes, inter alia,
items such as identification of the hedged item or
transaction and the nature of the risk being hedged. At
inception each hedge is expected to be highly effective
in achieving an offset of changes in fair value or cash
flows attributable to the hedged risk. The effectiveness
of hedge instruments to reduce the risk associated with
the exposure being hedged is assessed and measured
at the inception and on an ongoing basis. The
ineffective portion of designated hedges is recognised
immediately in the statement of profit and loss.
When hedge accounting is applied:
a. for fair value hedges of recognised assets and
liabilities, changes in fair value of the hedged
assets and liabilities attributable to the risk being
hedged, are recognised in the statement of profit
and loss and compensate for the effective portion
of symmetrical changes in the fair value of the
derivatives.
b. for cash flow hedges, the effective portion of
the change in the fair value of the derivative
is recognised directly in other comprehensive
income and the ineffective portion is taken to the
statement of profit and loss. If the cash flow hedge
of a firm commitment or forecasted transaction
results in the recognition of a nonfinancial asset
or liability, then, at the time the asset or liability is
recognised, the associated gains or losses on the
derivative that had previously been recognised in
other comprehensive income and accumulated in
equity are included in the initial measurement of
the asset or liability. For hedges that do not result in
the recognition of a non-financial asset or a liability,
amounts deferred in equity are recognised in the
statement of profit and loss in the same period in
which the hedged item affects the statement of
profit and loss.
In cases where hedge accounting is not applied,
changes in the fair value of derivatives are
recognised in the statement of profit and loss as
and when they arise.
Hedge accounting is discontinued when the
hedging instrument expires or is sold, terminated,
or exercised, or no longer qualifies for hedge
accounting. At that time, any cumulative gain or
loss on the hedging instrument recognised in
equity is retained in equity until the forecasted
transaction occurs. If a hedged transaction is no
longer expected to occur, the net cumulative gain
or loss recognised in equity is transferred to the
statement of profit and loss for the period.
The presumption under Ind AS 109 with reference
to significant increases in credit risk since initial
recognition (when financial assets are more than
30 days past due), has been rebutted and is not
applicable to the Company, as the Company is able
to collect a significant portion of its receivables that
exceed the due date.
Financial Liabilities and Equity Instruments
i. Classification as debt or equity
Debt and equity instruments issued by the Company
are classified as either financial liabilities or as equity
in accordance with the substance of the contractual
arrangements and the definitions of financial liability
and equity instrument.
ii. Equity instruments
An equity instrument is any contract that evidences
residual interest in the assets of an entity after
deducting all of its liabilities. Equity instruments
issued by the Company are recognised at the proceeds
received, net of direct issue cost.
iii. Financial liabilities
All financial liabilities are subsequently measured
at amortised cost using effective interest method of
FVTPL.
a) Financial liabilities at FVTPL
Financial liabilities are classified as at FVTPL
when the financial liability is held for trading or
designated as at FVTPL.
Financial liability at FVTPL are stated at fair value,
with any gains or losses arising on remeasurement
recognised in profit and loss. The net gain or loss
recognised in profit and loss incorporates any
interest paid on the financial liability and is included
in âOther Incomeâ.
b) Financial liabilities subsequently measured at
amortised cost
Financial liabilities that are not held for trading and
are not designated as at FVTPL are measured at
amortised cost at the end of subsequent accounting
periods. The carrying amount of financial liabilities
that are subsequently measured at amortised cost
are determined based on the effective interest
method. Interest expenses that is not capitalised as
part of cost of an asset is included in âfinance costâ.
The effective interest method is a method of
calculating the amortised cost of a financial liability
and of allocating interest expense over the relevant
period. The effective interest rate is the rate that
exactly discounts estimated future cash payments
through the expected life of the financial liability,
or (where appropriate) a shorter period, to the net
carrying amount on initial recognition.
c) Foreign exchange gains and losses
For financial liabilities that are denominated
in a foreign currency and are measured at
amortised cost at the end of each reporting
period, the foreign exchange gains and losses are
determined based on the amortised cost of the
instrument and are recognised in other income.
The fair value of financial liabilities denominated
in foreign currency is determined in that foreign
currency and translated at the spot rate at the
end of the reporting period. For financial liability
that are measured at FVTPL, the foreign exchange
component forms part of fair value gains or losses
and is recognised in the Statement of Profit and
Loss.
iv) Derecognition of financial liabilities
The Company derecognises financial liability when, and
only when, the Company obligations are discharged,
cancelled and have expired. An exchange between with
a lender of debt instrument is substantially different
term is accounted for as and extinguishment of the
original financial liability and the recognition of a new
financial liability. Similarly, a substantial modification
of a term of existing financial liability is accounted for
as and extinguishment of the original financial liability
and recognition of new financial liability. The difference
between the carrying amount of the financial liability
derecognised and the consideration paid and payable
is recognised in profit and loss.
O. New Accounting Standards, Amendments to
Existing Standards, Annual Improvements,
Interpretations, etc. applicable to the
Company effective subsequent to March 31,
2025
Ministry of Corporate Affairs (âMCAâ) notifies
new standards or amendments to the existing
standards under Companies (Indian Accounting
Standards) Rules as issued from time to time.
In May 2025, MCA notified amendments to Ind AS 21 - The
Effects of Changes in Foreign Exchange Rates, applicable
w.e.f. April 1, 2025.
The Company has reviewed the amendment
and based on its evaluation has determined that
it does not have any significant impact in its
financial statements.
In August 2025, MCA notified the following amendments
to:
1. Ind AS 1, Presentation of Financial Statements,
applicable w.e.f. April 1, 2025 - The amendment relates
to classification of liabilities as current or non-current
and non-current liabilities with covenants. In the
context of classifying a liability as current, it removes the
requirement of existence of a right to defer settlement
for at least 12 months after the reporting date and
instead requires that the said right should exist on the
reporting date and have substance. The amendment
also introduces guidance on classification of liabilities
with covenants. The Company has no impact of these
amendments in its classification criteria of current and
non-current liabilities.
2. Ind AS 7, Statement of Cash Flows and Ind AS 107,
Financial Instruments: Disclosures, applicable w.e.f.
April 1, 2025 - The amendment in Ind AS 7 requires to
inform users of financial statements of the existence of
supplier finance arrangements and explain the nature
of the arrangements, the carrying amount of liabilities
and the range of payment due dates. Ind AS 107 has
been amended to add supplier finance arrangements
as a factor that may cause concentration of liquidity
risk. The Company has reviewed the amendment and
based on its evaluation has determined that it does not
have any significant impact in its financial statements
(Refer note 18).
3. Ind AS 12, International Tax Reform - The Organisation
for Economic Co-operation and Development (OECD)
has published the model rules for global minimum
tax (Pillar Two model rules). Based on the current
assessment, the Company does not expect a material
financial impact from the application of the Pillar Two
rules.
Note 3 - Critical Judgements, estimations and
assumptions in applying Accounting Policies:
The preparation of the financial statements in conformity
with Ind AS requires the management to make estimates,
judgments and assumptions. These estimates, judgments
and assumptions affect the application of accounting
policies and the reported amounts of assets and liabilities,
the disclosures of contingent assets and liabilities at the
date of the financial statements and reported amounts of
revenues and expenses during the year. The application
of accounting policies that require critical accounting
estimates involving complex and subjective judgments and
the use of assumptions in these financial statements have
been disclosed appropriately. Accounting estimates could
change from period to period. Actual results could differ from
those estimates. The estimates and underlying assumptions
are reviewed on an ongoing basis. Appropriate changes
in estimates are made as management becomes aware
of changes in circumstances surrounding the estimates.
Changes in estimates and judgements are reflected in the
financial statements in the period in which changes are
made.
The Company uses the following critical accounting
judgements, estimates and assumptions in preparation of
its financial statements:
1. The preparation of financial statements involves
estimates and assumptions that affect the reported
amount of assets, liabilities, disclosure of contingent
liabilities at the date of financial statements and the
reported amount of revenues and expenses for the
reporting period. Specifically, the Company estimates
the probability of collection of accounts receivable
by analysing historical payment patterns, customer
concentrations, customer credit-worthiness and current
economic trends. If the financial condition of a customer
deteriorates, additional allowances may be required.
2. The Company uses the percentage-of-completion
method in accounting for its contract revenue. Use of
the percentage-of-completion method requires the
Company to estimate the efforts or costs expended to
date as a proportion of the total efforts or costs to be
expended. Efforts or costs expended have been used to
measure progress towards completion as there is a direct
relationship between input and productivity. Provisions
for estimated losses, if any, on uncompleted contracts
are recorded in the period in which such losses become
probable based on the expected contract estimates at
the reporting date.
3. In case of Property, Plant and Equipment and Intangible
assets, the charge in respect of periodic depreciation/
amortisation is derived after determining an estimate
of an assetâs expected useful life and the expected
residual value at the end of its life. The useful lives and
residual values of Companyâs assets are determined
by management at the time the asset is acquired and
reviewed periodically, including at each financial year end.
The lives are based on historical experience with similar
assets as well as anticipation of future events, which may
impact their life, such as changes in technology.
4. Ind AS 116 requires lessee to determine the lease term
as the non-cancellable period of a lease adjusted with
any option to extend or terminate the lease, if the use
of such option is reasonably certain. The Company
makes an assessment on the expected lease term on
a lease-by-lease basis and thereby assesses whether
it is reasonably certain that any options to extend or
terminate the contract will be exercised. In evaluating
the lease term, the Company considers factors such as
any significant leasehold improvements undertaken
over the lease term, costs relating to the termination of
the lease and the importance of the underlying asset
to the Companyâs operations taking into account the
location of the underlying asset and the availability of
suitable alternatives. The lease term in future periods
is reassessed to ensure that the lease term reflects the
current economic circumstances. After considering
current and future economic conditions, the company
has concluded that no material changes are required to
lease period relating to the existing lease contracts. Refer
note no 2 (M).
5. The cost of defined benefit plans, compensated
absences and the present value of defined benefit
obligations based on current actuarial valuations using
the projected unit credit method. An actuarial valuation
involves making various assumptions that may differ
from actual developments in the future. These include
the determination of discount rate, salary increment
and mortality rates. Due to complexities involved in
the valuation and its long term nature, defined benefit
obligation is sensitive to changes in these assumptions.
All assumptions are reviewed at each reporting date.
The concentration of credit risk is limited due to the fact that the customer base is large.
The Company determines the impairment loss based on historical loss experience adjusted to reflect current and estimated
future economic conditions. The Company has specifically evaluated the potential impact with respect to customers which
could have an immediate impact and the rest which could have an impact with expected delays. Basis this assessment, the
impairment loss for trade receivables as at March 31, 2026 is considered adequate.
The average credit period on sales of goods and services is 30-90 days. No interest is charged on outstanding trade receivables.
(a) Rights, preferences and restrictions attached to the shares
Equity shares: The Company has one class of equity shares having a par value of ''10 per share. Each shareholder is
eligible for one vote per share held. The dividend proposed by the Board of Directors is subject to the approval of the
shareholders in the ensuing Annual General Meeting, except in case of interim dividend. In the event of liquidation,
the equity shareholders are eligible to receive the remaining assets of the Company after distribution of all preferential
amounts, in proportion to their shareholding.
e) 6,631,142 (March 31, 2025 : 6,631,142) Equity shares constituting 75% (March 31, 2025 : 75%) of the paid-up capital
of the Company are held by Honeywell International Inc., the ultimate holding company, through its 100% subsidiary,
HAIL Mauritius Limited.
f) The Company has neither allotted any shares as fully paid up bonus shares nor pursuant to contract(s) payment being
received in cash during 5 years immediately preceding March 31, 2026.
Securities premium
Securities premium represents the excess of the issue price of shares over their face value less registration, other regulatory
fees and net of related tax benefits and is utilised in accordance with the provisions of the Companies Act, 2013
Group share based payment reserve
The Company has share option schemes under which Honeywell International Inc. (HII), the ultimate holding company,
may grant stock options and restricted stock awards to certain employees under its stock incentive plan. The share-based
payment reserve is used to recognise the value of equity-settled share-based payments provided to employees, including key
management personnel, as part of their remuneration. Refer Note 33 for further details of these plans.
General reserve
The general reserve is used from time to time to transfer profits from retained earnings for appropriation purpose. There is no
policy for regular transfer.
Retained Earnings
Retained earnings represents the profits that the Company has earned till date.
Effective portion of cash flow hedge
When a derivative is designated as a cash flow hedging instrument, the effective portion of changes in the fair value of the
derivative is recognized in other comprehensive income and accumulated in the Effective portion of cash flow hedge reserve.
The cumulative gain or loss previously recognized in the cash flow hedging reserve is transferred to the Statement of Profit and
Loss upon the occurrence of the related forecasted transaction.
Trade payables principally comprise amounts outstanding for trade purchases. The average credit period taken for trade
purchases is 90-180 days. For most of the suppliers, no interest is charged on trade payable. The Company has financial risk
management policies in place to ensure that all payables are paid within pre-agreed credit terms.
The company has supplier finance arrangements with its suppliers. However, this arrangement does not result in extended
credit terms for the Company. The Company obtains a credit period in the range of 90-180 days irrespective of the arrangement.
The total liabilities outstanding as on March 31, 2026, under suppliers financing arrangement is ''768 million (refer note 37 for
liquidity risk analysis)
* Refer note 37-B for ageing schedule from due date of payment and note 44 for struck off companies. Refer note 29 for related
party transactions.
B. Contract balances
Progress on satisfying performance obligations under contracts with customers and the related billings and cash collections
are recorded in accounts receivable and the unbilled receivables in Other current assets. The customer advances are
recorded as Contract Liabilities in Other Current Liabilities. Unbilled receivables (Contract Assets) arise when the timing
of cash collected from customers differs from the timing of revenue recognition, such as when contract provisions require
specific milestones to be met before a customer can be billed. Those assets are recognized when the revenue associated
with the contract is recognized prior to billing and derecognized when billed in accordance with the terms of the contract.
Contract liabilities are recorded when a milestone is met triggering the contractual right to bill but revenue recognised over
time is not recognized.
When contracts are modified to account for changes in contract specifications and requirements, the Company considers
whether the modification either creates new or changes the existing enforceable rights and obligations. Contract
modifications that are for goods or services that are not distinct from the existing contract, due to the significant integration
with the original good or service provided, are accounted for as if they were part of that existing contract. The effect of a
contract modification on the transaction price and the measure of progress for the performance obligation to which it
relates, is recognized as an adjustment to revenue (either as an increase in or a reduction of revenue) on a cumulative catch¬
up basis. When the modifications include additional performance obligations that are distinct, they are accounted for as a
new contract and performance obligation, which are recognized prospectively.
C. Performance obligation
A performance obligation is a promise in a contract to transfer a distinct good or service to the customer. A contractâs transaction
price is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is
satisfied. When contracts with customers require highly complex integration or manufacturing services that are not separately
identifiable from other promises in the contracts and, therefore, not distinct, then the entire contract is accounted for as a single
performance obligation. Performance obligations are satisfied as of a point in time or over time. Performance obligations
are supported by contracts with customers, providing a framework for the nature of the distinct goods, services or bundle of
goods and services. The timing of satisfying the performance obligation is typically indicated by the terms of the contract.
Typical payment terms of fixed-price over time contracts include progress payments based on specified events or
milestones, or based on project progress. For some contracts the Company may be entitled to receive an advance payment.
The Company provides standard warranty on its products and records obligation on the same based on past trend.
The Company has applied the practical expedient for certain revenue streams to exclude the value of remaining performance
obligations for contracts with an original expected term of one year or less. Performance obligations recognized as at the
year end will be satisfied over the course of future periods. The disclosure of the timing for satisfying the performance
obligation is based on the requirements of contracts with customers. Remaining performance obligation estimates are
subject to change and are affected by several factors, including terminations, changes in the scope of contracts and periodic
revalidations.
There is no significant financing component included in the transaction price for any of the contracts with customers.
The Company generates a large percentage of its sales and profits from its business with the Honeywell group (Honeywell),
its major shareholder. Sales to Honeywell group accounted for approximately 40% and 41% of our total net sales for the year
ended March 31, 2026 and year ended March 31, 2025 respectively. The Companyâs ability to maintain or grow its business
with Honeywell depends upon a number of performance factors. However, the Company cannot be assured that its level of
sales and profits associated with its relationship with Honeywell will continue. Honeywell-specific business considerations
(independent of its shareholding in the Company), including changes in Honeywellâs strategies regarding utilization of alternate
opportunities available to it to source products and services currently provided by the Company (including from alternate
sources which Honeywell may acquire or develop within its own group), may also reduce the level and/or mix of Honeywellâs
business with the Company.
Note 30 - Leases
The Company has entered into leases for office premises. These lease arrangements range for a period between 36 months
and 120 months.
The Company has compiled this information based on intimations received from suppliers of their status as Micro or Small
enterprises and / or its registration with the appropriate authority under Micro, Small and Medium Enterprises Development
Act, 2006 (as amended from time to time).
Note 33 - Share Based Payments
Employee share option plan of the company
Honeywell International Inc. (HII), the ultimate holding company, may grant stock options and restricted stock awards to certain
employees under its stock incentive plan.
Stock OptionsâThe exercise price, term and other conditions applicable to each option granted under the stock plans are
generally determined by the Management Development and Compensation Committee of the Board of Honeywell International
Inc. The exercise price of stock options is set on the grant date and may not be less than the fair market value per share of the
stock on that date. The fair value is recognized as an expense over the employeeâs requisite service period (generally the vesting
period of the award). Options generally vest over a four-year period and expire after ten years.
Restricted Stock UnitsâRestricted stock unit (RSU) awards entitle the holder to receive one share of common stock for each
unit when the units vest. RSUs are issued to certain employees as compensation at fair market value at the date of grant. RSUs
typically become fully vested over periods ranging from three to seven years and are payable in Honeywell common stock upon
vesting.
Fair value of share options granted in the year
The fair value of each stock option award is estimated on the date of grant using the Black-Scholes option-pricing model.
Expected volatility is based on implied volatilities from traded options on common stock of HII and historical volatility of
common stock of HII. Monte Carlo simulation model is used to derive an expected term which represents an estimate of the
time options are expected to remain outstanding. Such model uses historical data to estimate option exercise activity and post¬
vest termination behaviour. The risk-free rate for periods within the contractual life of the option is based on the U.S. treasury
yield curve in effect at the time of grant.
Note: It is not practicable for the Company to estimate the timing of cash outflow, if any, in respect of the above pending
resolutions of the respective proceedings.
As at March 31, 2026, Contingent liability majorly represent demands arising on completion of assessment proceedings
under the Income-tax Act, 1961 and other indirect tax act including GST, excise, custom and sales tax.
These claims are on account of various issues of disallowances, GSTR 2A/2B and GSTR 3B mismatches, or addition in liability
by tax liabilities related to various issues including C- forms, WCT TDS etc.
These matters are pending before various appellate authorities and the Management including its tax advisors expect that
its position will likely be upheld on ultimate resolution and will not have a material adverse effect on the Companyâs financial
position and results of operations.
Third party claims against company not acknowledged as debts includes ongoing cases pending in commercial court/ Arbitral
Tribunal in relation to claims/ counter claims raised by few vendors/ customers and the Company for certain commercial
teams disagreements.
B) Estimated amount of contracts remaining to be executed on capital accounts and not provided for (net of advances) -
'' 1.6 million [March 31, 2025''17 million].
A Litigations/ disputes mainly include:
a) Provision for disputed statutory matters comprises matters under litigation with Sales Tax and Local authorities.
b) The amount of provision made by the Company is based on the estimate made by the Management considering the
facts and circumstances of each case.
To the extent the Company is confident that it may have a strong case that portion is disclosed under contingent
liabilities.
c) The timing and the amount of cash flows that will arise from these matters will be determined when the matters are
settled with respective Appellate Authorities.
B Warranty
Provision for warranty is considered based on the rolling average warranty expense incurred in the preceding 12 months,
the warranty period for which ranges from 12 months to 24 months as per provisions of the contracts.
C Provision for Estimated Cost to complete on Contracts
A provision for estimated cost to complete on construction contracts is recognized when it is probable that the total
contract cost will exceed total contract revenue. The provision shall be utilized as and when the contract gets executed.
Note 36 - Employee Benefit plans
A) Defined contribution plans
The company has recognized the following amounts in the Statement of Profit and Loss for the year.
The Company has a defined contribution plan in form of provident fund. Contributions are made to the fund for
employees at the rate of 12% of basic salary as per regulations. The contributions are made to registered provident
fund administered by the government. The obligation of the Company is limited to the amount contributed and it has no
further contractual nor any constructive obligation.
2 - The assumptions used in preparing the sensitivity analysis is
Discount rate at 100 bps and - 100 bps
Salary escalation rate at 100 bps and -100 bps
3 - The method used to calculate the liability in these scenarios is by keeping all the other parameters and the data same
as in the base liability calculation except for the parameters to be stressed.
4 - There is no change in the method from the previous period and the points/percentage by which the assumptions are
stressed are same as that in the previous year.
A note on other risks
Investment risk - The funds are invested with an external insurer (LIC of India). The insurer manages the gratuity fund and
provides quarterly interest returns. Considering LIC is a state insurer with a sovereign guarantee and no history of defaults the
investment risk is not significant.
Interest Risk - The gratuity fund managed by an external insurer (LIC of India) is in the form of cash accumulation scheme
with interest rates declared annually - A significant fall in interest (discount) rates may not be offset by an increase in value of
gratuity fund, hence may pose an interest rate risk.
Longevity Risk - Since gratuity is paid at retirement in form of lump sum and also during service at the time of termination to
vested members, longevity risk is not applicable since maximum duration for benefit is till retirement age.
Salary Risk - The present value of the defined benefit plan liability is calculated by reference to the future salaries of plan
participants. As such, an increase in the salary of the plan participants will increase the planâs liability.
The Company expects to make a contribution of ''162 million (31 March 2025: ''117 million) to the defined benefit plans during
the next financial year.
Impact of New Labour Code:
In view of the recent changes to the Labour Codes, the Company has carried out a financial impact assessment of the Code
on Wages, 2019, which resulted in an increase in liabilities relating to gratuity ('' 306 million) and compensated absences
('' 5 million) arising from past service cost.
As a result, the Company has recognised a net impact amounting to '' 123 million, after adjusting related revenue, amounting
to '' 188 million, summarized as below:
Financial risk management objectives
Company is exposed to foreign exchange risk on account of import risk and hedging activities; and export transactions which
is monitored periodically. The Company leverages the global treasury operations of Honeywell to improve mitigation of risk
relating to foreign exchange.
Foreign currency risk management
The Company undertakes transactions denominated in foreign currencies; consequently, exposures to exchange rate
fluctuations arise. The carrying amounts of the Companyâs foreign currency denominated monetary assets and monetary
liabilities at the end of the reporting period are as follows:
Foreign currency exchange rate risk:
The fluctuation in foreign currency exchange rates may have potential impact on the income statement and equity, where
any transaction references more than one currency or where assets/liabilities are denominated in a currency other than the
functional currency of the Company. Considering the countries and economic environment in which the Company operates,
its operation are subject to risks arising from fluctuations in exchange rates in those countries. The risk primarily relate to U.S.
Dollars against the functional currency of Honeywell Automation India Limited.
The Company, as per its Hedging policy, uses forward contracts to hedge foreign exchange exposure. The Company evaluates
the impact of foreign exchange rate fluctuations by assessing its exposure to exchange rate risks. It hedges a part of these risks
by using forward contracts in accordance with its risk management policies.
The Company uses forward exchange contracts to hedge its exposure in foreign currency. The information on derivative
instruments is as follows :
Foreign currency sensitivity analysis
The Company is exposed mainly to the fluctuation in the value of USD and EURO. The following table details the company
sensitivity to a 5% increase and decrease in functional currency against the relevant foreign currency. The sensitivity analysis
includes only outstanding foreign currency denominated monetary items and adjust there translation at the period end for a
5% change in foreign currency rate.
Credit risk management
Credit risk refers to the risks that a counterparty may default on its contractual obligations resulting in financial loss to
the Company. The Company deals only with credit worthy counterparties and takes appropriate measures to mitigate
the risk of financial loss from defaults. Trade receivable consists of a large number of customers, spread across diverse
industries and geographical areas. Ongoing credit evaluation is performed on the financial condition of accounts receivable.
The credit risk in respect of bank balances held with banks and deposits with banks are managed via diversification of bank
deposits, and are only with major reputable financial institutions.
Liquidity risk management
The Company manages liquidity risk by maintaining adequate reserves, banking facility and by continuously monitoring
forecasts and actual cash flows and by matching the maturity profiles of financial assets and liabilities.
The Companyâs principal sources of liquidity are cash and cash equivalents and the cash flow that is generated from operations.
The Company has no outstanding borrowings. The Company believes that the working capital is sufficient to meet its current
requirements.
iii) No funds have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or
kind of funds) by the Company to or in any other person(s) or entity(ies), including foreign entities (âIntermediariesâ), with
the understanding, whether recorded in writing or otherwise, that the Intermediary shall, directly or indirectly lend or invest
in other persons or entities identified in any manner whatsoever by or on behalf of the Company (âUltimate Beneficiariesâ)
or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.
iv) No funds have been received by the Company from any person(s) or entity(ies), including foreign entities (âFunding
Partiesâ), with the understanding, whether recorded in writing or otherwise, that the Company shall, directly or indirectly, lend
or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (âUltimate
Beneficiariesâ) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.
Note 38
As set out in section 135 of the Companies Act, 2013 the Company is required to contribute/ spend '' 130 million (previous year
ended March 31, 2025: '' 113 million) towards Corporate Social Responsibility activities, as calculated basis 2% of its average
net profits of the last three financial years calculated in accordance with section 135 of the Companies Act, 2013.
Company has contributed to Honeywell Hometown Solution India Foundation (HHSIF), trust controlled by Honeywell group
for CSR activities. The trust has spent funds on activities such as âEducation, skill and researchâ and âsustainable and holistic
community development programâ etc. Refer note 29 for related party disclosure.
Note 39
The financial statements were approved for issue by the board of directors on May 20, 2026 (previous year ended March 31,
2025 on May 13, 2025). The Board of Directors have recommended dividend of '' 110 per equity share for the financial year
ended March 31, 2026 (previous year ended March 31, 2025: '' 105 per equity share) for approval of shareholders. The face
value of the equity share is '' 10 each. This payment is subject to the approval of shareholders in the Annual General Meeting of
the Company. This final dividend if approved by shareholders would result in a net cash outflow of approximately '' 973 million
(previous year ended March 31, 2025: '' 928 million approved by shareholder in Annual General Meeting held on June 27,
2025).
The Company maintains the books of account electronically and its back-up on daily-basis on a server located outside of India.
These data are accessible in India at all times. The Company notifies the Registrar of Companies (ROC) about the person in
control of the data in its annual filing.
Note 42
No direct database changes in accounting software are allowed and all data changes are governed at application layer to avoid
system performance problems and to follow the principle of data minimization. There are alternate governing processes in
place to mitigate any risk of unauthorized access to database.
The Company uses a third-party hosted application (Software-as-a-Service) for maintenance and processing of payroll records.
The application is operated and administered by the external service provider and the Company does not have access to, or
rights to, make direct changes at the database level of the said application.
Note 45 Additional regulatory disclosures as per Schedule III of Companies Act, 2013
(i) The Company has not traded or invested in crypto currency or virtual currency during the financial year.
(ii) No proceedings have been initiated or pending against the Company for holding any Benami property under the Benami
Transactions (Prohibition) Act, 1988 (45 of 1988) and the rules made thereunder.
(iii) There are no charges or satisfaction yet to be registered with Registrar of Companies beyond the statutory period.
(iv) The Company has not been declared wilful defaulter by any bank or financial institution or other lender or government
or any government authority.
(v) The Company has complied with the number of layers prescribed under clause (87) of section 2 of the Act read with the
Companies (Restriction on number of Layers) Rules, 2017.
(vi) The Company is not a Core Investment Company (CIC) as defined in the regulations made by the Reserve Bank of India.
Further, the Group as defined in Core Investment Companies (Reserve Bank) directions 2016, does not have any CIC.
(vii) The Company does not have any such transaction which is not recorded in the books of account that has been
surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 (such as,
search or survey or any other relevant provisions of the Income Tax Act, 1961).
During the year ended March 31, 2026. the Company has re-classified the following comparatives, which are primarily to
conform to the current yearâs classification. This reclassification do not have material impact on the Financial Statements and
has been done for the better presentation and to enhance the understanding of the users of the Financial Statements.
Mar 31, 2025
(a) Rights, preferences and restrictions attached to the shares
Equity shares: The Company has one class of equity shares having a par value of ''10 per share. Each shareholder is eligible for one vote per share held. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting, except in case of interim dividend. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the Company after distribution of all preferential amounts, in proportion to their shareholding.
e) 6,631,142 (March 31, 2024 : 6,631,142) Equity shares constituting 75% (March 31, 2024 : 75%) of the paid-up capital of the Company are held by Honeywell International Inc., the ultimate holding company, through its 100% subsidiary, HAIL Mauritius Limited.
f) The Company has neither allotted any shares as fully paid up bonus shares nor pursuant to contract(s) payment being received in cash during 5 years immediately preceding March 31, 2025.
Trade payables principally comprise amounts outstanding for trade purchases. The average credit period taken for trade purchases is 120 days. For most of the suppliers, no interest is charged on trade payable. The Company has financial risk management policies in place to ensure that all payables are paid within pre-agreed credit terms.
* Refer note 37-B for ageing schedule from due date of payment and note 44 for struck off companies. Refer note 29 for related party transactions.
Progress on satisfying performance obligations under contracts with customers and the related billings and cash collections are recorded in accounts receivable and the unbilled receivables in Other Financial Assets. The customer advances are recorded as Contract Liabilities in Other Current Liabilities. Unbilled receivables (Contract Assets) arise when the timing of cash collected from customers differs from the timing of revenue recognition, such as when contract provisions require specific milestones to be met before a customer can be billed. Those assets are recognized when the revenue associated with the contract is recognized prior to billing and derecognized when billed in accordance with the terms of the contract. Contract liabilities are recorded when a milestone is met triggering the contractual right to bill but revenue recognised over time is not recognized.
When contracts are modified to account for changes in contract specifications and requirements, the Company considers whether the modification either creates new or changes the existing enforceable rights and obligations. Contract modifications that are for goods or services that are not distinct from the existing contract, due to the significant integration with the original good or service provided, are accounted for as if they were part of that existing contract. The effect of a contract modification on the transaction price and the measure of progress for the performance obligation to which it relates, is recognized as an adjustment to revenue (either as an increase in or a reduction of revenue) on a cumulative catchup basis. When the modifications include additional performance obligations that are distinct, they are accounted for as a new contract and performance obligation, which are recognized prospectively.
The net change was primarily driven by the increase in recognition of revenue as performance obligations were satisfied exceeding milestone billings.
A performance obligation is a promise in a contract to transfer a distinct good or service to the customer. A contractâs transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied. When contracts with customers require highly complex integration or manufacturing services that are not separately identifiable from other promises in the contracts and, therefore, not distinct, then the entire contract is accounted for as a single performance obligation. Performance obligations are satisfied as of a point in time or over time. Performance obligations are supported by contracts with customers, providing a framework for the nature of the distinct goods, services or bundle of goods and services. The timing of satisfying the performance obligation is typically indicated by the terms of the contract. Typical payment terms of fixed-price over time contracts include progress payments based on specified events or milestones, or based on project progress. For some contracts the Company may be entitled to receive an advance payment. The Company provides standard warranty on its products and records obligation on the same based on past trend.
The Company has applied the practical expedient for certain revenue streams to exclude the value of remaining performance obligations for contracts with an original expected term of one year or less. Performance obligations recognized as at the year end will be satisfied over the course of future periods. The disclosure of the timing for satisfying the performance obligation is based on the requirements of contracts with customers. Remaining performance obligation estimates are subject to change and are affected by several factors, including terminations, changes in the scope of contracts and periodic revalidations.
Note 21.2 - Consequent to the change in the contractual terms w.e.f. April 1, 2024 that now requires that reimbursement of expenses (consisting of travel, living and allied costs) should be based on pre-authorisation, an amount of '' 2,781 million for the year ended March 31, 2025 pertaining to such reimbursements which were hitherto considered as part of revenue have been netted out from respective expenses. Such treatment is profit neutral.
Reimbursement of expenses for corresponding year included as gross in revenue is '' 2,530 million.
Information reported to the Chief operating decision maker (CODM) for the purposes of resource allocation and assessment of segment performance focuses only on one business segment i.e. Automation & Control Systems. There are no other reportable segments.
The Company generates a large percentage of its sales and profits from its business with the Honeywell group (Honeywell), its major shareholder. Sales to Honeywell group accounted for approximately 41% and 39% of our total net sales for the year ended March 31, 2025 and year ended March 31, 2024 respectively. The Companyâs ability to maintain or grow its business with Honeywell depends upon a number of performance factors. However, the Company cannot be assured that its level of sales and profits associated with its relationship with Honeywell will continue. Honeywell-specific business considerations (independent of its shareholding in the Company), including changes in Honeywellâs strategies regarding utilization of alternate opportunities available to it to source products and services currently provided by the Company (including from alternate sources which Honeywell may acquire or develop within its own group), may also reduce the level and/or mix of Honeywellâs business with the Company.
Note 33 - Share Based Payments
Employee share option plan of the company
Honeywell International Inc. (HII), the ultimate holding company, may grant stock options and restricted stock awards to certain employees under its stock incentive plan.
Stock OptionsâThe exercise price, term and other conditions applicable to each option granted under the stock plans are generally determined by the Management Development and Compensation Committee of the Board of Honeywell International Inc. The exercise price of stock options is set on the grant date and may not be less than the fair market value per share of the stock on that date. The fair value is recognized as an expense over the employeeâs requisite service period (generally the vesting period of the award). Options generally vest over a four-year period and expire after ten years.
Restricted Stock UnitsâRestricted stock unit (RSU) awards entitle the holder to receive one share of common stock for each unit when the units vest. RSUs are issued to certain employees as compensation at fair market value at the date of grant. RSUs typically become fully vested over periods ranging from three to seven years and are payable in Honeywell common stock upon vesting.
Fair value of share options granted in the year
The fair value of each stock option award is estimated on the date of grant using the Black-Scholes option-pricing model. Expected volatility is based on implied volatilities from traded options on common stock of HII and historical volatility of common stock of HII. Monte Carlo simulation model is used to derive an expected term which represents an estimate of the time options are expected to remain outstanding. Such model uses historical data to estimate option exercise activity and postvest termination behaviour. The risk-free rate for periods within the contractual life of the option is based on the U.S. treasury yield curve in effect at the time of grant.
These matters are pending before various appellate authorities and the Management including its tax advisors expect that its position will likely be upheld on ultimate resolution and will not have a material adverse effect on the Companyâs financial position and results of operations.
Third party claims against company not acknowledged as debts includes ongoing cases pending in commercial court/ Arbitral Tribunal in relation to claims/ counter claims raised by few vendors/ customers and HAIL for certain commercial teams disagreements.
B) Estimated amount of contracts remaining to be executed on capital accounts and not provided for (net of advances) -'' 17 million [31st March 2024''94 million].
A Litigations/ disputes mainly include:
a) Provision for disputed statutory matters comprises matters under litigation with Sales Tax and Local authorities.
b) The amount of provision made by the Company is based on the estimate made by the Management considering the facts and circumstances of each case.
To the extent the Company is confident that it may have a strong case that portion is disclosed under contingent liabilities.
c) The timing and the amount of cash flows that will arise from these matters will be determined when the matters are settled with respective Appellate Authorities.
B Warranty
Provision for warranty is considered based on the rolling average warranty expense incurred in the preceding 12 months, the warranty period for which ranges from 12 months to 24 months as per provisions of the contracts.
C Provision for Estimated Cost to complete on Contracts
A provision for estimated cost to complete on construction contracts is recognized when it is probable that the total contract cost will exceed total contract revenue. The provision shall be utilized as and when the contract gets executed.
Note 36 - Employee Benefit plans
A) Defined contribution plans
B) Defined benefit plans (gratuity and other retirement benefits)
The Company also provides for gratuity, covering eligible employees in accordance with the Payment of Gratuity Act, 1972. The Gratuity Plan provides a lump sum payment to vested employees at retirement, death, incapacitation or termination of employment, of an amount based on the respective employeeâs salary and the tenure of employment.
Provident Fund contributions were made to a Trust administered by the Company for its qualifying employees. This defined benefit plan is administered by separate trust that is legally separated from the entity. The board of the trust is required by law and by its trust deed to act in the interest of the fund and of all the relevant stakeholders in the scheme; i.e. active employees, inactive employees, retirees, employers. The board of the fund is responsible for the investment policy with regard to the assets of the fund.
Basis our earlier application, the Regional Provident Fund Commissioner issued a provisional sanction order on January 31, 2024 to start complying as an unexempted trust w.e.f. February 1, 2024. Consequently, all contributions are now made to EPFO (Refer Note 25).
Sensitivity analysis indicates the influence of a reasonable change in certain significant assumptions on the outcome of the Present value of obligation (PVO) and aids in understanding the uncertainty of reported amounts.
1 - Sensitivity analysis for each significant actuarial assumptions viz. Discount rate and Salary escalation rate as of the end of the reporting period, showing how the defined benefit obligation would have been affected by changes is called out in the table below.
2 - The assumptions used in preparing the sensitivity analysis is Discount rate at 100bps and - 100 bps
Salary escalation rate at 100 bps and -100 bps
3 - The method used to calculate the liability in these scenarios is by keeping all the other parameters and the data same as in the base liability calculation except for the parameters to be stressed.
4 - There is no change in the method from the previous period and the points/percentage by which the assumptions are stressed are same as that in the previous year.
A note on other risks
Investment risk- The funds are invested with an external insurer (LIC of India). The insurer manages the Gratuity Fund and provides quarterly interest returns. Considering LIC is a state insurer with a sovereign guarantee and no history of defaults the investment risk is not significant.
Interest Risk - The Gratuity fund managed by an external insurer (LIC of India) is in the form of cash accumulation scheme with interest rates declared annually - A significant fall in interest (discount) rates may not be offset by an increase in value of Gratuity Fund, hence may pose an interest rate risk.
Longevity Risk - Since Gratuity is paid at retirement in form of lump sum and also during service at the time of termination to vested members, longevity risk is not applicable since maximum duration for benefit is till retirement age.
Salary Risk- The present value of the defined benefit plan liability is calculated by reference to the future salaries of plan participants. As such, an increase in the salary of the plan participants will increase the planâs liability.
Financial risk management objectives
Company is exposed to foreign exchange risk on account of import risk and hedging activities; and export transactions which is monitored periodically. The Company leverages the global treasury operations of Honeywell to improve mitigation of risk relating to foreign exchange.
Foreign currency risk management
The Company undertakes transactions denominated in foreign currencies; consequently, exposures to exchange rate fluctuations arise. The carrying amounts of the Companyâs foreign currency denominated monetary assets and monetary liabilities at the end of the reporting period are as follows:
Foreign currency exchange rate risk:
The fluctuation in foreign currency exchange rates may have potential impact on the income statement and equity, where any transaction references more than one currency or where assets/liabilities are denominated in a currency other than the functional currency of the Company. Considering the countries and economic environment in which the Company operates, its operation are subject to risks arising from fluctuations in exchange rates in those countries. The risk primarily relate to U.S. Dollars against the functional currency of Honeywell Automation India Limited.
The Company, as per its Hedging policy, uses forward contracts to hedge foreign exchange exposure. The Company evaluates the impact of foreign exchange rate fluctuations by assessing its exposure to exchange rate risks. It hedges a part of these risks by using forward contracts in accordance with its risk management policies.
Foreign currency sensitivity analysis
The Company is exposed mainly to the fluctuation in the value of USD and EURO. The following table details the company sensitivity to a 5% increase and decrease in functional currency against the relevant foreign currency. The sensitivity analysis includes only outstanding foreign currency denominated monetary items and adjust there translation at the period end for a 5 % change in foreign currency rate.
Credit risk management
Credit risk refers to the risks that a counterparty may default on its contractual obligations resulting in financial loss to the Company. The Company deals only with credit worthy counterparties and takes appropriate measures to mitigate the risk of financial loss from defaults. Trade receivable consists of a large number of customers, spread across diverse industries and geographical areas. Ongoing credit evaluation is performed on the financial condition of accounts receivable.
Liquidity risk management
The Company manages liquidity risk by maintaining adequate reserves, banking facility and by continuously monitoring forecasts and actual cash flows and by matching the maturity profiles of financial assets and liabilities.
The Companyâs principal sources of liquidity are cash and cash equivalents and the cash flow that is generated from operations. The Company has no outstanding borrowings. The Company believes that the working capital is sufficient to meet its current requirements.
iii) No funds have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the Company to or in any other person(s) or entity(ies), including foreign entities (âIntermediariesâ), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall, directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company (âUltimate Beneficiariesâ) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.
iv) No funds have been received by the Company from any person(s) or entity(ies), including foreign entities (âFunding Partiesâ), with the understanding, whether recorded in writing or otherwise, that the Company shall, directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (âUltimate Beneficiariesâ) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.
As set out in section 135 of the Companies Act, 2013 the Company is required to contribute/ spend '' 113 million (previous year ended March 31, 2024: '' 110 million) towards Corporate Social Responsibility activities, as calculated basis 2% of its average net profits of the last three financial years.
Company has contributed to Honeywell Hometown Solution India Foundation (HHSIF), trust controlled by Honeywell group for CSR activities. The trust has spent funds on activities such as âEducation, Skill and Researchâ and âSustainable and Holistic Community Development Programâ etc. Refer note 29 for related party disclosure.
* HHSIF had unspent amount of '' 4 million as on 31st March 2023, which had been transferred back by HHSIF to the Company and the Company had deposited in âUnspent CSR Accountâ as on 28th April 2023. During the last year depending on the project requirements, the Company had disbursed amount from Unspent CSR Account to HHSIF. Further, HHSIF has spent this unspent amount of '' 4 million in Financial Year 2023-24 towards ongoing projects.
The financial statements were approved for issue by the board of directors on May 13, 2025 (previous year ended March 31, 2024 on May 15, 2024). The Board of Directors have recommended dividend of '' 105 per equity share for the financial year ended March 31, 2025 (previous year ended March 31, 2024: '' 100 per equity share) for approval of shareholders. The face value of the equity share is '' 10 each. This payment is subject to the approval of shareholders in the Annual General Meeting of the Company. This final dividend if approved by shareholders would result in a net cash outflow of approximately '' 928 million (previous year ended March 31, 2024: '' 884 million approved by shareholder in Annual General Meeting held on August 05, 2024).
The Company maintains the books of account electronically and its back-up on daily-basis on a server located outside of India. These data are accessible in India at all times. The Company notifies the Registrar of Companies (ROC) about the person in control of the data in its Annual filing.
No direct database changes in accounting software are allowed and all data changes are governed at application layer to avoid system performance problems and to follow the principle of data minimization. There are alternate governing processes in place to mitigate any risk of unauthorized access to database.
Mar 31, 2024
L. Provisions and Contingencies
Provisions: Provisions are recognised when there is a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and there is a reliable estimate of the amount of the obligation. Provisions are measured at the best estimate of the expenditure required to settle the present obligation at the Balance sheet date and are discounted to its present value as appropriate.
Provisions for onerous contracts are recognized when the expected benefits to be derived by the Company from a contract are lower than the unavoidable costs of meeting the future obligations under the contract. Provisions for onerous contracts are measured at the present value of lower of the expected net cost of fulfilling the contract and the expected cost of terminating the contract.
Contingent Liabilities: Contingent liabilities are disclosed when there is a possible obligation arising from past events, the existence of which will be confirmed only by the occurrence or non occurrence of one or more uncertain future events not wholly within the control of the Company or a present obligation that arises from past events where it is either not probable that an outflow of resources will be required to settle or a reliable estimate of the amount cannot be made, is termed as a contingent liability.
Contingent assets are disclosed where an inflow of economic benefits is probable.
Provisions, contingent liabilities and contingent assets are reviewed at each Balance Sheet date. Where the unavoidable costs of meeting the obligations under the contract exceed the economic benefits expected to be received under such contract, the present obligation under the contract is recognised and measured as a provision.â
M. Leases
At the inception of a contract, the Company assesses whether the contract is, or contains, a lease. The assessment is based on:
(1) whether the contract involves the use of a distinct identified asset,
(2) whether the Company obtains the right to substantially all the economic benefit from the use of the asset throughout the period, and
(3) whether the Company has the right to direct the use of the asset.
The Company has hired office premises under noncancellable operating lease arrangements at stipulated rentals.
Right-of-use assets represent right to use an underlying asset during the reasonably certain lease term, and lease liabilities represent obligation to make lease payments arising from the lease. The lease terms include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option.
The Company measures the lease liability at the present value of the lease payments that are not paid at the commencement date of the lease. The lease liability is subsequently remeasured by increasing the carrying amount to reflect interest on the lease liability, reducing the carrying amount to reflect the lease payments made and remeasuring the carrying amount to reflect any reassessment or lease modifications or to reflect revised in-substance lease payments.
The right-of-use assets are initially recognized at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or prior to the commencement date of the lease plus any initial direct costs less any lease incentives. They are subsequently measured at cost less accumulated depreciation and impairment losses.
The Company primarily uses incremental borrowing rate, which is based on the information available at the lease commencement date, in determining the present value of the lease payments.
A right-of-use asset and corresponding lease liability are not recorded for leases with an initial term of 12 months or less (short-term leases) and low value leases. For these short-term and low value leases, the Company recognizes lease payments as operating expense as incurred over the lease term.
The Company has also elected practical expedient available within the standard:
⢠not to separate non-lease components from lease components, and instead account for each lease component and any associated non-lease components as a single lease component.
⢠using hindsight in determining the lease term where the contract contains options to extend or terminate the lease.
N. Financial Instruments
Financial assets and financial liabilities are recognised when a company becomes a party to the contractual provisions of the instruments.
Financial assets and financial liabilities are initially measured at fair value. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at fair value through profit and loss) are added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at fair value through profit and loss are recognised immediately in Statement of Profit and Loss.
For financial reporting purposes, fair value measurements are categorised into Level 1, 2, or 3 based on the degree to which the inputs to the fair value measurements are observable and the significance of the inputs to the fair value measurement in its entirety, which are described as follows:
Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date;
Level 2 inputs are inputs, other than quoted prices included within Level 1, that are observable for the asset or liability, either directly or indirectly;
Level 3 inputs are unobservable inputs for the asset or liability.
Financial Assets
All purchases or sales of financial assets are recognised and derecognised on a trade date basis including delivery of assets within the time frame established by regulation or convention in the marketplace.
All recognised financial assets are subsequently measured in their entirety at either amortised cost or fair value, depending on the classification of the financial assets.
i. Classification of financial assets:
All financial assets are subsequently measured at amortised cost except derivative financial instruments.
ii. Impairment of financial assets:
The Company applies the expected credit loss model for recognising impairment loss on financial assets measured at amortised cost trade receivables, other
contractual right to receive cash or other financial asset.
Expected credit losses are the weighted average of credit losses with the respective risks of default occurring as the weights. Credit loss is the difference between all contractual cash flows that are due to the company in accordance with the contract and all the cash flows that the company expects to receive, discounted at the original effective interest rate (or credit-adjusted effective interest rate for purchased or originated credit-impaired financial assets). The Company estimates cash flows by considering all contractual terms of the financial instrument (for example, prepayment, extension, call and similar options) through the expected life of that financial instrument.
The Company measures the loss allowance for a financial instrument at an amount equal to the lifetime expected credit losses if the credit risk on that financial instrument has increased significantly since initial recognition. If the credit risk on a financial instrument has not increased significantly since initial recognition, the company measures the loss allowance for that financial instrument at an amount equal to 12 month expected credit losses. 12 month expected credit losses are portion of the life-time expected credit losses and represent the lifetime cash shortfalls that will result if default occurs within the 12 months after the reporting date and thus, are not cash shortfalls that are predicted over the next 12 months.
If the Company measured loss allowance for a financial instrument at lifetime expected credit loss model in the previous period, but determines at the end of a reporting period that the credit risk has not increased significantly since initial recognition due to improvement in credit quality as compared to the previous period, the company again measures the loss allowance based on 12 month expected credit losses.
When making the assessment of whether there has been a significant increase in credit risk since initial recognition, the Company uses the change in the risk of a default accruing over the expected life of the financial instrument instead of the change in the amount of expected credit losses. To make that assessment, the Company compares the risk of a default occurring on the financial instrument as at the reporting date with the risk of a default occurring on the financial instrument as at the date of initial recognition and considers reasonable and supportable information, that is available without undue cost or effort, that is indicative of significant increases in credit risk since initial recognition.
For trade receivables or any contractual right to receive cash or another financials asset that results from transactions that are within the scope of Ind AS 115, the Company measures the loss allowance at an amount equal to lifetime expected credit losses.
Further, for the purpose of measuring lifetime expected credit loss allowance for trade receivables, the Company has used a practical expedient as permitted under Ind AS 109. This expected credit loss allowance is computed based on a provision matrix based on judgement considering past experience.
The impairment requirements for the recognition and measurement of a loss allowance are equally applied to other financials assets.
iii. Derecognition of financial assets:
The Company derecognises a financial asset when the contractual rights to the cash flow from the asset expired or when it transfer the financial asset and substantially all the risks and rewards of ownership of the asset to another party. If the Company neither transfers nor retains substantially all the risks and rewards of ownership and continues to control the transferred assets the Company recognises its retained interest in the asset and then associated liability for amounts it may have to pay.
On derecognition of a financial asset in its entirety, the difference between the assetâs carrying amount and the sum of the consideration received and receivable and the cumulative gain or loss that had been recognised in other comprehensive income and accumulated in equity is recognised in profit or loss if such gain or loss would have otherwise been recognised in profit or loss on disposal of that financial assets.
On derecognition of a financial asset other than in its entirety, the Company allocates the previous carrying amount of the financial asset between the part it continues to recognise under continuing involvement, and the part it no longer recognises on the basis of relative fair values of those part on the date of the transfer. The difference between carrying amount allocated to the part that is no longer recognised and the sum of the consideration received for the part no longer recognised and any cumulative gain or loss allocated to it that had been recognised in other comprehensive income is recognised in profit and loss if such gain or loss would have otherwise been recognised in profit and loss on disposal of that financial asset. A cumulative gain or loss that has been recognised in other comprehensive income is allocated between the part that continues to be recognised and the part that is no longer recognised on the basis of the relative fair value of those parts.
iv. Derivative financial instruments and hedge accounting: In the ordinary course of business, the Company uses certain derivative financial instruments to reduce business risks which arise from its exposure to foreign exchange fluctuations. The instruments are confined principally to foreign exchange forward contracts. The instruments are employed as hedges of transactions included in the financial statements or for highly probable forecast transactions/firm contractual commitments.
Derivatives are initially accounted for and measured at fair value from the date the derivative contract is entered into and are subsequently re-measured to their fair value at the end of each reporting period
The Company adopts hedge accounting for forward contracts. At the inception of each hedge, there is a formal, documented designation of the hedging relationship. This documentation includes, inter alia, items such as identification of the hedged item or transaction and the nature of the risk being hedged. At inception each hedge is expected to be highly effective in achieving an offset of changes in fair value or cash flows attributable to the hedged risk. The effectiveness of hedge instruments to reduce the risk associated with the exposure being hedged is assessed and measured at the inception and on an ongoing basis. The ineffective portion of designated hedges is recognised immediately in the statement of profit and loss.
When hedge accounting is applied:
a. for fair value hedges of recognised assets and liabilities, changes in fair value of the hedged assets and liabilities attributable to the risk being hedged, are recognised in the statement of profit and loss and compensate for the effective portion of symmetrical changes in the fair value of the derivatives.
b. for cash flow hedges, the effective portion of the change in the fair value of the derivative is recognised directly in equity and the ineffective portion is taken to the statement of profit and loss. If the cash flow hedge of a firm commitment or forecasted transaction results in the recognition of a nonfinancial asset or liability, then, at the time the asset or liability is recognised, the associated gains or losses on the derivative that had previously been recognised in equity are included in the initial measurement of the asset or liability. For hedges that do not result in the recognition of a nonfinancial asset or a liability, amounts deferred in equity are recognised in the statement of profit and loss in the same period in which the hedged item affects the statement of profit and loss.
In cases where hedge accounting is not applied, changes in the fair value of derivatives are recognised in the statement of profit and loss as and when they arise.
Hedge accounting is discontinued when the hedging instrument expires or is sold, terminated, or exercised, or no longer qualifies for hedge accounting. At that time, any cumulative gain or loss on the hedging instrument recognised in equity is retained in equity until the forecasted transaction occurs. If a hedged transaction is no longer expected to occur, the net cumulative gain or loss recognised in equity is transferred to the statement of profit and loss for the period.
Financial Liabilities and Equity Instruments
i. Classification as debt or equity
Debt and equity instruments issued by the Company are classified as either financial liabilities or as equity in accordance with the substance of the contractual arrangements and the definitions of financial liability and equity instrument.
ii. Equity instruments
An equity instrument is any contract that evidences residual interest in the assets of an entity after deducting all of its liabilities. Equity instruments issued by the Company are recognised at the proceeds received, net of direct issue cost.
iii. Financial liabilities
All financial liabilities are subsequently measured at amortised cost using effective interest method of FVTPL.
a) Financial liabilities at FVTPL
Financial liabilities are classified as at FVTPL when the financial liability is held for trading or designated as at FVTPL.
Financial liability at FVTPL are stated at fair value, with any gains or losses arising on remeasurement recognised in profit and loss. The net gain or loss recognised in profit and loss incorporates any interest paid on the financial liability and is included in âOther Incomeâ.
b) Financial liabilities subsequently measured at amortised cost
Financial liabilities that are not held for trading and are not designated as at FVTPL are measured at amortised cost at the end of subsequent accounting periods. The carrying amount of financial liabilities that are subsequently measured at amortised cost
are determined based on the effective interest method. Interest expenses that is not capitalised as part of cost of an asset is included in âfinance costâ.
The effective interest method is a method of calculating the amortised cost of a financial liability and of allocating interest expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash payments through the expected life of the financial liability, or (where appropriate) a shorter period, to the net carrying amount on initial recognition.
c) Foreign exchange gains and losses
For financial liabilities that are denominated in a foreign currency and are measured at amortised cost at the end of each reporting period, the foreign exchange gains and losses are determined based on the amortised cost of the instrument and are recognised in other income. The fair value of financial liabilities denominated in foreign currency is determined in that foreign currency and translated at the spot rate at the end of the reporting period. For financial liability that are measured at FVTPL, the foreign exchange component forms part of fair value gains or losses and is recognised in the Statement of Profit and Loss.
iv) Derecognition of financial liabilities
The Company derecognises financial liability when, and only when, the Company obligations are discharged, cancelled and have expired. An exchange between with a lender of debt instrument is substantially different term is accounted for as and extinguishment of the original financial liability and the recognition of a new financial liability. Similarly, a substantial modification of a term of existing financial liability is accounted for as and extinguishment of the original financial liability and recognition of new financial liability. The difference between the carrying amount of the financial liability derecognised and the consideration paid and payable is recognised in profit and loss.
Q. New Accounting Standards, Amendments to Existing Standards, Annual Improvements, Interpretations, etc. applicable to the Company effective subsequent to March 31, 2024
Ministry of Corporate Affairs (âMCAâ) notifies new standards or amendments to the existing standards under Companies (Indian Accounting Standards) Rules as issued from time to time. For the year ended March 31, 2024,
MCA has not notified any new standards or amendments to the existing standards applicable to the Company.
Note 3 -Critical Judgements, estimations and assumptions in applying Accounting Policies:
The preparation of the financial statements in conformity with Ind AS requires the management to make estimates, judgments and assumptions. These estimates, judgments and assumptions affect the application of accounting policies and the reported amounts of assets and liabilities, the disclosures of contingent assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses during the year. The application of accounting policies that require critical accounting estimates involving complex and subjective judgments and the use of assumptions in these financial statements have been disclosed appropriately. Accounting estimates could change from period to period. Actual results could differ from those estimates. The estimates and underlying assumptions are reviewed on an ongoing basis. Appropriate changes in estimates are made as management becomes aware of changes in circumstances surrounding the estimates. Changes in estimates and judgements are reflected in the financial statements in the period in which changes are made.
The Company uses the following critical accounting judgements, estimates and assumptions in preparation of its financial statements:
1. The preparation of financial statements involves estimates and assumptions that affect the reported amount of assets, liabilities, disclosure of contingent liabilities at the date of financial statements and the reported amount of revenues and expenses for the reporting period. Specifically, the Company estimates the probability of collection of accounts receivable by analysing historical payment patterns, customer concentrations, customer credit-worthiness and current economic trends. If the financial condition of a customer deteriorates, additional allowances may be required.
2. The Company uses the percentage-of-completion method in accounting for its contract revenue. Use of the percentage-of-completion method requires the Company to estimate the efforts or costs expended to date as a proportion of the total efforts or costs to be expended. Efforts or costs expended have been used to measure progress towards completion as there is a direct relationship between input and productivity. Provisions
for estimated losses, if any, on uncompleted contracts are recorded in the period in which such losses become probable based on the expected contract estimates at the reporting date.
3. In case of Property, Plant and Equipment and Intangible assets, the charge in respect of periodic depreciation/ amortisation is derived after determining an estimate of an assetâs expected useful life and the expected residual value at the end of its life. The useful lives and residual values of Companyâs assets are determined by management at the time the asset is acquired and reviewed periodically, including at each financial year end. The lives are based on historical experience with similar assets as well as anticipation of future events, which may impact their life, such as changes in technology.
4. Ind AS 116 requires lessee to determine the lease term as the non-cancellable period of a lease adjusted with any option to extend or terminate the lease, if the use of such option is reasonably certain. The Company makes an assessment on the expected lease term on a lease-bylease basis and thereby assesses whether it is reasonably certain that any options to extend or terminate the contract will be exercised. In evaluating the lease term, the Company considers factors such as any significant leasehold improvements undertaken over the lease term, costs relating to the termination of the lease and the importance of the underlying asset to the Companyâs operations taking into account the location of the underlying asset and the availability of suitable alternatives. The lease term in future periods is reassessed to ensure that the lease term reflects the current economic circumstances. After considering current and future economic conditions, the company has concluded that no material changes are required to lease period relating to the existing lease contracts. Refer note no 2 (M).
5. The cost of defined benefit plans, compensated absences and the present value of defined benefit obligations based on current actuarial valuations using the projected unit credit method. An actuarial valuation involves making various assumptions that may differ from actual developments in the future. These include the determination of discount rate, salary increment and mortality rates. Due to complexities involved in the valuation and its long term nature, defined benefit obligation is sensitive to changes in these assumptions. All assumptions are reviewed at each reporting date.
(a) Rights, preferences and restrictions attached to the shares
Equity shares: The Company has one class of equity shares having a par value of ''10 per share. Each shareholder is eligible for one vote per share held. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting, except in case of interim dividend. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the Company after distribution of all preferential amounts, in proportion to their shareholding.
B. Contract balances
Progress on satisfying performance obligations under contracts with customers and the related billings and cash collections are recorded in accounts receivable and the unbilled receivables in Other Financial Assets. The customer advances are recorded as Other Current Liabilities. Unbilled receivables (Contract Assets) arise when the timing of cash collected from customers differs from the timing of revenue recognition, such as when contract provisions require specific milestones to be met before a customer can be billed. Those assets are recognized when the revenue associated with the contract is recognized prior to billing and derecognized when billed in accordance with the terms of the contract. Contract liabilities are recorded when a milestone is met triggering the contractual right to bill but revenue recognised over time is not recognized.
When contracts are modified to account for changes in contract specifications and requirements, the Company considers whether the modification either creates new or changes the existing enforceable rights and obligations. Contract modifications that are for goods or services that are not distinct from the existing contract, due to the significant integration with the original good or service provided, are accounted for as if they were part of that existing contract. The effect of a contract modification on the transaction price and the measure of progress for the performance obligation to which it relates, is recognized as an adjustment to revenue (either as an increase in or a reduction of revenue) on a cumulative catchup basis. When the modifications include additional performance obligations that are distinct, they are accounted for as a new contract and performance obligation, which are recognized prospectively.
C. Performance obligation
A performance obligation is a promise in a contract to transfer a distinct good or service to the customer. A contractâs transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied. When contracts with customers require highly complex integration or manufacturing services that are not separately identifiable from other promises in the contracts and, therefore, not distinct, then the entire contract is accounted for as a single performance obligation. Performance obligations are satisfied as of a point in time or over time. Performance obligations are supported by contracts with customers, providing a framework for the nature of the distinct goods, services or bundle of goods and services. The timing of satisfying the performance obligation is typically indicated by the terms of the contract. Typical payment terms of fixed-price over time contracts include progress payments based on specified events or milestones, or based on project progress. For some contracts the Company may be entitled to receive an advance payment. The Company provides standard warranty on its products and records obligation on the same based on past trend.
Employee share option plan of the company
Honeywell International Inc. (HII), the ultimate holding company, may grant stock options and restricted stock awards to certain employees under its stock incentive plan.
Stock OptionsâThe exercise price, term and other conditions applicable to each option granted under the stock plans are generally determined by the Management Development and Compensation Committee of the Board of Honeywell International Inc. The exercise price of stock options is set on the grant date and may not be less than the fair market value per share of the stock on that date. The fair value is recognized as an expense over the employeeâs requisite service period (generally the vesting period of the award). Options generally vest over a four-year period and expire after ten years.
Restricted Stock UnitsâRestricted stock unit (RSU) awards entitle the holder to receive one share of common stock for each unit when the units vest. RSUs are issued to certain employees as compensation at fair market value at the date of grant. RSUs typically become fully vested over periods ranging from three to seven years and are payable in Honeywell common stock upon vesting.
Fair value of share options granted in the year
The fair value of each stock option award is estimated on the date of grant using the Black-Scholes option-pricing model. Expected volatility is based on implied volatilities from traded options on common stock of HII and historical volatility of common stock of HII. Monte Carlo simulation model is used to derive an expected term which represents an estimate of the time options are expected to remain outstanding. Such model uses historical data to estimate option exercise activity and postvest termination behaviour. The risk-free rate for periods within the contractual life of the option is based on the U.S. treasury yield curve in effect at the time of grant.
Note: It is not practicable for the Company to estimate the timing of cash outflow, if any, in respect of the above pending resolutions of the respective proceedings.
As at March 31, 2024, Contingent liability majorly represent demands arising on completion of assessment proceedings under the Income-tax Act, 1961 and other indirect tax act including GST, excise, custom and sales tax.
These claims are on account of various issues of disallowances, GSTR 2A/2B and GSTR 3B mismatches, or addition in liability by tax liabilities related to various issues including C- forms, WCT TDS etc.
These matters are pending before various appellate authorities and the Management including its tax advisors expect that its position will likely be upheld on ultimate resolution and will not have a material adverse effect on the Companyâs financial position and results of operations.
Third party claims against company not acknowledged as debts includes ongoing cases pending in commercial court/ Arbitral Tribunal in relation to claims/ counter claims raised by few vendors/ customers and HAIL for certain commercial teams disagreements.
B) Estimated amount of contracts remaining to be executed on capital accounts and not provided for (net of advances) -''94 million [31st March 2023 ''45 million].
A Litigations/ disputes mainly include:
a) Provision for disputed statutory matters comprises matters under litigation with Sales Tax and Local authorities.
b) The amount of provision made by the Company is based on the estimate made by the Management considering the facts and circumstances of each case.
To the extent the Company is confident that it may have a strong case that portion is disclosed under contingent liabilities.
c) The timing and the amount of cash flows that will arise from these matters will be determined when the matters are settled with respective Appellate Authorities.
B Warranty
Provision for warranty is considered based on the rolling average warranty expense incurred in the preceding 12 months, the warranty period for which ranges from 12 months to 24 months as per provisions of the contracts.
C Provision for Estimated Cost to complete on Contracts
A provision for estimated cost to complete on construction contracts is recognized when it is probable that the total contract cost will exceed total contract revenue. The provision shall be utilized as and when the contract gets executed.
Note 36 - Employee Benefit plans
A) Defined contribution plans
The company has recognized the following amounts in the Statement of Profit and Loss for the year.
B) Defined benefit plans (gratuity and other retirement benefits)
The Company also provides for gratuity, covering eligible employees in accordance with the Payment of Gratuity Act, 1972. The Gratuity Plan provides a lump sum payment to vested employees at retirement, death, incapacitation or termination of employment, of an amount based on the respective employeeâs salary and the tenure of employment.
Provident Fund contributions were made to a Trust administered by the Company for its qualifying employees. This defined benefit plan is administered by separate trust that is legally separated from the entity. The board of the trust is required by law and by its trust deed to act in the interest of the fund and of all the relevant stakeholders in the scheme; i.e. active employees, inactive employees, retirees, employers. The board of the fund is responsible for the investment policy with regard to the assets of the fund.
Sensitivity Analysis
Sensitivity analysis indicates the influence of a reasonable change in certain significant assumptions on the outcome of the Present value of obligation (PVO) and aids in understanding the uncertainty of reported amounts.
1 - Sensitivity analysis for each significant actuarial assumptions viz. Discount rate and Salary escalation rate as of the end of the reporting period, showing how the defined benefit obligation would have been affected by changes is called out in the table below.
2 - The assumptions used in preparing the sensitivity analysis is Discount rate at 100bps and - 100 bps
Salary escalation rate at 100 bps and -100 bps
3 - The method used to calculate the liability in these scenarios is by keeping all the other parameters and the data same as in the base liability calculation except for the parameters to be stressed.
4 - There is no change in the method from the previous period and the points/percentage by which the assumptions are stressed are same as that in the previous year.
A note on other risks
Investment risk- The funds are invested with an external insurer (LIC of India). The insurer manages the Gratuity Fund and provides quarterly interest returns. Considering LIC is a state insurer with a sovereign guarantee and no history of defaults the investment risk is not significant.
Interest Risk - The Gratuity fund managed by an external insurer (LIC of India) is in the form of cash accumulation scheme with interest rates declared annually - A significant fall in interest (discount) rates may not be offset by an increase in value of Gratuity Fund, hence may pose an interest rate risk.
Longevity Risk - Since Gratuity is paid at retirement in form of lump sum and also during service at the time of termination to vested members, longevity risk is not applicable since maximum duration for benefit is till retirement age.
Salary Risk- The present value of the defined benefit plan liability is calculated by reference to the future salaries of plan participants. As such, an increase in the salary of the plan participants will increase the planâs liability.
Company is exposed to foreign exchange risk on account of import risk and hedging activities; and export transactions which is monitored periodically. The Company leverages the global treasury operations of Honeywell to improve mitigation of risk relating to foreign exchange.
Foreign currency risk management
The Company undertakes transactions denominated in foreign currencies; consequently, exposures to exchange rate fluctuations arise. The carrying amounts of the Companyâs foreign currency denominated monetary assets and monetary liabilities at the end of the reporting period are as follows:
Foreign currency exchange rate risk:
The fluctuation in foreign currency exchange rates may have potential impact on the income statement and equity, where any transaction references more than one currency or where assets/liabilities are denominated in a currency other than the functional currency of the Company. Considering the countries and economic environment in which the Company operates, its operation are subject to risks arising from fluctuations in exchange rates in those countries. The risk primarily relate to U.S. Dollars against the functional currency of Honeywell Automation India Limited.
The Company, as per its Hedging policy, uses forward contracts to hedge foreign exchange exposure. The Company evaluates the impact of foreign exchange rate fluctuations by assessing its exposure to exchange rate risks. It hedges a part of these risks by using forward contracts in accordance with its risk management policies.
Credit risk refers to the risks that a counterparty may default on its contractual obligations resulting in financial loss to the Company. The Company deals only with credit worthy counterparties and takes appropriate measures to mitigate the risk of financial loss from defaults. Trade receivable consists of a large number of customers, spread across diverse industries and geographical areas. Ongoing credit evaluation is performed on the financial condition of accounts receivable.
Liquidity risk management
The Company manages liquidity risk by maintaining adequate reserves, banking facility and by continuously monitoring forecasts and actual cash flows and by matching the maturity profiles of financial assets and liabilities. The Companyâs principal sources of liquidity are cash and cash equivalents and the cash flow that is generated from operations. The Company has no outstanding borrowings. The Company believes that the working capital is sufficient to meet its current requirements.
Note 39
The financial statements were approved for issue by the board of directors on May 15, 2024 (previous year ended March 31, 2023 on May 17, 2023). The Board of Directors have recommended dividend of ''100 per equity share for the financial year ended March 31, 2024 (previous year ended March 31, 2023: ''95 per equity share) for approval of shareholders. The face value of the equity share is ''10 each. This payment is subject to the approval of shareholders in the Annual General Meeting of the Company. This final dividend if approved by shareholders would result in a net cash outflow of approximately ''884 million (previous year ended March 31, 2023: ''840 million approved by shareholder in Annual General Meeting held on August 11, 2023).
Note 41
The Company maintains the books of account electronically and its back-up on daily-basis on a server located outside of India. These data are accessible in India at all times. The Company notifies the Registrar of Companies (ROC) about the person in control of the data in its Annual filing.
Note 42
No direct database changes in accounting software are allowed and all data changes are governed at application layer to avoid system performance problems and to follow the principle of data minimization. There are alternate governing processes in place to mitigate any risk of unauthorized access to database.
For and on behalf of the Board
Ganesh Natarajan Ashish Gaikwad
Chairman Managing Director
DIN:00176393 DIN:07585079
Pulkit Goyal Indu Daryani
Chief Financial Officer Company Secretary
M No: 124311 FCS No: 9059
Place : Pune
Date : May 15, 2024
Mar 31, 2023
B. Contract balances
Progress on satisfying performance obligations under contracts with customers and the related billings and cash collections are recorded in accounts receivable and the unbilled receivables in Other Financial Assets. The customer advances are recorded as Other Current Liabilities. Unbilled receivables (Contract Assets) arise when the timing of cash collected from customers differs from the timing of revenue recognition, such as when contract provisions require specific milestones to be met before a customer can be billed. Those assets are recognized when the revenue associated with the contract is recognized prior to billing and derecognized when billed in accordance with the terms of the contract. Contract liabilities are recorded when a milestone is met triggering the contractual right to bill but revenue recognised over time is not recognized.
When contracts are modified to account for changes in contract specifications and requirements, the Company considers whether the modification either creates new or changes the existing enforceable rights and obligations. Contract modifications that are for goods or services that are not distinct from the existing contract, due to the significant integration with the original good or service provided, are accounted for as if they were part of that existing contract. The effect of a contract modification on the transaction price and the measure of progress for the performance obligation to which it relates, is recognized as an adjustment to revenue (either as an increase in or a reduction of revenue) on a cumulative catch-up basis. When the modifications include additional performance obligations that are distinct, they are accounted for as a new contract and performance obligation, which are recognized prospectively.
A performance obligation is a promise in a contract to transfer a distinct good or service to the customer. A contractâs transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied. When contracts with customers require highly complex integration or manufacturing services that are not separately identifiable from other promises in the contracts and, therefore, not distinct, then the entire contract is accounted for as a single performance obligation. Performance obligations are satisfied as of a point in time or over time. Performance obligations are supported by contracts with customers, providing a framework for the nature of the distinct goods, services or bundle of goods and services. The timing of satisfying the performance obligation is typically indicated by the terms of the contract.
Typical payment terms of fixed-price over time contracts include progress payments based on specified events or milestones, or based on project progress. For some contracts the Company may be entitled to receive an advance payment. The Company provides standard warranty on its products and records obligation on the same based on past trend.
The Company has applied the practical expedient for certain revenue streams to exclude the value of remaining performance obligations for contracts with an original expected term of one year or less. Performance obligations recognized as at the year end will be satisfied over the course of future periods. The disclosure of the timing for satisfying the performance obligation is based on the requirements of contracts with customers. Remaining performance obligation estimates are subject to change and are affected by several factors, including terminations, changes in the scope of contracts and periodic revalidations.
Information reported to the Chief operating decision maker (CODM) for the purposes of resource allocation and assessment of segment performance focuses only on one business segment i.e. Automation & Control Systems. There are no other reportable segments.
The Company generates a large percentage of its sales and profits from its business with the Honeywell group (Honeywell), its major shareholder. Sales to Honeywell group accounted for approximately 40% and 32% of our total net sales for the year ended March 31, 2023 and year ended March 31, 2022 respectively. The Companyâs ability to maintain or grow its business with Honeywell depends upon a number of performance factors. However, the Company cannot be assured that its level of sales and profits associated with its relationship with Honeywell will continue. Honeywell-specific business considerations (independent of its shareholding in the Company), including changes in Honeywellâs strategies regarding utilization of alternate opportunities available to it to source products and services currently provided by the Company (including from alternate sources which Honeywell may acquire or develop within its own group), may also reduce the level and/or mix of Honeywellâs business with the Company.
The Company has compiled this information based on intimations received from suppliers of their status as Micro or Small enterprises and / or its registration with the appropriate authority under Micro, Small and Medium Enterprises Development Act, 2006 (as amended from time to time).
Note 33 - Share Based Payments Employee share option plan of the company
Honeywell International Inc. (HII), the ultimate holding company, may grant stock options and restricted stock awards to certain employees under its stock incentive plan.
Stock OptionsâThe exercise price, term and other conditions applicable to each option granted under the stock plans are generally determined by the Management Development and Compensation Committee of the Board of Honeywell International Inc. The exercise price of stock options is set on the grant date and may not be less than the fair market value per share of the stock on that date. The fair value is recognized as an expense over the employeeâs requisite service period (generally the vesting period of the award). Options generally vest over a four-year period and expire after ten years.
Restricted Stock UnitsâRestricted stock unit (RSU) awards entitle the holder to receive one share of common stock for each unit when the units vest. RSUs are issued to certain employees as compensation at fair market value at the date of grant. RSUs typically become fully vested over periods ranging from three to seven years and are payable in Honeywell common stock upon vesting.
Fair value of share options granted in the year
The fair value of each stock option award is estimated on the date of grant using the Black-Scholes option-pricing model. Expected volatility is based on implied volatilities from traded options on common stock of HII and historical volatility of common stock of HII. Monte Carlo simulation model is used to derive an expected term which represents an estimate of the time options are expected to remain outstanding. Such model uses historical data to estimate option exercise activity and post-vest termination behaviour. The risk-free rate for periods within the contractual life of the option is based on the U.S. treasury yield curve in effect at the time of grant.
|
Note 34 - Contingent Liabilities and Commitments A) Contingent liabilities |
('' in lakhs) |
|
|
Particulars |
31st March 2023 |
31st March 2022 |
|
a) Income tax liability that may arise in respect of matters in appeal |
4,358 |
6,068 |
|
b) Excise duty claims against the Company |
2 |
2 |
|
c) Sales tax liability that may arise in respect of matters in appeal |
6,170 |
8,199 |
|
d) Customs duty claims against the Company |
133 |
187 |
|
e) Third party Claims against the Company not acknowledged as debts |
152 |
123 |
Note: It is not practicable for the Company to estimate the timing of cash outflow, if any, in respect of the above pending resolutions of the respective proceedings.
As at March 31, 2023, Contingent liability majorly represent demands arising on completion of assessment proceedings under the Income-tax Act, 1961 and other indirect tax act including excise, custom and sales tax.
These claims are on account of various issues of disallowances, or addition in liability by tax liabilities related to various issues including C- forms, WCT TDS etc.
These matters are pending before various appellate authorities and the Management including its tax advisors expect that its position will likely be upheld on ultimate resolution and will not have a material adverse effect on the Companyâs financial position and results of operations.
Third party claims against company not acknowledged as debts includes ongoing cases pending in commercial court/ Arbitral Tribunal in relation to claims/ counter claims raised by few vendors/ customers and HAIL for certain commercial teams disagreements.
B) Estimated amount of contracts remaining to be executed on capital accounts and not provided for (net of advances) -'' 450 (âlakhs) [31st March 2022''502 (âlakhs)]
A Litigations/ disputes mainly include:
a) Provision for disputed statutory matters comprises matters under litigation with Sales Tax and Local authorities.
b) The amount of provision made by the Company is based on the estimate made by the Management considering the facts and circumstances of each case.
To the extent the Company is confident that it may have a strong case that portion is disclosed under contingent liabilities.
c) The timing and the amount of cash flows that will arise from these matters will be determined when the matters are settled with respective Appellate Authorities.
B Warranty
Provision for warranty is considered based on the rolling average warranty expense incurred in the preceding 12 months, the warranty period for which ranges from 12 months to 24 months as per provisions of the contracts.
C P rovision for Estimated Cost to complete on Contracts
A provision for estimated cost to complete on construction contracts is recognized when it is probable that the total contract cost will exceed total contract revenue. The provision shall be utilized as and when the contract gets executed.
B Defined benefit plans (gratuity and other retirement benefits)
The Company also provides for gratuity, covering eligible employees in accordance with the Payment of Gratuity Act, 1972. The Gratuity Plan provides a lump sum payment to vested employees at retirement, death, incapacitation or termination of employment, of an amount based on the respective employeeâs salary and the tenure of employment.
Provident Fund contributions are made to a Trust administered by the Company for its qualifying employees. This defined benefit plans is administered by separate trust that is legally separated from the entity. The board of the trust is required by law and by its trust deed to act in the interest of the fund and of all the relevant stakeholders in the scheme; i.e. active employees, inactive employees, retirees, employers. The board of the fund is responsible for the investment policy with regard to the assets of the fund.
A significant part of the plan assets are classified as Level 2 where the fair value is determined basis the observable inputs either directly or indirectly. The financial assets carried at fair value by the trust are mainly investments in Government securities, public and private sector bonds and mutual funds.
Sensitivity analysis indicates the influence of a reasonable change in certain significant assumptions on the outcome of the Present value of obligation (PVO) and aids in understanding the uncertainty of reported amounts.
1 - Sensitivity analysis for each significant actuarial assumptions viz. Discount rate and Salary escalation rate as of the end of the reporting period, showing how the defined benefit obligation would have been affected by changes is called out in the table above.
2 - The assumptions used in preparing the sensitivity analysis is Discount rate at 100bps and - 100 bps
Salary escalation rate at 100 bps and -100 bps
3 - The method used to calculate the liability in these scenarios is by keeping all the other parameters and the data same as in the base liability calculation except for the parameters to be stressed.
4 - There is no change in the method from the previous period and the points/percentage by which the assumptions are stressed are same as that in the previous year.
investment risk- The funds are invested with an external insurer (LIC of India). The insurer manages the Gratuity Fund and provides quarterly interest returns. Considering LIC is a state insurer with a sovereign guarantee and no history of defaults the investment risk is not significant.
interest Risk - The Gratuity fund managed by an external insurer (LIC of India) is in the form of cash accumulation scheme with interest rates declared annually - A significant fall in interest (discount) rates may not be offset by an increase in value of Gratuity Fund, hence may pose an interest rate risk.
Longevity Risk - Since Gratuity is paid at retirement in form of lump sum and also during service at the time of termination to vested members, longevity risk is not applicable since maximum duration for benefit is till retirement age
Salary Risk- The present value of the defined benefit plan liability is calculated by reference to the future salaries of plan participants. As such, an increase in the salary of the plan participants will increase the planâs liability.
Company is exposed to foreign exchange risk on account of import risk and hedging activities; and export transactions which is monitored periodically. The Company leverages the global treasury operations of Honeywell to improve mitigation of risk relating to foreign exchange.
Foreign currency risk management
The Company undertakes transactions denominated in foreign currencies; consequently, exposures to exchange rate fluctuations arise. The carrying amounts of the Companyâs foreign currency denominated monetary assets and monetary liabilities at the end of the reporting period are as follows:
Foreign currency exchange rate risk:
The fluctuation in foreign currency exchange rates may have potential impact on the income statement and equity, where any transaction references more than one currency or where assets/liabilities are denominated in a currency other than the functional currency of the Company. Considering the countries and economic environment in which the Company operates, its operation are subject to risks arising from fluctuations in exchange rates in those countries. The risk primarily relate to U.S. Dollars against the functional currency of Honeywell Automation India Limited.
The Company, as per its Hedging policy, uses forward contracts to hedge foreign exchange exposure. The Company evaluates the impact of foreign exchange rate fluctuations by assessing its exposure to exchange rate risks. It hedges a part of these risks by using forward contracts in accordance with its risk management policies.
Foreign currency sensitivity analysis
The Company is exposed mainly to the fluctuation in the value of USD and EURO. The following table details the company sensitivity to a 5% increase and decrease in functional currency against the relevant foreign currency. The sensitivity analysis includes only outstanding foreign currency denominated monetary items and adjust there translation at the period end for a 5 % change in foreign currency rate.
Credit risk refers to the risks that a counterparty may default on its contractual obligations resulting in financial loss to the Company. The Company deals only with credit worthy counterparties and takes appropriate measures to mitigate the risk of financial loss from defaults. Trade receivable consists of a large number of customers, spread across diverse industries and geographical areas. Ongoing credit evaluation is performed on the financial condition of accounts receivable.
The Company manages liquidity risk by maintaining adequate reserves, banking facility and by continuously monitoring forecasts and actual cash flows and by matching the maturity profiles of financial assets and liabilities.
The Companyâs principal sources of liquidity are cash and cash equivalents and the cash flow that is generated from operations. The Company has no outstanding borrowings. The Company believes that the working capital is sufficient to meet its current requirements.
Company has contributed to Honeywell Hometown Solution India Foundation (HHSIF), trust controlled by Honeywell group for CSR activities. The trust has spent funds on activities such as âEducation, Skill and Researchâ and âSustainable and Holistic Community Development Programâ etc. Refer note 29 for related party disclosure.
Unspent CSR contribution amounting to '' 45 lakhs is related to ongoing project and will be spent by HHSIF in next financial year considering the tenure of the project. The said amount is deposited in âUnspent CSR Accountâ in accordance with Section 135 of the Companies Act, 2013 within the prescribed time limit.
The financial statements were approved for issue by the board of directors on May 17, 2023 (previous year ended March 31, 2022 on May 12, 2022). The Board of Directors have recommended dividend of '' 95 per equity share for the financial year ended March 31, 2023 (previous year ended March 31, 2022: '' 90 per equity share) for approval of shareholders. The face value of the equity share is '' 10 each. This payment is subject to the approval of shareholders in the Annual General Meeting of the Company which is scheduled on August 11, 2023. This final dividend if approved by shareholders would result in a net cash outflow of approximately '' 8,399 lakhs (previous year ended March 31, 2022: '' 7,957 lakhs approved by shareholder in Annual General Meeting held on August 17, 2022).
The Company maintains the books of account electronically and itâs back-up on daily-basis on a server located outside of India. These data are accessible in India at all times. The Company has noted the recent changes in the Rule 3 of Companies Act and is in the process of evaluating the options to comply with the revised rules. The Company will notify Registrar of Companies (ROC) about the person in control of the data in its Annual filing.
Figures for the previous year have been regrouped/reclassified wherever required.
Mar 31, 2022
âDuring the year ended March 31, 2022 and March 31,2021,there is no movement in property, plant and equipment and intangible asset on account of revaluation, business combination, impairment.
The aggregate depreciation has been included under depreciation and amortization expense in the statement of Profit and Loss.â
The concentration of credit risk is limited due to the fact that the customer base is large.
The Company determines the allowance for expected credit losses based on historical loss experience adjusted to reflect current and estimated future economic conditions. The Company has specifically evaluated the potential impact with respect to customers which could have an immediate impact and the rest which could have an impact with expected delays. Basis this assessment, the allowance for doubtful trade receivables as at March 31, 2022 is considered adequate.
The Company is not having any trade receivables representing more than 5% of total trade receivables.
There are no repatriation restrictions with regards to cash and cash equivalents as at the end of the reporting period and prior periods.
The deposits maintained by the Company with banks and financial institutions comprise time deposits, which can be withdrawn by the Company at any point without prior notice or penalty on the principal.
(a) Rights, preferences and restrictions attached to the shares
Equity shares: The Company has one class of equity shares having a par value of Rs.10 per share. Each shareholder is eligible for one vote per share held. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting, except in case of interim dividend. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the Company after distribution of all preferential amounts, in proportion to their shareholding.
e) 6,631,142 (March 31, 2021 : 6,631,142 ) Equity shares constituting 75% (March 31, 2021 : 75%) of the paid-up capital of the Company are held by Honeywell International Inc., the ultimate holding company, through its 100% subsidiary, HAIL Mauritius Limited (earlier, Honeywell Asia Pacific Inc.).
f) The Company has neither allotted any shares as fully paid up bonus shares nor pursuant to contract(s) payment being received in cash during 5 years immediately preceding March 31,2022.
Progress on satisfying performance obligations under contracts with customers and the related billings and cash collections are recorded in accounts receivable and the unbilled receivables in Other Financial Assets. The customer advances are recorded as Other Current Liabilities. Unbilled receivables (Contract Assets) arise when the timing of cash collected from customers differs from the timing of revenue recognition, such as when contract provisions require specific milestones to be met before a customer can be billed. Those assets are recognized when the revenue associated with the contract is recognized prior to billing and derecognized when billed in accordance with the terms of the contract. Contract liabilities are recorded when a milestone is met triggering the contractual right to bill but revenue recognised over time is not recognized.
When contracts are modified to account for changes in contract specifications and requirements, the Company considers whether the modification either creates new or changes the existing enforceable rights and obligations. Contract modifications that are for goods or services that are not distinct from the existing contract, due to the significant integration with the original good or service provided, are accounted for as if they were part of that existing contract. The effect of a contract modification on the transaction price and the measure of progress for the performance obligation to which it relates, is recognized as an adjustment to revenue (either as an increase in or a reduction of revenue) on a cumulative catch-up basis. When the modifications include additional performance obligations that are distinct, they are accounted for as a new contract and performance obligation, which are recognized prospectively.
The net change was primarily driven by the increase in recognition of revenue as performance obligations were satisfied exceeding milestone billings..
A performance obligation is a promise in a contract to transfer a distinct good or service to the customer. A contractâs transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied. When contracts with customers require highly complex integration or manufacturing services that are not separately identifiable from other promises in the contracts and, therefore, not distinct, then the entire contract is accounted for as a single performance obligation. Performance obligations are satisfied as of a point in time or over time. Performance obligations are supported by contracts with customers, providing a framework for the nature of the distinct goods, services or bundle of goods and services. The timing of satisfying the performance obligation is typically indicated by the terms of the contract. Typical payment terms of fixed-price over time contracts include progress payments based on specified events or milestones, or based on project progress. For some contracts the Company may be entitled to receive an advance payment. The Company provides standard warranty on its products and records obligation on the same based on past trend.
The Company has applied the practical expedient for certain revenue streams to exclude the value of remaining performance obligations for contracts with an original expected term of one year or less. Performance obligations recognized as at the year end will be satisfied over the course of future periods. The disclosure of the timing for satisfying the performance obligation is based on the requirements of contracts with customers. Remaining performance obligation estimates are subject to change and are affected by several factors, including terminations, changes in the scope of contracts and periodic revalidations.
Information reported to the Chief operating decision maker (CODM) for the purposes of resource allocation and assessment of segment performance focuses only on one business segment i.e. Automation & Control Systems. There are no other reportable segments.
Notes to the financial statements
ability to maintain or grow its business with Honeywell depends upon a number of performance factors. However, the Company cannot be assured that its level of sales and profits associated with its relationship with Honeywell will continue. Honeywell-specific business considerations (independent of its shareholding in the Company), including changes in Honeywellâs strategies regarding utilization of alternate opportunities available to it to source products and services currently provided by the Company (including from alternate sources which Honeywell may acquire or develop within its own group), may also reduce the level and/or mix of Honeywellâs business with the Company.
The Company has compiled this information based on intimations received from suppliers of their status as Micro or Small enterprises and / or its registration with the appropriate authority under Micro, Small and Medium Enterprises Development Act, 2006 (as amended from time to time).
NOTE 33 - Share Based Payments Employee share option plan of the company
Honeywell International Inc. (HII), the ultimate holding company, may grant stock options and restricted stock awards to certain employees under its stock incentive plan.
Stock Options â The exercise price, term and other conditions applicable to each option granted under the stock plans are generally determined by the Management Development and Compensation Committee of the Board of Honeywell International Inc. The exercise price of stock options is set on the grant date and may not be less than the fair market value per share of the stock on that date. The fair value is recognized as an expense over the employeeâs requisite service period (generally the vesting period of the award). Options generally vest over a four-year period and expire after ten years.
Restricted Stock Units â Restricted stock unit (RSU) awards entitle the holder to receive one share of common stock for each unit when the units vest. RSUs are issued to certain employees as compensation at fair market value at the date of grant. RSUs typically become fully vested over periods ranging from three to seven years and are payable in Honeywell common stock upon vesting.
Fair value of share options granted in the year
The fair value of each stock option award is estimated on the date of grant using the Black-Scholes option-pricing model. Expected volatility is based on implied volatilities from traded options on common stock of HII and historical volatility of common stock of HII. Monte Carlo simulation model is used to derive an expected term which represents an estimate of the time options are expected to remain outstanding. Such model uses historical data to estimate option exercise activity and post-vest termination behavior. The risk-free rate for periods within the contractual life of the option is based on the U.S. treasury yield curve in effect at the time of grant.
Note: It is not practicable for the Company to estimate the timing of cash outflow, if any, in respect of the above pending resolutions of the respective proceedings.
âAs at March 31, 2022, Contingent liability majorly represent demands arising on completion of assessment proceedings under the Income-tax Act, 1961 and other indirect tax act including excise, custom and sales tax.
These claims are on account of various issues of disallowances, or addition in liability by tax liabilities related to various issues including C- forms, WCT TDS etc.
These matters are pending before various appellate authorities and the Management including its tax advisors expect that its position will likely be upheld on ultimate resolution and will not have a material adverse effect on the Companyâs financial position and results of operations.
Third party claims against company not acknowledged as debts includes ongoing cases pending in commercial court/ Arbitral Tribunal in relation to claims/ counter claims raised by few vendors/ customers and HAIL for certain commercial teams disagreements. â
B) Estimated amount of contracts remaining to be executed on capital accounts and not provided for (net of advances) - Rs. 502 (âlakhs) [31st March 2021 Rs. 461 (âlakhs)]
A Litigations/ disputes mainly include:
a) Provision for disputed statutory matters comprises matters under litigation with Sales Tax and Local authorities.
b) The amount of provision made by the Company is based on the estimate made by the Management considering the facts and circumstances of each case.
To the extent the Company is confident that it may have a strong case that portion is disclosed under contingent liabilities.
c) The timing and the amount of cash flows that will arise from these matters will be determined when the matters are settled with respective Appellate Authorities.
Provision for warranty is considered based on the rolling average warranty expense incurred in the preceding 12 months, the warranty period for which ranges from 12 months to 24 months as per provisions of the contracts.
C Provision for Estimated Cost to complete on Contracts
A provision for estimated cost to complete on construction contracts is recognized when it is probable that the total contract cost will exceed total contract revenue. The provision shall be utilized as and when the contract gets executed.
B Defined benefit plans (gratuity and other retirement benefits)
The Company also provides for gratuity, covering eligible employees in accordance with the Payment of Gratuity Act, 1972. The Gratuity Plan provides a lump sum payment to vested employees at retirement, death, incapacitation or termination of employment, of an amount based on the respective employeeâs salary and the tenure of employment.
Provident Fund contributions are made to a Trust administered by the Company for its qualifying employees. This defined benefit plans is administered by separate trust that is legally separated from the entity. The board of the trust is required by law and by its trust deed to act in the interest of the fund and of all the relevant stakeholders in the scheme; i.e. active employees, inactive employees, retirees, employers. The board of the fund is responsible for the investment policy with regard to the assets of the fund.
A significant part of the plan assets are classified as Level 2 where the fair value is determined basis the observable inputs either directly or indirectly. The financial assets carried at fair value by the trust are mainly investments in Government securities, public and private sector bonds and mutual funds.
Sensitivity analysis indicates the influence of a reasonable change in certain significant assumptions on the outcome of the Present value of obligation (PVO) and aids in understanding the uncertainty of reported amounts.
1 Sensitivity analysis for each significant actuarial assumptions viz. Discount rate and Salary escalation rate as of the end of the reporting period, showing how the defined benefit obligation would have been affected by changes is called out in the table above.
2 The assumptions used in preparing the sensitivity analysis is Discount rate at 100bps and - 100 bps Salary escalation rate at 100 bps and -100 bps
3 The method used to calculate the liability in these scenarios is by keeping all the other parameters and the data same as in the base liability calculation except for the parameters to be stressed.
4 There is no change in the method from the previous period and the points/percentage by which the assumptions are stressed are same as that in the previous year.
Investment risk - The funds are invested with an external insurer (LIC of India). The insurer manages the Gratuity Fund and provides quarterly interest returns. Considering LIC is a state insurer with a sovereign guarantee and no history of defaults the investment risk is not significant.
Interest Risk - The Gratuity fund managed by an external insurer (LIC of India) is in the form of cash accumulation scheme with interest rates declared annually - A significant fall in interest (discount) rates may not be offset by an increase in value of Gratuity Fund, hence may pose an interest rate risk.
Notes to the financial statements
Longevity Risk - Since Gratuity is paid at retirement in form of lump sum and also during service at the time of termination to vested members, longevity risk is not applicable since maximum duration for benefit is till retirement age
Salary Risk - The present value of the defined benefit plan liability is calculated by reference to the future salaries of plan participants. As such, an increase in the salary of the plan participants will increase the planâs liability.
Notes to the financial statements Financial risk management objectives
Company is exposed to foreign exchange risk on account of import risk and hedging activities; and export transactions which is monitored periodically. The Company leverages the global treasury operations of Honeywell to improve mitigation of risk relating to foreign exchange.
Foreign currency risk management
The Company undertakes transactions denominated in foreign currencies; consequently, exposures to exchange rate fluctuations arise. The carrying amounts of the Companyâs foreign currency denominated monetary assets and monetary liabilities at the end of the reporting period are as follows:
Foreign currency exchange rate risk:
The fluctuation in foreign currency exchange rates may have potential impact on the income statement and equity, where any transaction references more than one currency or where assets/liabilities are denominated in a currency other than the functional currency of the Company. Considering the countries and economic environment in which the Company operates, its operation are subject to risks arising from fluctuations in exchange rates in those countries. The risk primarily relate to U.S. Dollars against the functional currency of Honeywell Automation India Limited.
The Company, as per its Hedging policy, uses forward contracts to hedge foreign exchange exposure. The Company evaluates the impact of foreign exchange rate fluctuations by assessing its exposure to exchange rate risks. It hedges a part of these risks by using forward contracts in accordance with its risk management policies.
Foreign currency sensitivity analysis
The Company is exposed mainly to the fluctuation in the value of USD and EURO. The following table details the company sensitivity to a 5% increase and decrease in functional currency against the relevant foreign currency. The sensitivity analysis includes only outstanding foreign currency denominated monetary items and adjust there translation at the period end for a 5 % change in foreign currency rate.
Credit risk refers to the risks that a counterparty may default on its contractual obligations resulting in financial loss to the Company. The Company deals only with credit worthy counterparties and takes appropriate measures to
Notes to the financial statements
mitigate the risk of financial loss from defaults. Trade receivable consists of a large number of customers, spread across diverse industries and geographical areas. Ongoing credit evaluation is performed on the financial condition of accounts receivable.
The Company manages liquidity risk by maintaining adequate reserves, banking facility and by continuously monitoring forecasts and actual cash flows and by matching the maturity profiles of financial assets and liabilities.
The Companyâs principal sources of liquidity are cash and cash equivalents and the cash flow that is generated from operations. The Company has no outstanding borrowings. The Company believes that the working capital is sufficient to meet its current requirements.
Notes to the financial statements NOTE 38
As set out in section 135 of the Companies Act, 2013 the Company is required to contribute/ spend Rs. 1236 lakhs towards Corporate Social Responsibility activities, as calculated basis 2% of its average net profits of the last three financial years. Accordingly, during the current year, the Company has spent Rs. 1236 lakhs (previous year Rs.1071 lakhs). There is no shortfall for CSR spend as at 31 March 2022 and 31 March 2021. Company has contributed to Honeywell Hometown Solution, trust contolled by Honeywell group for CSR activities. Ultimately trust had spent funds on activities such as âsafe kids, safe schools,safe wate, covid relief, science program etc.
The financial statements were approved for issue by the board of directors on May 12, 2022 (previous year ended March 31, 2021 on May 31, 2021). The Board of Directors have recommended dividend of Rs. 90 per equity share for the financial year ended March 31, 2022 (previous year ended March 31, 2021: Rs. 85 per equity share) for approval of shareholders. The face value of the equity share is Rs. 10 each. This payment is subject to the approval of shareholders in the Annual General Meeting of the Company which is scheduled on 17th August. This final dividend if approved by shareholders would result in a net cash outflow of approximately Rs. 7957 lacs (previous year ended March 31,2021: Rs. 7,515 lakhs approved by shareholder in Annual General Meeting held on August 18, 2021).
Figures for the previous year have been regrouped/reclassified wherever required.
Mar 31, 2021
Contract balances
Progress on satisfying performance obligations under contracts with customers and the related billings and cash collections are recorded in accounts receivable and the unbilled receivables (Contract Assets) in Other Financial Assets. The customer advances are recorded as Other Current Liabilities. Unbilled receivables (Contract Assets) arise when the timing of cash collected from customers differs from the timing of revenue recognition, such as when contract provisions require specific milestones to be met before a customer can be billed. Those assets are recognized when the revenue associated with the contract is recognized prior to billing and derecognized when billed in accordance with the terms of the contract. Contract liabilities are recorded when a milestone is met triggering the contractual right to bill but revenue recognised over time is not recognized.
When contracts are modified to account for changes in contract specifications and requirements, the Company considers whether the modification either creates new or changes the existing enforceable rights and obligations. Contract modifications that are for goods or services that are not distinct from the existing contract, due to the significant integration with the original good or service provided, are accounted for as if they were part of that existing contract. The effect of a contract modification on the transaction price and the measure of progress for the performance obligation to which it relates, is recognized as an adjustment to revenue (either as an increase in or a reduction of revenue) on a cumulative catch-up basis. When the modifications include additional performance obligations that are distinct, they are accounted for as a new contract and performance obligation, which are recognized prospectively.
A performance obligation is a promise in a contract to transfer a distinct good or service to the customer. A contractâs transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied. When contracts with customers require highly complex integration or manufacturing services that are not separately identifiable from other promises in the contracts and, therefore, not distinct, then the entire contract is accounted for as a single performance obligation. Performance obligations are satisfied as of a point in time or over time. Performance obligations are supported by contracts with customers, providing a framework for the nature of the distinct goods, services or bundle of goods and services. The timing of satisfying the performance obligation is typically indicated by the terms of the contract. Typical payment terms of fixed-price over time contracts include progress payments based on specified events or milestones, or based on project progress. For some contracts the Company may be entitled to receive an advance payment. The Company provides standard warranty on its products and records obligation on the same based on past trend.
The Company has applied the practical expedient for certain revenue streams to exclude the value of remaining performance obligations for contracts with an original expected term of one year or less. Performance obligations recognized as at the year end will be satisfied over the course of future periods. The disclosure of the timing for satisfying the performance obligation is based on the requirements of contracts with customers. Remaining performance obligation estimates are subject to change and are affected by several factors, including terminations, changes in the scope of contracts and periodic revalidations.
The Company has evaluated the impact of COVID - 19 resulting from possibility of constraints to complete performance obligations within contracts with customers which may require revision of estimations of costs to complete the contract because of additional efforts, onerous obligations, liquidated damages and penalties within the terms of contract, termination or deferment of contracts by customers, invoking of force-majeure clause, etc. The Company has concluded that the impact of COVID - 19 is not material based on these estimates. Due to the nature of the pandemic, the Company will continue to monitor developments to identify significant uncertainties relating to revenue in future periods.
Information reported to the Chief operating decision maker (CODM) for the purposes of resource allocation and assessment of segment performance focuses only on one business segment i.e. Automation & Control Systems. There are no other reportable segments.
The Company generates a large percentage of its sales and profits from its business with the Honeywell group (Honeywell), its major shareholder. Sales to Honeywell group accounted for approximately 37% and 38% of our total net sales for the year ended March 31, 2021 and year ended March 31, 2020 respectively. The Companyâs ability to maintain or grow its business with Honeywell depends upon a number of performance factors. However, the Company cannot be assured that its level of sales and profits associated with its relationship with Honeywell will continue. Honeywell-specific business considerations (independent of its shareholding in the Company), including changes in Honeywellâs strategies regarding utilization of alternate opportunities available to it to source products and services currently provided by the Company (including from alternate sources which Honeywell may acquire or develop within its own group), may also reduce the level and/or mix of Honeywellâs business with the Company.
The Company has compiled this information based on intimations received from suppliers of their status as Micro or Small enterprises and / or its registration with the appropriate authority under Micro, Small and Medium Enterprises Development Act, 2006 (as amended from time to time).
NOTE 33 - Share Based Payments Employee share option plan of the company
Honeywell International Inc. (HII), the ultimate holding company, may grant stock options and restricted stock awards to certain employees under its stock incentive plan.
Stock OptionsâThe exercise price, term and other conditions applicable to each option granted under the stock plans are generally determined by the Management Development and Compensation Committee of the Board of Honeywell International Inc. The exercise price of stock options is set on the grant date and may not be less than the fair market value per share of the stock on that date. The fair value is recognized as an expense over the employeeâs requisite service period (generally the vesting period of the award). Options generally vest over a four-year period and expire after ten years.
Restricted Stock UnitsâRestricted stock unit (RSU) awards entitle the holder to receive one share of common stock for each unit when the units vest. RSUs are issued to certain employees as compensation at fair market value at the date of grant. RSUs typically become fully vested over periods ranging from three to seven years and are payable in Honeywell common stock upon vesting.
Fair value of share options granted in the year
The fair value of each stock option award is estimated on the date of grant using the Black-Scholes option-pricing model. Expected volatility is based on implied volatilities from traded options on common stock of HII and historical volatility of common stock of HII. Monte Carlo simulation model is used to derive an expected term which represents an estimate of the time options are expected to remain outstanding. Such model uses historical data to estimate option exercise activity and post-vest termination behavior. The risk-free rate for periods within the contractual life of the option is based on the U.S. treasury yield curve in effect at the time of grant.
Note: It is not practicable for the Company to estimate the timing of cash outflow, if any, in respect of the above pending resolutions of the respective proceedings.
As at March 31, 2021, Contingent liability majorly represent demands arising on completion of assessment proceedings under the Income-tax Act, 1961 and other indirect tax act including excise, custom and sales tax.
These claims are on account of various issues of disallowances, or addition in liability by tax liabilities related to various issues including C- forms, WCT TDS etc.
These matters are pending before various appellate authorities and the Management including its tax advisors expect that its position will likely be upheld on ultimate resolution and will not have a material adverse effect on the Companyâs financial position and results of operations.
Third party claims against company not acknowledged as debts includes ongoing cases pending in commercial court/ Arbitral Tribunal in relation to claims/ counter claims raised by few vendors/ customers and HAIL for certain commercial teams disagreements.
Estimated amount of contracts remaining to be executed on capital accounts and not provided for (net of advances) - Rs. 461 (âlakhs) [31st March 2020 Rs. 2,705 (âlakhs)]
A Litigations/ disputes mainly include:
a) Provision for disputed statutory matters comprises matters under litigation with Sales Tax and Local authorities.
b) The amount of provision made by the Company is based on the estimate made by the Management considering the facts and circumstances of each case.
To the extent the Company is confident that it may have a strong case that portion is disclosed under contingent liabilities.
c) The timing and the amount of cash flows that will arise from these matters will be determined when the matters are settled with respective Appellate Authorities.
B Warranty
Provision for warranty is considered based on the rolling average warranty expense incurred in the preceding 12 months, the warranty period for which ranges from 12 months to 24 months as per provisions of the contracts.
C Provision for Estimated Cost to complete on Contracts
A provision for estimated cost to complete on construction contracts is recognized when it is probable that the total contract cost will exceed total contract revenue. The provision shall be utilized as and when the contract gets executed.
Defined benefit plans (gratuity and other retirement benefits)
The Company also provides for gratuity, covering eligible employees in accordance with the Payment of Gratuity Act, 1972. The Gratuity Plan provides a lump sum payment to vested employees at retirement, death, incapacitation or termination of employment, of an amount based on the respective employeeâs salary and the tenure of employment.
Provident Fund contributions are made to a Trust administered by the Company for its qualifying employees. This defined benefit plans is administered by separate trust that is legally separated from the entity. The board of the trust is required by law and by its trust deed to act in the interest of the fund and of all the relevant stakeholders in the scheme; i.e. active employees, inactive employees, retirees, employers. The board of the fund is responsible for the investment policy with regard to the assets of the fund.
A significant part of the plan assets are classified as Level 2 where the fair value is determined basis the observable inputs either directly or indirectly. This fair value factors the uncertainties arising out of COVID-19. The financial assets carried at fair value by the trust are mainly investments in Government securities, public and private sector bonds and mutual funds.
Sensitivity analysis indicates the influence of a reasonable change in certain significant assumptions on the outcome of the Present value of obligation (PVO) and aids in understanding the uncertainty of reported amounts.
1. Sensitivity analysis for each significant actuarial assumptions viz. Discount rate and Salary escalation rate as of the end of the reporting period, showing how the defined benefit obligation would have been affected by changes is called out in the table above.
2 The assumptions used in preparing the sensitivity analysis is Discount rate at 100bps and - 100 bps Salary escalation rate at 100 bps and -100 bps
3 The method used to calculate the liability in these scenarios is by keeping all the other parameters and the data same as in the base liability calculation except for the parameters to be stressed.
4 There is no change in the method from the previous period and the points/percentage by which the assumptions are stressed are same as that in the previous year.
Investment risk- The funds are invested with an external insurer (LIC of India). The insurer manages the Gratuity Fund and provides quarterly interest returns. Considering LIC is a state insurer with a sovereign guarantee and no history of defaults the investment risk is not significant.
Interest Risk - The Gratuity fund managed by an external insurer (LIC of India) is in the form of cash accumulation scheme with interest rates declared annually - A significant fall in interest (discount) rates may not be offset by an increase in value of Gratuity Fund, hence may pose an interest rate risk.
Company is exposed to foreign exchange risk on account of import risk and hedging activities; and export transactions which is monitored periodically. The Company leverages the global treasury operations of Honeywell to improve mitigation of risk relating to foreign exchange.
Foreign currency risk management
The Company undertakes transactions denominated in foreign currencies; consequently, exposures to exchange rate fluctuations arise. The carrying amounts of the Companyâs foreign currency denominated monetary assets and monetary liabilities at the end of the reporting period are as follows:
Foreign currency exchange rate risk:
The fluctuation in foreign currency exchange rates may have potential impact on the income statement and equity, where any transaction references more than one currency or where assets/liabilities are denominated in a currency other than the functional currency of the Company. Considering the countries and economic environment in which the Company operates, its operation are subject to risks arising from fluctuations in exchange rates in those countries. The risk primarily relate to U.S. Dollars against the functional currency of Honeywell Automation India Limited.
The Company, as per its Hedging policy, uses forward contracts to hedge foreign exchange exposure. The Company evaluates the impact of foreign exchange rate fluctuations by assessing its exposure to exchange rate risks. It hedges a part of these risks by using forward contracts in accordance with its risk management policies.
The Company uses forward exchange contracts to hedge its exposure in foreign currency. The information on derivative
Credit risk refers to the risks that a counterparty may default on its contractual obligations resulting in financial loss to the Company. The Company deals only with credit worthy counterparties and takes appropriate measures to mitigate the risk of financial loss from defaults. Trade receivable consists of a large number of customers, spread across diverse industries and geographical areas. Ongoing credit evaluation is performed on the financial condition of accounts receivable.
The Company manages liquidity risk by maintaining adequate reserves, banking facility and by continuously monitoring forecasts and actual cash flows and by matching the maturity profiles of financial assets and liabilities. The Companyâs principal sources of liquidity are cash and cash equivalents and the cash flow that is generated from operations. The Company has no outstanding borrowings. The Company believes that the working capital is sufficient to meet its current requirements.
As set out in section 135 of the Companies Act, 2013 the Company is required to contribute/ spend Rs. 1071 lakhs towards Corporate Social Responsibility activities, as calculated basis 2% of its average net profits of the last three financial years. Accordingly, during the current year, the Company has spent Rs. 1071 lakhs (previous year Rs. 828 lakhs).
The financial statements were approved for issue by the board of directors on May 31, 2021 (previous year ended March 31, 2020 on May 22, 2020). The Board of Directors have recommended dividend of Rs. 85 per equity share for the financial year ended March 31,2021 (previous year ended March 31,2020: Rs. 75 per equity share) for approval of shareholders. The face value of the equity share is Rs. 10 each. This payment is subject to the approval of shareholders in the Annual General Meeting of the Company. In view of COVID - 19 the Company is working on an Annual General Meeting date which will be announced by the Company in due course. This final dividend if approved by shareholders would result in a net cash outflow of approximately Rs. 7515 lacs (previous year ended March 31,2020: Rs. 6,631 lacs approved by shareholder in Annual General Meeting held on August 18, 2020).
Figures for the previous year have been regrouped/reclassified wherever required.
Mar 31, 2019
NOTE 1 - GENERAL INFORMATION:
Honeywell Automation India Limited (the âCompanyâ) is engaged primarily in the business of Automation & Control systems on turnkey basis and otherwise. The Company is a public limited company and is listed on the Bombay Stock Exchange, Mumbai (BSE) and the National Stock Exchange (NSE).
(a) Rights, preferences and restrictions attached to the shares
Equity shares: The Company has one class of equity shares having a par value of Rs.10 per share. Each shareholder is eligible for one vote per share held. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting, except in case of interim dividend. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the Company after distribution of all preferential amounts, in proportion to their shareholding.
b) 6,631,142 (March 31, 2018 : 6,631,142 ) Equity shares constituting 75% (March 31,2018 : 75%) of the paid-up capital of the Company are held by Honeywell International Inc., the ultimate holding company, through its 100% subsidiary, HAIL Mauritius Limited (previous year Honeywell Asia Pacific Inc.)
c) The Company has neither allotted any shares as fully paid up bonus shares nor pursuant to contract(s) payment being received in cash during 5 years immediately preceding March 31, 2019.
d) Honeywell Asia Pacific Inc. (âHAPIâ) has merged with HAIL Mauritius Limited (âHAIL Mauritiusâ), resulting in:
(i) change in the immediate holding company of the Company, and
(ii) an inter se transfer of 6,631,142 equity shares aggregating to 75.00% of the shareholding of the Company, from HAPI to HAIL Mauritius. Honeywell International Inc. continues to be the ultimate holding company.
A. Contract balances
Progress on satisfying performance obligations under contracts with customers and the related billings and cash collections are recorded in accounts receivable and the unbilled receivables (Contract Assets) in Other Financial Assets. The customer advances are recorded as Other Current Liabilities. Unbilled receivables (Contract Assets) arise when the timing of cash collected from customers differs from the timing of revenue recognition, such as when contract provisions require specific milestones to be met before a customer can be billed. Those assets are recognized when the revenue associated with the contract is recognized prior to billing and derecognized when billed in accordance with the terms of the contract. Contract liabilities are recorded when a milestone is met triggering the contractual right to bill but revenue recognised over time is not recognized.
When contracts are modified to account for changes in contract specifications and requirements, the Company considers whether the modification either creates new or changes the existing enforceable rights and obligations. Contract modifications that are for goods or services that are not distinct from the existing contract, due to the significant integration with the original good or service provided, are accounted for as if they were part of that existing contract. The effect of a contract modification on the transaction price and the measure of progress for the performance obligation to which it relates, is recognized as an adjustment to revenue (either as an increase in or a reduction of revenue) on a cumulative catch-up basis. When the modifications include additional performance obligations that are distinct, they are accounted for as a new contract and performance obligation, which are recognized prospectively.
The net change was primarily driven by the increase in recognition of revenue as performance obligations were satisfied exceeding milestone billings.
B. Performance obligation
A performance obligation is a promise in a contract to transfer a distinct good or service to the customer. A contractâs transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied. When contracts with customers require highly complex integration or manufacturing services that are not separately identifiable from other promises in the contracts and, therefore, not distinct, then the entire contract is accounted for as a single performance obligation. Performance obligations are satisfied as of a point in time or over time. Performance obligations are supported by contracts with customers, providing a framework for the nature of the distinct goods, services or bundle of goods and services. The timing of satisfying the performance obligation is typically indicated by the terms of the contract. Typical payment terms of fixed-price over time contracts include progress payments based on specified events or milestones, or based on project progress. For some contracts the Company may be entitled to receive an advance payment. The Company provides standard warranty on its products and records obligation on the same based on past trend.
The Company has applied the practical expedient for certain revenue streams to exclude the value of remaining performance obligations for contracts with an original expected term of one year or less. Performance obligations recognized as of March 31, 2019 will be satisfied over the course of future periods. The disclosure of the timing for satisfying the performance obligation is based on the requirements of contracts with customers. Remaining performance obligation estimates are subject to change and are affected by several factors, including terminations, changes in the scope of contracts and periodic revalidations.
NOTE 2 - SEGMENT INFORMATION
Information reported to the Chief operating decision maker (CODM) for the purposes of resource allocation and assessment of segment performance focuses only on one business segment i.e. Automation & Control Systems. There are no other reportable segments.
* Property, Plant and Equipment, Capital work in progress and Intangible assets used in the Companyâs business have not been identified to âIndiaâ or âOtherâ, as they are used interchangeably.
The Company generates more than 10% of the revenue only from Honeywell group.
The Company generates a large percentage of its sales and profits from its business with the Honeywell group (Honeywell), its major shareholder. Sales to Honeywell group accounted for approximately 38% and 37% of our total net sales for the year ended March 31, 2019 and year ended March 31, 2018 respectively. The Companyâs ability to maintain or grow its business with Honeywell depends upon a number of performance factors. However, the Company cannot be assured that its level of sales and profits associated with its relationship with Honeywell will continue. Honeywell-specific business considerations (independent of its shareholding in the Company), including changes in Honeywellâs strategies regarding utilization of alternate opportunities available to it to source products and services currently provided by the Company (including from alternate sources which Honeywell may acquire or develop within its own group), may also reduce the level and/or mix of Honeywellâs business with the Company.
NOTE 3 - LEASE TRANSACTIONS:
As a Lessee in Operating Lease
Rentals for office premises, land, building under operating leases of Rs. 2,356 (âlakhs) [Previous year Rs. 2,255 (âlakhs)] have been included under Rent Expense.
Previous year figures are indicated in brackets.
The Company has compiled this information based on intimations received from suppliers of their status as Micro or Small enterprises and / or its registration with the appropriate authority under Micro, Small and Medium Enterprises Development Act, 2006 (as amended from time to time).
NOTE 4 - SHARE BASED PAYMENTS
Employee share option plan of the company
Honeywell International Inc (HII), the ultimate holding company, may grant stock options and restricted stock awards to certain employees under its stock incentive plan.
Stock Options - The exercise price, term and other conditions applicable to each option granted under the stock plans are generally determined by the Management Development and Compensation Committee of the Board of Honeywell International Inc. The exercise price of stock options is set on the grant date and may not be less than the fair market value per share of the stock on that date. The fair value is recognized as an expense over the employeeâs requisite service period (generally the vesting period of the award). Options generally vest over a four-year period and expire after ten years.
Restricted Stock Units - Restricted stock unit (RSU) awards entitle the holder to receive one share of common stock for each unit when the units vest. RSUs are issued to certain employees as compensation at fair market value at the date of grant. RSUs typically become fully vested over periods ranging from three to seven years and are payable in Honeywell common stock upon vesting.
Fair value of share options granted in the year
The fair value of each stock option award is estimated on the date of grant using the Black-Scholes option-pricing model. Expected volatility is based on implied volatilities from traded options on common stock of HII and historical volatility of common stock of HII. Monte Carlo simulation model is used to derive an expected term which represents an estimate of the time options are expected to remain outstanding. Such model uses historical data to estimate option exercise activity and post-vest termination behavior. The risk-free rate for periods within the contractual life of the option is based on the U.S. treasury yield curve in effect at the time of grant.
NOTE 5 - CONTINGENT LIABILITIES AND COMMITMENTS
A Contingent liabilities
B Estimated amount of contracts remaining to be executed on capital accounts and not provided for (net of advances) - Rs. 925 (âlakhs) [31st March 2018 Rs. 211 (âlakhs)]
A Litigations/ disputes mainly include:
a) Provision for disputed statutory matters comprises matters under litigation with Sales Tax and Local authorities.
b) The amount of provision made by the Company is based on the estimate made by the Management considering the facts and circumstances of each case.
To the extent the Company is confident that it may have a strong case that portion is disclosed under contingent liabilities.
c) The timing and the amount of cash flows that will arise from these matters will be determined when the matters are settled with respective Appellate Authorities.
B Warranty
Provision for warranty is considered based on the rolling average warranty expense incurred in the preceding 12 months, the warranty period for which ranges from 12 months to 24 months as per provisions of the contracts.
C Provision for Estimated Cost to complete on Contracts
A provision for estimated cost to complete on construction contracts is recognized when it is probable that the total contract cost will exceed total contract revenue. The provision shall be utilized as and when the contract gets executed.
NOTE 6 - EMPLOYEE BENEFIT PLANS
A Defined contribution plans
The company has recognized the following amounts in the Statement of Profit and Loss for the year.
B Defined benefit plans (gratuity and other retirement benefits)
The Company also provides for gratuity, covering eligible employees in accordance with the Payment of Gratuity Act, 1972. The Gratuity Plan provides a lump sum payment to vested employees at retirement, death, incapacitation or termination of employment, of an amount based on the respective employeeâs salary and the tenure of employment Provident Fund contributions are made to a Trust administered by the Company for its qualifying employees. This defined benefit plans is administered by separate trust that is legally separated from the entity. The board of the trust is required by law and by its trust deed to act in the interest of the fund and of all the relevant stakeholders in the scheme; i.e. active employees, inactive employees, retirees, employers. The board of the fund is responsible for the investment policy with regard to the assets of the fund.
The Principal assumptions used for the purposes of the actuarial valuations were as follows:
The estimates of future salary increases considered in actuarial valuation takes into account inflation, seniority, promotion and other relevant factors.
The current service cost and the net interest expenses for the year are included in âEmployee benefits expenseâ in the statement of profit and loss.
The remeasurement of the net defined benefit liability is included in other comprehensive income.
Note - Whenever there is a net surplus position in PF valuation, as per the PF trust act, no surplus can be transferred to the Company as it is separate from the Company. The Company would not be accounting for any amount in its books in this position.
Sensitivity Analysis
Sensitivity analysis indicates the influence of a reasonable change in certain significant assumptions on the outcome of the Present value of obligation (PVO) and aids in understanding the uncertainty of reported amounts.
1 Sensitivity analysis for each significant actuarial assumptions viz. Discount rate and Salary escalation rate as of the end of the reporting period, showing how the defined benefit obligation would have been affected by changes is called out in the table above.
2 The assumptions used in preparing the sensitivity analysis is Discount rate at 100bps and - 100 bps
Salary escalation rate at 100 bps and -100 bps
3 The method used to calculate the liability in these scenarios is by keeping all the other parameters and the data same as in the base liability calculation except for the parameters to be stressed.
4 There is no change in the method from the previous period and the points/percentage by which the assumptions are stressed are same as that in the previous year.
Impact of change in discount rate when base assumption is decreased/increased by 100 basis point
In presenting the above sensitivity analysis, the present value of the defined benefit obligations has been calculated using Projected Unit Credit method at the end of the reporting period, which is the same as that applied in calculating the defined benefit obligation liability recognised in the Balance sheet.
The overall expected rate of return on assets is based on the expectation of the average long term rate of return expected on investments of the Fund during the estimated term of the obligations.
A note on other risks
Investment risk: The funds are invested with an external insurer (LIC of India). The insurer manages the Gratuity Fund and provides quarterly interest returns. Considering LIC is a state insurer with a sovereign guarantee and no history of defaults the investment risk is not significant.
Interest Risk: The Gratuity fund managed by an external insurer (LIC of India) is in the form of cash accumulation scheme with interest rates declared annually - A significant fall in interest (discount) rates may not be offset by an increase in value of Gratuity Fund, hence may pose an interest rate risk.
Longevity Risk: Since Gratuity is paid at retirement in form of lump sum and also during service at the time of termination to vested members, longevity risk is not applicable since maximum duration for benefit is till retirement age
Salary Risk: The present value of the defined benefit plan liability is calculated by reference to the future salaries of plan participants. As such, an increase in the salary of the plan participants will increase the planâs liability.
Financial risk management objectives
Company is exposed to foreign exchange risk on account of import risk and hedging activities; and export transactions which is monitored periodically. The Company leverages the global treasury operations of Honeywell to improve mitigation of risk relating to foreign exchange.
Foreign currency risk management
The Company undertakes transactions denominated in foreign currencies; consequently, exposures to exchange rate fluctuations arise. The carrying amounts of the Companyâs foreign currency denominated monetary assets and monetary liabilities at the end of the reporting period are as follows:
Foreign currency exchange rate risk:
The fluctuation in foreign currency exchange rates may have potential impact on the income statement and equity, where any transaction references more than one currency or where assets/liabilities are denominated in a currency other than the functional currency of the Company. Considering the countries and economic environment in which the Company operates, its operation are subject to risks arising from fluctuations in exchange rates in those countries. The risk primarily relate to U.S. Dollars against the functional currency of Honeywell Automation India Limited.
The Company, as per its Hedging policy, uses forward contracts to hedge foreign exchange exposure. The Company evaluates the impact of foreign exchange rate fluctuations by assessing its exposure to exchange rate risks. It hedges a part of these risks by using forward contracts in accordance with its risk management policies.
Foreign currency sensitivity analysis
The Company is exposed mainly to the fluctuation in the value of USD and EURO. The following table details the company sensitivity to a 5% increase and decrease in functional currency against the relevant foreign currency. The sensitivity analysis includes only outstanding foreign currency denominated monetary items and adjust there translation at the period end for a 5 % change in foreign currency rate.
Credit risk management
Credit risk refers to the risks that a counterparty may default on its contractual obligations resulting in financial loss to the Company. The Company deals only with credit worthy counterparties and takes appropriate measures to mitigate the risk of financial loss from defaults. Trade receivable consists of a large number of customers, spread across diverse industries and geographical areas. Ongoing credit evaluation is performed on the financial condition of accounts receivable.
Liquidity risk management
The Company manages liquidity risk by maintaining adequate reserves, banking facility and by continuously monitoring forecasts and actual cash flows and by matching the maturity profiles of financial assets and liabilities.
NOTE 7
As set out in section 135 of the Companies Act, 2013 the Company is required to contribute/ spend Rs. 605 lakhs towards Corporate Social Responsibility activities, as calculated basis 2% of its average net profits of the last three financial years. Accordingly, during the current year, the Company has spent Rs. 605 lakhs (previous year Rs. 469 lakhs).
NOTE 8
The financial statements were approved for issue by the board of directors on May 13, 2019. The Board of Directors have recommended dividend of Rs. 45 per equity share for the financial year ended March 31, 2019 (previous year ended March 31, 2018: Rs. 32 per equity share) for approval of shareholders. The face value of the equity share is Rs. 10 each.
Mar 31, 2018
NOTE 1 - CRITICAL JUDGEMENTS, ESTIMATIONS AND ASSUMPTIONS IN APPLYING ACCOUNTING POLICIES
In the application of the Company''s accounting policies, which are described in note 3, the directors of the company are required to make judgments estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revision to accounting estimates are recognized in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.
The following are the key assumptions concerning the future, and other key sources of estimation uncertainty at the end of the reporting period that may have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year.
1. The preparation of financial statements involves estimates and assumptions that affect the reported amount of assets, liabilities, disclosure of contingent liabilities at the date of financial statements and the reported amount of revenues and expenses for the reporting period. Specifically, the Company estimates the probability of collection of accounts receivable by analyzing historical payment patterns, customer concentrations, customer creditworthiness and current economic trends. If the financial condition of a customer deteriorates, additional allowances may be required.
2. The company uses the percentage-of-completion method in accounting for its contract revenue. Use of the percentage-of-completion method requires the company to estimate the efforts or costs expended to date as a proportion of the total efforts or costs to be expended. Efforts or costs expended have been used to measure progress towards completion as there is a direct relationship between input and productivity. Provisions for estimated losses, if any, on uncompleted contracts are recorded in the period in which such losses become probable based on the expected contract estimates at the reporting date.
3. The stock compensation expense is determined based on the Companyâs estimate of equity instruments that will eventually vest.
4. Provision for warranty is considered based on the rolling average warranty expense incurred in the preceding 12 months, the warranty period for which ranges from 12 months to 24 months as per provisions of the contracts.
5. In case of Property, plant and equipment, The charge in respect of periodic depreciation is derived after determining an estimate of an assetâs expected useful life and the expected residual value at the end of its life. The useful lives and residual values of company''s assets are determined by management at the time the asset is acquired and reviewed periodically, including at each financial year end. The lives are based on historical experience with similar assets as well as anticipation of future events, which may impact their life, such as changes in technology.
NOTE 28 - SEGMENT INFORMATION
Information reported to the Chief operating decision maker (CODM) for the purposes of resource allocation and assessment of segment performance focuses only on one business segment i.e. Automation & Control Systems. There are no other reportable segments.
* Property, Plant and Equipment and Intangibles used in the Companyâs business have not been identified to âIndiaâ or âOtherâ, as they are used interchangeably.
The Company generates more then 10% of the revenue only from Honeywell group.
NOTE 2 - RELATED PARTY DISCLOSURE :
List of related parties (as identified and certified by the Management)
i) Parties where control exists
Honeywell Asia -Pacific Inc., Holding company
Honeywell International Inc., Ultimate holding company__
Other related parties with whom transactions have taken place during the year:
ii) Fellow Subsidiaries
Honeywell Middle East B.V. Honeywell International (India) Private Limited
Honeywell Technology Solutions Qatar Honeywell Limited Australia
Honeywell Tianjin Limited Honeywell Limited
Honeywell Life Safety AS Honeywell Enraf Americas, Inc.
Honeywell B.V. Honeywell Measurex (Ireland) Limited
Honeywell & Co. Oman L.L.C. Honeywell Turki-Arabia Limited
Honeywell Pte Ltd. Honeywell Controls System Limited Honeywell Automation & Control Solutions South Africa Honeywell International Middle East Ltd.
(Pty) Ltd. MST Technology GMBH
Honeywell Kuwait K.S.C. Honeywell Security France S.A.
Automation and Control Solutions, S. de R.L. de C.V. Honeywell GMBH
Honeywell Europe N.V. Honeywell S.A. (Belgium)
Honeywell Systems (Thailand) Ltd. Honeywell Airport Systems Gmbh
Honeywell Ltd. ( Hong Kong) Honeywell s.r.l.
Enraf B.V. UOP India Private Limited
Honeywell Technology Solutions Lab Pvt. Ltd. Honeywell Engineering Sdn. Bhd.
Pittway Systems Technology Group Europe Ltd. Honeywell Co., Ltd. (Korea)
Honeywell Taiwan Inc. Honeywell S.L.
Honeywell Life Safety AS Honeywell Portugal, Automacao e Contolo, S.A.
Honeywell Building Solutions Gmbh Honeywell Automation & control Solutions Carribean Ltd.
Novar Systems Ltd. Honeywell AS Norway
Honeywell Middle East FZE Honeywell OY
Honeywell Controls International Ltd. Matrikon Middle East Co WLL
Tridium Inc. Honeywell Environmental & Combustion Controls
Honeywell Limited (New Zeland) (Tianjin) Co., Ltd.
Honeywell Austria Gesellschaft mbh Honeywell International s.a.r.l.
Honeywell A.B. Honeywell Sensing & Control China Co, Ltd.
Matrikon Pty Ltd. Honeywell Technologies SARL
Trend Control Systems Ltd. Honeywell AG
Honeywell (China) Advanced Solutions Co. Ltd. Matrikon Inc.
Honeywell Southern Africa (Proprietary) Ltd. Honeywell NV [Belgium]
Honeywell Japan Inc. Honeywell S.A.I.C.
Honeywell Angola Lda Eclipse Combustion (Pvt.) Ltd.
Honeywell E.P.E. Elster GmbH
HONEYWELL LIMITED Elster Metering Private Limited
Honeywell S.A. [France] Elster Solutions GmbH
HONEYWELL TEKNOLOJI A.S Energy ICT N.V.
MK Electric (Malaysia) SDN BHD Honeywell Teknoloji Anonim Sirketi (Previously:
Intermec Technologies (S) Pte Ltd Honeywell Otomasyon ve Kontrol Sistemleri Sanayi ve
Honeywell Hometown Solutions India Foundation Ticaret A.S.)
Honeywell Trading (Shanghai) Co. Ltd. Metrologic Asia (Pte) Ltd
UOP Limited Xtralis Pty Ltd
Other related parties with whom transactions have taken place during the year:
Honeywell Fire Systems LLC Honeywell International Services S.r.l.
Life Safety Germany GmbH HSM Technology LLC
Honeywell Automotive de Mexico, S.A. de C.V. Honeywell HBS Solutions LLC
Honeywell A/S (Denmark) UOP L.L.C.
Automation And Control Solutions Limited Honeywell Aerospace B.V.
PT Honeywell Indonesia Honeywell Turbo Technologies (India) Private Limited
Life Safety Distribution AG Honeywell Electrical Devices and Systems India Pvt. Ltd.
Enraf Tanksystem AG Honeywell do Brasil Ltda.
Honeywell Analytics Ltd. Honeywell Egypt Limited
Sinpoec Honeywell Tianjin Ltd. Honeywell EOOd
ZAO Honeywell Matrikon International, Inc.
Maxon Corporation Novar Gmbh
Honeywell ASCa Inc. Honeywell Integrated Technology (China) Co Ltd.
Maxon Combustion Equipment (Shanghai) Co. Ltd. Ademco Asia Pacific Ltd.
Maxon International BVBA Tridium Asia Pacific Pte Ltd.
BW Technologies Partnership Honeywell Building Solutions SES Corporation
Inncom International Inc Honeywell Romania s.r.l.
Bryan Donkin RMG Gas Controls Ltd. Honeywell Marine SAS
Honeywell, S.L. [Spain] Honeywell Europe Services S.A.S.
Honeywell Iraq LLC Honeywell Automation and Control Soluitons West Africa
Saia-Burgess Controls AG Limited
Honeywell spol. s.r.o. [Slovak Republic] Honeywell Automation Controls System LLP (Kazakhstan)
Integrated Technical Innovation Company for General Honeywell (Macau) Limited
Services & Trade KAC Alarm Company Limited
Honeywell Specialty Chemicals (Singapore) Pte. Ltd. Elster Water Metering Limited
Honeywell Taiwan Limited Honeywell Sp. z o.o.
Honeywell, S.A. de C.V. Honeywell Szabalyozastechnikai Kft.
Mercury Instruments LLC Honeywell spol. s.r.o. [Czech Republic]
RMG Messtechnik GmbH Honeywell Technology Solutions Inc.
Honeywell China co. Ltd. Matrikon Business Systems Inc.
Honeywell Iraq Company for Technology Solutions and Novar ED&S Limited
Services Ltd. Salisbury Electrical Safety L.L.C.
Honeywell Chile S.A. Honeywell Gas Technologies GmbH
Intelligrated Systems LLC Honeywell spol. s.r.o.
Eclipse Combustion Equipment (Suzhou) Co. Ltd. Honeywell Resins & Chemicals LLC
Honeywell Algerie S.a.r.l. Elster Holdings US, Inc.
Matrikon Europe Limited Honeywell Automation Control Solutions (China) Co. Ltd.
Movilizer GmbH EnviteC-Wismar GmbH
iii) Key Management Personnel
Mr. Vikas Chadha, Managing Director [Resigned w.e.f. July 31, 2016 (close of business hours)]
Mr. Ashish Gaikwad, Managing Director [Appointed w.e.f. October 1, 2016]
Mr. Anurag Bhagania, CFO [Resigned w.e.f. June 26, 2016 (close of business hours)]
Mr. R Ravichandran, CFO [Appointed w.e.f. June 27, 2016]
Ms. Sangeet Hunjan, Company Secretary [Resigned w.e.f. November 24, 2016 (close of business hours)]
Ms. Farah Irani, Company Secretary [Appointed w.e.f. May 16, 2017]
The Company generates a large percentage of its sales and profits from its business with the Honeywell group (Honeywell), its major shareholder. Sales to Honeywell group accounted for approximately 37% and 39% of our total net sales for the year ended March 31, 2018 and year ended March 31, 2017 respectively. The Companyâs ability to maintain or grow its business with Honeywell depends upon a number of performance factors. However, the Company cannot be assured that its level of sales and profits associated with its relationship with Honeywell will continue. Honeywell-specific business considerations (independent of its shareholding in the Company), including changes in Honeywellâs strategies regarding utilization of alternate opportunities available to it to source products and services currently provided by the Company (including from alternate sources which Honeywell may acquire or develop within its own group), may also reduce the level and/or mix of Honeywellâs business with the Company.
As a Lessee in Operating Lease
Rentals for office premises, land, building under operating leases of Rs. 2,255 (''lakhs) [Previous period Rs. 2,252 (''lakhs)] have been included under Rent Expense.
NOTE 3 - SHARE BASED PAYMENTS Employee share option plan of the company
Honeywell International Inc (HII), the ultimate holding company, may grant stock options and restricted stock awards to certain employees under its stock incentive plan.
Stock OptionsâThe exercise price, term and other conditions applicable to each option granted under the stock plans are generally determined by the Management Development and Compensation Committee of the Board of Honeywell International Inc. The exercise price of stock options is set on the grant date and may not be less than the fair market value per share of our stock on that date. The fair value is recognized as an expense over the employeeâs requisite service period (generally the vesting period of the award). Options generally vest over a four-year period and expire after ten years.
Restricted Stock UnitsâRestricted stock unit (RSU) awards entitle the holder to receive one share of common stock for each unit when the units vest. RSUs are issued to certain employees as compensation at fair market value at the date of grant. RSUs typically become fully vested over periods ranging from three to seven years and are payable in Honeywell common stock upon vesting.
Fair value of share options granted in the year
The fair value of each stock option award is estimated on the date of grant using the Black-Scholes option-pricing model. Expected volatility is based on implied volatilities from traded options on common stock of HII and historical volatility of common stock of HII. Monte Carlo simulation model is used to derive an expected term which represents an estimate of the time options are expected to remain outstanding. Such model uses historical data to estimate option exercise activity and post-vest termination behavior. The risk-free rate for periods within the contractual life of the option is based on the U.S. treasury yield curve in effect at the time of grant.
A Disputed statutory matters mainly include:
a) Provision for disputed statutory matters comprises matters under litigation with Sales Tax and Local authorities.
b) The amount of provision made by the Company is based on the estimate made by the Management considering the facts and circumstances of each case.
To the extent the Company is confident that it may have a strong case that portion is disclosed under contingent liabilities.
c) The timing and the amount of cash flows that will arise from these matters will be determined by the Appellate Authorities only on settlement of these cases.
B Warranty
Provision for warranty is considered based on the rolling average warranty expense incurred in the preceding 12 months, the warranty period for which ranges from 12 months to 24 months as per provisions of the contracts.
C Provision for Estimated Cost to complete on Contracts
A provision for estimated cost to complete on construction contracts is recognized when it is probable that the total contract cost will exceed total contract revenue. The provision shall be utilized as and when the contract gets executed.
B Defined benefit plans (gratuity and other retirement benefits)
The Company also provides for gratuity, covering eligible employees in accordance with the Payment of Gratuity Act, 1972. The Gratuity Plan provides a lump sum payment to vested employees at retirement, death, incapacitation or termination of employment, of an amount based on the respective employeeâs salary and the tenure of employment.
Provident Fund contributions are made to a Trust administered by the Company for its qualifying employees. This defined benefit plans is administered by separate trust that is legally separated from the entity. The board of the trust is required by law and by its trust deed to act in the interest of the fund and of all the relevant stakeholders in the scheme; i.e. active employees, inactive employees, retirees, employers. The board of the fund is responsible for the investment policy with regard to the assets of the fund.
The current service cost and the net interest expenses for the year are included in ''Employee benefits expense'' in the statement of profit and loss.
The remeasurement of the net defined benefit liability is included in other comprehensive income.
Note - There is a net surplus position in PF valuation and however as per the PF trust act, no surplus can be transferred to the company as it is separate from the company, the company would not be accounting for any amount in its books in this position.
Sensitivity Analysis
Sensitivity analysis indicates the influence of a reasonable change in certain significant assumptions on the outcome of the Present value of obligation (PVO) and aids in understanding the uncertainty of reported amounts.
1. Sensitivity analysis for each significant actuarial assumptions viz. Discount rate and Salary escalation rate as of the end of the reporting period, showing how the defined benefit obligation would have been affected by changes is called out in the table above.
2. The assumptions used in preparing the sensitivity analysis is Discount rate at 100bps and - 100 bps
Salary escalation rate at 100 bps and -100 bps
3. The method used to calculate the liability in these scenarios is by keeping all the other parameters and the data same as in the base liability calculation except for the parameters to be stressed .
4. There is no change in the method from the previous period and the points/percentage by which the assumptions are stressed are same as that in the previous year.
In presenting the above sensitivity analysis, the present value of the defined benefit obligations has been calculated using Projected Unit Credit method at the end of the reporting period, which is the same as that applied in calculating the defined benefit obligation liability recognied in the Balance sheet.
A note on other risks
Investment risk: The funds are invested with an external insurer (LIC of India). The insurer manages the Gratuity Fund and provides quarterly interest returns. Considering LIC is a state insurer with a sovereign guarantee and no history of defaults the investment risk is not significant.
Interest Risk: The Gratuity fund managed by an external insurer (LIC of India) is in the form of cash accumulation scheme with interest rates declared annually - A significant fall in interest (discount) rates may not be offset by an increase in value of Gratuity Fund, hence may pose an interest rate risk.
Longevity Risk: Since Gratuity is paid at retirement in form of lump sum and also during service at the time of termination to vested members, longevity risk is not applicable since maximum duration for benefit is till retirement age.
Salary Risk: The present value of the defined benefit plan liability is calculated by reference to the future salaries of plan participants. As such, an increase in the salary of the plan participants will increase the plan''s liability.
Notes to the financial statements Financial risk management objectives
Company is exposed to foreign exchange risk on account of import risk and hedging activities; and export transactions which is monitored periodically. The Company leverages the global treasury operations of Honeywell to improve mitigation of risk relating to foreign exchange.
Foreign currency exchange rate risk:
The fluctuation in foreign currency exchange rates may have potential impact on the income statement and equity, where any transaction references more than one currency or where assets/liabilities are denominated in a currency other than the functional currency of the company. Considering the countries and economic environment in which the company operates, its operation are subject to risks arising from fluctuations in exchange rates in those countries. The risk primarily relate to U.S. Dollars against the functional currency of Honeywell Automation India Limited.
Notes to the financial statements Credit risk management
Credit risk refers to the risks that a counterparty may default on its contractual obligations resulting in financial loss to the Company. The Company deals only with credit worthy counterparties and takes appropriate measures to mitigate the risk of financial loss from defaults. Trade receivable consists of a large number of customers, spread across diverse industries and geographical areas. Ongoing credit evaluation is performed on the financial condition of accounts receivable.
Liquidity risk management
The Company manages liquidity risk by maintaining adequate reserves, banking facility and by continuously monitoring forecasts and actual cash flows and by matching the maturity profiles of financial assets and liabilities.
NOTE 4
As set out in section 135 of the Companies Act, 2013 the Company is required to contribute / spent Rs. 469 lakhs towards Corporate Social Responsibility activities, as calculated basis 2% of its average net profits of the last three financial years. Accordingly, during the current year, the Company has spent Rs. 469 lakhs (previous year Rs. 348 lakhs including Rs.9 lakhs toward administration cost).
NOTE 5
The financial statements were approved for issue by the board of directors on May 14, 2018. The Board of Directors have recommended dividend of Rs. 32 per equity share for the financial year ended March 31, 2018 (previous year ended March 31, 2017: Rs. 10 per equity share) for approval of shareholders. The face value of the equity share is Rs. 10 each.
Mar 31, 2017
NOTE 1 - CRITICAL JUDGEMENTS, ESTIMATIONS AND ASSUMPTIONS IN APPLYING ACCOUNTING POLICIES
In the application of the Companyâs accounting policies, which are described in note 3, the directors of the company is required to make judgments estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revision to accounting estimates are recognized in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.
The following are the key assumptions concerning the future, and other key sources of estimation uncertainty at the end of the reporting period that may have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year.
1. The preparation of financial statements involves estimates and assumptions that affect the reported amount of assets, liabilities, disclosure of contingent liabilities at the date of financial statements and the reported amount of revenues and expenses for the reporting period. Specifically, the Company estimates the probability of collection of accounts receivable by analyzing historical payment patterns, customer concentrations, customer credit-worthiness and current economic trends. If the financial condition of a customer deteriorates, additional allowances may be required.
2. The company uses the percentage-of-completion method in accounting for its contract revenue. Use of the percentage-of-completion method requires the company to estimate the efforts or costs expended to date as a proportion of the total efforts or costs to be expended. Efforts or costs expended have been used to measure progress towards completion as there is a direct relationship between input and productivity. Provisions for estimated losses, if any, on uncompleted contracts are recorded in the period in which such losses become probable based on the expected contract estimates at the reporting date.
3. The stock compensation expense is determined based on the Companyâs estimate of equity instruments that will eventually vest.
4. Items included in the financial statements of the Company are measured using the currency of the primary economic environment in which this entity operate (i.e. the âfunctional currencyâ). The financial statements are presented in Indian Rupee, the national currency of India, which is the functional currency of the Company.
5. Provision for warranty is considered based on the rolling average warranty expense incurred in the preceding 12 months, the warranty period for which ranges from 12 months to 24 months as per provisions of the contracts.
6. In case of Property, plant and equipment, The charge in respect of periodic depreciation is derived after determining an estimate of an assetâs expected useful life and the expected residual value at the end of its life. The useful lives and residual values of companyâs assets are determined by management at the time the asset is acquired and reviewed periodically, including at each financial year end. The lives are based on historical experience with similar assets as well as anticipation of future events, which may impact their life, such as changes in technology.
NOTE 2 - FIRST-TIME IND-AS ADOPTION RECONCILIATIONS
The company has prepared the opening balance sheet as per Ind AS as of April 1, 2015 (the transition date) by recognizing all assets and liabilities whose recognition is required by Ind AS, not recognizing items of assets or liabilities which are not permitted by Ind AS, by reclassifying items from Previous GAAP to Ind AS as required under Ind AS, and applying Ind AS in measurement of recognized assets and liabilities. However, this principle is subject to the certain optional exemptions availed by the company as detailed below :
Exemptions availed
Ind AS 101 allows first-time adopters certain exemptions from the retrospective application of certain requirements under Ind AS.
The Company has availed the following exemptions:
1. Deemed cost for property, plant and equipment and intangible assets: Property Plant and equipment, were carried in Balance sheet prepared in accordance with previous GAAP on 31st March 2015. The Company has elected to regard carrying values as at 31st March 2015 as deemed cost at the date of transition.
2. Derecognition of financial assets and liabilities: The Company has applied the derecognition requirements of financial assets and financial liabilities prospectively for transactions occurring on or after April 1, 2015 ( the transition date).
3. Cumulative translation differences on foreign operations: Cumulative currency translation differences for all foreign operations are deemed to be zero as at 1 April 2015.
4. Impairment of financial assets: The Company has applied the impairment requirements of Ind AS 109 retrospectively; however, as permitted by Ind AS 101, it has used reasonable and supportable information that is available without undue cost or effort to determine the credit risk at the date that financial instruments were initially recognized in order to compare it with the credit risk at the transition date. Further, the Company has not undertaken an exhaustive search for information when determining, at the date of transition to Ind ASs, whether there have been significant increases in credit risk since initial recognition, as permitted by Ind AS 101.
5. Determining whether an arrangement contains a lease: The Company has applied Appendix C of Ind AS 17 Determining whether an Arrangement contains a Lease to determine whether an arrangement existing at the transition date contains a lease on the basis of facts and circumstances existing at that date.
NOTE 3 - RELATED PARTY DISCLOSURE
List of related parties (as identified and certified by the Management)
i) Parties where control exists
Honeywell Asia -Pacific Inc., Holding company Honeywell International Inc., Ultimate holding company
Other related parties with whom transactions have taken place during the year:
ii) Fellow Subsidiaries
Honeywell Middle East B.V. Honeywell International (India) Private Limited
Honeywell Technology Solutions Quatar Honeywell Limited Australia
Honeywell Tianjin Limited Honeywell Limited
Honeywell Life Safety AS Honeywell Enraf Americas, Inc.
Honeywell B.V. Honeywell Measurex (Ireland) Ltd.
Honeywell & Co. Oman L.L.C. Honeywell Turki-Arabia Limited
Honeywell Pte Ltd. Honeywell Controls System Limited Honeywell Automation & Control Solutions South Africa Honeywell International Middle East Ltd.
(Pty) Ltd. MST Technology GMBH
Honeywell Kuwait KSC. Honeywell Security France S.A.
Automation and Control Solutions, S. de R.L. de C.V. Honeywell GMBH
Honeywell Europe N.V. Honeywell S.A. (Belgium)
Honeywell Systems (Thailand) Ltd. Honeywell Airport Systems Gmbh
Honeywell Ltd. ( Hong Kong) Honeywell s.r.l.
Enraf B.V. UOP India Pvt. Ltd.
Honeywell Technology Solutions Lab Pvt. Ltd. Honeywell Engineering Sdn. Bhd.
Pittway Systems Technology Group Europe Ltd. Honeywell Co., Ltd. (Korea)
Honeywell Taiwan Inc. Honeywell S.L.
HoneyweN Life Safety AS Honeywell Portugal, Automacao e Contolo, S.A.
HoneyweN Building S°luti°ns Gmbh Honeywell Automation & control Solutions Carribean Ltd.
Novar Systems Ltd. Honeywell AS Norway
Honeywell Middle East FZE Honeywell OY
Honeywell Controls International Ltd. Matrikon Middle East Co WLL
Tridium Inc. Honeywell Environmental & Combustion Controls
Honeywell Limited (New Zeland) (Tianjin) Co., Ltd.
Honeywell Austria Gesellschaft mbh Honeywell International s.a.r.l.
Honeywell A.B. Honeywell Sensing & Control China Co, Ltd.
Matrikon Pty Ltd. Honeywell Technologies SARL
Trend Control Systems Ltd. Honeywell AG
Honeywell (China) Advanced Solutions Co., Ltd. Matrikon Inc.
Honeywell Southern Africa (Proprietary) Ltd. Honeywell NV [Belgium]
Honeywell Japan Inc. Honeywell S.A.I.C.
Honeywell Angola Lda Eclipse Combustion (Pvt.) Ltd.
Honeywell E.P.E. Elster GmbH
Other related parties with whom transactions have taken place during the year:
HONEYWELL LIMITED / HONEYWELL LIMITEE Elster Metering Private Limited
Honeywell S.A. [France] Elster Solutions GmbH
HONEYWELL TEKNOLOJI A.S Energy ICT N.V.
MK Electric (Malaysia) SDN BHD Honeywell Teknoloji Anonim Sirketi (Previously:
Intermec Technologies (S) Pte Ltd Honeywell Otomasyon ve Kontrol Sistemleri Sanayi ve
Honeywell Hometown Solutions India Foundation Ticaret A.S.)
Honeywell Trading (Shanghai) Co., Ltd. Metrologic Asia (Pte) Ltd
UOP Limited Xtralis Pty Ltd
Honeywell Fire Systems LLC Honeywell International Services S.r.l.
Life Safety Germany GmbH HSM Technology LLC
Honeywell Automotive de Mexico, S.A. de C.V. Honeywell HBS Solutions LLC
Honeywell A/S (Denmark) UOP L.L.C.
Automation And Control Solutions Limited Honeywell Aerospace B.V.
PT Honeywell Indonesia Honeywell Turbo Technologies (India) Private Limited
Life Safety Distribution AG Honeywell Electrical Devices and Systems India Limited
Enraf Tanksystem AG Honeywell do Brasil Ltda.
Salisbury Electrical Safety L.L.C. Honeywell Egypt Limited
Honeywell Analytics Ltd Honeywell EOOD
Sinpoec Honeywell Tianjin Ltd. Matrikon International, Inc.
ZAO Honeywell Novar Gmbh
Maxon Corporation Honeywell Integrated Technology (China) Co Ltd.
Honeywell ASCa Inc. Ademco Asia Pacific Ltd.
Maxon Combustion Equipment (Shanghai) Co.,Ltd. Tridium Asia Pacific Pte Ltd.
Maxon International BVBA Honeywell Building Solutions SES Corporation
BW Technologies Partnership Honeywell Romania s.r.l.
Inncom International Inc Honeywell Marine SAS
Bryan Donkin RMG Gas Controls Ltd Honeywell Europe Services S.A.S.
Honeywell, S.L. [Spain] Honeywell Automation and Control Soluitons West
Honeywell Iraq LLC Africa Limited
Saia-Burgess Controls AG Honeywell Automation Controls System LLP
Honeywell spol. s.r.o. [Slovak Republic] (Kazakhstan)
Integrated Technical Innovation Company for General HoneyweN (Macau) Limited
Services & Trade KAC Alarm Company Limited
Honeywell Specialty Chemicals (Singapore) Pte. Ltd. RMG Regel Messtechnik GmbH
Honeywell Taiwan Limited HoneyweN Sp. z aa
Honeywell, S.A. de C.V. Honeywell Szabalyozastechnikai Kft.
Mercury Instruments LLC Honeywell spol. s.r.o. [Czech Republic]
RMG Messtechnik GmbH Honeywell Technology Solutions Inc.
Honeywell China co. Ltd. Matrikon Business Systems Inc.
Novar ED&S Limited
iii) Key Management Personnel
Mr. Vikas Chaddha, Managing Director [Resigned w.e.f. July 31, 2016 (close of business hours)]
Mr. Ashish Gaikwad, Managing Director [Appointed w.e.f. 1 October, 2016]
Mr. Anurag Bhagania, CFO [Resigned w.e.f. June 26, 2016 (close of business hours)]
Mr. R Ravichandran, CFO [Appointed w.e.f. June 27, 2016]
Ms. Sangeet Hunjan, Company Secretary [Resigned w.e.f. November 24, 2016 (close of business hours)]
Ms. Farah Irani, Company Secretary [Appointed w.e.f. May 16, 2017]
The Company generates a large percentage of its sales and profits from its business with the Honeywell group (Honeywell), its major shareholder. Sales to Honeywell accounted for approximately 39% and 33% of our total net sales for the year ended March 31, 2017 and year ended March 31, 2016 respectively. The Companyâs ability to maintain or grow its business with Honeywell depends upon a number of performance factors. However, the Company cannot be assured that its level of sales and profits associated with its relationship with Honeywell will continue. Honeywell-specific business considerations (independent of its shareholding in the Company), including changes in Honeywellâs strategies regarding utilization of alternate opportunities available to it to source products and services currently provided by the Company (including from alternate sources which Honeywell may acquire or develop within its own group), may also reduce the level and/or mix of Honeywellâs business with the Company.
NOTE 4 - SHARE BASED PAYMENTS Employee share option plan of the company
Honeywell International Inc (HII), the ultimate holding company, may grant stock options and restricted stock awards to certain employees under its stock incentive plan.
Stock OptionsâThe exercise price, term and other conditions applicable to each option granted under the stock plans are generally determined by the Management Development and Compensation Committee of the Board of Honeywell International Inc. The exercise price of stock options is set on the grant date and may not be less than the fair market value per share of our stock on that date. The fair value is recognized as an expense over the employeeâs requisite service period (generally the vesting period of the award). Options generally vest over a four-year period and expire after ten years.
Restricted Stock UnitsâRestricted stock unit (RSU) awards entitle the holder to receive one share of common stock for each unit when the units vest. RSUs are issued to certain employees as compensation at fair market value at the date of grant. RSUs typically become fully vested over periods ranging from three to seven years and are payable in Honeywell common stock upon vesting.
Fair value of share options granted in the year
The fair value of each stock option award is estimated on the date of grant using the Black-Scholes option-pricing model. Expected volatility is based on implied volatilities from traded options on common stock of HII and historical volatility of common stock of HII. Monte Carlo simulation model is used to derive an expected term which represents an estimate of the time options are expected to remain outstanding. Such model uses historical data to estimate option exercise activity and post-vest termination behavior. The risk-free rate for periods within the contractual life of the option is based on the U.S. treasury yield curve in effect at the time of grant.
A Disputed statutory matters mainly include:
a) Provision for disputed statutory matters comprises matters under litigation with Sales Tax and Local authorities.
b) The amount of provision made by the Company is based on the estimate made by the Management considering the facts and circumstances of each case.
To the extent the Company is confident that it may have a strong case that portion is disclosed under contingent liabilities.
c) The timing and the amount of cash flows that will arise from these matters will be determined by the Appellate Authorities only on settlement of these cases.
B Warranty
Provision for warranty is considered based on the rolling average warranty expense incurred in the preceding 12 months, the warranty period for which ranges from 12 months to 24 months as per provisions of the contracts.
C Provision for Estimated Cost to complete on Contracts
A provision for estimated cost to complete on construction contracts is recognized when it is probable that the total contract cost will exceed total contract revenue. The provision shall be utilized as and when the contract gets executed.
B Defined benefit plans (gratuity and other retirement benefits)
The Company also provides for gratuity, covering eligible employees in accordance with the Payment of Gratuity Act, 1972. The Gratuity Plan provides a lump sum payment to vested employees at retirement, death, incapacitation or termination of employment, of an amount based on the respective employeeâs salary and the tenure of employment.
Provident Fund contributions are made to a Trust administered by the Company for its qualifying employees. This defined benefit plans is administered by separate trust that is legally separated from the entity. The board of the trust is required by law and by its trust deed to act in the interest of the fund and of all the relevant stakeholders in the scheme; i.e. active employees, inactive employees, retirees, employers. The board of the fund is responsible for the investment policy with regard to the assets of the fund.
Note : There is a net surplus position in PF valuation and however as per the PF trust act, no surplus can be transferred to the company as it is separate from the company, the company would not be accounting for any amount in its books in this position.
Sensitivity Analysis
Sensitivity analysis indicates the influence of a reasonable change in certain significant assumptions on the outcome of the Present value of obligation (PVO) and aids in understanding the uncertainty of reported amounts.
1. Sensitivity analysis for each significant actuarial assumptions viz. Discount rate and Salary escalation rate as of the end of the reporting period, showing how the defined benefit obligation would have been affected by changes is called out in the table above.
2. The assumptions used in preparing the sensitivity analysis is Discount rate at 100 bps and- 100 bps
Salary assumption at 1 % and- 1%
3. The method used to calculate the liability in these scenarios is by keeping all the other parameters and the data same as in the base liability calculation except for the parameters to be stressed .
4. There is no change in the method from the previous period and the points/percentage by which the assumptions are stressed are same to that in the previous year.
Gratuity fund asset is managed byLife Insurance Corporation of India and the funding ratio of 60% (ie asset over liability ratio of 60% ), which is above average when compared to other companies, actuary donât see any material risk of HAIL unable to meet the Gratuity payments. Also as the fund is set up as a trust, the monies as a part of the trust will not flow back into the company until the last employee of the trust is paid .
A note on other risks
Investment risk: The funds are invested by LIC and they provide returns basis the prevalent bond yields, LIC on an annual basis requests for contributions to the fund, while the contribution requested may not be on the same interest rate as the bond yields provided, basis the past experience it is low risk.
Interest Risk: LIC does not provide market value of assets, rather maintains a running statement with interest rates declared annually - The fall in interest rate is not therefore offset by increase in value of Bonds, hence may pose a risk.
Longevity Risk: Since the Gratuity Payment happens at the retirement age, longevity impact is very low at this age.
Financial risk management objectives
Company is exposed to foreign exchange risk on account of import risk and hedging activities; and export transactions which is monitored periodically. The Company leverages the global treasury operations of Honeywell to improve mitigation of risk relating to foreign exchange.
Foreign currency risk management
The Company undertakes transactions denominated in foreign currencies; consequently, exposures to exchange rate fluctuations arise. The carrying amounts of the companies foreign currency denominated monetary assets and monetary liabilities at the end of the reporting period are as follows:
Notes to the financial statements Credit risk management
Credit risk refers to the risks that a counterparty will default on its contractual obligations resulting in financial loss to the Company. The Company deals only with credit worthy counterparties and takes appropriate measures to mitigate the risk of financial loss from defaults. Trade receivable consists of a large number of customers, spread across diverse industries and geographical areas. Ongoing credit evaluation is performed on the financial condition of accounts receivable.
Liquidity risk management
The Company manages liquidity risk by maintaining adequate reserves, banking facility and by continuously monitoring forecasts and actual cash flows and by matching the maturity profiles of financial assets and liabilities.
NOTE 5
As set out in section 135 of the Companies Act, 2013 the Company is required to contribute/spent Rs. 348 lakhs towards Corporate Social Responsibility activities, as calculated basis 2% of its average net profits of the last three financial years. Accordingly, during the current year, the Company has spent Rs. 348 lakhs (previous year Rs. 303 lakhs) including 9 lakhs (previous year Rs.7 lakhs) toward administration cost.
NOTE 6
Income tax expense relating to earlier years represents additional tax provision for earlier years arising out of proceedings with the authorities during the current year.
NOTE 7
The Company does not maintain any cash balance at any point in time. Accordingly, the requisite disclosures as regards its holding and dealings in Specified Bank Notes as defined in the Notification S.O. 3407(E) dated the 8th November, 2016 of the Ministry of Finance, during the period from 8th November 2016 to 30th December 2016; are not made in the financial statements.
NOTE 8
Previous periodâs figures have been regrouped, wherever necessary, to conform with current yearâs presentation.
NOTE 9
The financial statements were approved for issue by the board of directors on May 25, 2017.
Mar 31, 2015
A. GENERAL INFORMATION:
Honeywell Automation India Limited (the ''Company'') is engaged
primarily in the business of Automation & Control systems on turnkey
basis and otherwise. The Company is a public limited company and is
listed on the Stock Exchange, Mumbai (BSE) and the National Stock
Exchange (NSE).
(a) Rights, preferences and restrictions attached to the shares
Equity shares: The Company has one class of equity shares having a par
value of Rs.10 per share. Each shareholder is eligible for one vote per
share held. The dividend proposed by the Board of Directors is subject
to the approval of the shareholders in the ensuing Annual General
Meeting, except in case of interim dividend. In the event of
liquidation, the equity shareholders are eligible to receive the
remaining assets of the Company after distribution of all preferential
amounts, in proportion to their shareholding.
a) 6,631,142 (December 31,2013 : 6,631,142 ) Equity shares constituting
75% (December 31,2013 75%) of the paid-up capital of the Company are
held by Honeywell International Inc., the ultimate holding company,
through its 100% subsidiary, Honeywell Asia Pacific Inc.
b) The Company has neither allotted any shares as fully paid up bonus
shares nor pursuant to contract(s) payment being received in cash
during 5 years immediately preceding March 31,2015.
2 Segment Reporting:
Primary business segment:
The Company has determined its business segment as Automation & Control
Systems. There are no other reportable segments.
Secondary geographical segment:
The Company has two geographical segments, viz. Domestic and Exports.
Revenue from geographical segment is given below:
Fixed assets used in the Company''s business or liabilities contracted
have not been identified to any segment as the fixed assets and
services are used interchangeably between segments. Accordingly no
disclosure relating to total segment assets and liabilities is made.
3 Related Party Disclosure :
List of related parties (as identified and certified by the Management)
i) Parties where control exists
Honeywell Asia -Pacific Inc., Holding company
Honeywell International Inc., Ultimate holding company
Other related parties with whom transactions have taken place during
the year:
ii) Fellow Subsidiaries
Honeywell Middle East B.V.
Honeywell Technology Solutions Quatar
Honeywell Tianjin Limited
Honeywell Controls and Automation India Pvt. Ltd.
Honeywell B.V.
Honeywell & Co. Oman L.L.C.
Honeywell Pte Ltd.
Honeywell Automation & Control Solutions South Africa (Pty) Ltd.
Honeywell Kuwait KSC.
Automation and Control Solutions, S. de R.L. de C.V.
Honeywell Europe N.V.
Honeywell Systems (Thailand) Ltd.
Honeywell Ltd. ( Hong Kong)
Enraf B.V.
Honeywell Technology Solutions Lab Pvt. Ltd.
Pittway Systems Technology Group Europe Ltd.
Honeywell Taiwan Inc.
Callidus Technologies India Pvt. Ltd.
Honeywell Building Solutions Gmbh
Honeywell International (India) P. Ltd Honeywell Limited Australia
Honeywell Limited Honeywell Enraf Americas, Inc.
Honeywell Measurex (Ireland) Ltd.
Honeywell Turkey Arabia Ltd.
Honeywell Controls System Limited Honeywell International Middle East
Ltd.
MST Technology GMBH Honeywell Security France S.A.
Honeywell GMBH Honeywell S.A. (Belgium)
Honeywell Airport Systems Gmbh Honeywell s.r.l.
UOP India Pvt. Ltd.
Honeywell Engineering Sdn. Bhd.
Honeywell Co, Ltd.
Honeywell S.L.
Honeywell Portugal, Automacao e Contolo, S.A.
Other related parties with whom transactions have taken place during
the year:
Novar Systems Ltd.
Honeywell Middle East FZE Honeywell Controls International Ltd.
Tridium Inc.
Honeywell Limited (New Zealand)
Honeywell Austria Gesellschaft mbh Honeywell A.B.
Matrikon Pty Ltd.
Trend Control Systems Ltd.
Honeywell (China) Advanced Solutions Co., Ltd.
Honeywell Southern Africa (Proprietary) Ltd.
Honeywell Japan Inc.
Honeywell A/S (Denmark)
ADI-Gardiner NV Honeywell China co. Ltd.
PT Honeywell Indonesia
Life Safety Distribution AG
Honeywell Analytics Asia Pacific Co.Ltd.
Honeywell Otomasyon ve Kontrol Sistemleri Sanayi ve Ticaret A.S.
Honeywell Analytics Inc,
Sinpoec Honeywell Tianjin Ltd.
ZAO Honeywell Maxon Corporation Honeywell ASCa Inc.
Maxon Combustion Equipment (Shanghai) Co.,Ltd.
Maxon International BVBA Fire Sentry Corporation Inncom International
Inc Bryan Donkin RMG Gas Controls Ltd Honeywell, S.L. [Spain]
Honeywell Iraq LLC Saia-Burgess Controls AG Honeywell spol. s.r.o.
[Slovak Republic]
Integrated Technical Innovation Company for General Services & Trade
Honeywell NV [Belgium]
Honeywell Automation & control Solutions Carribean Ltd.
Honeywell AS Norway Honeywell OY
Matrikon Middle East Co WLL
Honeywell Environmental & Combustion Controls (Tianjin) Co., Ltd.
Honeywell International s.a.r.l.
Honeywell Sensing & Control China Co, Ltd.
Honeywell Technologies SARL Honeywell AG Matrikon Inc.
Matrikon Industrial Solutions India Pvt. Ltd.
Honeywell Chile S.A.
Honeywell Aerospace B.V.
Honeywell Turbo Technologies (India) Private Limited Honeywell
Electrical Devices and Systems India Limited Honeywell do Brasil Ltda.
Honeywell Egypt Limited Honeywell EOOD Matrikon International, Inc.
Novar Gmbh
Honeywell Integrated Technology (China) Co Ltd.
Ademco Asia Pacific Ltd.
Tridium Asia Pacific Pte Ltd.
Honeywell BeijingTechnology solution Honeywell Romania s.r.l.
Enraf Marine Systems S.A.S.
Honeywell Europe Services S.A.S.
Honeywell Automation and Control Solutions West Africa Limited
Honeywell Automation Controls LLP
Honeywell (Macau) Limited
KAC Alarm Company Limited
RMG Regel Messtechnik GmbH
Honeywell Sp. z o.o.
Honeywell Szabalyozastechnikai Kft.
Honeywell Life Safety AS
iii. Key Management Personnel
Mr. Vikas Chaddha, Managing Director (w.e.f. January 1,2014)
Mr. Anant Maheshwari, Managing Director (Upto December 31,2013)
The Company generates a large percentage of its sales and profits from
its business with the Honeywell group (Honeywell), its major
shareholder. Sales to Honeywell accounted for approximately 28% and 30%
of our total net sales in the 15 months ended March 31,2015 and year
ended December 31,2013 respectively. The Company''s ability to maintain
or grow its business with Honeywell depends upon a number of
performance factors. However, the Company cannot be assured that its
level of sales and profits associated with its relationship with
Honeywell will continue. Honeywell-specific business considerations
(independent of its shareholding in the Company), including changes in
Honeywell''s strategies regarding utilization of alternate opportunities
available to it to source products and services currently provided by
the Company (including from alternate sources which Honeywell may
acquire or develop within its own group), may also reduce the level
and/or mix of Honeywell''s business with the Company.
4 Lease Transactions:
As a Lessee in Operating Lease
Rentals for office premises, land, building under operating leases of
Rs. 2,549 (''lakhs) [Previous Year Rs. 1,794 (''lakhs)] have been
included under Rent Expense.
Non cancelable
The Company has hired premises under non-cancelable operating lease
arrangements at stipulated rentals. The future minimum lease payments
under these leases as of March 31,2015 are as follows:
5 Earning per share (EPS):
EPS is calculated by dividing the profit attributable to the equity
shareholders by the average number of shares outstanding during the
year. The basic and diluted earnings per share have been calculated as
under:
6 a) Estimated amount of contracts remaining to be executed on capital
accounts and not provided for (net of advances) - Rs. 404 (''lakhs)
[Previous year Rs. 366 (''lakhs)]
b) Disclosure in accordance with Section 22 of Micro, Small and Medium
Enterprises Development Act, 2006
The Company has compiled this information based on intimations received
from suppliers of their status as Micro or Small enterprises and / or
its registration with the appropriate authority under Micro, Small and
Medium Enterprises Development Act, 2006.
7 A) Provision for taxation has been made after considering the
various allowances / deductions available and after excluding profits
derived from undertaking registered with Software Technology Parks of
India under section 10A and unit registered under Special Economic Zone
under Section 10AA of the Income Tax Act, 1961.
B) The tax year for the Company being April 1 to March 31, provision
for current taxation for the period is the aggregate of the provision
made for the three months ended March 31,2014 and the provision based
on the figures for the remaining twelve months ended March 31,2015.
In addition to the above, the Company has entered into certain foreign
currency forward contracts against highly probable forecast
transactions relating to its purchases and sales. The foreign currency
forward contracts in respect of highly probable forecast transactions
outstanding at the balance sheet date aggregate as follows:
8 Employee Stock Option Schemes:
The Company has a Employees Stock Option Plans (Stock Options "SO"
and Restricted Units "RU") in operation for certain employees,
which is administered by Honeywell International Inc. the ultimate
holding company. Since the payments/ issue of shares, if any, under the
plan are proposed to be made directly by Honeywell International Inc
without any charge back to the Company, no accounting/disclosure for
the plan has been made by the Company.
9 Contingent Liabilities:
(Rupees in lakhs)
Particulars As at As at
March 31, 2015 December 31, 2013
a) Income Tax claims
against the Company 8,259 8,344
b) Excise duty claims
against the Company 3 3
c) Sales tax refunds/claims
against the Company 4,665 2,584
d) Customs duty claims
against the Company 262 292
e) Claims against the Company
not acknowledged as debts 1,516 1,516
Note: It is not practicable for the Company to estimate the timing of
cash outflow, if any, in respect of the above pending resolutions of
the respective proceedings.
A Disputed statutory matters mainly include:
a) Provision for disputed statutory matters comprises matters under
litigation with Sales Tax and Local authorities.
b) The amount of provision made by the Company is based on the estimate
made by the Management considering the facts and circumstances of each
case.
To the extent the Company is confident that it may have a strong case
that portion is disclosed under contingent liabilities.
c) The timing and the amount of cash flows that will arise from these
matters will be determined by the Appellate Authorities only on
settlement of these cases.
B Provision for Estimated Cost to complete on Contracts
A provision for estimated cost to complete on construction contracts is
recognized when it is probable that the contract cost will exceed total
contract revenue. The provision shall be utilized as and when the
contract gets executed.
C Warranty
Provision for warranty is considered based on the rolling average
warranty expense incurred in the preceding 12 months, the warranty
period for which ranges from 12 months to 24 months from the date of
handover of the project.
10 During the period ended March 31,2015, the Company determined that
certain costs had been recorded to incorrect projects and conducted a
review to determine the impact of the same. Following conclusion of the
review, adjustments have been made in these financial statements to
reduce revenue by Rs.5,450 lakhs and profit before tax by Rs.6,729
lakhs. This reduction in profit before tax includes an impact of
Rs.1,279 lakhs for provision for future losses for certain projects in
accordance with Accounting Standard 7 - Accounting for construction
contracts.
Of the above adjustments, amounts of Rs. 4,002 Lakhs, which relate to
prior years, have been disclosed as an exceptional item.
The Company is in the process of enhancing internal controls to
minimize the risk of such incorrect recording of costs in the future.
11 Disclosures in accordance with Revised AS- 15 on "Employee
Benefits":
A Defined contribution plans
The company has recognized the following amounts in the statement of
profit and loss for the period.
Fair Value of the planned asset as at March 31, 2015 represents the
balance as confirmed by the insurer managed funds.
vi. The overall expected rate of return on assets is based on the
expectation of the average long term rate of return expected on
investments of the Fund during the estimated term of the obligations.
vii. The actual return on plan assets is as follows
The estimates of future salary increases considered in actuarial
valuation takes into account inflation, seniority, promotion and other
relevant factors.
12 As set out in section 135 of the Companies Act, 2013 the Company is
required to contribute Rs. 283 lakhs towards Corporate Social
Responsibility activities, as calculated basis 2% of its average net
profits of the last three financial years. Accordingly, during the
current year, the Company has contributed Rs. 283 lakhs towards the
eligible projects as mentioned in Schedule VII ( including amendments
thereto) of the Companies Act, 2013.
13 Consequent to the change in the financial year of the Company from
January - December to April - March with effect from the current year,
the current year''s financial statements are for 15 months from January
1,2014 to March 31, 2015. The previous year''s figures relate to the 12
months ended December 31,2013. In view of the above, the current year''s
figures are accordingly not comparable to those of the previous year.
14 Previous year''s figures have been regrouped, wherever necessary, to
conform with current period''s presentation.
Dec 31, 2013
1. Lease Transactions:
As a Lessee in Operating Lease
Rentals for office premises under operating leases of Rs. 2,462
(''lakhs) [Previous Year Rs. 2,583 (''lakhs)] have been included
under''Rent Expenses''.
2. A) Provision for taxation has been made after considering the
various allowances / deductions available and after excluding profits
derived from undertaking registered with Software Technology Parks of
India under section 10A and unit registered under Special Economic Zone
under Section 10AA of the Income Tax Act, 1961.
B) The tax year for the Company being April 1 to March 31, provision
for current taxation for the year is the aggregate of the provision
made for the three months ended March 31, 2013 and the provision based
on the figures for the remaining nine months ended December 31, 2013,
the ultimate tax liability of which will be determined on the basis of
the figures for the period April 1,2013 to March 31,2014.
A. Disputed statutory matters mainly include:
a) Provision for disputed statutory matters comprises matters under
litigation with Sales Tax and Local authorities.
b) The amount of provision made by the Company is based on the estimate
made by the Management considering the facts and circumstances of each
case.
To the extent the Company is confident that it may have a strong case
that portion is disclosed under contingent liabilities.
c) The timing and the amount of cash flows that will arise from these
matters will be determined by the Appellate Authorities only on
settlement of these cases.
B. Provision for Estimated Cost to complete on Contracts
A provision for estimated cost to complete on construction contracts is
recognized when it is probable that the contract cost will exceed total
contract revenue. The provision shall be utilized as and when the
contract gets executed.
C. Warranty
Provision for warranty is considered based on the rolling average
warranty expense incurred in the preceding 12 months, the warranty
period for which ranges from 12 months to 24 months from the date of
handover of the project.
3. Previous year figures have been regrouped, wherever necessary to
conform with current year''s presentation.
Dec 31, 2012
(a) Rights, preferences and restrictions attached to the shares
Equity Shares: The Company has one class of equity shares having a par
value of Rs.10 per share. Each shareholder is eligible for one vote per
share held. The dividend proposed by the Board of Directors is subject
to the approval of the shareholders in the ensuing Annual General
Meeting, except in case of interim dividend. In the event of
liquidation, the equity shareholders are eligible to receive the
remaining assets of the Company after distribution of all preferential
amounts, in proportion to their shareholding.
a) 6,631,142 (December 31, 2011 : 7,182,475 ) Equity Shares
constituting 75% (December 31, 2011 : 81.24%) of the paid-up capital of
the Company are held by Honeywell International Inc., the ultimate
holding company, through its 100% subsidiary, Honeywell Asia Pacific
Inc.
b) The Company has not allotted any shares as fully paid up bonus
shares or pursuant to contract(s) neither payment being received in
cash during 5 years immediately preceding December 31, 2012.
1 Segment Reporting
Business segment has been considered as the primary segment and
geographical segment has been considered as the secondary segment.
Automation & Control systems being the only business segment constitute
one single primary segment in the context of Accounting Standard - 17
on Segment Reporting.
Fixed assets used in the Company''s business or liabilities contracted
have not been identified to any segment as the fixed assets and
services are used interchangeably between segments. Accordingly no
disclosure relating to total segment assets and liabilities is made.
The Company generates a large percentage of its sales and profits from
its business with the Honeywell group (Honeywell), its major
shareholder. Sales to Honeywell accounted for approximately 35% and 32%
of our total net sales in fiscal years 2012 and 2011 respectively. The
Company''s ability to maintain or grow its business with Honeywell
depends upon a number of performance factors. However, the Company
cannot be assured that its level of sales and profits associated with
its relationship with Honeywell will continue. Honeywell-specific
business considerations (independent of its shareholding in the
Company), including changes in Honeywell''s strategies regarding
utilization of alternate opportunities available to it to source
products and services currently provided by the Company (including from
alternate sources which Honeywell may acquire or develop within its own
group), may also reduce the level and/or mix of Honeywell''s business
with the Company.
Cancelable
Rentals paid for computers under operating leases of Rs. NIL [Previous
year Rs. 28(''lakhs)] have been included under '' Miscellaneous
Expenses''.
Rentals for office premises under operating leases of Rs. 709 (''lakhs)
[Previous Year Rs. 515 (''lakhs)] have been included under ''Rent
Expenses''
Previous year figures are indicated in brackets.
2 Earning Per Share (EPS)
EPS is calculated by dividing the profit attributable to the equity
shareholders by the average number of shares outstanding during the
year. The basic and diluted earnings per share have been calculated as
under:
3 a) Estimated amount of contracts remaining to be executed on capital
accounts and not provided for (net of advances) - Rs. 165(''lakhs)
[Previous year Rs. 148(''lakhs)]
b) Disclosure in accordance with Section 22 of Micro, Small and Medium
Enterprises Development Act, 2006
The Company has compiled this information based on intimations received
from suppliers of their status as Micro or Small enterprises and / or
its registration with the appropriate authority under Micro, Small and
Medium Enterprises Development Act, 2006.
4 A). Provision for taxation has been made after considering the
various allowances / deductions available and after excluding profits
derived from undertaking registered with Software Technology Parks of
India under section 10A and unit registered under Special Economic Zone
under Section 10AA of the Income Tax Act, 1961.
B). The tax year for the Company being April 1 to March 31, provision
for current taxation for the year is the aggregate of the provision
made for the three months ended March 31, 2012 and the provision based
on the figures for the remaining nine months ended December 31, 2012,
the ultimate tax liability of which will be determined on the basis of
the figures for the period April 1, 2012 to March 31, 2013.
5 Contingent Liabilities
(Rupees in lakhs)
Particulars As at As at
December
31, 2012 December
31, 2011
a) Income Tax claims against the Company 6,172 5,636
b) Excise duty claims against the Company 4 15
c) Sales tax refunds/claims against the Company 2,336 1,962
d) Customs duty claims against the Company 292 36
e) Claims against the Company not
acknowledged as debts 1,790 -
A Disputed statutory matters mainly include:
a) Provision for disputed statutory matters comprises matters under
litigation with Sales Tax and Local authorities.
b) The amount of provision made by the Company is based on the estimate
made by the Management considering the facts and circumstances of each
case.
To the extent the Company is confident that it may have a strong case
that portion is disclosed under contingent liabilities.
c) The timing and the amount of cash flows that will arise from these
matters will be determined by the Appellate Authorities only on
settlement of these cases.
B Provision for Estimated Cost to complete on Contracts
A provision for estimated cost to complete on construction contracts is
recognized when it is probable that the contract cost will exceed total
contract revenue. The provision shall be utilized as and when the
contract gets executed.
vi The overall expected rate of return on assets is based on the
expectation of the average long term rate of return expected on
investments of the Fund during the estimated term of the obligations.
6 The current year charge for Corporate Overhead Allocation includes
charge of Rs. 487(''lacs) (Previous Year reversal of Rs. 20 lacs) in
respect of services rendered in previous year.
7 The financial statements for the year ended December 31, 2011 had
been prepared as per the then applicable, pre- revised Schedule VI to
the Companies Act, 1956. Consequent to the notification of Revised
Schedule VI under the Companies Act, 1956, the financial statements for
the year ended December 31,2012 are prepared as per Revised Schedule
VI. Accordingly, the previous year figures have also been reclassified
to conform to this year''s classification. The adoption of Revised
Schedule VI for previous year figures does not impact recognition and
measurement principles followed for preparation of financial
statements.
Dec 31, 2011
1. Disclosures under Accounting Standards
i) Segment Reporting :
Business segment has been considered as the primary segment and
geographical segment has been considered as the secondary segment.
Automation & Control systems being the only business segment constitute
one single primary segment in the context of Accounting Standard - 17
on Segment Reporting.
Fixed assets used in the Company's business or liabilities contracted
have not been identified to any segment as the fixed assets and
services are used interchangeably between segments. Accordingly no
disclosure relating to total segment assets and liabilities is made.
The Company generates a large percentage of its sales and profits from
its business with the Honeywell group (Honeywell), its major
shareholder. Sales to Honeywell accounted for approximately 32% and 33%
of total net sales in fiscal years 2011 and 2010 respectively. The
Company's ability to maintain or grow its business with Honeywell
depends upon a number of performance factors. However, the Company
cannot be assured that its level of sales and profits associated with
its relationship with Honeywell will continue. Honeywell- specific
business considerations (independent of its shareholding in the
Company), including changes in Honeywell's strategies regarding
utilization of alternate opportunities available to it to source
products and services currently provided by the Company (including from
alternate sources which Honeywell may acquire or develop within its own
group), may also reduce the level and/or mix of Honeywell's business
with the Company.
iii) Lease Transactions :
As a Lessee in an Operating Lease:
Non cancellable
The Company has taken certain Office Premises under non cancellable
operating leases with a lock in period ranging from 12 to 60 months
generally and are usually renewable by mutual consent on agreed terms.
Rentals paid for equipments under operating leases of Rs. NIL [Previous
year Rs. 4,165 ('000)] have been included under 'Rent' under Schedule
15 to Profit and Loss Account.
Rentals paid for computers under operating leases of Rs. 2,815 ('000)
[Previous year Rs. 11,834('000)] have been included under
'Miscellaneous Expenses' under Schedule 15 to Profit and Loss Account.
Rentals paid for premises under operating leases of Rs. 86,372 ('000)
[Previous year Rs. 89,575 ('000)] have been included under 'Rent' under
Schedule 15 to Profit and Loss Account.
Previous year figures are indicated in brackets.
During the year 2011, weighted average share price for Stock Option
exercised was USD 44.17 (Previous year rate USD 46.2)
During the year 2011, weighted average share price for Restricted units
vested was USD 56.40 (Previous year rate USD 42.27)
There were 10,850 (Previous year: 60,410) Stock Options outstanding at
the end of 2011 with exercise prices in the range USD 37.75 to 57.05
(Previous Year : USD 28.25 to USD 58.48) with a weighted average
remaining contractual life of years 7.10 years(Previous Year: 8.16
years).
There were 9,852 (Previous Year: 37,775) Restricted Units at the end of
2011 with a weighted average remaining contractual life of 5.40 years
(Previous Year: 4.68 years).
2. Contingent Liabilities (Rs.'000)
Particulars December December
31,2011 31,2010
a) Income tax claims against the Company 563,575 773,014
b) Excise duty claims against the Company 1,475 1,475
c) Sales tax refunds/claims against the
Company 196,221 42,283
d) Customs duty claims against the Company 3,553 3,553
Note :
Bank Guarantees given to customers against performance/advance Rs.
3,616,854 ('000) [Previous Year Rs. 2,684,891 ('000)].
Notes:
The above information does not include:
a. As the future liability for gratuity and leave encashment is
provided on actuarial basis for the Company as a whole, the amounts
pertaining to the directors is not ascertainable and is therefore not
included above.
b. Employee Stock Options, Restricted Units and Share Awards in
respect of shares in Honeywell International Inc. (ultimate holding
company) granted to the directors.
c. Pension aggregating Rs.720('000) [Previous Year Rs.720('000)]
paid to a Non-executive director, who was previously an employee of the
company.
* Not quantifiable as the size/mix of the system varies according to
customers' requirements. Previous year figures are indicated in
brackets.
** Not Applicable
A) Disputed statutory matters mainly include:
a) Provision for disputed statutory matters comprises matters under
litigation with Sales Tax and Local authorities.
b) The amount of provision made by the Company is based on the estimate
made by the Management considering the facts and circumstances of each
case.
To the extent the Company is confident that it may have a strong case
that portion is disclosed under contingent liabilities.
c) The timing and the amount of cash flows that will arise from these
matters will be determined by the Appellate Authorities only on
settlement of these cases.
B) Provision for Estimated Cost to Complete on Contracts:
A provision for estimated cost to complete on construction contracts is
recognised when it is probable that the contract costs will exceed
total contract revenue. The provision shall be utilised as and when the
contract gets executed.
3. The current year charge for Corporate Overhead Allocation includes
reversal of Rs. 2,006 ('000) (Previous Year charge of Rs.105,200
('000)) in respect of services rendered in previous year.
4. Prior year comparatives have been re-grouped, re-classified to
conform to the current year presentation, wherever applicable.
Dec 31, 2009
1. Disclosures under Accounting Standards
i) Segment Reporting :
The business segment has been considered as the primary segment and the
geographical segment has been considered as the secondary segment.
Automation & Control being the only business segment, necessary
information has already been given in the Balance Sheet and Profit and
Loss Account.
ii) Related Party Disclosures :
List of related parties (as identified and certified by the Management)
(i) Parties where control exists :
Honeywell Asia-Pacific Inc., Holding Company Honeywell International
Inc., Ultimate Holding Company
Other related parties with whom transactions have taken place during
the year :
(ii) Fellow subsidiaries
Callidus Technologies India P. Ltd.
Honeywell & Co Oman LLC
Honeywell A/S (Danmark)
Honeywell Ab (Sweden)
Honeywell Acs Sensing & Control
Honeywell Acs South Africa
Honeywell Ag
Honeywell Airport Systems Gmbh
Honeywell Analytics Asia Pacific Co.
Honeywell Analytics Inc.
Honeywell A/S (Norway)
Honeywell ASCA Inc.
Honeywell Austria Gmbh
Honeywell Automation & Control
Honeywell B V
Honeywell Building Solutions Gmbh
Honeywell C.A.
Honeywell China
Honeywell Co. Ltd. (Korea)
Honeywell Control Systems Limited
Honeywell Controls & Automation (India)
Honeywell Ecc (Tianjin) Co. Ltd.
Honeywell Egypt Ltd.
Honeywell Electrical
Honeywell Engineering Sdn Bhd
Honeywell Engines & Systems
Honeywell Enraf Americas, Inc.
Honeywell Enraf Marine Systems Sas
Honeywell Enraf Bv
Honeywell Environmental & Combustion
Honeywell Europe Nv
Honeywell Gmbh
Honeywell International (India) Pvt.
Honeywell International Me Ltd.
Honeywell Japan Inc.
Honeywell Kuwait Ksc
Honeywell Measurex Ireland Pvt. Ltd.
Honeywell Limited
Honeywell Ltd. (Australia)
Honeywell Ltd. (Corp-Hong Kong)
Honeywell Ltd. Singapore Gbs
Honeywell Middle East Ltd.
Honeywell N V
Honeywell New Zealand
Honeywell Otomasyon Ve
Honeywell OY
Honeywell Portugal Lda
Honeywell Process Solutions Canada
Honeywell Process Solutions Us
Honeywell Pte Ltd.
Honeywell S.R.L.
Honeywell Sa
Honeywell Safety Management
Honeywell Scanning & Mobility
Honeywell Security
Honeywell Sensing & Control
Honeywell SI
Honeywell Sp. Zo.O.
Honeywell Systems (Thailand) Ltd.
Honeywell Taiwan Ltd.
Honeywell Technology Solution Lab.
Honeywell Tianjin Ltd.
Honeywell Turbo Technologies India
Honeywell Turkey Arabia Ltd.
Honeywell Xinyao Auto. Sensor (Shan
Maxon Corporation
Novar Gmbh
Novar Projects Limited
Novar Systems Ltd.
Pittway Sys Tech Grp Eur.
Pt.Honeywell Indonesia
Trend Control Systems Ltd.
Uop Lie
Xian System Sensor Electronics
Zao Honeywell
(Mi) Key Management Personnel
Mr. Vimal Kapur, Managing Director
Mr. Harshavardhan Chitale, Executive Director upto October 14, 2008
2. Contingent Liabilities (Rs.OOO)
December December
31,2009 31,2008
a) Income tax claims against
the Company 420,176 402,194
b) Excise duty claims against
the Company* 1,475 1,475
c) Sales Tax refunds/claims
against the Company* 173,992 84,675
d) Customs Duty claims against
the Company* 3,553 4,000
* Excludes penalties, if any, relating to penalty proceedings, since
the precedence indicate that the probability of levy is remote.
Note :
Bank Guarantees given to customers- against performance/advance.
Bank Guarantees issued Rs. 2,387,223 (000) [Previous Year Rs.
1,966,153 (000)] are secured by hypothecation of present and future
stocks of raw materials, semi- finished goods, finished goods, stores
and spares and book debts.
3. From the current year, the Company has recognised reimbursement of
expenses received as a part of sales, instead of netting off against
expenses. Accordingly, expenses aggregating Rs.432,031 (000s) have
been included under sales for the year 2009. Further, expenses
aggregating Rs.389,776 (OOOs)in respect of the year 2008 have been
reclassified under sales for the year 2008.
4. With effect from previous year, the Company has accounted for
corporate overhead allocation, in respect of various services rendered
by Honeywell group companies. The previous year charge includes Rs.
154,862 (000s) in respect of services rendered in the year 2007.
5. Prior year comparatives have been re-grouped, re-classified to
conform to the current year presentation, wherever applicable.
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ഓഹരി വിപണിയിൽ വൻ കുതിപ്പ്: സെൻസെക്സും നിഫ്റ്റിയും കുതിച്ചുയരുന്നു, നിക്ഷേപകർക്ക് വൻ നേട്ടം -
വിപണിയിൽ വൻ ചാഞ്ചാട്ടം; ഐടി ഓഹരികളുടെ കുതിപ്പിനിടെ നിക്ഷേപകർ ഉറ്റുനോക്കുന്ന ആ നിർണ്ണായക തീരുമാനം ഇതാ! -
കോൾ ഇന്ത്യ സെറ്റിൽമെന്റും വാഹന വിൽപന കണക്കുകളും; നിഫ്റ്റിയിൽ ഇന്ന് വൻ മാറ്റങ്ങൾക്ക് സാധ്യതയോ? -
വെള്ളിയാഴ്ചത്തെ വിപണി തകർച്ച: നിക്ഷേപകരുടെ പണം ഒലിച്ചുപോയോ? സെൻസെക്സ് വീഴ്ചയ്ക്ക് പിന്നിലെ ഞെട്ടിക്കുന്ന കാരണങ്ങൾ ഇതാ! -
സെൻസെക്സ് ഇടിവ് തുടരുമോ? തിങ്കളാഴ്ച വിപണിയിൽ വൻ മാറ്റങ്ങൾക്ക് സാധ്യത, നിക്ഷേപകർ ശ്രദ്ധിക്കേണ്ട കാര്യങ്ങൾ ഇതാ! -
സെൻസെക്സും നിഫ്റ്റിയും കുതിക്കുന്നു; ഓഹരി വിപണിയിലെ ഈ വമ്പൻ മുന്നേറ്റത്തിന് പിന്നിലെ യഥാർത്ഥ കാരണം ഇതാണ്! -
മൺസൂൺ കാറ്റിൽ വിപണി കുതിക്കുമോ? നിക്ഷേപകർ ശ്രദ്ധിക്കേണ്ട നിർണ്ണായക മാറ്റങ്ങളും ഐപിഒ അവസരങ്ങളും ഇതാ! -
വിപണിയിൽ വൻ കുതിപ്പ്; സെൻസെക്സും നിഫ്റ്റിയും റെക്കോർഡ് ഉയരത്തിലേക്ക്, നിക്ഷേപകർക്ക് ഇനി എന്ത് സംഭവിക്കും? -
ഓഹരി വിപണിയിൽ കടുത്ത ചാഞ്ചാട്ടം; നിക്ഷേപകർക്ക് ആശങ്കയോ അതോ അവസരമോ? സെൻസെക്സ് നൽകുന്ന സൂചനകൾ ഇതാ! -
വിപണിയിൽ വൻ തകർച്ച; നിക്ഷേപകരെ ഞെട്ടിച്ച് സെൻസെക്സും നിഫ്റ്റിയും കൂപ്പുകുത്തിയതെങ്ങനെ? -
വിപണിയിൽ തളർച്ച, പക്ഷേ ഓട്ടോ ഓഹരികളിൽ വൻ കുതിപ്പ്; നിക്ഷേപകർക്ക് ഇനി എന്ത് സംഭവിക്കും? -
മെയ് 8: വിപണിയിൽ കുതിപ്പിന് സാധ്യതയോ? നിക്ഷേപകർ ശ്രദ്ധിക്കേണ്ട നിർണ്ണായക ഘടകങ്ങൾ ഇതാ! -
വിപണിയിൽ കനത്ത ഇടിവ്; നിക്ഷേപകരെ ആശങ്കയിലാക്കി സെൻസെക്സും നിഫ്റ്റിയും കൂപ്പുകുത്തി -
വിപണിയിൽ കാളക്കൂറ്റന്മാരുടെ തിരിച്ചുവരവ്; നിഫ്റ്റിയും സെൻസെക്സും കുതിച്ചുയർന്നത് എങ്ങനെ? -
വിപണിയിൽ വൻ കുതിപ്പിന് കളമൊരുങ്ങുന്നു; ഈ ഓഹരികൾ ശ്രദ്ധിക്കാതെ പോകരുത്! -
തിങ്കളാഴ്ച വിപണിയിൽ എന്ത് സംഭവിക്കും? നിക്ഷേപകരെ കാത്തിരിക്കുന്നത് വൻ അട്ടിമറികളോ?
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