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Directors Report of Honeywell Automation India Ltd.

Mar 31, 2015

Dear Members,

The Directors present the THIRTY FIRST ANNUAL REPORT with the audited statements of accounts of the Company for the period ended March 31,2015 .

1. FINANCIAL RESULTS:

Particulars Period ended Year ended March 31,2015 December 31,2013 (Rs. in lacs) (Rs. in lacs)

Sales & Other Income 242,611 172,563

Operating Profit 106,868 73,110

Less: Interest 44 39

Depreciation 1686 1,392

Profit for the year (Before Exceptional Item) 21,724 12,278

Exceptional Item 4,002 -

Profit for the year (After Exceptional Item) 17,722 12,278

Provision for tax 7,684 5,390

Deferred Tax Adjustment (1,382) (1,728)

PROFIT AFTER TAX 11,420 8,616

Profit brought forward from the previous year 61,305 54,585

Profit available for appropriations 70,253 61,305

APPROPRIATIONS

General Reserve 1,142 862

Proposed Dividend 1,105 884

Tax on proposed dividend 225 150

BALANCE CARRIED FORWARD 70,253 61,305

2. DIVIDEND:

Final dividend @ Rs.12.50/- per share of Rs.10/- each was recommended by the Board in their meeting held on May 25, 2015.

3. OPERATIONS:

The Management Discussion & Analysis Report annexed herewith provides full details of operational performance and business analysis of these business units.

- Honeywell Process Solutions (HPS) serves core industrial sectors of Refining, Oil & Gas, Pulp & Paper, Metal and Cement etc.

- Honeywell Building Solutions (HBS) provides solutions and services for facilities such as Commercial & Industrial Buildings, IT & ITES industry, Hospitals, Hotels, Airports etc.

- Environment and Combustion Control (ECC) serves multiple brands through channels and offers environmental and combustion products and solutions to commercial, hospitality and industrial segments.

- Sensing & Control (S&C) business provides various sensors and switches to manufacturing and automobile

industry. This business serves primarily OEMs in various manufacturing industries such as auto, medical instrumentation, IT, etc.

- Exports Business Group (EBG) addresses manufacturing and engineering services needs of Honeywell along with some other non Honeywell customers across the globe, leveraging the cost, skills and knowledge arbitrage.

4. CORPORATE SOCIAL RESPONSIBILITY (CSR):

Your Company remains committed to making the world a better place and expanding community outreach through CSR activities As part of its initiatives under CSR, the Company has partnered with Safe Kids Foundation India, a not- for-profit Trust, that aims to protect children in India from injuries and death in the home. The Annual Report on CSR activities, in accordance with Section 135 of the Companies Act, 2013, read with Companies (Corporate Social Responsibility Policy) Rules, 2014, is annexed herewith as "Annexure A".

5. HONEYWELL OPERATING SYSTEM (HOS):

Your company is continuing on the operational excellence journey with strong focus on driving the Honeywell Operating System (HOS). HOS is favorably impacting Safety, Quality, Delivery, Cost and Inventory metrics. During 2014 Pune factory achieved the advanced level of HOS Silver Excellence and the Global Engineering Services (GES) supporting Honeywell Building Solutions (HBS) business achieved Silver level. In 2015 the main focus is on achieving Bronze level for manufacturing facility of Environmental and Combustion Controls (ECC) business at Vadodara, Gujarat and global back office of Honeywell Building Solutions in Pune. Further, the businesses have started contributing to the HOS Gold initiative to achieve next level of overall business performance.

6. DIRECTORS:

As per the provisions of the Companies Act, 2013 and Articles of Association of the Company, Mr. Anant Maheshwari, retires by rotation and is eligible for reappointment.

7. HUMAN RESOURCES:

Honeywell''s Positive Employee Relationships (PER) strategy aims at engaged and motivated workforce and to create a positive and productive work environment.

Honeywell''s Global PER Assessment Process outlines the Communication, Action Planning, Surveys (Employee and Manager Survey) and Focus Groups to make it more effective.

Honeywell has also made great strides to get the Employee Value Proposition (EVP) in place. It focuses on 5 key themes i.e. 1. Challenging work that matters 2. Right People 3.Talent and Leader Development 4. Differentiated Rewards and 5. Community Engagement.

As on March 31,2015, the Company''s employee strength was 2842 as compared to 2713 as on December 31,2013.

8. MANAGEMENT DISCUSSION & ANALYSIS/CORPORATE GOVERNANCE REPORT:

As per Clause 49 of the Listing Agreement with the Stock Exchanges (Revised w.e.f. October 1,2014), Management Discussion and Analysis Report and Corporate Governance Report are annexed and form part of the Directors Report.

9. CODE OF CONDUCT COMPLIANCE:

As per Clause 49 of the Listing Agreement with the Stock Exchanges, the declaration signed by the Managing Director affirming compliance with the Code of Conduct by Directors and Senior Management, for the Financial period ended March 31,2015 is annexed and forms part of the Directors Report.

10. AUDITORS:

Statutory Audit

M/s. Price Waterhouse & Co Bangalore LLP has completed 10 years as Statutory Auditors of your Company. The provisions regarding rotation of auditors, as prescribed under the Companies Act, 2013 are applicable to the Company. It is, hence, proposed to appoint M/s Deloitte Haskins & Sells LLP (Firm Registration No. 117366W/W- 100018) as the Statutory Auditors for a period of 5 years to hold office from the conclusion of the ensuing Annual General Meeting (2015) till the Sixth following Annual General Meeting (2020), subject to ratification of their appointment at every AGM, during the term of their office. They have confirmed their eligibility and willingness for appointment as Statutory Auditors for the aforesaid period, as per Section 141 of the Companies Act, 2013. The Board of Directors recommends their appointment to the shareholders.

Cost Audit

The Central Government has approved the appointment of M/s C S Adawadkar & Co.,Cost Accountants as Cost Auditor for conducting Cost Audit of the Company for the Financial Year ending December 31,2013 and December 31,2014. The Company changed the Financial year ending from December 31,2014 to March 31,2015 and as such the Cost Audit report will be submitted for 15 months period of January 1,2014 to March 31,2015.

The due date for filing the Cost Audit Report for the Financial Year ended March 31,2015 is September 27, 2015.

The due date for filing the Cost Audit Report of the Company for the Financial Year ended December 31,2013 was June 29, 2014 and the Cost Audit Report was filed by the Cost Auditor M/s C S Adawadkar & Co.,Cost Accountants, on May 26, 2014 in XBRL mode as mandated by the Ministry of Corporate Affairs.

11. DIRECTORS'' RESPONSIBILITY STATEMENT:

Pursuant to Section 217(2AA) of the Companies Act, 1956 the Directors, based on the representations received from the Operating Management, confirm that-

(i) In the preparation of these accounts, the applicable accounting standards have been followed and that there was no material departure from the accounting standards;

(ii) They have, in the selection of the accounting policies, applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the accounting year and of the profit of the Company for that period;

(iii) Read with paragraph on Internal Control in the Management Discussion & Analysis Report and paragraph 12(B) of this Report, they have taken proper and sufficient care, to the best of their knowledge and ability, for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956, for safeguarding the assets, for adequacy of financial controls and controls for preventing and detecting fraud and other irregularities;

(iv) They have prepared the annual accounts on a going concern basis.

12. COMMENTS IN AUDITORS'' REPORT:

(A) Comments regarding paragraph 8(b) of the Auditors'' Report:

The Company maintains and periodically updates the back up of Books of Account. However, as pointed out in the Auditors'' Report, the back up is not maintained on servers physically located in India. The Company is in the process of evaluating technology options to maintain the back up on servers physically located in India.

(B) Comments regarding paragraph iv and xxi of Annexure to Auditors'' Report

As discussed in Note 41 of the Notes forming part of financial statements for the accounting year ended March 31,2015, the Company determined that certain projects in the HPS business units had costs that had been recorded to incorrect projects. At the request of Senior Management and with oversight by the Audit Committee, the Company has conducted an objective and independent review ("review") to determine the impact of the

same. On conclusion and as a result of this review, adjustments have been made for certain projects for the period ended March 31,2015 to reduce revenue by Rs. 3095 lacs and reduce profit before tax for the period by Rs. 4002 lacs. This reduction in profit before tax includes an impact of Rs. 907 lacs for provision for future losses in accordance with Accounting Standard 7 - Accounting for construction contracts.

The Company is in the process of enhancing internal controls to minimize the risk of such incorrect recording of costs in the future.

13. OTHER INFORMATION:

Information as per Section 217 (2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975 pertaining to absorption of technology, foreign exchange earnings, is given as an Annexure B to this Report and forms part of it. As per provisions of Section 219(1)(b)(iv) of the Act, the Directors'' Report and Accounts are being sent to the shareholders excluding the statement giving particulars of employees under Section 217(2A) of the Act. Any Shareholder interested in obtaining a copy of the statement may write to the Company Secretary at the Registered Office of the Company.

14. APPLICABILITY OF SECTION 134 OF THE COMPANIES ACT, 2013 :

The Ministry of Corporate Affairs, Government of India, has, vide its General Circular number 08/2014 issued on April 4, 2014, clarified that the financial statements (and documents required to be attached thereto), Auditors report and Board''s report in respect of financial years that commenced earlier than April 1,2014 shall be governed by the relevant provisions/schedules/rules of the Companies Act, 1956 and that in respect of financial years commencing on or after April 1,2014, the provisions of the new Act shall apply. This Directors'' Report is in relation with the financial year commencing on January 1,2014 and has been prepared in accordance with the requirements of the Companies Act 1956.

15. ACKNOWLEDGEMENT:

The Board would like to place on record its appreciation and thanks to all its employees for their contribution. The Board also wishes to acknowledge the support it has received from its investors, customers, vendors, regulatory authorities and bankers.

Gurgaon, May 25, 2015

Registered Office: 56 & 57, Hadapsar Industrial Estate, Pune 411 013

For and on behalf of the Board Surendra L. Rao Chairman DIN : 00005675


Dec 31, 2012

Dear Members,

The Directors present the TWENTY-NINTH ANNUAL REPORT with the audited statements of accounts of the Company for the year ended December 31, 2012.

1. FINANCIAL RESULTS:

Particulars Year ended Year ended December 31, 2012 December 31, 2011 (Rs. in lacs) (Rs. in lacs)

Sales & Other Income 167192 162936

Operating Profit 13365 16137

Less: Interest 34 85

Depreciation 1399 1481

Profit for the year 11932 14571

Provision for tax 3610 4804

Deferred Tax Adjustment (195) (947)

PROFIT AFTER TAX 8517 10714

Profit brought forward from the previous year 47947 39331

Profit available for appropriations 56464 50045

APPROPRIATIONS

General Reserve 852 1071

Proposed Dividend 884 884

Tax on proposed dividend 143 143

BALANCE CARRIED FORWARD 54585 47947

2. DIVIDEND:

Final dividend @Rs.10/- per share of Rs.10/- each was recommended by the Board in their meeting held on February 6, 2013.

3. OPERATIONS:

The Management Discussion & Analysis Report annexed herewith provides full details of operational performance and business analysis of these business units.

· Honeywell Process Solutions (HPS) – business serves core industrial sectors of Refining, Oil & Gas, Pulp & Paper, Metal and Cement etc.

· Honeywell Building Solutions (HBS) – business provides solutions and services for facilities such as Commercial & Industrial Buildings, IT & ITES industry, Hospitals, Hotels, Airports, Mass Rapid Transit (MRT) etc.

· Environment and Combustion Control (ECC) – Through multi channels and multiple brands, offers environmental and combustion products and solutions to commercial, hospitality and industrial segments.

· Sensing & Control (S&C) – Products business provides various sensors and switches to manufacturing and automobile industry. This business serves primarily OEMs in various manufacturing industries such as auto, medical instrumentation, IT, etc.

· Exports Business Group (EBG) – Addresses manufacturing and engineering services needs of Honeywell along with some other non Honeywell customers across the globe, leveraging the cost, skills and knowledge arbitrage.

4. COMMUNITY DEVELOPMENT WORK:

HAIL is committed to its CSR activities and strongly believes that helping out even in a small way, can bring about a difference in the lives of many. Our commitment is on issues related to Health, Education & Environment.

Some of the initiatives under CSR were as follows: Education:

· Text book Audio recording for blind school students.

· School kit with school bag donated to Samparc orphanage center & schools near Pune.

· Computer Skills Training for the Physically Handicapped at a school in Pune.

· Scholarship program for street children and students of Hermann Gmeiner social center for college education.

· Chemistry Olympic organized and it was conducted in the form of science test, quiz & talk show. Science kits were given to all participating schools.

Health:

· Medical Checkup Camps were held in an orphanage and in various schools. Workshops were held for anti addiction & anti anemia.

· Cancer Awareness program was held which covered information on Lifestyle and Cancer Prevention.

Environment:

· Various treks were organized. A Cycle rally was held to spread the message of Go green & to promote cycling for a healthy life style.

5. DIRECTORS:

As per the provisions of the Companies Act, 1956 and Articles of Association of the Company, Mr. S.L. Rao and Mr. Gerard Willis, retire by rotation and are eligible for reappointment.

6. MANAGEMENT DISCUSSION & ANALYSIS/CORPORATE GOVERNANCE REPORT:

As per Clause 49 of the Listing Agreement with the Stock Exchanges, Management Discussion and Analysis Report and Corporate Governance report are annexed and form part of the Directors Report.

7. CODE OF CONDUCT COMPLIANCE:

As per Clause 49 of the Listing Agreement with the Stock Exchanges, the declaration signed by the Managing Director affirming compliance with the Code of Conduct by Directors and Senior Management, for the Financial Year 2012 is annexed and forms part of the Corporate Governance Report.

8. DIRECTORS'' RESPONSIBILITY STATEMENT:

Pursuant to Section 217(2AA) of the Companies Act, 1956, the Directors, based on the representations received from the Operating Management, confirm that -

a) In the preparation of the annual accounts, the applicable accounting standards have been followed and that there are no material departures;

b) They have, in the selection of the accounting policies, consulted the Statutory Auditors and have applied them consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for that period;

c) They have taken proper and sufficient care, to the best of their knowledge and ability, for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

d) They have prepared the annual accounts on a going concern basis.

9. AUDITORS:

M/s. Price Waterhouse & Co., Bangalore the Statutory Auditors retire at the forthcoming Annual General Meeting and are eligible for reappointment. The Company has received the certificate from the retiring auditors to the effect that the appointment, if made, will be in accordance with the limits specified in Section 224(1-B) of the Companies Act, 1956.

10. OTHER INFORMATION:

Information as per Section 217 (2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975 pertaining to absorption of technology, foreign exchange earnings, is given as an Annexure to this Report and forms part of it. As per provisions of Section 219(1)(b)(iv) of the Act, the Directors'' Report and Accounts are being sent to the shareholders excluding the statement giving particulars of employees under Section 217(2A) of the Act. Any Shareholder interested in obtaining a copy of the statement may write to the Company Secretary at the Registered Office of the Company.

11. ACKNOWLEDGMENT:

The Board would like to place on record its appreciation and thanks to all its employees for their contribution. The Board also wishes to acknowledge the support it has received from its investors, customers, vendors, regulatory authorities and bankers.

For and on behalf of the Board M.N. Bhagwat

Pune, February 6, 2013 Chairman

Registered Office:

56 & 57, Hadapsar

Industrial Estate,

Pune 411 013.


Dec 31, 2011

The Directors present the TWENTY-EIGHTH ANNUAL REPORT with the audited statements of accounts of the Company for the year ended December 31, 2011.

1. FINANCIAL RESULTS :

Particulars Year ended Year ended December 31, 2011 December 31, 2010 (Rs. in lacs) (Rs. in lacs)

Sales & Other Income 162936 136377

Operating Profit 16136 15188

Less: interest 84 8

Depreciation 1481 1290

Profit for the year 14570 13890

Provision for tax 4804 3655

Deferred Tax Adjustment (948) (270)

PROFIT AFTER TAX 10714 10505

Profit brought forward from the previous year 39331 30908

Profit available for appropriations 50046 41413

APPROPRIATIONS

General Reserve 1071 1050

Proposed Dividend 884 884

Tax on proposed dividend 143 147

BALANCE CARRIED FORWARD 47947 39331

2. DIVIDEND:

Final dividend @Rs.10/- per share of Rs.10/- each was recommended by the Board in their meeting held on February 9, 2012.

3. OPERATIONS:

The Management Discussion & Analysis Report annexed herewith provides full details of operational performance and business analysis of these business units.

- Honeywell Process Solutions (HPS) - Business serves core industrial sectors of Refining, Oil & Gas, Pulp & Paper, Metal and Cement etc.

- Honeywell Building Solutions (HBS) - Business provides solutions and services for facilities such as Commercial & Industrial Buildings, IT & ITES industry, Hospitals, Hotels, Airports, Mass Rapid Transit (MRT) etc.

- Environment and Combustion Control (ECC) - Through multi channels and multiple brands, offers environmental and combustion products and solutions to commercial, hospitality and industrial segments.

- Sensing & Control (S&C) - Products business provides various sensors and switches to manufacturing and automobile industry. This business serves primarily OEMs in various manufacturing industries such as auto, medical instrumentation, IT, etc.

- Exports Business Group (EBG) - Provides manufacturing and engineering services to Honeywell along with some other non Honeywell customers across the globe, leveraging the economies of scale on talent and cost arbitrage.

4. COMMUNITY DEVELOPMENT WORK:

HAIL is committed to its CSR activities and strongly believes that helping out even in a small way, can bring about a difference in the lives of many. Our commitment is on issues related to Health, Education & Environment.

Some of the initiatives under CSR were as follows:

Education:

- Child Sponsorship Project at Kolwan Valley near Pune. Sponsorship for health and education expenses for 50 students' upto standard 10 and Sponsorship of 5 girl students for their engineering studies.

- Different programs were organized for teachers & Students from 1st to 7th class for Maths, Geography, Chemistry, vocational courses etc. at various schools.

- Scholarship program for Contract labour children - 52 students were sponsored for school fees, books & stationery.

Health:

- Conducted two programs and medical checkup camps in and around rural areas near Pune for Health Awareness.

- Blood Donation camp were organized at different locations at Pune during the year.

Environment:

- Tree plantations at 2 schools - 250 trees planted in the schools and 150 books were given to the school library to teach the students to take care of plants. .

5. DIRECTORS:

As per the provisions of the Companies Act, 1956 and Articles of Association of the Company, Mr. M.N. Bhagwat and Mr. S. Tedjarati, retire by rotation and are eligible for reappointment.

6. MANAGEMENT DISCUSSION & ANALYSIS/CORPORATE GOVERNANCE REPORT:

In accordance with Clause 49 of the Listing Agreement with the Stock Exchanges, Management Discussion and Analysis Report and Corporate Governance report are annexed and form part of the Directors Report.

7. CODE OF CONDUCT COMPLIANCE:

In accordance with Clause 49 of the Listing Agreement with the Stock Exchanges, the declaration signed by the Managing Director affirming compliance with the Code of Conduct by Directors and Senior Management, for the Financial Year 2011 is annexed and forms part of the Corporate Governance Report.

8. DIRECTORS' RESPONSIBILITY STATEMENT:

Pursuant to Section 217(2AA) of the Companies Act, 1956, the Directors, based on the representations received from the Operating Management, confirm that -

a) In the preparation of the annual accounts, the applicable accounting standards have been followed and that there are no material departures;

b) They have, in the selection of the accounting policies, consulted the Statutory Auditors and have applied them consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for that period;

c) They have taken proper and sufficient care, to the best of their knowledge and ability, for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

d) They have prepared the annual accounts on a going concern basis.

9. AUDITORS:

M/s. Price Waterhouse & Co., the Statutory Auditors retire at the forthcoming Annual General Meeting and are eligible for reappointment. The Company has received the certificate from the retiring auditors to the effect that the appointment, if made, will be in accordance with the limits specified in Section 224(1-B) of the Companies Act, 1956.

10. OTHER INFORMATION:

Information as per Section 217 (2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975 pertaining to absorption of technology, foreign exchange earnings, is given as an Annexure to this Report and forms part of it. As per provisions of Section 219(1 )(b)(iv) of the Act, the Directors' Report and Accounts are being sent to the shareholders excluding the statement giving particulars of employees under Section 217(2A) of the Act. Any Shareholder interested in obtaining a copy of the statement may write to the Company Secretary at the Registered Office of the Company.

In line with the initiative taken by the Ministry of Corporate Affairs ("Ministry") allowing companies to send their Annual Reports through electronic mode vide its recent circulars bearing no. 17/2011 dated 21.04.2011 and 18/2011 dated 29.04.2011, your Company has started the facility to send the Annual Report to its shareholders through electronic mode, to the registered email addresses of the shareholders. We have received a response to this facility and would request more shareholders to come forward and obtain the Annual Report over email and contribute towards this Green Initiative.

11. ACKNOWLEDGEMENT:

The Board would like to place on record its appreciation and thanks to all its employees for their dedication and contribution towards the Company's performance. The Board also thanks its customers, investors, vendors, regulatory authorities and bankers for their business and support it has received from them. For and on behalf of the Board

M. N. BHAGWAT

Gurgaon, February 9, 2012 Chairman

Registered Office:

56 & 57, Hadapsar Industrial Estate,

Pune 411 013


Dec 31, 2010

The Directors present the TWENTY-SEVENTH ANNUAL REPORT with the audited statements of accounts of the Company for the year ended December 31, 2010.

1. FINANCIAL RESULTS :

Particulars Year ended Year ended December 31, 2010 December 31, 2009 (Rs. in lacs) (Rs. in lacs)

Sales & Other Income 136377 118137

Operating Profit 15188 19446

Less: Interest 8 61

Depreciation 1290 1186

Profit for the year 13890 18199

Provision for tax 3655 5762

Deferred Tax Adjustment (270) (843)

PROFIT AFTER TAX 10505 13280

Profit brought forward from the previous year 30908 19991

Profit available for appropriations 41413 33271

APPROPRIATIONS

General Reserve 1050 1328

Proposed Dividend 884 884

Tax on proposed dividend 147 150

BALANCE CARRIED FORWARD 39332 30909

2. DIVIDEND:

The Directors recommend a dividend @Rs.10/- per share for the financial year 2010.

3. OPERATIONS:

The Management Discussion and Analysis Report annexed herewith provides full details of operational performance and business analysis of these business units.

- Honeywell Process Solutions (HPS) - business serves core industrial sectors of Refining, Oil and Gas, Pulp and Paper, Metal and Cement etc.

- Honeywell Building Solutions (HBS) - business provides solutions and services for facilities such as Commercial and Industrial Buildings, IT and ITES industry, Hospitals, Hotels, Airports, Mass Rapid Transit (MRT) etc.

- Environment and Combustion Control (ECC) - Through multi channels and multiple brands, offers environmental and combustion products and solutions to commercial, hospitality and industrial segments.

- Sensing and Control (S&C) - Products business provides various sensors and switches to manufacturing and automobile industry. This business serves primarily OEMs in various manufacturing industries such as auto, medical instrumentation, IT, etc.

- Global Services (GS) - Addresses manufacturing and engineering services needs of Honeywell along with some other non Honeywell customers across the globe, leveraging the cost, skills and knowledge arbitrage.

4. COMMUNITY DEVELOPMENT WORK:

Your Company, Honeywell Automation India Ltd. (HAIL) is committed to its Corporate Social Responsibility (CSR) activities and strongly believes that helping out even in a small way, can bring about a difference in the lives of many. We focus our CSR activities on issues related to health, education and environment.

HAIL has a dedicated CSR Committee staffed with employees volunteering to dedicate time and commitment for this important initiative. Funding for CSR activities is generated from both the Company and also voluntary contributions from the employees through payroll. Multiple CSR projects were undertaken this year. Major ones are listed below:

- Sponsoring 50 children from Kolwan Valley Mulshi Taluka in close co-ordination with Sadhana Village - an NGO. This sponsorship aims at providing academic support as well as health check up and medical insurance to the villagers.

- HAIL continues to be associated with Aabha, an organization that focuses on educating people in rural areas on the health aspect, once again focusing on the Kolwan Valley with 10-12 villages benefiting from these programs. This program aims towards educating the villagers on general health and hygiene aspects.

- Health check up program with the help of B.J.Medical College, in Gurukul - a centre for orphans situated in Veer, a small village near Pune.

- With a focus on improving teaching skills, HAIL conducted a discovery workshop to enhance skills of teachers to understand the principles of Maths, Science and Geography. Teachers from 12 schools were covered under this workshop, which was to empower and to catalyze children to learn. This will help the students to develop interest in learning.

- The Company has also contributed to the Lila Poonavala Foundation for the work it carries out in the field of education of women and building women leaders and technical experts.

In addition to the above, HAIL employees also actively participate in various initiatives through DISHA, an employee engagement program.

Projects undertaken this year through DISHA were:

- Teaching a structured syllabus to children with disability in a school in Wanowrie, Pune. Employees visit the school on Saturday/Sunday to teach children of standards 9 and 10, Creation of audio CDs for standard 9 from which 5 schools for the visually impaired benefited, Joy of giving week (collection of clothes, books, toys), Blood donation drives, Tree Planting and Trekking - Clean up drives along the path uphill.

5. DIRECTORS:

As per the provisions of the Companies Act, 1956 and Articles of Association of the Company, Mr. S.L. Rao and Mr. Norman Gilsdorf, retire by rotation and are eligible for reappointment.

6. MANAGEMENT DISCUSSION AND ANALYSIS/CORPORATE GOVERNANCE REPORT:

As per Clause 49 of the Listing Agreement with the Stock Exchanges, Management Discussion and Analysis Report and Corporate Governance report are annexed and form part of the Directors Report.

7. CODE OF CONDUCT COMPLIANCE:

As per Clause 49 of the Listing Agreement with the Stock Exchanges, the declaration signed by the Managing Director affirming compliance with the Code of Conduct by Directors and Senior Management, for the Financial Year 2010 is annexed and forms part of the Directors Report.

8. DIRECTORS RESPONSIBILITY STATEMENT:

Pursuant to Section 217(2AA) of the Companies Act, 1956, the Directors, based on the representations received from the Operating Management, confirm that -

a) In the preparation of the annual accounts, the applicable accounting standards have been followed and that there are no material departures;

b) They have, in the selection of the accounting policies, consulted the Statutory Auditors and have applied them consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for that period;

c) They have taken proper and sufficient care, to the best of their knowledge and ability, for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

d) They have prepared the annual accounts on a going concern basis.

9. AUDITORS:

M/s. Price Waterhouse & Co., the Statutory Auditors retire at the forthcoming Annual General Meeting and are eligible for reappointment. The Company has received the certificate from the retiring auditors to the effect that the appointment, if made, will be in accordance with the limits specified in Section 224(1-B) of the Companies Act, 1956.

10. OTHER INFORMATION:

Information as per Section 217 (2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975 is given as an Annexure to this Report and forms part of it.

As per provisions of Section 219(1)(b)(iv) of the Act, this Directors Report and Accounts are being sent to the shareholders excluding the statement giving particulars of employees under Section 217(2A) of the Act. Any Shareholder interested in obtaining a copy of the statement may write to the Company Secretary at the Registered Office of the Company. The Annual Report and the statement under Section 217(2A) of the Act is available for inspection at the Registered Office of the Company during working hours for a period from March 28, 2011.

Information pertaining to absorption of technology, foreign exchange earnings is given as an Annexure to this Report and forms part of it.

11. ACKNOWLEDGEMENT:

The Board would like to place on record its appreciation and thanks to all its employees for their contribution. The Board also wishes to acknowledge the support it has received from its investors, customers, vendors, regulatory authorities and bankers.

For and on behalf of the Board M. N. BHAGWAT

Mumbai, February 9, 2011 Chairman

Registered Office:

56 & 57, Hadapsar Industrial Estate, Pune411 013


Dec 31, 2009

The Directors present the TWENTY-SIXTH ANNUAL REPORT with the audited statements of accounts of the Company for the year ended December 31, 2009.

1. FINANCIAL RESULTS :

Particulars Year ended Year ended December 31, 2009 December 31, 2008 (Rs. in lacs) (Rs. in lacs)

Sales & Other Income 118137 101335

Operating Profit 19446 12691

Less: Interest 61 72

Depreciation 1186 852

Profit for the year 18199 11767

Provision for tax 5762 3986

Deferred Tax Adjustment (843) (404)

PROFIT AFTER TAX 13280 8185

Profit brought forward from the previous year 19991 11806

Profit available for appropriations 33271 19991 APPROPRIATIONS

General Reserve 1328 --

Proposed Dividend 884 --

Tax on proposed dividend 150 --

BALANCE CARRIED FORWARD 30909 19991

2. DIVIDEND:

Final dividend @Rs.10/- per share of Rs.10/- each was recommended by the Board in their meeting held on February 1, 2010.

3. OPERATIONS:

The Management Discussion & Analysis Report annexed herewith provides full details of operational performance and business analysis of these business units.

- Honeywell Process Solutions (HPS) - Serves core industrial sectors of Refining, Oil & Gas, Pulp & Paper, Metal and Cement etc.

- Honeywell Building Solutions (HBS) - Provides solutions and services for facilities such as Commercial & Industrial Buildings, IT & ITES industry, Hospitals, Hotels, Airports, Mass Rapid Transit (MRT) etc.

- Environment and Combustion Control (ECC) - Through multi channels and multiple brands, offers environmental and combustion products and solutions to commercial, hospitality and industrial segments.

- Sensing & Control (S&C) - Products business provides various sensors and switches to manufacturing and automobile industry. This business serves primarily OEMs in various manufacturing industries such as auto, medical instrumentation, IT, etc.

- Exports Business Group (EBG) - Addresses manufacturing and engineering services needs of Honeywell along with some other non Honeywell customers across the globe, leveraging the cost, skills and knowledge arbitrage.

4. COMMUNITY DEVELOPMENT WORK:

HAIL embarked upon the journey to bring a small difference to society by focusing on - Health, Education & Environment through its club named Disha, which is an employee engagement program. HAIL initiated contributions from the employees through payroll and this funding has given way to various CSR projects undertaken this year. HAIL has continued to sponsor 50 children from Kolwan Valley in Mulshi Taluka in close co-ordination with Sadhana Village, an NGO. This sponsorship monitors child health and education. HAIL has worked with Aabha, an organization that focuses on educating people in rural areas on the health aspect, once again focusing on the Kolwan Valley.

HAIL has sponsored the construction of a new site Astitva Pratishthan, which is a Residential Vocational School which can accommodate 25 students a year. This program teaches youth vocational courses and aims at achieving development through educational system, imbibe a scientific temper & awaken the hidden potential in youths. In addition to this HAIL has sponsored 10 youths to attend this Diploma in Basic Rural Technology in an already running school - Vigyan Aashram.

HAIL conducted a discovery workshop to enhance skills of teachers to understand the principles of Mathematics, Science and Geography. Teachers from 12 schools were covered under this workshop.

5. DIRECTORS:

As per the provisions of the Companies Act, 1956 and Articles of Association of the Company, Mr. Gerard Willis and Mr. Shane Tedjarati, retire by rotation and are eligible for reappointment. Mr. Vimal Kapur has resigned as Managing Director pursuant to having accepted a new role in Honeywell. The Board places on record its sincere appreciation for the services rendered by him towards the success of this Company. Mr. Anant Maheshwari has been appointed as an Additional Director and Managing Director and he is eligible for re-appointment at this Annual General Meeting.

6. MANAGEMENT DISCUSSION & ANALYSIS/CORPORATE GOVERNANCE REPORT:

As per Clause 49 of the Listing Agreement with the Stock Exchanges, Management Discussion and Analysis Report and Corporate Governance report are annexed and form part of the Directors Report.

7. CODE OF CONDUCT COMPLIANCE:

As per Clause 49 of the Listing Agreement with the Stock Exchanges, the declaration signed by the Managing Director affirming compliance with the Honeywell Code of Conduct by Directors and Senior Management, for the Financial Year 2009 is annexed and forms part of the Directors Report.

8. DIRECTORS RESPONSIBILITY STATEMENT:

Pursuant to Section 217(2AA) of the Companies Act, 1956, the Directors, based on the representations received from the Operating Management, confirm that -

a) In the preparation of the annual accounts, the applicable accounting standards have been followed and that there are no material departures;

b) They have, in the selection of the accounting policies, consulted the Statutory Auditors and have applied them consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for that period;

c) They have taken proper and sufficient care, to the best of their knowledge and ability, for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

d) They have prepared the annual accounts on a going concern basis.

9. AUDITORS:

M/s. Price Waterhouse & Co., the Statutory Auditors retire at the forthcoming Annual General Meeting and are eligible for reappointment. The Company has received the certificate from the retiring auditors to the effect that the appointment, if made, will be in accordance with the limits specified in Section 224(1-B) of the Companies Act, 1956.

10. OTHER INFORMATION:

Information as per Section 217 (2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975 pertaining to absorption of technology, foreign exchange earnings, is given as an Annexure to this Report and forms part of it. As per provisions of Section 219(1 )(b)(iv) of the Act, the Directors Report and Accounts are being sent to the shareholders excluding the statement giving particulars of employees under Section 217(2A) of the Act. Any Shareholder interested in obtaining a copy of the statement may write to the Company Secretary at the Registered Office of the Company.

11. ACKNOWLEDGEMENT:

The Board would like to place on record its appreciation and thanks to all its employees for their contribution. The Board also wishes to acknowledge the support it has received from its investors, customers, vendors, regulatory authorities and bankers.

For and on behalf of the Board M. N. BHAGWAT

Pune, February 15, 2010 Chairman

Registered Office :

56 & 57, Hadapsar Industrial Estate, Pune 411 013

 
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