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Directors Report of Honeywell Automation India Ltd.

Mar 31, 2017

Directors'' Report

Dear Members,

The Directors present the THIRTY THIRD ANNUAL REPORT with the audited statements of accounts of the Company for the financial year ended March 31, 2017.

1. FINANCIAL RESULTS:

(Rs. in lakhs)

Particulars

Year ended March 31, 2017

Year ended March 31, 2016

Sales & Other Income

248,275

224,550

Operating Profit

32,392

24,194

Less: Interest

26

38

Depreciation

1,635

1,540

Profit for the year

30,731

22,616

Income tax and Deferred Tax expenses

13,786

8,497

Profit for the period

16,945

14,119

Profit brought forward from the previous year

83,047

71,643

Profit available for Appropriations

99,992

85,762

APPROPRIATIONS

General Reserve

1,694

1,385

Dividend Declared

884

1,105

Tax on Dividend

180

225

BALANCE CARRIED FORWARD

97,234

83,047

Revenue from Operations registered a growth of 10%. Profit before tax was 12.6% of revenue from operations as compared to 10.2% in previous year. Exports revenue increased over previous year by 36%. This growth was achieved despite competitive challenges on pricing.

2. DIVIDEND:

Payment of final dividend @ Rs. 10/- per equity share of Rs. 10/- each was recommended by the Board of Directors at their meeting held on May 25, 2017. The dividend, if approved by the Members at the ensuing Annual General Meeting, will result in a total cash pay-out of Rs. 1,064 Lakhs including dividend distribution tax.

3. APPROPRIATION TO GENERAL RESERVES:

The Company proposes to transfer Rs. 1,694 Lakhs to the general reserve out of the amount available for appropriation and an amount of Rs. 97,234 Lakhs is proposed to be retained in the profit and loss account.

4. OPERATIONS:

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

5. INDUSTRY OUTLOOK:

The details regarding Industry Outlook are given in the Management Discussion and Analysis Report which forms a part of this Report.

6. HONEYWELL OPERATING SYSTEM (HOS):

Your Company continues to be strongly focused on its operational excellence journey using the Honeywell Operating System (HOS). HOS is favorably impacting Safety, Quality, Delivery, Cost, and Inventory metrics. The Pune Integrated Supply Chain organization has sustained its HOS Silver Excellence certification and is now pursuing the next milestone of “World Class” in the new HOS Order-to-Cash Framework. In 2016-17, a significant part of the Global Engineering Services supporting Process Solutions has remained at Silver Level, with the aim of sustaining the organization’s maturity level in 2017. The Global Business Operations supporting Building Solutions achieved HOS Silver certification in October 2016. The Global Engineering Services supporting Process Solutions, already a silver certified site, is driving further maturity using HOS principles to achieve superior quality and delivery experience for customers.

7. HUMAN RESOURCES:

Honeywell believes in the immense potential of its human capital and acknowledges that our employees are the core growth engine for the Company. Your Company is committed to creating an inclusive, performance oriented, and an entrepreneurial culture that allows us to bring the best out of every individual and team. Honeywell is committed to creating an equal opportunity workplace, which promotes openness and diversity. Your Company has a strong employee value proposition that focuses on challenging work that matters, hiring and retaining the right people, sustained focus on talent and leadership development, differentiated rewards to drive exceptional performance, and community engagement.

Your Company deploys a Positive Employee Relations (PER) framework to get annual feedback from all employees on key engagement factors to build an engaged and motivated workforce. Additionally, a Labour and Employment Relations framework elicits feedback in all our factories and supports action planning to drive engagement at all levels in the organization.

As on March 31, 2017, the Company’s employee strength was 2931 as compared to 2930 as on March 31, 2016. Your Company had 417 women employees which represents 14% of our workforce. The Company is fully compliant with the prevailing laws on Prevention of Sexual Harassment of Women at Workplaces. The Internal Complaints Committee deals with all matters related to the subject in accordance with the tenets of the law.

8. DIRECTORS AND KEY MANAGERIAL PERSONNEL:

During the year, Mr. Vikas Chadha resigned as Managing Director w.e.f. the close of business hours of July 31, 2016. Mr. Anant Maheshwari resigned as Director w.e.f. the close of business hours of August 10, 2016. Mr. Vikas Chadha was appointed as Director with effect from August 11, 2016; in casual vacancy caused by resignation of Mr. Anant Maheshwari.

Mr. Ashish Gaikwad was appointed as Additional Director and Managing Director with effect from October 1, 2016 for the period of five years. His appointment as Director and Managing Director for the period of five years with effect from October 1, 2016 was further approved by shareholders pursuant to the necessary resolutions passed by Postal Ballot on December 9, 2016.

Mr. Norman Gilsdorf resigned as Director w.e.f. the close of business hours of November 9, 2016. Ms. Tina Pierce was appointed as Director with effect from February 6, 2017; in casual vacancy caused by resignation of Mr. Norman Gilsdorf.

Mr. Anurag Bhagania resigned as the Chief Financial Officer w.e.f. the close of business hours of June 26, 2016. Mr. R. Ravichandran was appointed as the Chief Financial Officer with effect from June 27, 2016.

Ms. Sangeet Hunjan resigned as the Company Secretary w.e.f. close of business hours of November 24, 2016. Ms. Farah Irani was appointed as the Company Secretary w.e.f. May 16, 2017.

As per the provisions of the Companies Act, 2013, Ms. Tina Pierce, who was appointed in casual vacancy of Mr. Norman Gilsdorf, retires by rotation at the forthcoming AGM and being eligible, she offers herself for re-appointment. The Board recommends her re-appointment.

Ms. Nisha Gupta continues to be Non-Executive Director and Mr. Suresh Senapaty and Mr. N. Srinath continue as Independent Directors on the Board.

Mr. Ashish Gaikwad, Managing Director, Mr. R. Ravichandran, Chief Financial Officer (CFO) and Ms. Farah Irani, Company Secretary are the Key Managerial Personnel (KMP) of the Company, pursuant to the provisions of Companies Act, 2013, as on the date of this Report.

The Board places on record its appreciation of the valuable contributions made by Mr. Norman Gilsdorf, Mr. Anant Maheshwari, Mr. Anurag Bhagania and Ms. Sangeet Hunjan.

9. BOARD MEETINGS:

Four meetings of the Board of Directors were held during the year. Details about the meetings are available in the Report on Corporate Governance, which forms a part of this Report.

10. COMMITTEES OF BOARD:

The details regarding Committees of the Board of Directors of the Company are given in the Report on Corporate Governance, which forms a part of this Report.

11. DECLARATION BY INDEPENDENT DIRECTORS:

The Company has received necessary declarations from each Independent Director under Section 149(7) of the Companies Act, 2013, that he meets the criteria of Independence laid down in and Section 149(6) of the Companies Act, 2013 and Regulation 25 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

12. BOARD EVALUATION:

Pursuant to the provisions of the Companies Act, 2013, and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Board has carried out an annual evaluation of its own performance, its Committees, as well as the Directors individually.

The outcome of the Board evaluation was discussed by the Nomination & Remuneration Committee and at the Board Meeting held on February 6, 2017.

Details regarding process and criteria for evaluation are given in the Report on Corporate Governance, which forms a part of this Report.

13. CODE OF CONDUCT COMPLIANCE:

The declaration signed by the Managing Director affirming compliance with the Code of Conduct by Directors and Senior Management, for the financial year ended March 31, 2017 is given in Report on Corporate Governance, which forms a part of this Report.

14. CORPORATE SOCIAL RESPONSIBILITY:

Your Company remains committed to making the world a better place and expanding community outreach through CSR activities. As part of its initiatives under “Corporate Social Responsibility” (CSR), the Company, in partnership with leading public and non-profit institutions, has developed powerful programs to address needs in the communities it serves. The Annual Report on CSR activities, in accordance with Section 135 of the Companies Act, 2013, read with Companies (Corporate Social Responsibility Policy) Rules, 2014 as amended from time to time, is annexed herewith as “Annexure - 1” and the copy of the CSR Policy is also available on the Company’ website.

15. AUDITORS:

Statutory Audit

Pursuant to the provisions of Section 139 of the Companies Act, 2013 and the rules framed there under M/s. Deloitte Haskins & Sells LLP (Firm Registration No. 117366W/W-100018) were appointed as the Statutory Auditors for a period of 5 years to hold office from the conclusion of the AGM of the Company held on July 21, 2015, subject to ratification of their appointment at every subsequent AGM. A resolution seeking ratification of their appointment forms part of the Notice of AGM and the same is recommended for your consideration and approval.

The Notes on financial statements referred to in the Auditors’ Report are self-explanatory and do not call for any further comments. The Auditors’ Report does not contain any qualification, reservation or adverse remark.

Cost Audit

In terms of the provisions of Section 148 and other applicable provisions of the Companies Act, 2013, read with the Companies (Audit and Auditors) Rules, 2014, Cost Audit was not applicable to your Company for the financial year 2016-17.

Secretarial Audit

In terms of the provisions of Section 204 of the Companies Act, 2013 and Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board of Directors of the Company appointed M/s. Bokil Punde & Associates, Practicing Company Secretaries as Secretarial Auditors of the Company for the financial year 2016-17. The report of the Secretarial Auditors is enclosed as ‘Annexure - 2’ to this report. The Secretarial Audit Report does not contain any qualification, reservation or adverse remark.

16. RELATED PARTY TRANSACTIONS

The particulars of contracts or arrangements with related parties referred to in Section 188(1) of the Companies Act, 2013, Read with 8(2) of Companies (Accounts) Rules, 2014 are enclosed herewith as ‘Annexure - 3’.

17. RISK MANAGEMENT

Your Company has an Enterprise Risk Management Framework, for identification, assessment, monitoring, and mitigation of operational, financial, and strategic business risks that are key in achieving our business objectives. Risks are identified and prioritized based on impact, and probability of occurrence. Mitigating controls are evaluated and reviewed periodically, and assessed for enhancement.

Your Company has put in place an Enterprise Risk Management framework, administered by the Risk Committee to develop, implement, and monitor the effectiveness of risk management processes for the company. This framework enables identification, assessment, monitoring, and mitigation of strategic, operational, compliance and financial risks that are key in achieving our business objectives. Risks are evaluated and prioritized based on their likelihood of occurrence and severity of business Impact. Major risks identified by the businesses and functions are systematically addressed through mitigation and governance.

18. COMPANY POLICY ON DIRECTORS’ APPOINTMENT AND REMUNERATION

The Company policy on Directors’ appointment and remuneration and other matters as provided in Section 178(3) of the Companies Act, 2013 is enclosed herewith as ‘Annexure - 4’.

19. WHISTLE BLOWER POLICY / VIGIL MECHANISM

In line with requirement under Section 177 (9) and (10) and Regulation 22 of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, your Company has established a whistle blower/vigil mechanism for its employees and Directors to report their genuine concerns. The details of the same are explained in the Corporate Governance Report.

20. INTERNAL FINANCIAL CONTROLS

The Board has adopted the policies and procedures for ensuring the orderly and efficient conduct of its business, including adherence to the Company’s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information.

21. HOLDING COMPANY

The Company is a subsidiary of Honeywell Asia Pacific Inc. USA, the ultimate holding Company being Honeywell International Inc. USA.

22. TRANSFER OF AMOUNTS TO INVESTOR EDUCATION AND PROTECTION FUND

There was no dividend declared pertaining to financial year ended December 31, 2008 and hence no unclaimed dividend was required to be transferred by the Company in 2016 to the Investor Education and Protection Fund established by the Central Government.

Pursuant to the provisions of the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) [IEPF] Rules, 2016 notified by Ministry of Corporate Affairs effective 7th September, 2016, the Company had dispatched the communication individually to the concerned shareholders whose equity share/s were liable to be transferred to IEPF under the Rules for taking appropriate action(s). The Company had also issued public notice in the Newspapers as required under the IEPF Rules.

The Company has uploaded the full details of such shareholders and shares due for transfer to IEPF on its website at the following link:

https://honeywell.com/country/in/Documents/HAIL/HAIL_Details%20of%20Transfer%20of%20Shares%20to%20I

EPF%20Suspense%20Account%20_29112016.pdf

Shareholders are requested to refer the link to verify the details of the shares that are liable to be transferred to IEPF.

23. PARTICULARS OF EMPLOYEES

A statement containing particulars of employees as required under Section 197(12) of the Companies Act, 2013, read with Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is provided in ‘Annexure 9’ forming part of this Report. As per the first proviso to Section 136(1) of the Act, the Annual Report is being sent to the members excluding the aforesaid annexure. The said information is available for inspection at the registered office of the Company during working hours. Any member interested in obtaining such information may write to the Company Secretary and the same will be furnished on request. The full Annual Report including the aforesaid information is available on the Company’s website.

The ratio of the remuneration of each director to the median employee’s remuneration and other details prescribed in Section 197(12) of the Companies Act, 2013, read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, are attached to this report as ‘Annexure 5’ - Statement of Disclosure of Remuneration.

24. DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013

Your Company respects and values diversity reflected in various backgrounds, experiences, and ideas and is committed to providing employees with a workplace that is free from discrimination or harassment. The Company has earlier adopted a policy on prevention, prohibition, and redressal of sexual harassment at workplace in line with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. Every employee is required to complete mandatory online training on ‘Prevention of Sexual Harassment at Workplace’.

The Company has Internal Complaints Committee (ICC) established in accordance with the aforesaid Act for addressing sexual harassment incidents.

No complaints on sexual harassment were received by the Company during the financial year under review.

25. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS UNDER SECTION 186

The Company has not made any loans, guarantees or investments during the year under review, pursuant to the provisions of Section 186 of the Companies Act, 2013.

26. MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY

There are no material changes and commitments affecting the financial position of the Company which have occurred between the end of the financial year of the Company to which the financial statements relate and the date of the report.

27. SIGNIFICANT AND MATERIAL ORDERS

There are no significant and material orders during the financial year ended March 31, 2017 passed by the regulators or courts or tribunals impacting the going concern status and Company’s operations.

28. DEPOSITS

The Company has not accepted any deposits from public and as such, no amount on account of principal or interest on deposits from public was outstanding as on the date of the balance sheet.

29. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE

Information required under Section 134 of the Act read with Rule 8(3) of the Companies (Accounts) Rules, 2014, with respect to conservation of energy, technology absorption and foreign exchange earnings/outgo is included in ‘Annexure 6’.

30. MANAGEMENT DISCUSSION & ANALYSIS / CORPORATE GOVERNANCE REPORT:

The Management Discussion and Analysis Report and Corporate Governance Report pursuant to SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 are annexed and form part of the Directors Report.

31. EXTRACT OF ANNUAL RETURN

Pursuant to Section 92(3) of the Companies Act, 2013 and Rule 12(1) of the Companies Management and Administration) Rules, 2014, an extract of the annual return in Form No. MGT-9 is annexed herewith as ‘Annexure 7’.

32. LEGAL COMPLIANCE REPORTING

The Head - Legal, the Company Secretary, and Chief Financial Officer of the Company monitor the legal compliance reporting process and advise the Company on compliance issues with respect to the laws of various jurisdictions in which the Company has its business activities.

The Company has a practice of obtaining quarterly compliance certificates from various functional heads for compliance with laws applicable to the respective function. A consolidated report on compliance with applicable laws is presented to the Board every quarter. To take care of the continuously evolving compliance scenario, the Company is constantly striving to strengthen the compliance reporting framework.

33. DIRECTORS’ RESPONSIBILITY STATEMENT:

Pursuant to provisions of Section 134(3)(c) and Section 134(5) of the Companies Act, 2013, your Directors make the following statements:

(a) in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;

(b) the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company as on March 31, 2017 and of the profit for the year April 1, 2016 to March 31, 2017;

(c) the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;

(d) the Directors have prepared the annual accounts on a going concern basis;

(e) the Directors, have laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively; and

(f) the Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

34. DIVIDEND DISTRIBUTION POLICY:

The SEBI (Listing Obligations and Disclosure Requirements) (Second Amendment) Regulations, 2016 read with Notification dated July 8, 2016 mandates formulation of Dividend Distribution policy by Top 500 Listed Entities based on market capitalization. In compliance with the Regulation, the Company has formulated dividend distribution policy prescribing the parameters for the dividend distribution and the same is disclosed in ‘Annexure 8’ to this Report and forms part of this Report. The policy is also available on the Company’s website at the following link-

https://honeywell.com/country/in/Documents/HAIL/Dividend%20Distribution%20Policy.pdf

35. BUSINESS RESPONSIBILITY REPORT:

The SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 mandates inclusion of the Business Responsibility Report (BRR) as a part of Annual Report for Top 500 Listed Entities based on market capitalization. In compliance with the Regulation, the BRR forms part of this Annual Report.

36. ACKNOWLEDGMENT:

The Board of Directors 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 of Directors of

Honeywell Automation India Limited

Suresh Senapaty

Chairman

Gurugram, May 25, 2017

Registered Office:

56 & 57, Hadapsar Industrial Estate,

Pune 411 013


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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