Honeywell Automation India Ltd

Dear Members,

The Directors hereby present the 40^th Annual Report of the Company along with the Audited Financial Statements for the Financial Year ended March 31, 2024.

Financial Performance

Key highlights of financial performance of the Company for the Financial Year 2023-24 are provided below:

Sales and Other Income registered an increase of 17.5%, Profit before tax is 16.6% of revenue from operations as compared to 17.2% in the previous year. Exports revenue increased over previous year by 14.8%.

DIVIDEND

The Board, at its meeting held on May 15, 2024, has recommended payment of final dividend at '100/- per equity share of the face value of '10/- each for FY 2023-24. (Previous Year: '95/- per equity share). The dividend, if approved by the Members at the ensuing Annual General Meeting, will result in a total cash pay-out of '884 Million. The Company is in compliance with its Dividend Distribution Policy as approved by the Board.

The closing balance of the retained earnings of the Company for FY 2023-24, after all appropriation and adjustments was '34,028 Million.

Pursuant to Section 134 (3)(j) of the Act, there is no amount to be transferred to reserves during the period under review.

OPERATIONS

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

INDUSTRY OUTLOOK

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

HONEYWELL ACCELERATOR

Honeywell Accelerator is the Company's best-in-class operating system. The content is Honeywell-specific and it offers a framework and toolkit that enables us to get work done faster and smarter, and helps achieving the best business practices as listed below:

• revitalizing our Operating System to drive a sustainable advantage.

• revitalized operating system for how we manage and govern the business.

• includes employee resources like standard tools, processes and playbooks.

• removes barriers to execution and improves speed.

• Areas of benefits include innovation and product development, integrated supply chain, customer service and satisfaction, M&A integration, achievement of financial and ESG objectives and talent development.

• Accelerator content also enhances digital acumen and career development.

HUMAN RESOURCES

The Company believes in the immense potential of its human capital and acknowledges that employees are the core growth engine for the Company. The Company is committed to creating an inclusive, performance oriented and entrepreneurial culture that allows it to bring the best out of every individual and team. The Company is committed to creating an equal opportunity workplace, which promotes openness and diversity. The 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.

Honeywell Automation India Limited Employees' Provident Fund Trust (HAIL PF Trust) received Provisional Order from the Employees' Provident Fund Organization (EPFO) for surrender of exemption granted to the Company with effect from February 1, 2024. Pursuant to the said Order, the Trust has settled all the dues with EPFO and consequently, further contributions are made to EPFO. Refer Notes to the Financial Statements for details.

The Company deploys a Labour and Employment Relations framework which elicits feedback in our factory and supports action planning to drive engagement at all levels in the organisation.

As on March 31, 2024, the Company's employee strength (full-time employees) was 3,096 as compared to 2,956 as on March 31, 2023. Women employees represent 16.4% of the workforce.

DiRECTORS, KMP AND SMP

As on March 31, 2024, the Board comprises of:

1. Dr. Ganesh Natarajan (DIN: 00176393), Independent Director and Chairman (Non-Executive) - Board

2. Ms. Neera Saggi (DIN: 00501029), Independent Director

3. Mr. Ashish Gaikwad (DIN: 07585079), Managing Director

4. Mr. Ashish Modi (DIN: 07680512), Non-Executive Director

5. Mr. Atul Pai (DIN: 02704506), Non- Executive Director

6. Mr. Brian Scott Rudick (DIN: 06759691), Non-Executive Director.

The following changes have taken place in the composition of Board during the year under review: ^•

• Appointment of Ms. Nisha Gupta (DIN: 02331771) as the Non-Executive Director of the Company w.e.f March

1, 2023 was approved by the Shareholders by way of Postal Ballot, results of which were declared on May 28, 2023. Ms. Nisha Gupta resigned from the Directorship of the Company with effect from close of business hours of August 9, 2023. The Board places on record its appreciation of the valuable contribution made by Ms. Nisha Gupta during her tenure with the Company.

• Mr. Brian Scott Rudick (DIN: 06759691) was appointed as an Additional Director (Non-Executive) of the Company with effect from August 10, 2023. His appointment as a Non-Executive Director of the Company was approved by the Shareholders by way of Postal Ballot, results of which were declared on November 6, 2023.

• Ms. Neera Saggi (DIN: 00501029) was reappointed as an Independent Director of the Company, not liable to retire by rotation, to hold office for a second term of 3 (three) consecutive years on the Board of the Company commencing from February 4, 2024 up to February 3, 2027 (both days inclusive).

No changes have taken place in the composition of KMP of the Company during the year under review. Mr. Ashish Gaikwad (DIN: 07585079), Managing Director, Mr. Pulkit Goyal, Chief Financial Officer and Ms. Indu Daryani, Company Secretary are the Key Managerial Personnel of the Company, pursuant to the provisions of Sections 2(51) and 203 of the Act, as on March 31, 2024.

At the Board Meeting held on May 15, 2024, the Board:

• took on record resignation of Mr. Ashish Gaikwad (DIN: 07585079) as the Managing Director as also a Director of the Company and Key Managerial Personnel under the Act, with effect from the close of business hours of May 15, 2024.

• approved appointment of Mr. Atul Pai (DIN: 02704506), as the Managing Director and Key Managerial Personnel under the Act for a term of 5 years with effect from May 16, 2024 up to May 15, 2029 (both days inclusive), subject to approval of the Shareholders of the Company at the 40^th AGM.

• Approved appointment of Mr. Thaj Mathew (DIN: 07425690) as an Additional Director (Non-Executive NonIndependent Director) of the Company with effect from May 16, 2024, to hold office up to the date of the ensuing Annual General Meeting of the Company. His appointment will be subject to approval by the Shareholders of the Company at the 40^th AGM.

For SMP details, please refer Corporate Governance Report.

As per the provisions of the Act, Mr. Ashish Modi (DIN: 07680512) retires by rotation at the forthcoming AGM, and being eligible, offers himself for re-appointment. The Board recommends his re-appointment.

The Board is of the opinion that the Independent Directors of the Company have fulfilled the conditions as specified in the SEBI Listing Regulations, are independent of the management, possess requisite qualifications, experience and expertise in the fields of industry knowledge, board governance, financials, strategy, leadership and they hold highest standards of integrity.

BOARD MEETiNGS

During the Financial Year 2023-24, the Board duly met four times on (i) May 17, 2023, (ii) August 10, 2023, (iii) November 6, 2023 and (iv) February 8, 2024. The intervening period between two Board meetings was well within the maximum gap of 120 days as prescribed under the provisions of the Act.

Details of attendance at the Board Meetings is provided in the Corporate Governance Report, which forms part of this Annual Report.

COMMiTTEES OF THE BOARD

The Board has the following statutory committees as per the requirements of the SEBI Listing Regulations and the Act:

1. Audit Committee

2. Nomination and Remuneration Committee

3. Corporate Social Responsibility Committee

4. Stakeholders' Relationship Committee

5. Risk Management Committee

Details of terms of reference of the Committees, Committee membership and attendance at meetings are provided in the Corporate Governance Report, which forms part of this Annual Report.

DECLARATiON BY iNDEPENDENT DiRECTORS

The Company has received necessary declarations from the Independent Directors as required under Section 149(7) of the Act, that he/she meets the criteria of Independence laid down under Section 149(6) of the Act and Regulation 25 of the SEBI Listing Regulations.

BOARD EVALUATiON

Pursuant to the provisions of the Act and the SEBI Listing Regulations, 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 NRC and the Board on February 8, 2024.

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

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, 2024 is given in Report on Corporate Governance, which forms a part of this Annual Report.

CORPORATE SOCiAL RESPONSiBiLiTY

The Annual Report on CSR activities, as required under Section 135 of the Act read with the Companies (Corporate Social Responsibility Policy) Rules, 2014 is annexed herewith as Annexure-1 to the Directors' Report. A copy of the CSR Policy is available on the Company's website at https://www.honeywell.com/in/en/hail#policies. A copy of the Impact Assessment Report is available on the Company's website at https://www.honevwell.eom/in/en/hail#aam-eam-postalballot.

AUDiTORS

Statutory Audit

Pursuant to the provisions of Section 139 of the Act and the rules framed thereunder, Deloitte Haskins & Sells LLP (Firm Registration No.117366W/W-100018) were re-appointed as the Statutory Auditors for a period of 5 years at the 36^th AGM of the Company to hold office from the conclusion of the 36^th AGM up to the conclusion of the 41^st AGM of the Company on such remuneration as was approved by the shareholders at the 36^th AGM, re-produced below:

* Subject to addition or reduction upto 10% with prior approval of Audit Committee and Board.

Further, in addition to the above, the Statutory Auditors are also entitled to fees for others service like Audit of Internal Financial Controls, Tax Audit and Certificates etc. subject to prior approval of Audit Committee and Board.

Statutory Auditors' Report

There are no qualifications, reservations or adverse remarks made by Deloitte Haskins & Sells LLP (Firm Registration No.117366W/W100018), Statutory Auditors, in their report for the Financial Year ended March 31, 2024. The Notes on financial statements referred to in the Auditors' Report are self-explanatory.

Pursuant to provisions of Section 143 (12) of the Act, the Statutory Auditors have not reported any incident of fraud to the Audit Committee during the year under review.

Cost Audit

In terms of the provisions of Section 148 and other applicable provisions of the Act read with Rule 14 of the Companies (Audit and Auditors) Rules, 2014, Cost Audit is applicable to the Company for the Financial Year 2023-24. The Board at its meeting held on May 15, 2024, pursuant to recommendation of the Audit Committee, appointed M/s C S Adawadkar & Co., (Firm Registration No. 100401) as the Cost Auditors for the Financial Year ending March 31, 2025 at a remuneration of '7,00,000/- plus GST and reimbursement of out-of-pocket expenses. The remuneration is placed before the Annual General Meeting for ratification by the members.

The Company has maintained the cost accounts and records as specified by the Central Government under sub-section (1) of section 148 of the Act for the Financial Year ended March 31, 2024. The Cost Auditors have not reported any incident of fraud for the year under review.

Secretarial Audit

In terms of the provisions of Section 204 of the Act and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board appointed M/s J B Bhave & Co, Practicing Company Secretaries, as Secretarial Auditors of the Company for the Financial Year 2023-24. The report of the Secretarial Auditors is enclosed as Annexure-2 to the Directors' Report. The Secretarial Audit Report does not contain any qualification, reservation or adverse remark. The Secretarial Auditors have not reported any incident of fraud for the year under review.

RELATED PARTY TRANSACTIONS

The particulars of contracts or arrangements with related parties referred to in Section 188(1) of the Act read with Rule 8(2) of the Companies (Accounts) Rules, 2014 are enclosed herewith as Annexure-3 to the Directors' Report.

RISK MANAGEMENT

The Company has an Enterprise Risk Management framework administered by the Risk Management 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, financial, reputation and Cyber & ESG risks that are key to achieving our business objectives. Risks are identified, 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 plan and governance and reviewed by the Risk Management Committee and Audit Committee/Board.

WHISTLE BLOWER POLICY / VIGIL MECHANISM

In line with requirement under Section 177(9) and (10) of the Act and Regulation 22 of the SEBI Listing Regulations, the Company has established a whistle blower/vigil mechanism for its employees and Directors to report their genuine concerns. The details of the same are provided in the Corporate Governance Report.

INTERNAL FINANciAL cONTROLS

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

holding company

The Company is a subsidiary of HAIL Mauritius Limited, the ultimate holding Company being Honeywell International Inc. USA. The Company does not have any Joint Venture(s) or Associate Company(ies) or Subsidiary Company(ies).

TRANSFER OF AMOuNTS TO INVESTOR EDucATION AND pROTEcTION FuND

As required under Section 124 of the Act, the unclaimed dividend lying with the Company for a period of seven years pertaining to the Financial Year 2015-16 amounting to INR 2,45,210/- was transferred during the Financial Year 2023-24 to the Investor Education and Protection Fund established by the Central Government.

Members who have not encashed the dividend warrant(s) so far for the period ended March 31, 2017 or any subsequent financial years are requested to make their claim. It shall be noted that once the dividend is transferred to the Investor

Education and Protection Fund as above, no claim shall lie with the Company in respect of such amount.

PARTiCULARS OF EMPLOYEES

A statement containing particulars of employees as required under Section 197(12) of the Act, read with Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is provided as Annexure-6 to the Directors' 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 will be open for inspection electronically upon request by the Members during the AGM. Any member interested in obtaining such information may write to the Company Secretary at HAIL.InvestorServices@Honeywell.com.

The ratio of the remuneration of each Director to the median employee's remuneration and other details prescribed in Section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, are enclosed in Annexure-4 to the Directors' Report.

The Nomination and Remuneration Policy of the Company is available on the website of the Company at https://www.honeywell.com/in/en/hail#policies.

DiSCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTiON, PROHiBiTiON And REDRESSAL) Act, 2013

The Company respects and values diversity reflected in various backgrounds, experiences and ideas and is committed to providing employees with a workplace that is free from discrimination or harassment. The Company has adopted a policy on prevention, prohibition, and 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 Committees established in accordance with the aforesaid Act for addressing sexual harassment incidents.

No complaint on sexual harassment was received by the Company during the Financial Year under review.

PARTicuLARS OF LOANS, GuARANTEES OR iNVESTMENTS

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

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.

significant AND material ORDERS

There are no significant and material orders during the Financial Year ended March 31, 2024 passed by the regulators or courts or tribunals impacting the going concern status and the Company's operations.

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 in accordance with the Act read with Companies (Acceptance of Deposits) Rules, 2014.

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-5 to the Directors' Report.

MANAGEMENT DIScuSSION & ANALYSIS

The Management Discussion and Analysis pursuant to the SEBI Listing Regulations are annexed and form part of the Annual Report.

annual return

Pursuant to Section 92 (3) of the Act and Rule 12 (1) of the Companies Management and Administration) Rules, 2014, the Annual Return is available on the website of the Company at https://www.honeywell.com/in/en/hail#agm-egm-postal- ballot.

cORPORATE GOVERNANcE REPORT

The Company believes in adopting best practices of corporate governance.

As per Regulation 34 of the SEBI Listing Regulations, a separate section on corporate governance practices followed by the Company, together with a certificate from M/s Bokil Punde & Associates, Company Secretaries, on compliance with corporate governance norms under the SEBI Listing Regulations, is provided in Corporate Governance Report which forms part of this Annual Report.

DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to provisions of Section 134(3)(c) and Section 134(5) of the Act, 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, 2024 and of the profit for the year April 1, 2023 to March 31, 2024;

c) The Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act 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;

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.

COMPLIANCE WITH SECRETARIAL STANDARDS

The Directors confirm that the Secretarial Standards issued by the Institute of Companies Secretaries of India, as applicable to the Company, have been duly complied with.

DIVIDEND DISTRIBUTION POLICY

In compliance with Regulation 43A of the SEBI Listing Regulations, the Company has formulated Dividend Distribution Policy and the same is available on the Company's website at https://www.honeywell.com/in/en/hail#policies.

BuSINESS RESPONSIBILITY AND SuSTAINABILITY REPORT

In compliance with the provisions of Regulation 34 (2) (f) of the SEBI Listing Regulations, the Business Responsibility and Sustainability Report (BRSR) forms part of this Annual Report.

GENERAL DISCLOSURES

The Directors state that no disclosure or reporting is required in respect of the following items as there were no transactions on these items during the year under review:

1. Issue of Equity Shares with differential rights as to dividend, voting or otherwise.

2. Issue of Equity Shares (including Sweat Equity Shares) to employees of the Company under any scheme.

3. The Company has not resorted to any buy back of its equity shares during the year under review.

4. The Company does not have any subsidiaries. Hence, neither the Managing Director nor the Whole-time Directors of the Company received any remuneration or commission during the year from any of its subsidiaries.

5. The details of difference between amount of the valuation done at the time of one-time settlement and the valuation done while taking loan from the Banks or Financial Institutions along with the reasons thereof is not applicable.

6. The details of application made or any proceeding pending under the Insolvency and Bankruptcy Code, 2016 during the year along with their status as at the end of the Financial Year is not applicable.

7. There has been no change in the nature of business of the Company.

ACKNOWLEDGMENT

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