Dear Members,

The Directors hereby present the 39^th Annual Report of the Company along with the audited financial statements for the financial year ended March 31, 2023.

Key highlights of financial performance of the Company for the financial year 2022-23 are provided below:

( 'Rs in lakhs)

Sales and Other Income registered an increase of 18%, Profit before tax is 17.2% of revenue from operations as compared to 15.5% in the previous year. Exports revenue increased over previous year by 28.7%.

Payment of final dividend at '95/- per equity share of face value of '10/- each was recommended by the Board at its meeting held on May 17, 2023 (Previous Year'90/- 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 '8,399 Lakhs. 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 2022-23, after all appropriation and adjustments was '2,99,582 Lakhs.

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

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

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

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.

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.

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, 2023, the Company's employee strength (full-time employees) was 2,956 as compared to 2,950 as on March 31, 2022. Women employees represent 17.5% of the workforce. The Company is fully compliant with the prevailing law namely Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

As on March 31, 2023, the Board comprises of Dr. Ganesh Natarajan, Independent Director and Chairman (Non-Executive) - Board, Ms. Neera Saggi, Independent Director, Mr. Ashish Gaikwad, Managing Director, Mr. Ashish Modi, Non-Executive Director, Mr. Atul Pai, Non- Executive Director and Ms. Nisha Gupta, Non-Executive Director.

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

• Dr. Akshay Bellare, Non-Executive Director of the Company resigned from the Directorship of the Company with effect from close of business hours of June 14, 2022.

• Mr. Rajesh Rege was appointed as an Additional Director (Non-Executive) of the Company with effect from June 15, 2022. His appointment as a Non-Executive Director of the Company was regularised at the Annual General Meeting of the Company held on August 17, 2022. He resigned from the Directorship of the Company with effect from close of business hours of February 28,

2023.

• Ms. Nisha Gupta was appointed as an Additional Director (Non-Executive) of the Company with effect from March 1, 2023.

The following changes have taken place in the composition of Key Managerial Personnel during the year under review:

• Ms. Farah Irani (ACS No. 21182) resigned from the position of the Company Secretary and the Compliance

Officer of the Company effective end of day September 4, 2022.

• Ms. Indu Daryani (FCS No. F9059) was appointed as the Company Secretary and Compliance Officer of the Company with effect from November 21, 2022.

Mr. Ashish Gaikwad, 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 Section 2(51) and Section 203 the Act, as on the date of this Report.

The Board places on record its appreciation of the valuable contribution made by Dr. Akshay Bellare, Mr. Rajesh Rege and Ms. Farah Irani during their respective tenure with the Company.

As per the provisions of the Act, Mr. Ashish Gaikwad (DIN07585079) 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.

During the financial year under review, the Board duly met four times on May 12, 2022 August 13, 2022 November 8, 2022 and February 8, 2023. 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.

The Board has the following 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.

The Company has received necessary declarations from each Independent Director 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.

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 Nomination and Remuneration Committee at the Board Meeting held on February 8, 2023 and improvement areas were discussed as well as the agreed action plan of previous year was reviewed.

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

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, 2023 is given in Report on Corporate Governance, which forms a part of this Annual Report.

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 of 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.

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 Annual General Meeting of the Company to hold office from the conclusion of the 36^th Annual General Meeting (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 which is 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.

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, 2023. 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.

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 2022-23. The Board at its meeting held on May 17, 2023, pursuant to recommendation of the Audit Committee, appointed M/s C S Adawadkar & Co., as the Cost Auditors for the financial year ending March 31, 2024 at a remuneration of '7,00,000/- plus GST and re-imbursement 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, 2023.

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 J B Bhave & Co, Practicing Company Secretaries as Secretarial Auditors of the Company for the financial year 2022-23. The report of the Secretarial Auditors is enclosed as Annexure - 2 of the Directors' Report.

The Secretarial Audit Report does not contain any qualification, reservation or adverse remark.

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 of the Directors' Report.

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 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.

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.

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.

During the financial year under review, 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).

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 2014-15 amounting to Rs'2,91,425/- was transferred during the financial year 202223 to 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, 2016 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.

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 of 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 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.honevwell.com/in/en/hail#policies.

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.

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.

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.

There are no significant and material orders during the financial year ended March 31, 2023 passed by the regulators or courts or tribunals impacting the going concern status and the Company's operations.

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.

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 of the Directors' Report.

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

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. honevwell.com/in/en/hail#agm-egm-postal-ballot.

The Company has a compliance management tool to review and monitor compliances with laws applicable to the respective function. Additionally, 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 for review. To take care of the continuously evolving compliance scenario, the Company is constantly striving to strengthen the compliance reporting framework.

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.

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, 2023 and of the profit for the year April 1, 2022 to March 31, 2023

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.

Your 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.

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.

Regulation 34 (2) (f) of the SEBI Listing Regulations mandates inclusion of the Business Responsibility and Sustainability Report (BRSR) as a part of the annual report for Top 1000 listed entities based on market capitalisation. In compliance with the aforesaid Regulation, BRSR forms part of this Annual Report.

Your 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. No significant or material orders were passed by the Regulators or Courts or Tribunals which impact the going concern status and the Company's operations in future.

6. No fraud has been reported by the Statutory Auditors under sub-section (12) of Section 143 of the Act.

7. 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.

8. 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.

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.

Independent Director and Chairman (Non-Executive) - Board

Pune, May 17, 2023

56 & 57, Hadapsar Industrial Estate,

Pune- 411 013, Maharashtra CIN:L29299PN1984PLC017951 Tel+91 20 7114 8888

EmailHAIL.InvestorServices@Honeywell.com Websitehttps://www.honevwell.com/in/en/hail