Honeywell Automation

1.  a) Estimated amount of contracts remaining to be executed on
 capital accounts and not provided for - Rs. 67,954 (000) [Previous
 Year Rs. 18,314 (000)].
 
 2.  a) The cash credit from Bank is secured by hypothecation of present
 and future stocks of raw materials, semi- finished goods, finished
 goods, stores and spares and book debts. The vehicle loans are secured
 by hypothecation of vehicles.
 
 b) The sales tax liability of Rs.35,031(000) [Previous Year Rs. 47,315
 (000)], deferred and classified under unsecured loans is repayable, in
 respect of each years collection, in six annual installments
 commencing from the year 2005.
 
 c) The sales tax liability of Rs.60,968 (000) [Previous Year Rs.
 60,968 (000)], deferred and classified under unsecured loans is
 repayable, in respect of each years collection, in five annual
 installments commencing from the year 2010.
 
 3.  Provision for taxation has been made after considering the various
 allowances/deductions available and after excluding profits derived
 from an undertaking registered with Software Technology Parks of India
 under Section 10A and unit registered under Special Economic Zone under
 Section 10AA of the Income Tax Act, 1961.
 
 4.  Interest includes interest on fixed loans 2,598 (000) [Previous
 Year Rs. 12,635 (000)] and others Rs. 4,639 (000) [Previous Year
 Rs.8,077 (000)].
 
 5.  Contingent Liabilities
 
                                                         (Rs.000)
                                                 December     December
                                                  31,2008      31,2007
 
 a) Income tax claims against the Company         402,194     109,645
 b) Excise duty claims against the Company*         1,475       8,635
 c) Sales Tax refunds/claims against the Company*  84,675     153,486
 d) Customs Duty claims against the Company*        4,000
 e) Octroi*                                           -         1,055
 
 * Excludes penalties, if any, relating to penalty proceedings, since
 the precedence indicate that the probability of levy is remote.
 
 Note :
 
 Bank Guarantees given to customers- against performance/advance.
 
 Bank Guarantees issued Rs. 1,966,153 (000) [Previous Year Rs.
 1,720,748 (000)] are secured by hypothecation of present and future
 stocks of raw materials, semi-finished goods, finished goods, stores
 and spares and book debts.
 
 6.  During the year, the Company has accounted for corporate overhead
 allocation, in respect of various services rendered by Honeywell group
 companies, aggregating Rs. 371,338 (000) with effect from January 1,
 2007. Out of the above, Rs. 154,862 (000) are in respect of services
 rendered in the year 2007.
 
 7.  During the previous year, the Company had revised its estimated
 useful lives of all assets (except land). As a result, additional
 depreciation charge for the previous year was Rs. 50,122 (000).
 
 8.  Based on an exercise to ascertain impairment, if any, in the
 carrying amount of fixed assets, the Company had in the previous year
 provided for an impairment loss of Rs. 8,769 (000) in Product
 Distribution Rights.
 
 9.  Beginning January 1, 2007, the Company had refined its accounting
 practice for revenue recognition under the Accounting Standard 7
 (AS-7). Consequent to this refinement the profit before tax for the
 previous year was higher by Rs. 36,000 (000).
 
 10.  Prior year comparatives have been regrouped, reclassified to
 conform to the current year presentation, wherever applicable.