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Directors Report of Rexnord Electronics and Controls Ltd.

Mar 31, 2016

The Directors have great pleasure in presenting the 28th Annual Report together with the Audited Accounts for the year ended March 31, 2016.

1. FINANCIAL PERFORMANCE / HIGHLIGHTS :

(Amount in Rs.)

Particulars

For the year ended 31.03.2016

For the year ended 31.03.2015

Total revenue

518077093.40

528193369.30

Profit before depreciation and amortization

43774919.42

50136082.29

Depreciation and amortization

12941473.52

12692753.53

Profit before exceptional items & tax

30833445.90

37443328.76

Exceptional items

0.00

0.00

Profit before tax

30833445.90

37443328.76

Tax expense

10814718.01

12446257.49

Net profit after tax

20018727.89

24997071.27

Balance brought forward

83097099.97

59355978.49

Balance carried forward

103115827.86

83097099.97

3. FINANCIAL REVIEW:

The Year 2015-2016 was tough but despite the global slowdown of economy your Company managed to achieve total revenue of Rs. 518077093.40 as against the total revenue of Rs. 528193369.30 in the previous year.

Despite the drop in the demand of the refrigeration industry your Company has been able to earn net profit after tax of Rs. 20018727.89 for the year 20152016 as against the net profit after tax of Rs. 24997071.27 in the previous year.

The Company aims at increasing its marketing strengths and its global identity in order to boost its export sales and thereby increase its sales volume. The Company also aims at developing strategies in making the product reach global requirements by setting up distribution channels and branding techniques.

The current year looks promising with the Company investing in new marketing strategies and has taken appropriate measures in order to achieve sale targets.

4. DIVIDEND & TRANSFER TO RESERVES:

To consolidate the financial position of the Company, the Board does not propose any dividend for the year ended March 31, 2016. The Board does not propose to transfer any amount to General Reserves for the aforesaid Financial Year.

5. SHARE CAPITAL OF THE COMPANY:

The Paid up Equity Share Capital, as at 31st March, 2016 was Rs. 9,95,91,000/- divided into 99,59,100 Equity shares, having face value of Rs. 10/- each fully paid up. During the year 2015-16, your Company has converted 23,80,500 warrants into equal number of Equity Shares each at a price of Rs. 13.40 to Promoters & Non-Promoters. A detailed table containing the same is mentioned below:

Sr. No.

Name of the Applicant

Nos. of Warrants issued during FY 201415

Warrants O/s as on 31.03.2015

Date of Conversion of Warrants into Equity during the year

Nos. of Equity Shares allotted on 12.06.2015

Balance Warrants as on 31.03.2016

1.

Mr. Kishore Chand Talwar

25,00,000

19,00,500

12.06.2015

12,00,500

7,00,000

2

Mrs. Sharda Talwar

13,08,800

10,20,000

12.06.2015

5,20,000

5,00,000

3

Mr. Nandkishore Soni

2,20,000

2,20,000

12.06.2015

2,20,000

-

4

Mr. Purushottam R. Soni

2,20,000

2,20,000

12.06.2015

2,20,000

-

5

Pawan Kumar Soni HUF

2,20,000

2,20,000

12.06.2015

2,20,000

-

6

Nandkishore Soni HUF

2,10,000

Nil

-

-

-

TOTAL

46,78,800

35,80,500

23,80,500

12,00,000

2. COMPANY OVERVIEW:

Rexnord Electronics and Controls Ltd is one of the leading manufacturers of Fans and Motors in India, having its corporate headquarters in Mumbai.

Your Company prepares its financial statements in compliance with the requirements of the Companies Act 2013 and the Generally Accepted Accounting Principles (GAAP) in India.

6. SUBSIDIARIES & ASSOCIATE COMPANIES:

The Company does not have any subsidiary or associate companies.

7. CHANGE IN THE NATURE OF BUSINESS:

There was no change in the nature of business activities during the Financial Year 2015-16.

8. BOARD OF DIRECTORS:

In accordance with the provisions of Section 152 of the Companies Act 2013 and the Articles of Association of the Company, Mrs. Nainy K. Tanna, Whole time Director of the Company, retires by rotation at the forthcoming Annual General Meeting and being eligible offers herself for re-appointment.

The Board has appointed Mr. Ganapathy Dharmarajan as an Additional Director of the Company in independent capacity w.e.f. 4th November, 2015. The Board proposes to appoint Mr. Ganapathy Dharmarajan as a Regular Independent Director of the Company in accordance with Section 149 of the Companies Act, 2013 and under Regulation 25 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (Listing Regulations) for one term of Five (5) years.

9. DECLARATION OF INDEPENDENT DIRECTORS:

The Company has received Declarations from all the Independent Directors stating that they meet the criteria of independence as laid down under Section 149(6) of the Companies Act, 2013 and the Listing Regulations.

10. DIRECTORS RESPONSIBILITY STATEMENT:

Pursuant to Section 134 (3)(c) of the Companies Act, 2013 the Directors confirm that:

a. that in the preparation of the Annual Accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures, if any;

b. that the Directors had 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 at the end of the Financial Year and of the profit and loss of the Company for that period;

c. the Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

d. the Directors had prepared the annual accounts on a going concern basis;

e. the Directors, had 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 had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

11. KEY MANAGERIAL PERSONNEL:

The details of the Key Managerial Personnel of the Company, including the appointments / resignations during the year are as under:

Sr. No.

Name of the Key Managerial Personnel as on 31.03.2016

Designation

1.

Mr. Kishore Chand Talwar

Managing Director

2.

Mr. Kundan Talwar

Chief Financial Officer

3

Mr. Debabrata Guha Chaudhury1

Company Secretary

4

Ms. Swati Sureka2

Company Secretary

5.

Mr. Krunal S. Wala3

Company Secretary

12.2 NOMINATION AND REMUNERATION COMMITTEE:

Pursuant to Regulation 19 of Listing Regulations and Companies Act, 2013 and provisions of Section 178 of the Companies Act 2013, the Company has reconstituted the Nomination & Remuneration Committee comprising of 3 Independent Directors. The Board of Directors has framed a policy which lays down a framework in relation to remuneration of Directors, Key Managerial Personnel and Senior Management of the Company. The policy lays down the criteria for selection and appointment of Board Members. The details of the policy are explained in the Corporate Governance Report.

12.3 STAKEHOLDERS RELATIONSHIP COMMITTEE:

The Company has reconstituted the existing Stakeholders Relationship Committee in compliance with the Companies Act, 2013 & Listing Regulations. The Committee has been constituted to strengthen the investor relations and to specifically look into the mechanism of redressal of grievances of shareholders pertaining to transfer of shares, non-receipt of Annual Report, issues concerning de-materialization etc. The details regarding composition etc. are explained in the Corporate Governance Report.

13. VIGIL MECHANISM / WHISTLE BLOWER POLICY:

The Company has a Vigil Mechanism / Whistle Blower policy to report genuine concerns, grievances, frauds and mismanagements, if any. The Vigil Mechanism /Whistle Blower policy has been posted on the website of the Company (www.rexnordindia.in)

14. BOARD EVALUATION:

Pursuant to the provisions of the Companies Act, 2013 and SEBI (LODR) Regulations, 2015, the company has implemented a system of evaluating performance of the Board of Directors and of its Committees and individual Directors on the basis of evaluation criteria suggested by the Nomination and Remuneration Committee. Accordingly, the board has carried out an evaluation of its performance after taking into consideration various performance related aspects of the Board’s functioning, composition of the Board and its Committees, culture, execution and performance of specific duties, remuneration, obligations and governance. The performance evaluation of the Board as a whole and Chairperson and the Non Independent Directors was also carried out by the Independent Directors at their meeting held on 25th January, 2016

Similarly, the performance of various committees, individual independent and Non independent Directors was evaluated by the entire Board of Directors (excluding the Director being evaluated) on various parameters like engagement, analysis, decision making, communication and interest of stakeholders.

The Board of Directors expressed its satisfaction with the performance of the Board, its committees and individual Directors.

15. NUMBER OF MEETINGS OF THE BOARD OF DIRECTORS:

During the Financial Year ended March 31, 2016, 12 (Twelve) meetings of the Board of Directors were held. The details of the attendance of Directors at the Board Meeting are mentioned in the Corporate Governance Report annexed hereto.

16. CODE OF CONDUCT:

Your Company is committed to conducting its business in accordance with the applicable laws, rules and regulations and highest standards of business ethics. In recognition thereof, the Board of Directors has implemented a Code of Conduct for adherence by the Directors, Senior Management Personnel and Employees of the Company. This will help in dealing with ethical issues and also foster a culture of accountability and integrity. The Code with revision made in accordance with the requirements of Listing Regulations has been posted on the Company’s website www. rexnordindia.in

All the Board Members and Senior Management Personnel have confirmed compliance with the Code.

17. FIXED DEPOSITS:

Your Company has not accepted any deposits within the meaning of Section 73 of the Companies Act, 2013 and the Companies (Acceptance of Deposits) Rules, 2014.

18. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS:

The Company has not given loans, or guarantees or made any investments, during the Financial Year 2015-16, therefore the provisions of Section 186 of the Companies Act, 2013 was not attracted.

19. ISO CERTIFICATION:

The Company’s products were awarded as ISO 9001:2008 Certification.

20. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS:

There are no significant and material orders passed by the Regulators or Courts that would impact the going concern status of the Company and its future operations.

21. EXTRACT OF ANNUAL RETURN:

The details forming part of the extract of the Annual Return in Form MGT-

9, as required under Section 92 of the Companies Act, 2013, is included in this Report as Annexure ‘A’ and forms an integral part of this Report.

22. RELATED PARTY TRANSACTIONS:

All related party transactions that were entered into during the Financial Year were on arm’s length basis and were in the ordinary course of the business and as per the provisions of Section 188 of the Companies Act, 2013 and Listing Regulations. Thus the disclosure in AOC-2 is not required. Further, there are no materially significant related party transactions made by the company with Promoters, Key Managerial Personnel or other designated persons which may have potential conflict with interest of the company at large.

All related party transactions are placed before the Audit Committee and also before the Board for their approval in accordance with the Policy on Related Party Transactions formulated by the Board of Directors of the Company and has been posted on the website of the Company (www.rexnordindia.in).

23. STATUTORY AUDITORS:

M/s. R. S. Agrawal & Associates, Chartered Accountants, (Firm Registration No 100156W) were appointed as the Statutory Auditors of the Company at the 26th Annual General Meeting held on August 30, 2014 to hold office until the conclusion of the 29th Annual General Meeting, are recommended for ratification of appointment for the Financial Year 2016-17. As required under the provisions of Section 139 of the Companies Act, 2013, the Company has obtained written confirmation from M/s. R. S. Agrawal & Associates that their appointment, if made, would be in conformity with the limits specified in the said Section and they are not disqualified.

The members are requested to ratify the appointment of M/s. R. S. Agrawal & Associates as Statutory Auditors of the Company from the conclusion of 28th Annual General Meeting to 29th Annual General Meeting of the Company.

24. SECRETARIAL AUDIT:

Pursuant to provisions of Section 204 of the Companies Act, 2013 and the Rules made there under, the Company has appointed M/s. GMJ & Associates, Company Secretaries to undertake the Secretarial Audit of the Company. The Secretarial Audit Report is annexed herewith as Annexure ‘B’ and forms an integral part to this Report.

25. COST AUDIT:

Pursuant to the provisions of Section 148 of the Companies Act 2013 read with Rules made there under, Cost Audit is not applicable to the Company for the Financial Year 2015-2016 and 2016-2017.

26. AUDITORS’ REPORT/ SECRETARIAL AUDIT REPORT:

The Auditors Report and the Secretarial Audit Report for the Financial Year 2015-16 do not contain any qualifications, reservations or adverse remarks.

27. PREVENTION OF SEXUAL HARASSMENT:

The Company has complied with the provisions of Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the Rules made there under.

During the year under review, no complaints were reported.

28. RISK MANAGEMENT:

Your Company recognizes that risk is an integral part of business and is committed to managing the risks in a proactive and efficient manner; your Company periodically assesses risks in the internal and external environment, along with the cost of treating risks and incorporates risk treatment plans in the strategy, business and operational plans.

The Company has a Risk Management policy (a) to ensure that all the current and future material risk exposures of the Company are identified, assessed, quantified, appropriately mitigated, minimized and managed i.e. to ensure adequate systems for risk management (b) to establish a framework for the Company’s risk management process and to ensure its implementation (c) to enable compliance with appropriate regulations, wherever applicable, through the adoption of best practices (d) to assure business growth with financial stability.

There are no risks which threaten the existence of the Company.

29. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY:

The Company has an Internal Control System, commensurate with the size, scale and complexity of its operations. The internal audit functions of the Company are carried out by a firm of Chartered Accountants. The scope and authority of the Internal Audit function is defined by the Audit Committee. The Internal Auditors reports to the Chairman of the Audit Committee of the Board.

The Internal Auditors monitors and evaluates the efficacy and adequacy of internal control system in the Company, its compliance with operating systems, accounting procedures and policies of the Company.

Based on the report of internal auditors, the Company undertakes corrective action in their respective areas and thereby strengthens the controls. Significant audit observations and recommendations along with corrective actions thereon are presented to the Audit Committee of the Board.

The Company has in place adequate 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.

30. DEPOSITORY SERVICES:

The Company’s Equity Shares have been admitted to the depository mechanism of the National Securities Depository Limited (NSDL) and also the Central Depository Services Limited (CDSL). As a result the investors have an option to hold the shares of the Company in a dematerialized form in either of the two Depositories. The Company has been allotted ISIN No. INE687C01012.

Shareholders’ therefore are requested to take full benefit of the same and lodge their holdings with Depository Participants [DPs] with whom they have their Demat Accounts for getting their holdings in electronic form.

31. PARTICULARS REGARDING CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNING AND OUTGO:

The information on conservation of energy, technology absorption and foreign exchange earnings and outgo pursuant to Section 134(3)(m) of the Companies Act, 2013, read with the Rule 8(3) of the Companies (Accounts) Rules, 2014 is given as under:

Efficient use of energy in all forms has been a consistent corporate trust in the Company. Better maintenance of equipments, improved operating practice and installation of most modern machinery has resulted in lot of saving in energy cost and consumption of raw materials.

A. CONSERVATION OF ENERGY:

The Company is consistently doing research in the field of saving energy by implementing new cost-effective ideas. The steps taken during the year for conservation of energy are as under:

1. Due consideration has been given to energy consumption while procuring equipments.

2. As a responsible Corporate Citizen and in adherence to our climate change strategy, Company is continuously taking effective steps to conserve energy.

3. Except the emergency lights, all lights and electrical gadgets are turned off after working hours and on holidays at office premises of the Company to help in minimizing the energy consumption.

4. The Steps taken by the Company for utilizing alternate source of energy; The Company is constantly exploring avenues for cost saving as an ongoing process.

5. The Capital invested on energy equipments: Nil

B. TECHNOLOGY ABSORPTION:

a. Research & Development

The Research & Development department of the Company has been arduously working to provide quality and value for money to the customer in keeping with market trends. Research and Development is being carried out in the following areas.

i. Making design modifications in the products so as to simplify the manufacturing process and enhance productivity.

ii. Developing Jigs, Fixtures and devices to increase productivity.

iii. Improvements to tool design.

iv. Up gradation of machines.

v. Design and development of special machines required for increasing capacity.

vi Development of equipment required for testing product reliability at various stages.

b. Technology absorption, adaptation and innovation.

Technology for the manufacture of Instrument Cooling Fans of various sizes has been successfully absorbed.

C. FOREIGN EXCHANGE EARNED AND USED:

The particulars regarding foreign exchange earnings and expenditure appear at note nos. 34, 35 and 38 in the notes to the financial statements.

32. PARTICULARS OF EMPLOYEES:

The information required pursuant to Section 197 read with Rule 5 (1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is annexed as Annexure “C” to this Report.

None of the employees have drawn remuneration more than Rs. 5,00,000/p.m., if employed for the part of the year and Rs. 60,00,000/- p.a., if employed throughout the Year.

33. CORPORATE GOVERNANCE & MANAGEMENT DISCUSSION AND ANALYSIS REPORT:

It has always been the Company’s endeavor to excel through better Corporate Governance and fair and transparent practices, many of which have already been in place even before they were mandated by the law of the land. The company voluntarily complies with the requirement of the SEBI (LODR) regulations 2015.

The Board of Directors of the Company had also evolved and adopted a Code of Conduct based on the principles of Good Corporate Governance and best management practices being followed globally. The Code is available on the website of the Company www.rexnordindia.in. A separate report on Corporate Governance and Management Discussion and Analysis Reports which is voluntarily adopted by the Company is included in this Annual Report as Annexure ‘D’ & ‘E’.

34. LISTING:

The Shares of the Company are listed on the Stock Exchange at Mumbai. The Company has paid the Listing fees for the year 2016-17 to the Stock Exchange at Mumbai.

35. EVENTS SUBSEQUENT TO THE DATE OF FINANCIAL STATEMENTS:

There were 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 related and the date of the Report.

36. CORPORATE SOCIAL RESPONSIBILITY:

Pursuant to the provisions of Section 135 of the Companies Act, 2013 read with the Companies (Corporate Social Responsibility Policy) Rules 2014, the net profit of the Company was below Rs. 5 Crores during the last three immediately preceding Financial Years. Accordingly, the provisions of CSR policy were not applicable for the Financial Year 2015-16.

37. ENVIRONMENT AND SAFETY:

The Company is committed to:

- Maintain an organizational culture of Health, Safety & Environmental excellence by conducting its business in a manner that will promote consistent development.

- Safe work, resource conservation, waste management and emergency response measures for continual improvement in performance.

- Design, construct, operate & maintain its facilities while assuring the best material and service quality and operate in a way that mitigates and minimizes risks and hazards.

- Prevention of ill-health, injuries and pollution by adopting best practices, carrying out periodic risk assessments, reviews, inspections and providing awareness to employees and concerned stakeholders.

38. ACKNOWLEDGMENT:

The Directors wish to convey their appreciation to the Company’s shareholders, customers, suppliers, bankers and distributors for the support they have given to the Company and the confidence, which they have reposed in its management and the employees for the commitment and dedication shown by them.

For and on behalf of the Board

REXNORD ELECTRONICS AND CONTROLS LIMITED

KISHORECHAND TALWAR

(DIN: 00351751)

CHAIRMAN & MANAGING DIRECTOR

Registered Office:

92-D Govt. Ind. Estate,

Charkop, Kandivli (W),

Mumbai - 400 067

Dated: May 30, 2016


Mar 31, 2014

THE SHAREHOLDERS

The Directors have great pleasure in presenting their 26th Annual Report together with the audited accounts for the year ended March 31, 2014.

FINANCIAL PERFORMANCE:

(Amount in Rs.)

For the year ended For the year ended Particulars 31.03.2014 31.03.2013

Total revenue 400994598.99 306617650.88

Profit before depreciation and 33115235.24 30016249.97 amortization

Depreciation and amortization 9572172.48 9039871.65

Profit before exceptional items 23543062.76 20976378.32 &tax

Exceptional items 5498424.75 -

Profit before tax 29041487.51 20976378.32

Tax expense 9529482.00 6892460.00

Net profit after tax 19512005.51 14083918.32

Balance brought forward 39843972.98 25760054.66

Balance carried forward 59355978.49 39843972.98

OPERATIONS:

Total revenue of your Company, during the year under review, increased at e 400994598.99 as against the total revenue of Rs. 306617650.88 in the previous year. Your Company has been able to earn net profit after tax of Rs. 19512005.51 for the year as against the net profit after tax of Rs. 14083918.32 in the previous year.

The financial year ended March 2014 was another successful year, where despite a challenging environment, our business grew well ahead of competition. Several innovations/ product lines were launched to meet the emerging needs and aspirations of our consumers. We expanded our reach and further strengthened our distribution to the Export market so that we can serve our consumers better with our wide range of product offerings.

DIVIDEND:

To consolidate the financial position of the Company, the Board does not propose any dividend for the year ended March 31, 2014.

RESEARCH & DEVELOPMENT:

The R&D department of the Company has been arduously working to provide quality and value for money to the customer in keeping with market trends.

ISO CERTIFICATION:

The Company''s products were awarded as ISO 9001:2008 Certification.

FIXED DEPOSITS:

Your Company has not accepted any deposit within the meaning of section 58A of the Companies Act, 1956 from the public and the rules made there under.

BOARD OF DIRECTORS:

The Companies Act, 2013 provides for appointment of Independent Directors. Section 149 (10) of the Companies Act, 2013 states that Independent Directors shall hold office for a term of upto 5 consecutive years on the Board of a Company, and shall be eligible for re-appointment on passing of a Ordinary Resolution by the shareholders of the Company.

Pursuant to the provisions of Section 161 (1) of the Companies Act, 2013, Mr. Ram Sanehi and Mr.Ayyaswami Sundaram, both Non Executive (Independent) Directors retire by rotation and are proposed to be appointed for a term of 5 consecutive years (not liable to retire by rotation) i.e. upto March 31, 2019.

The Company has received declarations from all the Independent Directors of the Company confirming that they meet with the criteria of independence as prescribed both under sub-section (6) of Section 149 of the Companies Act, 2013 and under Clause 49 of the Listing Agreement with the Stock Exchanges.

It is proposed to re-appoint Mr. Kishore Chand Talwar and Mrs. Nainy K. Tanna as Chairman & Managing Director and Whole time Director respectively. Necessary resolutions are placed for member''s approval.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT:

An analysis of the Company''s performance is discussed in the Management Discussion and Analysis Report which forms part of this Directors'' Report.

CORPORATE GOVERNANCE:

Your Company fully subscribes to the standards set out by the Securities and Exchange Board of India''s Corporate Governance practices and has ensured compliance of the conditions of Corporate Governance stipulated in Clause 49 of the Listing Agreement with the Stock Exchange(s). A separate report on Corporate Governance together with Auditors'' Certificate on its compliance is included in this Annual Report.

DIRECTORS RESPONSIBILITY STATEMENT:

Pursuant to Section 217(2AA) of the Companies Act, 1956 the directors confirm that:

i. in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departure;

ii. appropriate policies have been selected and applied consistently and judgments and estimates wherever made are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2014 and of the profit of the Company for that year;

iii. proper and sufficient care has been taken 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; and

iv. the annual accounts have been prepared on a going concern basis.

CODE OF CONDUCT:

The Company is committed to conduct its business in accordance with the applicable laws, rules and regulations and highest standards of business ethics. In recognition thereof, the Board of Directors has implemented a Code of Conduct for adherence by the Directors and Senior Management Personnel of the Company. This will help in dealing with ethical issues and also foster a culture of accountability and integrity.

AUDITORS:

M/s. R. S. Agrawal & Associates, Chartered Accountants, auditors of the Company are retiring at the ensuing annual General Meeting. They are eligible for re-appointment and have confirmed their eligibility and willingness to accept office, if re-appointed. The Company has received letter from them to the effect that their re-appointment if made, would be within the prescribed limits under section 141 (3) (g) of the Companies Act, 2013 and they are not disqualified for re-appointment.

AUDITORS'' OBSERVATIONS:

As pointed out by the statutory auditors, the Board hereby clarifies as under:

a. The Company is looking for professional directors to appoint them as directors to compose the Nomination and Remuneration committee (earlier known as Remuneration Commiteee) in conformity of requirement of the Companies Act, 2013

b. The income tax dues have not been paid on account of disputes pending with respective authorities for granting the credit of TDS.

Other observations of the auditors contained in their report have been adequately dealt with in the notes to the financial statements which are self- explanatory and, therefore, do not call for any further comments.

COST AUDITORS:

The Company has appointed M/s. Krishna S. & Associates, Cost Accountants, as cost auditors of the Company for conducting cost audit of the Company for the financial year 2014-15.

AUDIT COMMITTEE:

The Audit Committee''s composition meets the requirement of the Companies Act, 1956, the Companies Act 2013 and Clause 49 of the Listing Agreement. The Audit Committee acts in accordance with the terms of reference specified from time to time by the Board.

DEPOSITORY SERVICES:

The Company''s Equity Shares have been admitted to the depository mechanism of the National Securities Depository Limited (NSDL) and also the Central Depository Services Limited (CDSL). As a result the investors have an option to hold the shares of the Company in a dematerialised form in either of the two Depositories. The Company has been allotted ISIN No. INE687C01012.

Shareholders'' therefore are requested to take full benefit of the same and lodge their holdings with Depository Participants [DPs] with whom they have their Demat Accounts for getting their holdings in electronic form.

PARTICULARS REGARDING CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNING AND OUTGO:

The information pursuant to section 217 (I) (e) of the Companies Act, 1956 read with the Companies (Disclosure of particulars in the Report of Board of Directors) Rules 1988 are given as under.

Efficient use of energy in all form has been a consistent corporate trust in the Company. Better maintenance of equipments, improved operating practice and installation of most modern machinery has resulted in lot of saving in energy cost and consumption of raw materials.

A. CONSERVATION OF ENERGY:

The Company is consistently doing research in the field of saving energy by implementing new cost-effective ideas. The steps taken during the year for conservation of energy are as under:

1. Due consideration has been given to energy consumption while procuring equipments.

2. As a responsible Corporate Citizen and in adherence to our climate change strategy, Company is continuously taking effective steps to conserve energy.

3. Except the emergency lights, all lights and electrical gadgets are turned off after working hours and on holidays at office premises of the Company to help in minimizing the energy consumption.

B. TECHNOLOGY ABSORPTION:

a) Research & Development

The Research & Development department of the Company has been arduously working to provide quality and value for money to the customer in keeping with market trends. Research and Development is being carried out in the following areas.

- Making design modifications in the products so as to simplify the manufacturing process and enhance productivity.

- Developing Jigs, Fixtures and devices to increase productivity.

- Improvements to tool design.

- Upgradation of machines.

- Design and development of special machines required for increasing capacity.

- Development of equipment required for testing product reliability at various stages.

b) Technology absorption, adaptation and innovation.

Technology for the manufacture of Instrument Cooling Fans of various sizes has been successfully absorbed.

C. FOREIGN EXCHANGE EARNED AND USED:

The particulars regarding foreign exchange earnings and expenditure appear at note nos. 34, 35 and 38 in the notes to the financial statements.

PARTICULARS OF EMPLOYEES:

None of the employees of the Company come within the purview of the information required u/s 217 (2A) of the Companies Act, 1956 read with the Companies (particulars of Employees) Rules, 1975 as amended.

LISTING:

Equity Shares of the Company are listed at the Stock Exchanges at Mumbai and Delhi. The shares of the Company got delisted from Ahemedabad Stock Exchange during the year. The process for delisting from Delhi Stock Exchange is on. "

SAFETY, ENVIRONMENTAL CONTROL AND PROTECTION:

The Company is committed to:

- Maintain an organizational culture of Health, Safety & Environmental excellence by conducting its business in a manner that will promote consistent development.

- Safe work, resource conservation, waste management and emergency response measures for continual improvement in performance.

- Design, construct, operate & maintain its facilities while assuring the best material and service quality and operate in a way that mitigates and minimizes risks and hazards.

- Prevention of ill-health, injuries and pollution by adopting best practices, carrying out periodic risk assessments, reviews, inspections and providing awareness to employees and concerned stakeholders.

ACKNOWLEDGMENT:

The Directors wish to convey their appreciation to the Company''s shareholders, customers, suppliers, bankers and distributors for the support they have given to the Company and the confidence, which they have reposed in its management and the employees for the commitment and dedication shown by them.

For and on behalf of the Board REXNORD ELECTRONICS AND CONTROLS LIMITED

Kishore Chand Talwar

Chairman & Managing Director

Place : Mumbai Dated : July 19, 2014


Mar 31, 2013

To , THE SHAREHOLDERS

The Directors have great pleasure in presenting their 25th Annual Report together with the audited accounts for the year ended March 31, 2013.

FINANCIAL PERFORMANCE:

(Amount in Rs.) For the year ended For the year ended Particulars 31.03.2013 31.03.2012

Total revenue 306617650.88 272661972.80

Proft before depreciation and amortization 30016249.97 18765807.58

Depreciation and amortization 9039871.65 6095271.39

Proft before tax 20976378.32 12670536.19

Tax expense 6892460.00 4556846.29

Net proft after tax 14083918.32 8113689.90

Balance brought forward 25760054.66 17646364.76

Balance carried forward 39843972.98 25760054.66

OPERATIONS:

Total revenue of your Company, during the year under review, increased at Rs. 306617650.88 as against the total revenue of Rs. 272661972.80 in the previous year. Your Company has been able to earn net proft after tax of Rs. 14083918.32 for the year as against the net proft after tax of Rs. 8113689.90 in the previous year.

Financial 2012-13 proved to be a challenging year amidst global economic uncertainties and disturbances in many parts of the world. Factors like unmanageable infation, higher cost of commodities, unprecedented depreciation of Indian rupee against US dollar, reined in liquidity and infated cost of borrowing tested the much talked about strong fundamentals of Indian economy. Despite these constraints and challenging environment, your Company based on its core strengths and sincere efforts of all the Rexnord team members, performed well. The Board expects better results for the current year.

DIVIDEND:

To consolidate the fnancial position of the Company, the Board does not propose any dividend for the year ended March 31, 2013.

RESEARCH & DEVELOPMENT:

The R&D department of the Company has been arduously working to provide quality and value for money to the customer in keeping with market trends.

ISO CERTIFICATION:

The Company''s products were awarded as ISO 9001:2008 Certifcation.

FIXED DEPOSITS:

Your Company has not accepted any deposit within the meaning of section 58A of the Companies Act, 1956 from the public and the rules made there under.

BOARD OF DIRECTORS:

As per the provisions of the Companies Act, 1956 and in terms of the Articles of Association of the Company, Mrs. Nainy K. Tanna retires by rotation and being eligible offer herself for reappointment.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT:

An analysis of the Company''s performance is discussed in the Management Discussion and Analysis Report which forms part of this Directors'' Report.

CORPORATE GOVERNANCE:

Your Company fully subscribes to the standards set out by the Securities and Exchange Board of India''s Corporate Governance practices and has ensured compliance of the conditions of Corporate Governance stipulated in Clause 49 of the Listing Agreement with the Stock Exchange(s). A separate report on Corporate Governance together with Auditors'' Certifcate on its compliance is included in this Annual Report.

DIRECTORS RESPONSIBILITY STATEMENT:

Pursuant to Section 217(2AA) of the Companies Act, 1956 the directors confrm that:

i. in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departure;

ii. appropriate policies have been selected and applied consistently and judgements and estimates wherever made are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2013 and of the proft of the Company for that year;

iii. proper and suffcient care has been taken 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; and

iv. the annual accounts have been prepared on a going concern basis.

CODE OF CONDUCT:

The Company is committed to conduct its business in accordance with the applicable laws, rules and regulations and highest standards of business ethics. In recognition thereof, the Board of Directors has implemented a Code of Conduct for adherence by the Directors and Senior Management Personnel of the Company. This will help in dealing with ethical issues and also foster a culture of accountability and integrity.

AUDITORS:

M/s. R. S. Agrawal & Associates, Chartered Accountants, auditors of the Company are retiring at the ensuing Annual General Meeting. They are eligible for re-appointment and have expressed their willingness to act as auditors, if re-appointed. The Company has received a certifcate from them that they are qualifed under section 224 (1) of the Companies Act, 1956, for appointment as auditors of the Company. Members are requested to consider their appointment at a remuneration to be decided by the Board of Directors for the fnancial year ending March 31, 2014 as set out in the Notice convening the Meeting.

AUDITORS'' OBSERVATIONS:

As pointed out by the statutory auditors, the Board hereby clarifes as under:

a. The Company is looking for professional directors to appoint them as directors to compose the remuneration committee in conformity of requirement of Schedule XIII of the Companies Act, 1956.

b. The income tax dues have not been paid on account of disputes pending with respective authorities for granting the credit of TDS.

Other observations of the auditors contained in their report have been adequately dealt with in the notes to the fnancial statements which are self-explanatory and, therefore, do not call for any further comments.

COST AUDITORS:

The Company has appointed M/s. Krishna S. & Associates, Cost Accountants, as cost auditors of the Company for conducting cost audit of the Company for the fnancial year 2012-13.

AUDIT COMMITTEE:

In accordance with the provisions of the Companies Act, 1956 and Listing Agreement, the Company has constituted an Audit Committee. The Audit Committee acts in accordance with the terms of reference specifed from time to time by the Board.

DEPOSITORY SERVICES:

The Company''s Equity Shares have been admitted to the depository mechanism of the National Securities Depository Limited (NSDL) and also the Central Depository Services Limited (CDSL). As a result the investors have an option to hold the shares of the Company in a dematerialised form in either of the two Depositories. The Company has been allotted ISIN No. INE687C01012.

Shareholders'' therefore are requested to take full beneft of the same and lodge their holdings with Depository Participants [DPs] with whom they have their Demat Accounts for getting their holdings in electronic form.

PARTICULARS REGARDING CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNING AND OUTGO:

The information pursuant to section 217 (I) (e) of the Companies Act, 1956 read with the Companies (Disclosure of particulars in the Report of Board of Directors) Rules 1988 are given as under.

Effcient use of energy in all form has been a consistent corporate trust in the Company. Better maintenance of equipments, improved operating practice and installation of most modern machinery has resulted in lot of saving in energy cost and consumption of raw materials.

A. CONSERVATION OF ENERGY:

The Company is consistently doing research in the feld of saving energy by implementing new cost-effective ideas. The steps taken during the year for conservation of energy are as under:

1. Due consideration has been given to energy consumption while procuring equipments.

2. As a responsible Corporate Citizen and in adherence to our climate change strategy, Company is continuously taking effective steps to conserve energy.

3. Except the emergency lights, all lights and electrical gadgets are turned off after working hours and on holidays at offce premises of the Company to help in minimizing the energy consumption.

Form for disclosure of particulars with respect of Consumption of Energy is enclosed herewith.

Units Current Year Previous Year

a. Power & Fuel Consumption Electricity – Purchased

Unit (KWH) Units 1007790 822545

Total Amount In Rs. 8288541.01 6633486*

Average Rate Rs. per unit 8.22 8.06

b. Consumption per unit of production Electricity (KWH)

Instrument Cooling Units/Thousand 890 788

Fans/Motors AC

Instrument Cooling Fans DC Units/Thousand 223 197

B. TECHNOLOGY ABSORPTION:

(a) Research & Development

The Research & Development department of the Company has been arduously working to provide quality and value for money to the customer in keeping with market trends. Research and Development is being carried out in the following areas.

- Making design modifcations in the products so as to simplify the manufacturing process and enhance productivity.

- Developing Jigs, Fixtures and devices to increase productivity.

Improvements to tool design.

Upgradation of machines.

Design and development of special machines required for increasing capacity.

Development of equipment required for testing product reliability at various stages.

(b) Technology absorption, adaptation and innovation.

Technology for the manufacture of Instrument Cooling Fans of various sizes has been successfully absorbed.

C. FOREIGN EXCHANGE EARNED AND USED:

The particulars regarding foreign exchange earnings and expenditure appear at note nos. 35, 36 and 39 in the notes to the fnancial statements.

PARTICULARS OF EMPLOYEES:

None of the employees of the Company come within the purview of the information required u/s 217 (2A) of the Companies Act, 1956 read with the Companies (particulars of Employees) Rules, 1975 as amended.

LISTING:

Shares of the Company are listed at the Stock Exchanges at Mumbai, Ahmedabad and Delhi. The shares of the Company got delisted from Bangalore Stock Exchange during the year. The company has not paid the listing fees for Ahmedabad and Delhi Stock Exchanges as the process for delisting from Ahmedabad and Delhi Stock Exchanges is on.

SAFETY, ENVIRONMENTAL CONTROL AND PROTECTION:

The Company is committed to:

Maintain an organizational culture of Health, Safety & Environmental excellence by conducting its business in a manner that will promote consistent development.

Safe work, resource conservation, waste management and emergency response measures for continual improvement in performance.

Design, construct, operate & maintain its facilities while assuring the best material and service quality and operate in a way that mitigates and minimizes risks and hazards.

Prevention of ill-health, injuries and pollution by adopting best practices, carrying out periodic risk assessments, reviews, inspections and providing awareness to employees and concerned stakeholders.

ACKNOWLEDGMENT:

The Directors wish to convey their appreciation to the Company''s shareholders, customers, suppliers, bankers and distributors for the support they have given to the Company and the confdence, which they have reposed in its management and the employees for the commitment and dedication shown by them.

For and on behalf of the Board

REXNORD ELECTRONICS AND CONTROLS LIMITED

Kishore Chand Talwar

Chairman & Managing Director

Place : Mumbai

Dated : 30th May, 2013


Mar 31, 2011

The Directors have great pleasure in presenting their 23rd Annual Report together with the Audited accounts for the year ended March 31, 2011.

( in lacs) Particulars Year ended Year ended

31.03.2011 31.03.2010

Sales & Other Income

(Net of Excise duty and Sales Tax) 2759.00 2105.70

Profit before depreciation 160.25 99.40

Depreciation 55.37 53.55

Net Profit before tax 104.87 45.85

Net Profit after tax 68.03 31.20

Balance Brought Forward 108.43 77.23

Balance Carried Forward 176.46 108.43

OPERATIONS:

The year under review remained better than previous year in spite of tough competition. The sales and other income of your Company, during the year under review, remained at Rs. 2759.00 lacs as against sales and other income of Rs. 2105.70 lacs in the previous year. Your Company has been able to earn net profit before tax of Rs. 104.87 lacs for the year as against the net profit before tax of Rs. 45.85 lacs in the previous year. The board expects better results for the current year.

DIVIDEND:

To consolidate the financial position of the Company, the Board does not propose any dividend for the year ended March 31, 2011.

RESEARCH & DEVELOPMENT:

The R&D department of the Company has been arduously working to provide quality and value for money to the customer in keeping with market trends.

ISO CERTIFICATION:

The Company's products were awarded as DIN EN ISO 9001:2008 Certification.

FIXED DEPOSITS:

Your Company has not accepted any deposit within the meaning of section 58A of the Companies Act, 1956 from the public and the rules made there under.

BOARD OF DIRECTORS:

As per the provisions of the Companies Act, 1956 and in terms of the Articles of Association of the Company, Mr. Ram Sanehi and Mr. Ayyaswami Sundram retire by rotation and being eligible offer themselves for reappointment.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT:

An analysis of the Company's performance is discussed in the Management Discussion and Analysis Report which forms part of this Directors Report.

CORPORATE GOVERNANCE:

Your Company fully subscribes to the standards set out by the Securities And Exchange Board of India's Corporate Governance practices and has ensured compliance of the conditions of Corporate Governance stipulated in Clause 49 of the Listing Agreement with the Stock Exchange. A separate report on Corporate Governance together with Auditor's Certificate on its compliance is included in this Annual Report.

DIRECTORS RESPONSIBILITY STATEMENT:

Pursuant to Section 217(2AA) of the Companies Act, 1956 the directors confirm that:

i. In the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departure.

ii. Appropriate policies have been selected and applied consistently and judgments and estimates wherever made are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2011 and of the profit of the Company for that year.

iii. Proper and sufficient care has been taken 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.

iv. The annual accounts have been prepared on a going concern basis.

CODE OF CONDUCT:

The Company is committed to conduct its business in accordance with the applicable laws, rules and regulations and highest standards of business ethics. In recognition thereof, the Board of directors has implemented a Code of Conduct for adherence by the Directors and Senior Management Personnel of the Company. This will help in dealing with ethical issues and also foster a culture of accountability and integrity.

AUDITORS:

M/s. R. S. Agrawal & Associates, Chartered Accountants, auditors of the Company are retiring at the ensuing Annual General Meeting. They are eligible for re- appointment and have expressed their willingness to act as auditors, if re-appointed. The Company has received a certificate from them that they are qualified under section 224 (1) of the Companies Act, 1956, for appointment as Auditors of the Company. Members are requested to consider their appointment at a remuneration to be decided by the Board of Directors for the financial year ending March 31, 2012 as set out in the Notice convening the Meeting.

AUDITORS' OBSERVATIONS:

As pointed out by the Statutory Auditors, the board hereby clarifies as under:

a. The Company is looking for professional directors to appoint them as directors to compose the remuneration committee in conformity of requirement of Schedule XIII of the Companies Act, 1956.

b. Regarding the appointment of whole-time Company secretary, the Company is in process of appointing a whole time Company Secretary. In the mean time the Company is availing services of a practicing Company Secretary and has obtained a certificate from him to the effect that the Company is complying with the applicable provisions of the Companies Act, 1956.

c. The statutory dues including excise duty and income tax are not paid on account of disputes pending with respective authorities.

d. The Company has already appointed a firm of chartered accountants for internal audit of the transactions of the Company. The Company is also planning to enlarge the scope of work of the internal auditors of the Company for the current year.

Other observations of the auditors contained in their report have been adequately dealt with in the notes to accounts given in Schedule 20 which are self-explanatory and, therefore, do not call for any further comments.

AUDIT COMMITTEE:

In accordance with the provisions of the Companies Act, 1956 and Listing Agreement the Company has constituted an Audit Committee. The Audit Committee acts in accordance with the terms of reference specified from time to time by the Board.

DEPOSITORY SERVICES:

The Company's Equity Shares have been admitted to the depository mechanism of the National Securities Depository Limited (NSDL) and also the Central Depository Services Limited (CDSL). As a result the investors have an option to hold the shares of the Company in a dematerialised form in either of the two Depositories. The Company has been allotted ISIN No. INE687C01012.

Shareholders' therefore are requested to take full benefit of the same and lodge their holdings with Depository Participants [DPs] with whom they have their Demat Accounts for getting their holdings in electronic form.

PARTICULARS REGARDING CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNING AND OUTGO:

The information pursuant to section 217 (I) (e) of the Companies Act, 1956 read with the Companies (Disclosure of particulars in the Report of Board of Directors) Rules 1988 are given as under.

Efficient use of energy in all form has been a consistent corporate trust in the Company. Better maintenance of equipments, improved operating practice and installation of most modern machinery has resulted in lot of saving in energy cost and consumption of raw materials.

A. CONSERVATION OF ENERGY:

The Company is consistently doing research in the field of saving energy by implementing new cost-effective ideas. Form for disclosure of particulars with respect of Consumption of Energy is enclosed herewith.

B. TECHNOLOGY ABSORPTION:

a) Research & Development

The Research & Development department of the Company has been arduously working to provide quality and value for money to the customer in keeping with market trends. Research and Development is being carried out in the following areas.

- Making design modifications in the products so as to simplify the manufacturing process and enhance productivity.

- Developing Jigs, Fixtures and devices to increase productivity.

- Improvements to tool design.

- Up gradation of machines.

- Design and development of special machines required for increasing capacity.

- Development of equipment required for testing product reliability at various stages.

b) Technology absorption, adaptation and innovation.

Technology for the manufacture of Instrument Cooling Fans of various sizes has been successfully absorbed.

PARTICULARS OF EMPLOYEES:

None of the employees of the Company came within the purview of the information required u/s 217 (2A) of the Companies Act, 1956 read with the Companies (particulars of Employees) Rules, 1975 as amended.

LISTING:

Shares of the Company are listed at the Stock Exchanges at Mumbai, Ahmadabad, Bangalore and Delhi. The Company has not paid the listing fees for Ahmadabad, Bangalore and Delhi Stock Exchanges since the Company is in process of getting the equity shares delisted from these stock exchanges.

SAFETY, ENVIRONMENTAL CONTROL AND PROTECTION:

The Company has taken all the necessary steps for safety and environmental control and protection at the plant.

ACKNOWLEDGMENT:

The Directors wish to convey their appreciation to the Company's shareholders, customers, suppliers, bankers and distributors for the support they have given to the Company and the confidence, which they have reposed in its management and the employees for the commitment and dedication shown by them.

For and on behalf of the Board

REXNORD ELECTRONICS AND CONTROLS LIMITED

Kishore Chand Talwar

Chairman & Managing Director

Place : Mumbai

Dated : 31st August 2011


Mar 31, 2010

The Directors have great pleasure in presenting their 22nd Annual Report together with the Audited accounts for the year ended March 31,2010.

FINANCIAL RESULTS: (Rs. in lacs) Tear ended Year ended 31.03.2010 31.03.2009

Sales & Other Income (Net of Excise Duty and Sales Tax) 2105.70 1503.53

Profit before depreciation 99.40 113.14

Depreciation 53.55 69.29

Net Profit before tax 45.85 43.85

Net Profit after tax 31.20 35.17

Balance Brought Forward 77.23 42.06

Balance Gamed Forward 108.43 77.23

OPERATIONS:

The year under review remained better than previous year inspite of tough competition with low cost import of electronic goods. The sales and other income of your company, during the year under review, remained at Rs. 2105.70 lacs as against sales and other income of Rs. 1503.53 lacs in the previous year. Your company has been able to earn net profit before tax of Rs. 45.85 lacs for the year as against the net profit before tax of Rs 43.85 lacs in the previous year. The board expects better results for the current year.

DIVIDEND:

To make the company financially sound, Board has decided not to recommend any dividend for the year ended March 31,2010.

RESEARCH & DEVELOPMENT:

The R&D department of the company has been arduously working to provide quality and value for money to the customer in keeping with market trends. ISO CERTIFICATION: The companys products were awarded as DIN EN ISO 9001:2008 Certification.

FIXED DEPOSITS:

Your Company has not accepted any deposit within the meaning of section 5 8 A of the Companies Act, 195 6 from the public and the rules made there under.

BOARD OFDIRECTORS:

It is proposed to appoint Mr. Ram Sanehi and Mr. Ayyaswami Sundram as regular Directors of the Company. Necessary Resolutions are placed in the Notice calling Annual General Meeting.

As per the provisions of the Companies Act, 1956 and in terms of the Articles of Associaion of the Company, Mrs. Nainy K. Tanna retires by rotation and being eligible offer herself for reappointment.

During the year Mrs. Sharda K. Talwar, Mr. Ram Bahadur Roka and Mr. Pankaj Sanehi resigned due to their other preoccupations. Your board places its appreciations for the services rendered by them during the tenure of directorship.

MANAGEMENTDISCUSSIONAND ANALYSIS REPORT:

An analysis of the companys performance is discussed in the Management Discussion and Analysis Report which forms part of this Annual Report.

CORPORATE GOVERNANCE:

Your Company fully subscribes to the standards set out by the Securities And Exchange Board of Indias Corporate Governance practices and has ensured compliance of the conditions of Corporate Governance stipulated in Clause 49 of the Listing Agreement with the Stock Exchange. A separate report on Corporate Governance together with Auditors Certificate on its compliance is included in this Annual Report.

DIRECTORS RESPONSIBILITY STATEMENT:

Pursuant to Section 217(2AA) of the Companies Act, 1956 the directors confirm that:

I. in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departure;

ii. appropriate policies have been selected and applied consistently and judgments and estimates wherever made are reasonable and prudent so as to give a true and fair view of the state of affairs of the company as at March 31,2010 and of the profit of the company for t hat year;

iii. proper and sufficient care has been taken 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; and

iv. the annual accounts have been prepared on a going concern basis.

CODE OF CONDUCT:

The company is committed to conduct its business in accordance with the applicable laws, rules and regulations and highest standards of business ethics. In recognition thereof, the Board of directors has implemented a Code of Conduct for adherence by the Directors and Senior Management Personnel of the Company. This will help in dealing with ethical issues and also foster a culture of accountability and integrity.

AUDITORS:

M/s. R. S. Agrawal & Associates, Chartered Accountants, auditors of the company are retiring at the ensuing Annual General Meeting. They are eligible for re-appointment and have expressed their willingness to act as auditors, if re-appointed. The Company has received a certificate from them that they are qualified under section 224 (1) of the Companies Act, 1956, for appointment as Auditors of the Company. Members are requested to consider their appointment at a remuneration to be decided by the Board of Directors for the financial year ending March 31, 2011 as set out in the Notice convening the Meeting.

AUDITORS OBSERVATIONS:

As pointed out by the Statutory Auditors, the board hereby clarifies as under:

a. The company has already appointed two independent directors on the Board during the year under review and also looking for more professional directors to appoint them as directors to compose the remuneration committee in conformity of requirement of Schedule Xin of the Companies Act, 1956.

b. Regarding the appointment of whole-time company secretary, the company is in process of appointing a whole time Company Secretary. In the mean time the company is availing services of a practicing company secretary and has obtained a certificate from him to the effect that the company is complying with the applicable provisions of the Companies Act, 1956.

c. The statutory dues including excise duty and income tax are not paid on account of disputes pending with respective authorities.

d. The company does not have internal audit system, however the company has internal check system commensurate with the size of the company and nature of its business.

Other observations of the auditors contained in their report have been adequately dealt with in the notes to the accounts given in Schedule 17 which are self-explanatory and, therefore, do not call for any further comments.

AUDIT COMMITTEE:

In accordance with the provisions of the Companies Act, 1956 and Listing Agreement the Company has constituted an Audit Committee. The Audit Committee acts in accordance with the terms of reference specified from time to time by the Board.

DEPOSITORY SERVICES:

The Companys Equity Shares have been admitted to the depository mechanism of the National Securities Depository Limited (NSDL) and also the Central Depository Services Limited (CDSL). As a result the investors have an option to hold the shares of the Company in a dematerialised form in either of the two Depositories. The Company has been allotted ISIN No. INE687C01012.

Shareholders therefore are requested to take full benefit of the same and lodge then- holdings with Depository Participants [DPs] with whom they have their Demat Accounts for getting their holdings in electronic form.

PARTICULARS REGARDING CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNING AND OUTGO:

The information pursuant to section 217 (I) (e) of the Companies Act, 1956 read with the Companies (Disclosure of particulars in the Report of Board of Directors) Rules 1988 are given as under.

Efficient use of energy in all form has been a consistent corporate trust in the Company. Better maintenance of equipments, improved operating practice and installation of most modern machinery has resulted in lot of saving in energy cost and consumption of raw materials.

A. CONSERVATION OFENERGY:

The Company is consistently doing research in the field of saving energy by implementing new cost-effective ideas. Form for disclosure of particulars with respect of Consumption of Energy is enclosed herewith

B. TECHNOLOGYABSORPTION:

a) Research & Development The Research & Development department of the company has been aduously working to provide quality and value for money to the customer in keeping with market trends. Research and Development is being carried out in the following areas;

- Making design modifications in the products so as to simplify the manufacturing process and enhance productivity.

- Developing Jigs, Fixtures and devices to increase productivity. Improvements to tool design.

- Up gradation of machines.

- Design and development of special machines required for increasing capacity.

- Development of equipment required for testing product reliability at various stages.

b) Technology absorption, adaptation and innovation. Technology for the manufacture of Instrument Cooling Fans of various sizes has been successfully absorbed.

C. FOREIGN EXCHANGE EARNED AND USED:

The particulars regarding foreign exchange earnings and expenditure appear at item nos. 28 (II), 29 and 30 of the Schedule 17to the accounts.

PARTICULARS OFEMPLOYEES:

None of the employees of the company came within the purview of the information required u/s 217 (2A) of the Companies Act, 1956 read with the Companies (particulars of Employees) Rules, 1975 as amended.

LISTING:

Shares of the company are listed at the Stock Exchanges at Mumbai, Ahmedabad, Bangalore and Delhi. The company has not paid the listing fees for Ahmedabad, Bangalore and Delhi Stock Exchanges since the company is in process of getting the equity shares delisted from these stock exchanges.

SAFETY, ENVIRONMENTAL CONTROLAND PROTECTION:

The Company has taken all the necessary steps for safety and environmental control and protection at the plant.

ACKNOWLEDGMENT:

The Directors wish to convey their appreciation to the Companys shareholders, customers, suppliers, bankers and distributors for the support they have given to the Company and the confidence, which they have reposed in its management and the employees for the commitment and dedication shown by them.

For and on behalf of the Board

REXNORD ELECTRONICS AND CONTROLS LIMITED

Kishore Chand Talwar

Chairman & Managing Director Place : Mumbai

Dated: 30st August, 2010

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