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Directors Report of Rexnord Electronics and Controls Ltd.

Mar 31, 2018

DIRECTORSâ REPORT TO THE SHAREHOLDERS

To,

The Shareholders,

It gives us immense pleasure to share with you an update on the performance of your Company for FY 2017-18 and present 30th Annual Report of the Company. It was a metamorphic year in the history of India with the introduction of the Goods and Services Tax (GST), one of the biggest tax reform since Independence and awaited since the longest of times. GST has created a single national market and will benefit both consumers as well as the industry and we have welcomed this move by the honorable Government of India. We are extremely happy to share that your Company has worked very closely with its partners along its entire supply chain to transition its operations to the new tax regime efficiently.

The implementation of GST has streamlined the process of taxation in our country with the one nation one tax motto, we have had initial disrupted demand in our industry purely because of destocking of traders in the month of June and the second quarter. Though the sales in the subsequent quarters remained stable, it will take some time for the benefits of GST to get realized.

In this challenging business environment, our strong brand connect, the launch of new products, service methods and continuous expansion of our distribution network enabled us to deliver a strong performance.

The Board of Directors would like to thank the entire team at Rexnord Electronics and Controls Ltd. for their great work and dedication throughout the year. The Board of Directors would also like to express its gratitude to you and all the stakeholders for the trust and faith that you have in us. As we move into another exciting year, we continue to seek your support. We would continue our consumer- focussed philosophy to accelerate our growth and deliver success for all our stakeholders while balancing our responsibility to society and the communities at large.

1. FINANCIAL HIGHLIGHTS:

Rs, in Lakhs except EPS)

Particulars	Standalone		Consolidated
Particulars	As at March 31, 2018	As at March 31, 2017	As at March 31, 2018
Total Revenue	5864.46	6312.95	5864.46
Profit before Interest, depreciation and amortization	725.34	723.62	724.68
Finance Cost	92.31	100.61	92.31
Profit before depreciation and amortization	633.03	623.01	632.37
Depreciation and amortization	148.99	136.55	148.99
Profit before exceptional items & tax	484.04	486.46	483.38
Exceptional items	-	-	-
Profit before tax	484.04	486.46	483.38
Tax Expense	139.90	158.78	139.90
Net Profit after tax	344.13	327.68	343.48
Other comprehensive income (net of tax)	0.01	(0.36)	0.01
Total comprehensive income	344.15	327.32	343.49
Earning per Equity Share
Basic	3.08	2.94	3.08
Diluted	3.08	2.94	3.08

The Total Revenue for the year ended March 31, 2017 and period ended 30th June 2017 include excise duty on goods sold, which is discontinued w.e.f. July 1, 2017 upon implementation of Goods and Service Tax (GST) in India. In the view of the aforesaid restructuring of indirect tax, total revenue for the year ended is not comparable with the previous year. The following additional information is being provided to facilitate such understanding.

Particulars	Standalone		Consolidated
	As at March 31, 2018	As at March 31, 2017	As at March 31, 2018
Total Revenue	5864.46	6312.95	5864.46
Less: Excise duty	150.56	573.30	150.56
Total Revenue (net of tax collected)	5713.90	5739.65	5713.90

3. COMPANY OVERVIEW:

The Company is a well-established brand in the Refrigeration industry and holds the leadership position in the Axial Fan and Shaded Pole Motor segment. The Company recorded steady performance in FY 2017- 18 despite some challenges faced due to demonetization effect, GST, fall in demand, and adjustments as per Ind AS. Though there was some drop in sales, margin growth was better led by effective procurement and increased sales realization.

Leveraging its brand name, mass appeal and broad understanding of the consumer markets, it has also entered into opening up a Branch office in Singapore to exploit opportunities in the Asian Market.

To achieve higher economies of scale, improve synergies and expand its reach, the Company also plans to increase its revenue by exploring Agricultural segment. With the ongoing efforts of the Government to improve power supply, help increase agricultural produce demand has led to the company to explore this segment and thus has opened up a subsidiary company Rexford Enterprises Private Limited to create a strong foothold.

4. FINANCIAL REVIEW:

Your Company achieved a Total Revenue (net of taxes collected) of Rs, 5713.90 lakhs as against Rs, 5739.65 lakhs in the previous Year. The total expenditure during the Year under review was Rs, 5229.86 lakhs as against Rs, 5253.19 lakhs in the previous Year. The Profit before tax was Rs, 484.04 lakhs as against Rs, 486.46 lakhs in the previous and the Net Profit after tax was Rs, 344.14 lakhs as against Rs, 327.68 lakhs in the previous Year.

5. FUTURE OUTLOOK:

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.

6. CHANGE IN THE NATURE OF BUSINESS:

i) Change in Object Clause

The Board of Directors at their meeting held on January 23, 2018 has decided to diversify into the business of Trading Activities and sought approval of members vide postal ballot for amending the main objects of the Memorandum of Association of the Company. The details of Voting Results are provided in the Corporate Governance Report, which forms part of the Annual Report.

ii) Branch Office

During the year, the Company has opened its Branch office in Singapore, the details of the Branch at Singapore are provided in the Corporate Governance Report, which forms part of the Annual Report.

7. DIVIDEND:

To consolidate the financial position of the Company, the Board does not propose any dividend for the year ended March 31, 2018.

8. TRANSFER TO RESERVES:

No amount is proposed to be transferred to Reserves out of the profits earned during the Financial Year 2017-2018.

9. DEPOSITS:

The Company has not accepted deposits from the public falling within the ambit of Section 73 of the Companies Act, 2013 and the Rules framed thereunder.

10. SHARE CAPITAL OF THE COMPANY:

The Paid up Equity Share Capital, as at 31st March, 2018 was Rs,11,15,91,000/- divided into 1,11,60,000 Equity shares, having face value of Rs, 10/- each fully paid up. During the year under review, the Company has not issued any shares with differential voting rights nor granted any stock options or sweat equity.

11. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS:

During the year under review, your Company has not given loan to any bodies corporates or any other persons or has not provided any corporate guarantee or security under section 186 of the Companies Act, 2013.

As regards investments, during the year under review, your Company incorporated a Wholly Owned Subsidiary viz. âRexnord Enterprise Private Limitedâ and subscribed its initial share capital of Rs, 10.00 lakhs. Further, during the year under review, your Company has made investment in certain mutual funds.

Particulars of investments and disclosure required under Section 186(4) of the Companies Act, 2013 read with Companies (meeting of Board and its Powers) Rules, 2014 are provided in the note 48 to the standalone financial statements.

12. BOARD OF DIRECTORS AND KEY MANAGERIAL PERSONNEL:

a) DIRECTORS

i) Composition:

The Board of Directors includes the Executive and Independent Directors so as to ensure proper governance and management. The Board consists of Five (5) Directors comprising of Two (2) Executive Director including One (1) Woman Director and Three (3) Independent Directors as on March 31, 2018.

ii) Re-appointments:

Based on performance evaluation and recommendations of Nomination and Remuneration Committee and in terms of the provisions of Sections 149 and 152 read with Schedule IV and any other applicable provisions of the Act and the Listing Regulations, the Board recommends re-appointment of Mr. Ayyaswami Sundaram as Independent Director for a second term of five consecutive years with effect from April 1, 2019 to March 31, 2024, for the approval of Members.

In accordance with the provisions of Section 152 (6) of the Companies Act, 2013 and the Articles of Association of the Company, Mrs. Nainy Kunal Tanna, Director of the Company, retires by rotation, and being eligible, has offered herself for reappointment.

iii) Resignation:

Mr. Ram Senhi and Mr. Ganapathy Dharmarajan resigned as Independent Directors from April 1, 2018 and May 7, 2018 respectively. The Board of Directors has placed on record its warm appreciation for the rich contribution made by them and the guidance provided by them during their tenure as Independent Directors of the Company.

iv) Inductions / Appointments:

The Board has appointed Mr. Krishnamoorthy Krishnan and Mr. Sriram Shrinivasan as Additional Directors on the Board of the Company in Independent capacity w.e.f. May 16, 2018. The Board proposes to appoint Mr. Krishnamoorthy Krishnan and Mr. Sriram Shrinivasan as Regular Independent Directors 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 subject to approval of Members.

v) Key Managerial Personnel:

The Company is having the following persons as the Key Managerial Personnel.

Sr.No.	Name of Personnel	Designation
1.	Mr. Kishore Chand Talwar	Chairman & Managing Director
2.	Mr. Kundan Talwar	Chief Financial Officer
3.	Mr. Krunal Wala	Company Secretary & Compliance Officer

13. DECLARATION BY INDEPENDENT DIRECTORS:

Pursuant to the provisions of Section 149(7) of the Companies Act, 2013, Independent Directors have submitted declaration that each of them meets the criteria of independence as provided in Section 149(6) of the Companies Act, 2013 and there has been no change in the circumstances which may affect their status as independent director during the year.

14. SUBSIDIARIES & ASSOCIATE COMPANIES:

During the reporting period, the Company has incorporated One (1) Wholly Owned Subsidiary Company i.e. Rexnord Enterprise Private Limited within the meaning of Section 2(87) of the Companies Act, 2013.

The Subsidiary Company is carrying on the business of Agro & Trading Activities and the Company holds 100% of the Equity Share Capital in Rexnord Enterprise Private Limited as on March 31, 2018.

Pursuant to provisions of Section 129(3) of the Act read with rule 5 of the Companies (Accounts) Rules, 2014, a statement containing salient features of the financial statements of the Subsidiary Company in Form AOC-1 is appended as Annexure âAâ and forms part of the Annual Report.

The Company does not have joint venture or associate companies within the meaning of Section 2(6) of the Companies Act, 2013.

15. CONSOLIDTAED FINANCIAL STATEMENTS :

The Consolidated Financial Statements of the Company are prepared in accordance with Indian Accounting Standards notified under the Companies (Indian Accounting Standards) Rules, 2015. The Audited Consolidated Financial Statements of the Company for the year ended 31st March 2018 along with Auditorsâ Report forms part of this Annual Report.

In accordance with third proviso of Section 136(1) of the Companies Act, 2013, the Audited Annual Report of the Company, containing therein its standalone and the consolidated financial statements has been placed on the website of the Company i.e www.rexnordindia.com

Further, as per fourth proviso of the said section, Audited Annual Accounts of each of the subsidiary companies have also been placed on the website of the Company, www.rexnordindia.com.Shareholders interested in obtaining a copy of the Audited Annual Accounts of the subsidiary company may write to the Company at the Companyâs registered office.

16. EXTRACT OF ANNUAL RETURN:

The extract of the Annual Return as provided under sub-section (3) of Section 92 in the Form MGT 9 for the financial year under review is appended as Annexure âBâ and forms part of this report.

17. NUMBER OF MEETING:

a) Board of Directors

The Board of Directors met Six (6) times in the financial year. The details of the Board Meetings and the attendance of the Directors are provided in the Corporate Governance Report, which forms part of the Annual Report.

b) Audit Committee

During the year, Four (4) Audit Committee Meetings were convened and held. The Audit Committee was reconstituted at the Board Meeting held on May 16, 2018. The details pertaining to composition of Audit Committee and the attendance of the Audit Committee members are provided in the Corporate Governance Report, which forms part of the Annual Report.

c) Nomination & Remuneration Committee

During the year, Three (3) Nomination and Remuneration Committee Meetings were convened and held. The Nomination and Remuneration Committee was reconstituted at the Board Meeting held on May 16, 2018. The details pertaining to composition of Nomination and Remuneration Committee and the attendance of the Nomination and Remuneration Committee members are provided in the Corporate Governance Report, which forms part of the Annual Report.

d) Stakeholders Relationship Committee

During the year, Four (4) Stakeholders Relationship Committee Meetings were convened and held. The Stakeholders Relationship Committee was reconstituted at the Board Meeting held on May 16, 2018. The details pertaining to composition of Stakeholders Relationship Committee and the attendance of the Stakeholders Relationship Committee members are provided in the Corporate Governance Report, which forms part of the Annual Report.

18. DIRECTORS RESPONSIBILITY STATEMENT:

Pursuant to the provision of 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.

19. ANNUAL PERFORMANCE EVALUATION:

The Board of Directors carried out an annual evaluation of its own performance, committees and individual directors pursuant to the provisions of the Act and as prescribed by SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

The performance of the Board was evaluated after seeking inputs from all the directors on the basis of the criteria as under:

- Board composition and structure

- Effectiveness of Board processes, information and functioning

The performance of the committees was evaluated by the Board after seeking inputs from the committee members on the basis of the criteria such as:

- Composition of committees

- Effectiveness of committee meetings

- Achievements during the year based on their duties

- Reviewing the terms of reference of the committees

The Board and the Nomination and Remuneration Committee reviewed the performance of the individual directors on the basis of the criteria such as;

- Contribution of the director to the Boardâs strategic thinking

- Leadership and commitment of the director

- Participation in Board and Committee meetings

- Communication and interpersonal skills of the director

- Ethical issues and dilemmas faced by the director

- Relationship of the director with the senior management.

In addition, the Chairman was also evaluated on the key aspects of his role.

Performance evaluation of Independent directors was done by the entire Board on the basis of their role, accountability, objectivity, leadership qualities and personal attributes. The Directors being evaluated did not participate in the evaluation process.

20. POLICY ON DIRECTORSâ APPOINTMENT, REMUNERATION AND OTHER DETAILS:

The Companyâs policy on Directorsâ appointment, remuneration and other matters provided in Section 178(3) of the Companies Act, 2013 has been disclosed in the Corporate Governance report, which forms part of the Annual Report.

21. RELATED PARTY TRANSACTIONS:

All related party transactions that were entered into during the financial year were on armâs length basis and were in the ordinary course of the business and in compliance with the provisions of Section 188 of the Companies Act, 2013 and Listing Regulations. Further, disclosure in Form AOC - 2 is not given as the Company has not entered into any material significant related party transactions with Promoters, Key Managerial Personnel or other designated persons as per the materiality defined by the Board.

All Related Party Transactions are placed on a quarterly basis before the Audit Committee for which Omnibus approval was obtained from the Committee and also before the Board for approval.

The Policy for determining the materiality of related party transactions and dealing with related party transactions as approved by the Board is uploaded on the Companyâs website i.e. www.rexnordindia.com

22. AUDITORS:

a) Statutory Auditor

Members of the Company at the Annual General Meeting (âAGMâ) held on September 1, 2017, approved the appointment of M/s. Rakesh Soni & Co., Chartered Accountants (Firm Registration No. 114625W), as the statutory auditors of the Company for a period of five years commencing from the conclusion of the 29th Annual General Meeting held on September 1, 2017 until the conclusion of 34th AGM of the Company to be held in the year 2022.

The first proviso to section 139(1) of the Companies Act, 2013 has been omitted vide section 40 of the Companies (Amendment) Act,

2017 notified on 7th May, 2018. Therefore, it is not mandatory for the Company to place the matter relating to appointment of statutory auditor for ratification by members at every Annual General Meeting. Hence the Company has not included the resolution for ratification of appointment of statutory auditors in the Notice of AGM. However M/s. Rakesh Soni & Co. Chartered Accountants has confirmed that they are eligible to continue as Statutory Auditors of the Company to audit the books of accounts of the Company for the Financial Year ending March 31, 2019 and accordingly M/s. Rakesh Soni & Co.,

Chartered Accountants will continue to be the Statutory Auditors of the Company for Financial Year ending March 31, 2019.

The Report given by M/s. Rakesh Soni & Co., Chartered Accountants, on the financial statements of the Company for the financial year 2017-2018 is a part of the Annual Report. There has been no qualification, reservation or adverse remark or disclaimer in their Report. During the year under review, the Auditors had not reported any matter under Section 143 (12) of the Act, therefore no detail is required to be disclosed under Section 134 (3)(ca) of the Act.

b) Internal Auditor

Pursuant to the provisions of Section 138 of the Companies Act, 2013 read with Companies (Accounts) Rules, 2014, the Board on recommendation of the Audit Committee has appointed M/s. R. J. Rathi & Co., as internal auditors of the Company.

c) Secretarial Auditor

Pursuant to the provisions of Section 204 of the Companies Act, 2013 read with Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed M/s. GMJ & Associates, a firm of Company Secretaries in Practice to undertake the Secretarial Audit of the Company. The Secretarial Audit Report is appended as Annexure âCâ and forms part of this report.

There has been no qualification, reservation or adverse remark or disclaimer in their Report. During the year under review, the Secretarial Auditors had not reported any matter under Section 143

(12) of the Act, therefore no detail is required to be disclosed under Section 134 (3) (ca) of the Act.

23. COST AUDITOR:

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 2017-2018 and 2018-2019.

24. 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 three immediately preceding Financial Years. Accordingly, the provisions of CSR policy were not applicable for the Financial Year 2017-18.

25. 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 Companyâs website www. rexnordindia.com

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

26. PREVENTION OF INSIDER TRADING:

The Company has adopted a Code of Conduct for Prevention of Insider Trading with a view to regulate trading in securities by the Directors and designated employees of the Company. The Code requires pre-clearance for dealing in the Companyâs shares and prohibits the purchase or sale of Company shares by the Directors and the designated employees while in possession of unpublished price sensitive information in relation to the Company and during the period when the Trading Window is closed. The Board is responsible for implementation of the Code.

27. PARTICULARS OF EMPLOYEES:

The information required pursuant to Section 197 read with rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is appended as Annexure âDâ & âEâ forms part of this Report.

28. 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 Chairperson 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.

29. INTERNAL FINANCIAL CONTROLS OVER FINANCIAL REPORTING:

The Company has documented its internal financial controls considering the essential components of various critical processes, physical and operational. This includes its design, implementation and maintenance, along with periodical internal review of operational effectiveness and sustenance, which are commensurate with the nature of its business and the size and complexity of its operations.

This ensures orderly and efficient conduct of its business, including adherence to the Companyâs policies, safeguarding of its assets, prevention of errors, accuracy and completeness of the accounting records and the timely preparation of reliable financial information. The internal financial controls with reference to the financial statements were adequate and operating effectively.

30. 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 Companyâs 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.

31. VIGIL MECHANISM / WHISTLE BLOWER POLICY:

The Company has adopted a Whistle Blower Policy to provide a formal mechanism to the Directors and Employees to report their concerns about unethical behavior, actual or suspected fraud or violation of the Companyâs Code of Conduct or Ethics Policy. The policy provides for adequate safeguards against victimization of employees who avail of the mechanism and also provides for direct access to the Chairman of the Audit Committee. It is affirmed that no personnel of the Company has been denied access to the Audit Committee. The Whistle Blower Policy has been posted on the website of the Company (www.rexnordindia.com)

32. DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORK PLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013:

The Company has in place an Anti-Sexual Harassment Policy in line with the requirements of The Sexual Harassment of Women at Work Place (Prevention, Prohibition and Redressal) Act, 2013. An Internal Complaints Committee has been set up to redress complaints received regarding sexual harassment. The Company affirms that during the year under review, no complaints were received by the Committee for redressal.

33. 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:

A. CONSERVATION OF ENERGY:

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

(i) 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:

- Due consideration has been given to energy consumption while procuring equipmentâs.

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

- 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.

(ii) 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.

(iii) The Capital invested on energy equipmentâs: 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.

- 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 during the Financial Year 2017-18 are as under :

Rs, in lakhs)

Particulars	2017-18	2016-17
Foreign Exchange Earning	841.77	1128.17
Foreign Exchange Outgo	2007.70	1778.89

34. 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.

35. INDIAN ACCOUNTING STANDARDS:

Pursuant to the notification, issued by the Ministry of Corporate Affairs dated February 16, 2015 relating to the Companies (Indian Accounting Standard) Rules, 2015, the Company and its subsidiaries has adopted âIND ASâ with effect from April 01, 2017, with the comparatives for the periods ending March 31, 2017.

36. GOODS AND SERVICE TAX (GST):

During the Financial Year, the Company has migrated to GST and has accelerate economic growth in the long run by simplifying the tax structure, enhancing tax compliances and facilitating the ease of doing business in a unified common market.

37. DEPOSITORY SERVICES:

The Companyâs 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.

Shareholdersâ 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.

38. MATERIAL CHANGES AND COMMITMENT IF ANY AFFECTING THE FINANCIAL POSITION OF THE COMPANY OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR TO WHICH THE FINANCIAL STATEMENTS RELATE AND THE DATE OF THE REPORT:

No material changes and commitments affecting the financial position of the Company occurred between the end of the financial year to which this financial statement relate and on the date of this report.

39. THE DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANYâS OPERATIONS IN FUTURE:

There are no significant or material orders which were passed by the Regulators or Courts or Tribunals which impact the going concern status and the Companyâs operations in future.

40. CORPORATE GOVERNANCE & MANAGEMENT DISCUSSION AND ANALYSIS REPORT:

Pursuant to Regulation 15(2) of SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015, compliance with the corporate governance provisions is applicable to your Company during the financial year 2017-18.

The Corporate Governance and Management Discussion & Analysis Report, which form an integral part of this Report, are set out as a separate Annexures âFâ & âGâ, together with the Certificate from the Auditors of the Company regarding compliance with the requirements of Corporate Governance as stipulated in Listing Regulations.

41. BUSINESS RESPONSIBILITY REPORTING:

The Business Responsibility Reporting as required by Regulation 34(2) of the SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015, is not applicable to the Company for the financial year ending March 31, 2018.

42. FINANCIAL YEAR:

The Company and its subsidiary company, in India which have been following the April to March as the Financial Year.

43. COMPLIANCE WITH SECRETARIAL STANDARDS ON BOARD AND ANNUAL GENERAL MEETINGS:

The Company has complied with secretarial standards issued by the Institute of Company Secretaries of India on Board Meetings and Annual General Meetings.

44. ISO CERTIFICATION:

The Companyâs products are awarded as ISO 9001:2008 Certification.

45. ACKNOWLEDGMENT:

The Directors wish to convey their appreciation to the Companyâs 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

Chairman & Managing Director

(DIN: 00351751)

Registered Office:

92-D Govt. Ind. Estate,

Charkop, Kandivli (W),

Mumbai- 400 067

Dated: May 30, 2018

Mar 31, 2016

The Directors have great pleasure in presenting the 28^th 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 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. 4^th 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 Boardâs 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 25^th 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:

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 Companyâs 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 âAâ 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 armâs 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 26^th Annual General Meeting held on August 30, 2014 to hold office until the conclusion of the 29^th 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 28^th Annual General Meeting to 29^th 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 âBâ 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. AUDITORSâ 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:

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

29. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY:

The Company has in place adequate policies and procedures for ensuring the orderly and efficient conduct of its business, including adherence to the Companyâs 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:

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

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

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 âCâ 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 Companyâs 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 âDâ & âEâ.

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.

38. ACKNOWLEDGMENT:

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 Â 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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