Notes to Accounts of Rexnord Electronics and Controls Ltd.

Mar 31, 2024

b. The company has issued only one class of equity shares having a par value of '' 10/- per share. Each shareholder is entitled to one vote per share. The dividend proposed by the board of directors is subiect to the approval of shareholders, except in case of interim dividend. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the company, after distribution of preferential amounts, in proportion of their shareholding.

a) Secured Loans:

(I) Terms of repayment of vehicle loan from HDFC Bank Ltd.

Vehicle Loan from HDFC Bank was sanctioned on 25th August 2021 at an interest rate of 7.10% p.a. repayable in 60 monthly installments of '' 1.38 lakhs commencing from 5th September 2021. As on reporting date, It carries an interest rate of 7.10% p.a, and repayable in 29 monthly installment of '' 1.38 lakhs each from the reporting date.

(II) Nature of security:

Vehicle loan from HDFC Bank is secured by hypothecation of specific vehicle acquired from the loan

b) The Company has not defaulted in repayment of loans and other borrowings and payment of interest thereon.

c) The Company has utilized the borrowings from banks for the specific purpose for which it was taken.

a) Secured Loans:

I Nature of security:

(i) Working capital loans including the non fund based facilities from HDFC Bank Limited are :

(a) primarily secured by hypothecation of stocks and book debts of the company ;

(b) further collaterally secured by way of equitable mortgage of land and building at Plot No. 92-D Government Industrial Estate, Charkop, Kandivali (W), Mumbai 400067;

(c) also personally guaranteed by Chairman & Managing Director, Wholetime Director and one relative of the Chairman & Managing Director of the Company i.e Smt. Sharda K. Talwar.

(ii) Overdraft against the fixed deposits are secured by lien on the fixed deposits.

II The Compnay has borrowed money from bank on the basis of security of current assets and the quarterly statements of current aseets filed by the Company with the Bank are materially in agreement with the books of accounts.

b) The Company has not defaulted in repayment of loans and other borrowings and payment of interest thereon.

c) The Company has utilized the borrowings from banks for the specific purpose for which it was taken.

			(Amount	in '' Lakhs)
Particulars		As at 31.03.2024	As at 31.03.2023
NOTE 39: CONTINGENT LIABILITIES AND COMMITMENTS (TO THE EXTENT NOT PROVIDED FOR) (i) Contingent liabilities:
(a)	Letter of credit issued by the bankers of the company	141.95		123.64
(b)	Bonds/Undertakings given under duty exemption under advance licence scheme pending fulfilment of export obligation.	1200.00		1470.00
(c)	Bonds/Undertakings given under duty exemption under EPCG licence scheme pending fulfilment of export obligation.	17.00		21.00
(d)	The capital advances include '' 110.00 lakhs paid as earnest money deposit towards participation in the E-Auction for the sale of Land & Building situated at Plot No A-7, Aral Industrial Area, Village - Mulgaon, MIDC Road No.5, Andheri (East) Mumbai 400093 (“Premises”) where the Company declared successful bidder for the said E-Auction at a full consideration of '' 1100/- lakhs for the said premises. The e-auction was carried out by Mr. Brijendra Kumar Mishra, the Liquidator of Shrenuj & Co. Ltd. Certain dispute arose on account of alleged tenancy rights claimed by the Occupant of the premises which has been now been decided in favour of the Liquidator by the Hon''ble NCLAT, in which the Company was also the Respondent No. 2. The Hon’ble NCLT in consequent to the order of Hon’ble NCALT has passed an order in favor of the Liquidator of Shrenuj & Co. Ltd. for getting handover of the possession. As per the information of the Company the Liquidator has received the possession from the Occupant. The Company has made an application with the Hon’ble NCLT through IA No. 1838/2023 for waiver of interest due to delay in handover of possession and therefore for direction upon Liquidator of Shrenuj & Co. Ltd. to hand over the vacant and peaceful possession upon payment of balance consideration of '' 990.00 lacs without charging the interest for the period from 13th April 2022 till the date of handing over the possession. The matter is yet to be decided by the Hon''ble NCLT.
(ii) Contingent commitments
(a)	Estimated amount of contracts remaining to be executed on capital account and not provided for (net of advances).	999.80		990.00
			(Amount	in '' Lakhs)
		2023-24		2022-23
NOTE 40: PAYMENT TO AUDITORS*
Statutory audit fees		5.25		5.00
Tax audit fees		4.50		4.00
Certification work		1.23		1.13
Out of pocket expenses		0.21		0.22
Total		11.19		10.35
*excluding GST wherever input tax credit taken

NOTE 41: EMPLOYEE BENEFITS EXPENSE

The disclosures required under Indian Accounting Standard 19 “Employee Benefits” are given below:

(a) Defined contribution plan

The Company makes contributions, determined as a specified percentage of employee salaries, in respect of qualifying employees towards Provident Fund, which is a defined contribution plan. The Company has no obligations other than to make the specified contributions. The contributions are charged to the Statement of Profit and Loss as they accrue.

(b) Defined benefit plan:

Gratuity :

The Company provides for gratuity for employees as per the Payment of Gratuity Act, 1972. Employees who are in continuous service for a period of 5 years are eligible to gratuity at the rate of fifteen days wages for every completed year of service or part thereof in excess of six months, based on the rate of wages last drawn by the employee.

VII) The Company''s philosophy is to not to externally fund these liabilities but instead create an accounting provisions in its books of accounts and pay the gratuity to its employees directly from its own resources as and when the employee leaves the Company. The expected contribution payable to the plan next year is therefore Nil. If the Company opts for externally fund these liabilities in the next year, the best estimate contribution for the Company during the next year would be '' 24.03 Lakhs. (Previous year'' 18.55 Lakhs)

NOTE 42: CAPITAL MANAGEMENT

The Company’s policy is to maintain a strong capital base so as to maintain creditors and market confidence and to sustain future development of the business. Management monitors the return on capital as well as the level of dividends to ordinary shareholders. The board of directors seeks to maintain a balance between the higher returns that might be possible with higher levels of borrowings and the advantages and security afforded by a sound capital position.

The Company monitors capital using a ratio of ‘net debt’ to ‘equity’. For this purpose, net debt is defined as total borrowings less cash & cash equivalents, bank deposit (including earmarked balances) and current investments.

NOTE 43: FINANCIAL INSTRUMENTS AND RISK REVIEW A) Financial Instruments

Fair value measurement hierarchy

The fair value of financial instruments as below have been classified into three categories depending on the inputs used in the valuation technique. The hierarchy gives the highest priority to quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and lowest priority to unobservable inputs (Level 3 measurements).

The categories used are as follows

Level 1: Quoted prices (unadjusted) in active markets: This level of hierarchy includes financial assets or liabilities that are measured by reference to quoted prices (unadjusted) in active markets for identical assets or liabilities. This category consists of mutual fund and equity investments.

Level 2: Valuation techniques with observable inputs: This level of hierarchy includes financial assets and liabilities, measured using inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e., as prices) or indirectly (i.e., derived from prices). This category includes the derivatives financial assets designated as hedges.

Level 3: Valuation techniques with significant unobservable inputs: This level of hierarchy includes financial assets and liabilities measured using inputs that are not based on observable market data (unobservable inputs). Fair values are determined in whole or in part, using a valuation model based on assumptions that are neither supported by prices from observable current market transactions in the same instrument nor are they based on available market data.

There have been no financial assets and financial liabilities which has been fair valued under level 3 category therefore no details for the same given in the table above.

Valuation

The fair values of the financial assets and liabilities are defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Methods and assumptions used to estimate the fair values are consistent.

Financial assets and liabilities measured at fair value as at Balance Sheet date:

(i) Current financial assets and liabilities are stated at carrying value which is approximately equal to their fair value.

(ii) The fair values of investments in mutual fund units is based on the net asset value (‘NAV’) as stated by the issuers of these mutual fund units in the published statements as at Balance Sheet date.

(iii) Management uses its best judgement in estimating the fair value of its financial instruments. However, there are inherent limitations in any estimation technique. Therefore, for substantially all financial instruments, the fair value estimates presented above are not necessarily indicative of the amounts that the Company could have realised or paid in sale transactions as of respective dates. As such, fair value of financial instruments subsequent to the reporting dates may be different from the amounts reported at each reporting date.

B) Financial Risk Management Framework

The Company’s business activities are exposed to a variety of financial risks, namely credit risk, liquidity risk and market risk (currency risk and interest rate risk). The Company''s management and the Board of Directors has the overall responsibility for establishing and governing the Company''s risk management framework. The Board of Directors which is responsible for developing and monitoring the Company''s risk management policies. The Company''s risk management policies are established to identify and analyse the risks faced by the Company, to set and monitor appropriate risk limits and controls, periodically review the changes in market conditions and reflect the changes in the policy accordingly. The key risks and mitigating actions are also placed before the Audit Committee and Board of Directors of the Company.

i) Credit Risk

Credit risk is the risk of financial loss to the Company if a customer or counter-party fails to meet its contractual obligations. Financial instruments that are subject to credit risk principally consist of trade receivables, investments, loans, cash and cash equivalents, other balances with banks and other financial assets. None of the financial instruments of the Company result in material credit risk.

Credit risk with respect to trade receivables are limited as the Company has a policy of dealing only with credit worthy customers. All trade receivables are reviewed and assessed for default on a quarterly basis. Our historical experience of collecting receivables is that credit risk is very low. Hence, trade receivables are considered to be a single class of financial assets.

Credit risk on cash and cash equivalents, other bank balances with bank is limited as the Company generally invest in deposits with banks. Investments primarily include investment in liquid mutual fund units. The Company reviews credit worthiness of the counter parties to whom security deposits and loans given. The managements believes that there is no credit risk lies with the security deposits given and loans to employees.

The Company’s maximum exposure to credit risk as at 31st March, 2024 and 31st March, 2023 is the carrying value of each class of financial assets.

ii) Liquidity risk

Liquidity risk refers to the risk that the Company cannot meet its financial obligations. The objective of liquidity risk management is to maintain sufficient liquidity and ensure that funds are available for use as per requirements.The Company''s approach in managing liquidity is to ensure that it will have sufficient funds to meet its liabilities when due without incurring unacceptable losses. In doing this, management considers both normal and stressed conditions.The Company maintained a cautious liquidity strategy, with a positive cash balance throughout the year ended 31st March, 2024 and 31st March, 2023. Cash flow from operating activities provides the funds to service the financial liabilities on a day-to-day basis. The Company has obtained fund and non-fund based working capital lines from banks. The Company invests its surplus funds in bank fixed deposit and in mutual funds, which carry no or low market risk.

iii) Market Risk

Market risk is the risk that the changes in market prices such as foreign exchange rates, interest rates and equity prices will affect the Company’s income or the value of its holdings of financial instruments. Market risk is attributable to all market risk sensitive financial instruments including foreign currency receivables and payables and long-term debt. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimising the return.

a) Currency Risk

The Company is subject to the risk that changes in foreign currency values impacting the Company''s exports revenue and imports of raw material and property, plant and equipment. The risk also includes highly probable foreign currency cash flows.The objective of the cash flow hedges is to minimise the volatility of the rupee cash flows of highly probable forecast transaction. It hedges its foreign exchange risk using foreign exchange forward contracts and currency options wherever considered. As at 31st March, 2024 and 31st March, 2023, the net unhedged exposure to the Company on holding assets (trade receivables, advance to suppliers and capital advances) and liabilities (trade payables, advance from customers, borrowing and accrued interest) other than in their functional currency is as under.

b) Interest Rate Risk

Interest rate risk is measured by using the cash flow sensitivity for changes in variable interest rates. Any movement in the reference rates could have an impact on the Company’s cash flows as well as costs. The Company is subject to variable interest rates on some of its interest bearing liabilities. The Company''s interest rate exposure is mainly related to borrowing obligations.

NOTE 44: SEGMENT REPORTING

The Company is predominantly engaged in the business of manufacturing and selling of Instrument cooling fans/ motors. The company is presenting its Consolidated financial statements which is form parts of this report. In terms of para 4 of Ind AS 108 “Segment Reporting “ no disclosures related to segments are required in Standalone financial statements.

* present value of lease payments for the lease period on addition to lease t the remaining period of lease on modifications of lease terms

** Post employment benefits do not include the gratuity as the partywise break is not available

IV) Terms and conditions of transactions with related parties:

Outstanding balances at the year-end are unsecured and settlement occurs in cash.

NOTE 46: LEASES

Disclosure as per requirement of Ind AS 116

During the year, the Company entered into a contract which contains a lease. In terms of requirement of Ind AS 116, the lease liability has been measured at the present value of the lease payments for the period of contract, discounted using the incremental borrowing rate of the Company, with an equivalent amount for the right-of-use asset. Further the Company had, during the previous year terminated the contract containing the lease for land and accordingly the related balances of ROU asset and lease liabilities have been reduced to Nil.

b) As a lessor

Operating Lease:

Cancellable leases

The Company had given part of its premise under operating lease or on leave and licence basis during the previous year. The agreement for the same is not noncancellable for a period of less than 11 months and is renewable at mutual consent on mutually agreeable terms. The company has taken refundable interest free security deposits in accordance with the agreed terms. The rent received '' Nil (Previous year '' 10.80 lakhs) in accordance with the agreement is credited to the statement of profit and loss for the year.

NOTE 47: DISCLOSURE UNDER MICRO, SMALL AND MEDIUM ENTERPRISES DEVELOPMENT ACT, 2006

Based on the information available, there are certain vendors who have confirmed that they are registered under the Micro, Small and Medium Enterprises Development Act, 2006 as micro and small enterprises. Disclosures as required by section 22 of ‘The Micro, Small and Medium Enterprises Development Act, 2006, are given below:

NOTE 48: CORPORATE SOCIAL RESPONSIBILITY

As per provisions of section 135 of the Companies Act, 2013, the Company has to incur at least 2% of average net profits of the preceeding three financial years towards Corporate Social Responsibility (CSR). Accordingly, a CSR committee has been formed for carrying out CSR activities as per the Schedule VII of the Companies Act, 2013. Details of the CSR expenditure are as under:

NOTE 49: EXCEPTIONAL ITEMS INCLDE:

a) the loss of '' 232.15 lakhs during the previous year on compensation received from the lessor for the structure/factory building at the leased land at Survey No. 62, 74, 75 & 20 Village Devdal, Kaman, Taluka - Vasai Dist - Palghar (MS) on termination of lease arrangement of the above said land with the lessor Mr. Kundan K. Talwar, a related party.

b) the provision made during previous year for'' 6.25 lakhs for impairment in value of investment in debenture of Reliance Capital Limited.

NOTE 50: CODE ON SOCIAL SECURITY

The Code on Social Security, 2020 (‘Code’) relating to employee benefits during employment and post- employment, received Presidential assent in September 2020. The Code has been published in the Gazette of India. However, the date on which the Code will come into effect has not been notified. The Company will assess the impact of the Code when it comes into effect and will record any related impact after the Code becomes effective.

NOTE 52 :

The Company, on 23 May 2023, allotted 2100000 Share Warrants at a price of '' 109.00 per Warrant carrying an entitlement to subscribe to an equivalent number of equity shares of face value of '' 10/- each within 18 months from the date of allotment of warrants to promoter/promoter group and non promoter in accordance of Regulations for Preferential Issue contained in Chapter V of the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2018 as amended and received 25% of issue price as warrant allotment money aggregating to '' 572.25 lakhs. The Company had utilized this proceeds for long term working capital requirements in accordance with the object of the issue.

NOTE 54 :

Additional regulatory information required by Schedule III of the Companies Act 2013:

(i) Investment property: The Company does not have any investment property, therefore the disclosure of fair value of investment property based on the valuation by a Registered Valuer is not applicable to the Company.

(ii) Valuation of PP&E and intangible assets : The Company has not revalued its property, plant and equipment (including right-of-use assets) or intangible assets or both during the current or previous year.

(iii) Loans and Advances in the nature of Loans to Promoters, Directors, KMPs and the related parties: The Company has not granted loans and advances in the nature of loans to Promoters, Directors, KMPs and the related parties either severally or jointly with any other person which is repayable on demand or without specifying any terms or period of repayment.

(iv) Details of Benami property: No proceedings have been initiated or are pending against the Company for holding any Benami property under the Prohibition of Benami Property Transactions Act, 1988 and the rules made thereunder.

(v) Wilful Defaulter: The Company has not been declared wilful defaulter by any bank or financial institution or Government and any GovernmentAuthority.

(vi) Relationship with Struck off Companies: Details of struck off companies with whom the Company has transaction during the year or outstanding balance as on Balance Sheet date:

(vii) Registration of Charges or Satisfaction with Registrar of Companies: The Company does not have any charges or satisfaction which is yet to be registered with ROC beyond the statutory period.

(viii) Compliance with number of layers of companies: The Company has complied with the number of layers prescribed under the Companies Act, 2013.

(ix) Compliance with approved scheme(s) of arrangements: The Company has not entered into any scheme of arrangement which has an accounting impact on

current or previous financial year.

(x) Utilisation of borrowed funds and share premium:

(a) The Company has not advanced or loaned or invested funds (either from borrowed funds or share premium or any other sources or kind of funds) to any other person(s) or entity(ies), including foreign entities (Intermediaries) with the understanding, whether recorded in writing or otherwise, that the Intermediary shall:

a. directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the company (Ultimate Beneficiaries), or

b. provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries

(b) The Company has not received any fund from any person(s) or entity(ies), including foreign entities (Funding Party) with the understanding, whether recorded in writing or otherwise, that the Company shall:

a. directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (Ultimate Beneficiaries), or

b. provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries.

(xi) Undisclosed income: There is no income surrendered or disclosed as income during the current or previous year in the tax assessments under the Income Tax Act, 1961, that has not been recorded in the books of account.

(xii) Details of Crypto Currency or Virtual Currency: The Company has not traded or invested in any crypto currency or virtual currency during the current or previous year.

NOTE 55 : AUDIT TRAIL

As per the requirements of Rule 3(1) of the Companies (Accounts) Rules 2014, the Company uses only such accounting software (SAP Business one ERP) for maintaining its books of account that has a feature of, recording the audit trail of each and every transaction, creating an edit log of each change made in the books of account along with the date when such changes were made and who made those changes within such accounting software. This feature of recording audit trail has operated throughout the year and was not tampered with during the year. The said software does not have facility of creating edit log for direct data changes at database level, however the Company has established and maintained an internal control framework over its financial reporting in this regard and based on its assessment, has concluded that the internal controls for the year ended March 31, 2024 were effective.

NOTE 56 :

Previous year figures have been regrouped, rearranged and recasted to make them comparable with the current year figures

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Mar 31, 2023

2.13) PROVISION, CONTINGENT LIABILITIES & CONTINGENT ASSETS

Provisions are recognized when the Company has a present obligation, as a result of past events, for which it is probable that an outflow of economic benefits will be required to settle the obligation and a reliable estimate can be made for the amount of the obligation.

If the effect of the time value of money is material, provisions are discounted to reflect its present value using a current pre-tax rate that reflects the current market assessments of the time value of money and the risks specific to the obligation. When discounting is used, the increase in the provision due to the passage of time is recognised as a finance cost.

A contingent liability is a possible obligation that arise from past events whose existence will be confirmed by the occurrence or non-occurrence of one or more uncertain future events beyond the control of the company or a present obligation that is not recognised because it is probable that an outflow of resources will not be required to settle the obligation. However, if the possibility of outflow of resources, arising out of present obligation, is remote, it is not even disclosed as contingent liability. The company does not recognize a contingent liability but discloses its existence in the financial statement.

Contingent assets are neither recognized nor disclosed in the financial statements.

2.14) IMPAIRMENT OF NON-FINANCIAL ASSETS

At each reporting date, the Company reviews the carrying amounts of its non-financial assets (other than deferred tax assets) to determine whether there is any indication of impairment. If any such indication exists, then the asset’s recoverable amount is estimated. For impairment testing, assets are grouped together into the smallest group of assets that generates cash inflows from continuing use that are largely independent of the cash inflows of other assets or Cash generating units (“CGU”). The recoverable amount of an asset or CGU is the greater of its value in use and its fair value less costs to sell. Value in use is based on the estimated future cash flows, discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset or CGU. An impairment loss is recognised if the carrying amount of an asset or CGU exceeds its recoverable amount. Impairment losses are recognised in profit or loss. An impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortization, if no impairment loss had been recognized.

2.15) EARNINGS PER SHARE

Basic earnings per share are calculated by dividing the net profit for the period attributable to equity shareholders by the weighted-average number of equity shares outstanding during the period. The weighted-average number of equity shares outstanding during the period and for all years presented is adjusted for events such as bonus issue; bonus element in a rights issue to existing shareholders; share split; and reverse share split (consolidation of shares) that have changed the number of equity-shares outstanding, without a corresponding change in resources.

For the purpose of calculating diluted earnings per share, the net profit or loss for the period attributable to equity shareholders and the weighted-average number of shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares.

2.16) INVENTORIES

Inventories are valued at lower of cost and estimated net realizable value. Obsolete, defective and unserviceable stocks are provided for. Materials-in-process are valued at raw material cost and estimated cost of conversion. Cost of finished goods includes conversion and other costs incurred in bringing the inventories to their present location and condition

Cost of Inventories is computed on FIFO basis. Goods in transit, if any, are stated at actual cost incurred upto the date of balance sheet.

2.17) FINANCIAL INSTRUMENTS

I. FINANCIAL ASSETS

A) Initial Recognition and Measurement

Financial assets are recognised when the Company becomes a party to the contractual provisions of the instrument. Financial assets which are recognised at fair value through profit and loss (FVTPL), its transaction cost is recognized in the statement of profit and loss. In other cases, the transaction cost is attributed to the acquisition value of the financial asset. Trade receivables and debt securities are initially recognised when they are originated. All other financial assets and financial liabilities are initially recognised when the Company becomes a party to the contractual provisions of the instrument.

B) Classification And Subsequent Measurement

a) Amortized cost: A financial asset is measured at amortized cost if it is held within a business model whose objective is to hold the asset in order to collect contractual cash flows and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

b) Fair value through other comprehensive income (FVOCI):

A financial asset is measured at FVTOCI if it is held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

c) Fair value through profit and loss (FVTPL): A financial asset which is not classified in any of the above categories are measured at FVTPL.

Financial assets are not reclassified subsequent to their recognition, except if and in the period the Company changes its business model for managing financial assets.

C) Cash and bank balances

(i) Cash and cash equivalents which includes cash in hand, deposits held at call with banks and other short-term deposits which are readily convertible into known amounts of cash, are subject to an insignificant risk of change in value and have maturities of 3 months or less from the date of such deposits. These balances with banks are unrestricted for withdrawal and usage.

(ii) Other bank balances which include balances and deposits with banks that are restricted for withdrawal and usage.

D) Investments in subsidiaries

Investments in subsidiaries are carried at cost less accumulated impairment losses, if any. Where an indication of impairment exists, the carrying amount of the investment is assessed and written down immediately to its recoverable amount. On disposal of investments in subsidiaries, the difference between net disposal proceeds and the carrying amounts are recognized in the Statement of Profit and Loss.

E) Equity instruments

All other equity investments are measured at fair value, with value changes recognised in Statement of Profit and Loss, except for those equity investments for which the Company has elected to present the value changes in ‘Other Comprehensive Income’.

F) Trade receivables and loans

Trade receivables are initially recognised at fair value. Subsequently, these assets are held at amortized cost, using the effective interest rate (EIR) method net of any expected credit losses. The EIR is the rate that discounts estimated future cash income through the expected life of financial instrument.

G) Debt Instruments

Debt instruments are initially measured at amortized cost, fair value through other comprehensive income (‘FVOCI’) or fair value through profit or loss (‘FVTPL’) till derecognition on the basis of (i) the entity’s business model for managing the financial assets and (ii) the contractual cash flow characteristics of the financial asset.

H) Impairment of Financial Asset

In accordance with Ind-AS 109, the Company applies Expected Credit Loss (ECL) model for measurement and recognition of impairment loss on the following financial assets and credit risk exposure:

a) Financial assets that are debt instruments, and are measured at amortized cost e.g., loans, security deposits, bank deposits and bank balance.

b) Trade receivables

The Company follows ‘simplified approach’ for recognition of impairment loss allowance on trade receivables which do not contain a significant financing component. The application of simplified approach does not require the Company to track changes in credit risk. Rather, it recognizes impairment loss allowance based on lifetime ECLs at each reporting date, right from its initial recognition.

For recognition of impairment loss on other financial assets and risk exposure, the Company determines that whether there has been a significant increase in the credit risk since initial recognition. If credit risk has not increased significantly, 12 months ECL is used to provide for impairment loss. However, if credit risk has increased significantly, lifetime ECL is used. If, in a subsequent period, credit quality of the instrument improves such that there is no longer a significant increase in credit risk since initial recognition, then the entity reverts to recognizing impairment loss allowance based on 12-month ECL.

The impairment losses and reversals are recognised in Statement of Profit and Loss.

I) Income recognition Interest income

Interest income is accrued on a time proportion basis, by reference to the principal outstanding and effective interest rate applicable.

Dividend income

Dividend income from investments is recognised when the right to receive payment has been established.

II. FINANCIAL LIABILITIES

A) Initial Recognition and Measurement

Financial liabilities are recognised when the Company becomes a party to the contractual provisions of the instrument. Financial liabilities are initially measured at the amortized cost unless at initial recognition, they are classified as fair value through profit and loss. In case of trade payables, they are initially recognised at fair value and subsequently, these liabilities are held at amortized cost, using the effective interest method.

B) Classification And Subsequent Measurement

Financial liabilities are subsequently measured at amortized cost using the EIR method. Financial liabilities carried at fair value through profit or loss are measured at fair value with all changes in fair value recognised in the Statement of Profit and Loss.

III. DERECOGNITION OF FINANCIAL INSTRUMENTS

The Company derecognizes a financial asset when the contractual rights to the cash flows from the financial asset expire or it transfers the financial asset and the transfer qualifies for derecognition under Ind AS 109. A financial liability (or a part of a financial liability) is derecognized from the Company’s Balance Sheet when the obligation specified in the contract is discharged or cancelled or expires.

IV. OFFSETTING OF FINANCIAL ASSETS AND FINANCIAL LIABILITIES

Financial assets and liabilities are offset and the net amount presented in the statement of financial position when, and only when, the Company has a legal right to offset the amounts and intends either to settle on a net basis or to realize the asset and settle the liability simultaneously.

2.18) DERIVATIVES AND HEDGING ACTIVITIES:

The Company holds derivative financial instruments such as foreign exchange forward, interest rate swaps, currency swaps and currency options to mitigate the risk of changes in exchange rates or interest rate. The counterparty for these contracts is generally a bank.

i) Financial assets or financial liabilities, at fair value through profit or loss:

This category has derivative financial assets or liabilities which are not designated as hedges.

Although the Company believes that these derivatives constitute hedges from an economic perspective, they may not qualify for hedge accounting under Ind AS 109, Financial Instruments. Any derivative that is either not designated a hedge, or is so designated but is ineffective as per Ind AS 109, is categorized as a financial asset or financial liability, at fair value through profit or loss.

Derivatives not designated as hedges are recognized initially at fair value and attributable transaction costs are recognized in net profit in the Standalone Statement of Profit and Loss, when incurred. Subsequent to initial recognition, these derivatives are measured at fair value through profit or loss and the resulting gains or losses are included in other income or other expenses. Assets / liabilities in this category are presented as current assets / current liabilities if they are either held for trading or are expected to be realized within 12 months after the Standalone Balance Sheet date.

ii) Cash flow hedge:

The Company designates certain foreign exchange forward and options contracts as cash flow hedges to mitigate the risk of foreign exchange exposure on firm commitment and highly probable forecast transactions.

When a derivative is designated as a cash flow hedging instrument, the effective portion of changes in the fair value of the derivative is recognized in other comprehensive income and accumulated in the cash flow hedging reserve. Any ineffective portion of changes in the fair value of the derivative is recognized immediately in the net profit in the Statement of Profit and Loss. If the hedging instrument no longer meets the criteria for hedge accounting, then hedge accounting is discontinued prospectively. If the hedging instrument expires or is sold, terminated or exercised, the cumulative gain / (loss) on the hedging instrument recognized in cash flow hedging reserve till the period the hedge was effective remains in cash flow hedging reserve until the forecasted transaction occurs. The cumulative gain/(loss) previously recognized in the cash flow hedging reserve is transferred to the Statement of Profit and Loss upon the occurrence of the related forecasted transaction.

If the forecasted transaction is no longer expected to occur, then the amount accumulated in cash flow hedging reserve is reclassified to net profit in the Statement of Profit and Loss.

2.19) SEGMENT REPORTING

Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker.

2.20) RECENT INDIAN ACCOUNTING STANDARDS (IND AS)

Ministry of Corporate Affairs (“MCA”) notifies new standard or amendments to the existing standards under Companies (Indian Accounting Standards) Rules as issued from time to time. On March 31, 2023, MCA amended the Companies (Indian Accounting Standards) Rules, 2015 by issuing the Companies (Indian Accounting Standards) Amendment Rules, 2023, applicable from April 1, 2023, as below:

Ind AS 1 - Presentation of Financial Statements

The amendments require entities to disclose their material accounting policies rather than their significant accounting policies. Accounting policy information, together with other information, is material when it can reasonably be expected to influence decisions of primary users of general-purpose financial statements. The Company does not expect this amendment to have any significant impact in its financial statements.

Ind AS 8 - Accounting Policies, Changes in Accounting Estimates and Errors

This amendment has introduced a definition of ‘accounting estimates’ and included amendments to Ind AS 8 to help entities distinguish changes in accounting policies from changes in accounting estimates. Under the new definition, accounting estimates are “monetary amounts in financial statements that are subject to measurement uncertainty”. Entities develop accounting estimates if accounting policies require items in financial statements to be measured in a way that involves measurement uncertainty. The Company does not expect this amendment to have any significant impact in its financial statements.

Ind AS 12 - Income Taxes

The amendments clarify how entities account for deferred tax on transactions such as leases and decommissioning obligations. The amendment narrows the scope of the recognition exemption in paragraphs 15 and 24 of Ind AS 12 (recognition exemption) so that it no longer applies to transactions that, on initial recognition, give rise to equal taxable and deductible temporary differences. The Company does not expect this amendment to have any significant impact in its financial statements.

aDove.

Valuation

The fair values of the financial assets and liabilities are defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Methods and assumptions used to estimate the fair values are consistent.

Financial assets and liabilities measured at fair value as at Balance Sheet date:

(i) Current financial assets and liabilities are stated at carrying value which is approximately equal to their fair value.

(ii) The fair values of investments in mutual fund units is based on the net asset value (‘NAV’) as stated by the issuers of these mutual fund units in the published statements as at Balance Sheet date.

(iii) Management uses its best judgement in estimating the fair value of its financial instruments. However, there are inherent limitations in any estimation technique. Therefore, for substantially all financial instruments, the fair value estimates presented above are not necessarily indicative of the amounts that the Company could have realised or paid in sale transactions as of respective dates. As such, fair value of financial instruments subsequent to the reporting dates may be different from the amounts reported at each reporting date.

B) Financial Risk Management Framework

The Company’s business activities are exposed to a variety of financial risks, namely credit risk, liquidity risk and market risk (currency risk and interest rate risk). The Company’s management and the Board of Directors has the overall responsibility for establishing and governing the Company’s risk management framework. The Board of Directors which is responsible for developing and monitoring the Company’s risk management policies. The Company’s risk management policies are established to identify and analyse the risks faced by the Company, to set and monitor appropriate risk limits and controls, periodically review the changes in market conditions and reflect the changes in the policy accordingly. The key risks and mitigating actions are also placed before the Audit Committee and Board of Directors of the Company.

i) Credit Risk

Credit risk is the risk of financial loss to the Company if a customer or counter-party fails to meet its contractual obligations. Financial instruments that are subject to credit risk principally consist of trade receivables, investments, loans, cash and cash equivalents, other balances with banks and other financial assets. None of the financial instruments of the Company result in material credit risk.

Credit risk with respect to trade receivables are limited as the Company has a policy of dealing only with credit worthy customers. All trade receivables are reviewed and assessed for default on a quarterly basis. Our historical experience of collecting receivables is that credit risk is very low. Hence, trade receivables are considered to be a single class of financial assets.

Credit risk on cash and cash equivalents, other bank balances with bank is limited as the Company generally invest in deposits with banks. Investments primarily include investment in liquid mutual fund units. The Company reviews credit worthiness of the counter parties to whom security depoits and loans given. The managements belives that there is no credit risk lies with the security deposits given and loans to employees.

The Company’s maximum exposure to credit risk as at 31st March, 2023 and 31st March, 2022 is the carrying value of each class of financial assets.

ii) Liquidity risk

Liquidity risk refers to the risk that the Company cannot meet its financial obligations. The objective of liquidity risk management is to maintain sufficient liquidity and ensure that funds are available for use as per requirements.The Company’s approach in managing liquidity is to ensure that it will have sufficient funds to meet its liabilities when due without incurring unacceptable losses. In doing this, management considers both normal and stressed conditions.The Company maintained a cautious liquidity strategy, with a positive cash balance throughout the year ended 31st March, 2023 and 31st March, 2022. Cash flow from operating activities provides the funds to service the financial liabilities on a day-to-day basis. The Company has obtained fund and non-fund based working capital lines from banks. The Company invests its surplus funds in bank fixed deposit and in mutual funds, which carry no or low market risk.

The following table shows a maturity analysis of the anticipated cash flows including interest obligations for the Company’s financial liabilities. Cash flows in foreign currencies are translated using the period end spot rates.

a. directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the company (Ultimate Beneficiaries), or

b. provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries

B. The Company has not received any fund from any person(s) or entity(ies), including foreign entities (Funding Party) with the understanding, whether recorded in writing or otherwise, that the Company shall

a. directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (Ultimate Beneficiaries), or

b. provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries.

(xi) Undisclosed income: There is no income surrendered or disclosed as income during the current or previous year in the tax assessments under the Income Tax Act, 1961, that has not been recorded in the books of account.

(xii) Details of Crypto Currency or Virtual Currency: The Company has not traded or invested in any crypto currency or virtual currency during the current or previous year.

NOTE 55: Previous year figures have been regrouped, rearranged and recasted to make them comparable with the curent year figures

As per our attached report of even date For and on behalf of the Board of Directors of

Rexnord Electronics and Controls Limited

^F0^{r R}'' ^S:,^Agrawal & ^Associates CIN: L31200MH1988PLC047946

Chartered Accountants

^{(Firm Registration} IM°. ^100156W) Kishore Chand Talwar Nainy K. Tanna Krishnamoorthy Krishnan

Chairman & Managing Director Wholetime Director Director

O P Agrawal DIN 00351751 DIN 00351762 DIN 08129657

^Partner Kundan Talwar Shweta Kalantri

^{Membership No}. ⁰⁴⁵⁸⁶² Chief Financial Officer Company Secretary

Place : Mumbai Place : Mumbai

Dated : May 30, 2023 Dated : May 30, 2023

---

Mar 31, 2018

Note 1: CORPORATE INFORMATION

Rexnord Electronics and Controls Limited (“the Company”) is a public limited Company domiciled in India with its registered office located at 92-D, Government Industrial Estate, Sahyadrinagar Charkop, Kandivali (West), Mumbai-400067. The Company is listed on the Bombay Stock Exchange (BSE). The Company is manufacturer of fans & motors. The Company has manufacturing facility at Survey no. 62, 74, 75, 20, Village Devdal (Sagpada), Opp Sagar Hotel Kaman Bhiwandi Road, Kaman Tal- Vasai, Dist Thane- 401208 and sells Indian Market and is regularly exporting.

Note 2: SIGNIFICANT ACCOUNTING POLICIES 2.1) BASIS OF PREPARATION A) Statement of Compliance

a) These financial statements have been prepared in accordance with the Indian Accounting Standards (hereinafter referred to as the ‘Ind AS’) as notified by Ministry of Corporate Affairs pursuant to section 133 of the Companies Act, 2013 read with Rule 3 of the Companies (Indian Accounting Standards) Rules, 2015 and Companies (Indian Accounting Standards) Amendment Rules, 2016.

b) These financial statements for the year ended 31st March,

2018 are the first the Company has prepared under Ind AS. For all periods up to and including the year ended 31st March, 2017, the Company prepared its financial statements in accordance with the accounting standards notified under the section 133 of the Companies Act 2013, read together with paragraph 7 of the Companies (Accounts) Rules, 2014 (hereinafter referred to as ‘Previous GAAP’) used for its statutory reporting requirement in India immediately before adopting Ind AS. The financial statements for the year ended 31st March, 2017 and the opening Balance Sheet as at 1st April, 2016 have been restated in accordance with Ind AS for comparative information. Reconciliations and explanations of the effect of the transition from Previous GAAP to Ind AS on the Company’s Balance Sheet, Statement of Profit and Loss and Statement of Cash Flows are provided in Note 49.

c) The financial statements have been prepared on accrual and going concern basis. The accounting policies are applied consistently to all the periods presented in the financial statements, including the preparation of the opening Ind AS Balance Sheet as at 1st April, 2016 being the ‘date of transition to Ind AS’. All assets and liabilities have been classified as current or non-current as per the Company’s normal operating cycle and other criteria as set out in the Division II of Schedule III to the Companies Act, 2013. Based on the nature of products and the time between acquisition of assets for processing and their realization in cash and cash equivalents, the Company has ascertained its operating cycle as 12 months for the purpose of current or non-current classification of assets and liabilities.

d) The financial statements of the Company for the year ended 31st March, 2018 were approved for issue in accordance with the resolution of the Board of Directors on 30th May, 2018.

B) Basis of Measurement

These financial statements are prepared under the historical cost convention, except for the following:

a) Certain financial assets and liabilities that are measured at fair value (refer- Accounting policy regarding financials instruments).

b) Defined benefit plans - present value of defined benefit obligation unless otherwise indicated.

C) Functional and Presentation Currency

These financial statements are presented in Indian Rupees, the functional currency of the Company. All amounts have been rounded off to the nearest lakhs, unless otherwise indicated. Items included in the financial statements of the Company are recorded using the currency of the primary economic environment in which the Company operates (the ‘functional currency’).

D) Use of Estimates

a) The preparation of financial statements in conformity with Ind AS requires the management to make judgments, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities and the disclosure of contingent liabilities, at the end of the reporting period. Although these estimates are based on the management’s best knowledge of current events and actions, uncertainty about these assumptions and estimates could result in the outcomes requiring a material adjustment to the carrying amounts of assets or liabilities prospectively.

b) Information about critical judgments in applying accounting policies, as well as estimates and assumptions that have the most significant effect to the carrying amounts of assets and liabilities within the next financial year, are included in the following notes:

i) Measurement of defined benefit obligations - Note 38.

ii) Measurement and likelihood of occurrence of provisions and contingencies - Note 20 & 26 and 36.

iii) Recognition of deferred tax liabilities - Note 21.

E) Measurement of fair values

The Company’s accounting policies and disclosures require the measurement of fair values for, both financial assets and liabilities.

The Company has an established control framework with respect to the measurement of fair values. The management regularly reviews significant unobservable inputs and valuation adjustments. If third party information is used to measure fair values, then the management assesses the evidence obtained from the third parties to support the conclusion that such valuations meet the requirements of Ind AS, including the level in the fair value hierarchy in which such valuations should be classified.

When measuring the fair value of a financial asset or a financial liability, the Company uses observable market data as far as possible. Fair values are categorized into different levels in a fair value hierarchy based on the inputs used in the valuation techniques as follows.

- Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities.

- Level 2: inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).

- Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs).

If the inputs used to measure the fair value of an asset or a liability fall into different levels of the fair value hierarchy, then the fair value measurement is categorised in its entirety in the same level of the fair value hierarchy as the lowest level input that is significant to the entire measurement.

Further information about the assumptions made in measuring fair values is included in the Note 40.

3) REVENUE RECOGNITION

Revenue is measured at the fair value of consideration received or receivable net of discounts, taking into account contractually defined terms and excluding taxes and duties collected on behalf of the Government.

Sale of goods

Revenue from sale of goods is recognized when the Company has transferred to the buyer the significant risks and rewards of ownership, no longer retains control over the goods sold, the amount of revenue can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the Company and the costs incurred or to be incurred in respect of the transaction can be measured reliably. Depending on the contractual terms, risks and rewards of ownership is transferred when the delivery is completed. In case of exports

Interest income

Interest income is accrued on a time proportion basis, by reference to the principal outstanding and effective interest rate applicable.

Dividend income

Dividend income from investments is recognized when the right to receive payment has been established.

Rental income

Rental income is recognized on a straight line basis over the term of the relevant arrangements.

4) EXPORT INCENTIVE

The benefits, on account of entitlement to import duty free raw material under the Advance License Scheme in respect of goods already exported, are not valued and brought into the books in the year of export. The raw materials are recorded at cost at which they are procured in the year of import.

The benefits under FMS/FPS/Incremental Export Incentivisation Scheme and Duty Drawback Scheme are recognized when the exports are made.

5 EMPLOYEE BENEFITS

a) Short term employee benefits

All employee benefits payable wholly within twelve months of rendering services are classified as short-term employee benefits. Short-term employee benefits are expensed as the related service is provided. A liability is recognized for the amount expected to be paid if the Company has a present legal or constructive obligation to pay this amount as a result of past service provided by the employee and the obligation can be estimated reliably.

Short-term benefits such as salaries, wages, bonus, ex gratia, short-term compensation absences, etc., are determined on an undiscounted basis and recognized in the period in which the employee renders the related service.

b) Post-employment benefits Defined contribution plans

Obligations for contributions to defined contribution plans such as Provident Fund maintained with Regional Provident Fund Office is expensed as the related service is provided.

Defined benefit plans

The following post - employment benefit plans are covered under the defined benefit plans:

- Gratuity

The Company provides for gratuity, a defined benefit retirement plan covering eligible employees. The Gratuity Plan provides a lump-sum payment to vested employees at retirement, death, incapacitation or termination of employment, of an amount based on the respective employee’s salary and the tenure of employment with the Company. The calculation of defined benefit obligations is performed annually by a qualified actuary using the projected unit credit method.

Remeasurement gains and losses arising from experience adjustments and changes in actuarial assumptions are recognized in the period in which they occur, directly in other comprehensive income.

c) Other long-term employee benefits Compensated absences

The Company does not have any leave encashment policy. Further any unutilized leave at the end of the year is lapsed and not eligible for carry forward.

6 FOREIGN CURRENCY TRANSACTIONS AND TRANSCLATION

Transactions in foreign currencies are recorded in the functional currency, by applying to the foreign currency amount the exchange rate between the functional currency and the foreign currency at the date of the transaction.

Foreign currency monetary items (assets and liabilities) are restated using the exchange rate prevailing at the reporting date.

Exchange differences arising on settlement or translation of monetary items are recognized in Statement of Profit and Loss except to the extent of exchange differences which are regarded as an adjustment to finance costs on foreign currency borrowings that are directly attributable to the acquisition or construction of qualifying assets, are capitalized as cost of assets.

Non-monetary items that are measured in terms of historical cost in a foreign currency are recorded using the exchange rates at the date of the transaction. Non-monetary items measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value was measured. The gain or loss arising on translation of nonmonetary items measured at fair value is treated in line with the recognition of the gain or loss on the change in fair value of the item (i.e., translation differences on items whose fair value gain or loss is recognized in OCI or Statement of Profit and Loss are also recognized in OCI or Statement of Profit and Loss, respectively).

7) ACCOUNTING FOR TAXES ON INCOME

Income tax expense for the period comprises of current tax and deferred tax. It is recognized in the Statement of Profit and Loss except to the extent it relates to a business combination or to an item which is recognized directly in equity or in other comprehensive income.

Current tax is the expected tax payable on the taxable income for the year using applicable tax rates at the Balance Sheet date, and any adjustment to taxes in respect of previous years.

Deferred tax is recognized in respect of temporary differences between the carrying amount of assets and liabilities for financial reporting purposes and the corresponding amounts used for taxation purposes.

A deferred tax liability is recognized based on the expected manner of realization or settlement of the carrying amount of assets and liabilities, using tax rates enacted, or substantively enacted, by the end of the reporting period. Deferred tax assets are recognized only to the extent that it is probable that future taxable profits will be available against which the asset can be utilized. Deferred tax assets are reviewed at each reporting date and reduced to the extent that it is no longer probable that the related tax benefit will be realized; such reductions are reversed when the probability of future taxable profits improves. Unrecognized deferred tax assets are reassessed at each reporting date and recognized to the extent that it has become probable that future taxable profits will be available against which they can be used.

Current tax assets and current tax liabilities are offset when there is a legally enforceable right to set off the recognized amounts and there is an intention to settle the asset and the liability on a net basis. Deferred tax assets and deferred tax liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities; and the deferred tax assets and the deferred tax liabilities relate to income taxes levied by the same taxation authority.

MAT credit entitlement is recognized and carried forward only if there is a reasonable certainty of it being set off against regular tax payable within the stipulated statutory period.

8) PROPERTY, PLANT & EQUIPMENT

Property, plant and equipment are stated at acquisition cost net of accumulated depreciation and accumulated impairment losses, if any. Cost comprises of purchase price and any attributable cost such as duties, freight, borrowing costs, erection and commissioning expenses incurred in bringing the asset to its working condition for its intended use. If significant parts of an item of property, plant and equipment have different useful lives, then they are accounted and depreciated for as separate items (major components) of property, plant and equipment.

Subsequent costs are included in the asset’s carrying amount or recognized as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Company and the cost of the item can be measured reliably. All other repairs and maintenance are charged to the Statement of profit and loss during the period in which they are incurred.

Gains or losses arising on retirement or disposal of property, plant and equipment are recognized in the Statement of profit and loss.

Property, plant and equipment which are not ready for intended use as on the date of Balance Sheet are disclosed as “Capital work-in-progress”.

Upon first-time adoption of Ind AS, the Company has elected to measure all its property, plant and equipment at the Previous GAAP carrying amount as its deemed cost on the date of transition to Ind AS i.e., 1st April,2016.

9 INTANGIBLE ASSETS

Intangible Assets are stated at cost of acquisition net of recoverable taxes, trade discount and rebates less accumulated amortisation/depletion and impairment loss, if any. Such cost includes purchase price, borrowing costs, and any cost directly attributable to bringing the asset to its working condition for the intended use, net charges on foreign exchange contracts and adjustments arising from exchange rate variations attributable to the intangible assets.

Subsequent costs are included in the asset’s carrying amount or recognized as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the entity and the cost can be measured reliably.

Gains or losses arising from derecognition of an intangible asset are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognized in the Statement of Profit and Loss when the asset is derecognized.

Upon first-time adoption of Ind AS, the Company has elected to measure all its intangible assets at the Previous GAAP carrying amount as its deemed cost on the date of transition to Ind AS i.e., 1st April,2016.

10) RESEARCH AND DEVELOPMENT EXPENDITURE

Revenue expenditure pertaining to research is charged to the Statement of Profit and Loss. Development costs of products are charged to the Statement of Profit and Loss unless a product’s technological and commercial feasibility has been established, in which case such expenditure is capitalized.

11) DEPRECIATION

Depreciation on Property, Plant & Equipment is provided on straight line method at the rates and in the manner specified in Schedule II to the Companies Act, 2013. In the case of revalued assets, depreciation is calculated on straight line method on the revalued amounts as determined by the valuer.

Depreciation on Property, Plant & Equipment added/disposed off/discarded during the period is provided on the pro-rata basis with reference to the date of addition/disposal/discarding.

The residual values, useful lives and method of depreciation of property, plant and equipment is reviewed at each financial year end and adjusted prospectively, if appropriate.

12) AMORTIZATION

Intangible assets (Application Software) acquired by the Company are amortized on a straight line basis over its useful life i.e. three years, as decided by the management.

Amortisation methods, useful lives and residual values are reviewed at each reporting date and adjusted prospectively, if appropriate.

13) BORROWING COSTS

Borrowing costs include exchange differences arising from foreign currency borrowings to the extent they are regarded as an adjustment to the interest cost. Borrowing costs that are directly attributable to the acquisition or construction of qualifying assets are capitalized as part of the cost of such assets. A qualifying asset is one that necessarily takes substantial period of time to get ready for its intended use.

Interest income earned on the temporary investment of specific borrowings pending their expenditure on qualifying assets is deducted from the borrowing costs eligible for capitalization.

All other borrowing costs are charged to the Statement of Profit and Loss for the period for which they are incurred.

14) LEASES

Where the Company has substantially acquired all risks and rewards of ownership of the assets, leases are classified as financial lease. Such assets are capitalized at the inception of the lease, at the lower of the fair value or present value of minimum lease payment and liability is created for equivalent amount. Each lease payment is allocated between liability and finance cost so as to obtain constant periodic rate of interest on the outstanding liability for each period. Finance expenses are recognized immediately in Statement of Profit and Loss, unless they are directly attributable to qualifying assets, in which case they are capitalized. Contingent rentals are recognized as expenses in the periods in which they are incurred.

A leased asset is depreciated over the useful life of the asset. However, if there is no reasonable certainty that the Company will obtain ownership by the end of the lease term, the asset is depreciated over the shorter of the estimated useful life of the asset and the lease term.

Assets acquired/given under leases other than finance leases are classified as operating leases. Operating lease payments/receivable are recognized as an expense/income in the Statement of Profit and Loss on a straight-line basis over the lease term except where another systematic basis is more representative of time pattern in which economic benefits from the leased assets are consumed. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying value of the leased asset and recognized on a straight line basis over the lease term.

15) PROVISION, CONTINGENT LIABILITIES & CONTINGENT ASSETS

Provisions are recognized when the Company has a present obligation, as a result of past events, for which it is probable that an outflow of economic benefits will be required to settle the obligation and a reliable estimate can be made for the amount of the obligation.

If the effect of the time value of money is material, provisions are discounted to reflect its present value using a current pre-tax rate that reflects the current market assessments of the time value of money and the risks specific to the obligation. When discounting is used, the increase in the provision due to the passage of time is recognized as a finance cost.

A contingent liability is a possible obligation that arise from past events whose existence will be confirmed by the occurrence or non-occurrence of one or more uncertain future events beyond the control of the company or a present obligation that is not recognized because it is probable that an outflow of resources will not be required to settle the obligation. However, if the possibility of outflow of resources, arising out of present obligation, is remote, it is not even disclosed as contingent liability. The company does not recognize a contingent liability but discloses its existence in the financial statement.

Contingent assets are neither recognized nor disclosed in the financial statements.

16) IMPAIRMENT OF NON-FINANCIAL ASSETS

At each reporting date, the Company reviews the carrying amounts of its non-financial assets (other than deferred tax assets) to determine whether there is any indication of impairment. If any such indication exists, then the asset’s recoverable amount is estimated. For impairment testing, assets are grouped together into the smallest group of assets that generates cash inflows from continuing use that are largely independent of the cash inflows of other assets or Cash generating units (“CGU”). The recoverable amount of an asset or CGU is the greater of its value in use and its fair value less costs to sell. Value in use is based on the estimated future cash flows, discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset or CGU. An impairment loss is recognized if the carrying amount of an asset or CGU exceeds its recoverable amount. Impairment losses are recognized in profit or loss. An impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortisation, if no impairment loss had been recognized.

17 EARNINGS PER SHARE

Basic earnings per share are calculated by dividing the net profit for the period attributable to equity shareholders by the weighted-average number of equity shares outstanding during the period. The weighted-average number of equity shares outstanding during the period and for all years presented is adjusted for events such as bonus issue; bonus element in a rights issue to existing shareholders; share split; and reverse share split (consolidation of shares) that have changed the number of equity shares outstanding, without a corresponding change in resources.

For the purpose of calculating diluted earnings per share, the net profit or loss for the period attributable to equity shareholders and the weighted-average number of shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares.

18) INVENTORIES

Inventories are valued at lower of cost and estimated net realizable value. Obsolete, defective and unserviceable stocks are provided for. Materials-in-process are valued at raw material cost and estimated cost of conversion. Cost of finished goods includes conversion and other costs incurred in bringing the inventories to their present location and condition

Cost of Inventories is computed on FIFO basis. Goods in transit, if any, are stated at actual cost incurred up to the date of balance sheet.

NOTE 19: SEGMENT REPORTING

The Company is engaged in the business of manufacturing and selling of Instrument cooling fans/ motors. The company is presenting its Consolidated financial statements which is form parts of this report. In terms of para 4 of Ind AS 108 “Segment Reporting “ no disclosures related to segments are required in Standalone financial statements.

NOTE 20: RELATED PARTY DISCLOSURES:

I) Names of related parties and description of relationships

a) Enterprises over which exercising control Rexnord Enterprise Pvt Ltd (w.e.f. 08/02/2018)

b) Persons owning directly or indirectly, an interest in the voting power of the Company that gives him significant influence over the Company.

Shri Kishore Chand Talwar

c) Key management personnel :

Executive directors

Shri Kishore Chand Talwar (Chairman & Managing Director)

Smt. Nainy K. Tanna (Wholetime Director)

Non-executive directors (Independent directors)

Shri Ayyaswami Sundram

Shri D.Ganapathy (director up to 06.05.2018)

Shri Ram Sanehi (director up to 31.03.2018)

d) Relatives of persons referred in b) and c) above

Smt. Sharda Talwar (Wife of Chairman and Managing Director of the company)

Shri Kundan Talwar (Son of Chairman and Managing Director of the company)

Smt. Ramandeep Talwar (Daughter in law of Chairman and Managing Director of the company) Shri Kunal Tanna (Spouse of Smt. Nainy K. Tanna, Whole time Director of the company)

e) Enterprises over which any person described in (d ) above is able to exercise significant influence. Excelum Enterprises (A proprietary concern of Shri Kunal Tanna)

NOTE 21: LEASES Cancellable leases

a) The Company has taken ceratin equipments under operating lease or on rental basis. This contract is not non-cancellable and for a period of three months and are renewable at the mutual consent on mutually agreeable terms. The rent paid in accordance with this agreement is debited to the statement of profit and loss for the year.

b) The Company has given its industrial galas under operating lease or on leave and licence basis. These agreements are generally not non-cancellable and for a period ranging between 11 months and above and are renewable at mutual consent on mutually agreeable terms. The company has taken refundable interest free security deposits in accordance with the agreed terms. The rent received in accordance with these agreements is credited to the statement of profit and loss for the year.

Non-cancellable leases

The Company has given its part premises under operating lease or on leave and license basis for a period of 3 years. The company has taken refundable interest free security deposits in accordance with the agreed terms. The lease rentals income for the year recognized in the Statement of profit and loss and future lease rental receivable as per the rentals stated in respective agreement are as follows:

(A mm i nt in I

NOTE 22: TAXATION MATTERS:

a) The sales tax assessments of the company have been completed up to financial year 2006-2007 for its Daman unit and up to financial year 2014-15 for its Kandivali unit.

b) The income tax assessments of the company have been completed up to assessment Year 2016-2017.

NOTE 46 : ISSUE OF SHARE WARRANTS, THEIR CONVERSION AND UTILIZATION OF ITS PROCEEDS

(a) (i) The Company, during the financial year 2014-15, had allotted 1200000 Warrants at a price of '' 24.50 per warrant carrying an entitlement to subscribe to an equivalent number of equity shares of face value of '' 10/- each within 18 months from the date of allotment of warrants to promoter/promoter group in accordance of Regulations for Preferential Issue contained in Chapter VII of the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009 as amended, on 23rd December 2014 and received 25% of issue price as warrant allotment money aggregating to '' 73,50,000. The company had utilized this proceeds for its working capital requirements and other corporate purposes in accordance with the object of the issue.

(ii) Out of the above warrants, the Company had, during the year 2016-17, allotted 1200000 equity shares on conversion of 1200000 warrants on 11th April 2016 and had realized the balance 75% allotment money aggregating to '' 22050000. The Company had utilized this proceed for its working capital requirements and other corporate purposes in accordance with the objects of the said Issue.

NOTE 23:

The Company had, during the 2016-17, purchased a plot of land admeasuring 0.242 Hectare at S. No. 61, H. No. 1 Part at Village- Kaman, Taluka -Vasai District -Palghar by executing Memorandum of Understanding and taken possession of the same. The Company is in process of executing Sale Deed and getting the same registered with the appropriate authorities.

NOTE 24: DISCLOSURE UNDER SECTION 186(4) OF THE COMPANIES ACT, 2013

During the year the Company has made investments in equity shares of wholly owned subsidiary namely Rexford Enterprise Private Limited and units of various mutual funds. The required details of the investments made during the year and investments outstanding as on 31.03.2018 are given in note 4 and 9 to the financial statements.

NOTE 25: FIRST TIME ADOPTION OF INDIAN ACCOUNTING STANDARDS (IND AS)

A. Transition to Ind AS:

For the purposes of reporting as set out in Note 2.1(A), the Company has transitioned the basis of accounting from Indian generally accepted accounting principles (“IGAAP”) to Ind AS. The accounting policies set out in note 2 have been applied in preparing the financial statements for the year ended 31 March

2018, the comparative information presented in these financial statements for the year ended 31 March 2017 and in the preparation of an opening Ind AS balance sheet at 1 April 2016 (the “transition date”).

In preparing opening Ind AS balance sheet as at 1 April 2016 and in presenting the comparative information for the year ended 31 March 2017, the Company has adjusted amounts reported previously in financial statements prepared in accordance with IGAAP. An explanation of how the transition from IGAAP to Ind AS has affected the financial performance, cash flows and financial position is explained in this note.

B. Mandatory exceptions to retrospective application

The Company has applied the following exceptions to the retrospective application of Ind AS as mandatorily required under Ind AS 101 “First Time Adoption of Indian Accounting Standards”.

i) Estimates

On assessment of estimates made under the Previous GAAP financial statements, the Company has concluded that there is no necessity to revise such estimates under Ind AS, as there is no objective evidence of an error in those estimates. However, estimates that were required under Ind AS but not required under IGAAP are made by the Company for the relevant reporting dates reflecting conditions existing as at that date.

ii) Classification and measurement of financial assets/liabilities

The classification of financial assets to be measured at amortized cost or fair value through profit & loss is made on the basis of facts and circumstances that existed on the date of transition to Ind AS.

C. Optional exemptions from retrospective application

Ind AS 101 “First time Adoption of Indian Accounting Standards” permits Companies adopting Ind AS for the first time to take certain exemptions from the full retrospective application of Ind AS during the transition. The Company has accordingly on transition to Ind AS availed the following key exemptions:

i) Deemed cost for property, plant and equipment and intangible assets

The Company has elected to measure all its property, plant and equipment and intangible assets at the Previous GAAP carrying amount as its deemed cost on the date of transition to Ind AS.

D. The following reconciliations provide the explanations and quantification of the differences arising from the transition from Previous GAAP to Ind AS in accordance with Ind AS 101:

i) Reconciliation of Equity as at 1st April, 2016 and 31st March, 2017

ii) Reconciliation of Statement of Profit and Loss for the year ended 31st March, 2017

iii) Adjustments to Statement of Cash Flows for the year ended 31st March, 2017

1 Investments

Under Previous GAAP, the current investment were measured at lower of cost and fair value. Under Ind AS, the Company has designated these investments at fair value through profit or loss (FVTPL). Accordingly, these investments are required to be measured at fair value. air value changes are recognized in the Statement of Profit and Loss for the year ended 31st March, 2017.

2 Borrowings

In accordance with Ind AS 109 “Financial Instruments”, transaction costs on issue of debentures are required to be considered as effective finance costs and recognized in the statement of profit and loss using the effective interest rate. Consequently, transaction costs recognized directly in equity or amortized using a different approach under the Previous GAAP has been reversed and are now recognized through the statement of profit and loss using the effective interest rate.

3 Employee benefits & Other comprehensive Income

In accordance with Ind AS 19, “Employee Benefits” re-measurement gains and losses on post employment defined benefit plans are recognized in other comprehensive income as compared to the statement of profit and loss under the Previous GAAP.

Under Ind AS, all items of income and expense recognized during the year are included in the profit or loss for the year, unless Ind AS requires or permits otherwise. Items that are not recognized in profit or loss but are shown in the statement of profit and loss as other comprehensive income include re-measurement gains or losses on defined benefit plans. The concept of other comprehensive Income did not exist under the Previous GAAP.

4 Deferred Taxes

In accordance with Ind AS 12, “Income Taxes”, the Company on transition to Ind AS has recognized deferred tax on temporary differences, i.e. based on balance sheet approach as compared to the earlier approach of recognizing deferred taxes on timing differences, i.e. profit and loss approach. The tax impacts as above primarily represent deferred tax consequences arising out of Ind AS re-measurement changes.

5 Excise Duty

Under Previous GAAP, excise duty was netted off against sale of goods. However, under Ind AS, excise duty is included in sale of goods and is separately presented as expense on the face of Statement of Profit and Loss. Thus, sale of goods under Ind AS has increased with a corresponding increase in expenses.

iii) Adjustments to Statement of Cash Flows for the year ended 31st March, 2017

There were no material differences between the Statement of Cash Flows presented under Ind AS and the Previous GAAP.

NOTE 6:

Previous year figures have been regrouped, rearranged and recanted to make them comparable with the current year figures

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Mar 31, 2016

NOTE 1: LEASES

The company has taken various residential premises / industrial galas under operating lease or on leave and license basis. These are generally not non-cancellable and for a period ranging between 11 months and above and are renewable at mutual consent on mutually agreeable terms. The company has given refundable interest free security deposits in accordance with the agreed terms. The rent paid in accordance with these agreements is debited to the statement of profit and loss for the year.

NOTE 2: DISCLOSURE UNDER MICRO, SMALL AND MEDIUM ENTERPRISES DEVELOPMENT ACT, 2006

Based on the information available, there are certain vendors who have confirmed that they are registered under the Micro, Small and Medium Enterprises Development Act, 2006 as micro and small enterprises. Disclosures as required by section 22 of ‘The Micro, Small and Medium Enterprises Development Act, 2006, are given below:

NOTE 3: ISSUE OF SHARE WARRANTS, THEIR CONVERSION AND UTILIZATION OF ITS PROCEEDS

4. (i) The Company, during the previous year, had allotted 3478800 Warrants at a price of Rs. 13.40 per warrant carrying an entitlement to subscribe to an equivalent number of equity shares of face value of Rs. 10/- each within 18 months from the date of allotment of warrants to promoter/promoter group and non promoter group in accordance of Regulations for Preferential Issue contained in Chapter VII of the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009 as amended, on 23^rd September 2014 and received 25% of issue price as warrant allotment money aggregating to Rs. 1,16,53,980. The company had utilized this proceeds for its working capital requirements and other corporate purposes in accordance with the object of the issue.

5. Out of the above warrants, the Company had allotted 1098300 equity shares on conversion of 1098300 warrants on 13^th December 2014 and realized the balance 75% allotment money aggregating to Rs. 11037915. The Company had utilized this proceed for its working capital requirements and other corporate purposes in accordance with the objects of the said Issue.

6. Out of the above warrants, the Company has, during the year, allotted 2380500 equity shares on conversion of 2380500 warrants on 12th June 2015 and has realized the balance 75% allotment money aggregating to Rs. 23924025. The Company has utilized this proceed for its working capital requirements and other corporate purposes in accordance with the objects of the said Issue.

7. The Company, further during the previous year, had allotted 1200000 Warrants at a price of Rs. 24.50 per warrant carrying an entitlement to subscribe to an equivalent number of equity shares of face value of Rs. 10/- each within 18 months from the date of allotment of warrants to promoter/promoter group in accordance of Regulations for Preferential Issue contained in Chapter VII of the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009 as amended, on 23rd December 2014 and received 25% of issue price as warrant allotment money aggregating to Rs. 73,50,000. The company had utilized this proceeds for its working capital requirements and other corporate purposes in accordance with the object of the issue.

8. (i) As per the consistent practice followed by the company in earlier years, the excise duty payable in respect of goods manufactured during the year but not cleared from factory premises at the end of year, are neither included in expenses nor considered in valuation of the inventories of such goods which is contrary to the guidance note “Accounting Treatment for Excise Duty” issued by the Institute of Chartered Accountant Of India . However the same does not have any impact on the profit of the year.

9. As per the consistent practice followed by the company in earlier years, the custom duty payable in respect of imported materials lying at custom bonded warehouse at the end of year, are neither included in expenses nor considered in valuation of the inventories of such materials. However this practice does not have any impact on the profit of the year.

10. Previous year figures have been regrouped, rearranged and recasted to make them comparable with current year figures.

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Mar 31, 2015

1. The company has issued only one class of equity shares having a par value of Rs, 10/- per share. Each shareholder is entitled to one vote per share. The dividend proposed by the board of directors is subject to the approval of shareholders, except in case of interim dividend. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the company, after distribution of preferential amounts, in proportion of their shareholding.

2. Shareholders holding more than 5% of share capital at the end of the year :

A Nature of security:

(I) Term loans from HDFC Bank Limited are :

(a) primarily secured by hypothecation of stocks, book debts and plant & machineries of the company ;

(b) further secured by way of equitable mortgage of land and building at Plot No. 92-D Government Industrial Estate, Charkop, Kandivli (W), Mumbai 400067:

(c) further collaterally secured by way of equitable mortgage of Residential Flats at 802A and 802B, Beach Classic, J.P. Road, Versova, Andheri (W) Mumbai 400061 belonging to Shri Kishore Chand Talwar, Smt. Sharda Talwar and Shri Kundan Talwar and a plot of land at Survey No. 62, 74, 75, 20 Village Devdal (Sagpada), Kaman, Vasai (E), Palghar 401202 belonging to Shri Kundan Talwar; and

(d) also personally guaranteed by Chairman & Managing Director, Whole time Director and two relatives of the Chairman & Managing Director of the Company

(II) All the vehicle loans are secured by hypothecation of specific vehicles acquired from the loans.

Nature of security:

Working capital loans from HDFC Bank Limited are :

(a) primarily secured by hypothecation of stocks, book debts and plant & machineries of the company ;

(b) further secured by way of equitable mortgage of land and building at Plot No. 92-D Government Industrial Estate, Charkop, Kandivli (W), Mumbai - 400 067:

(c) further collaterally secured by way of equitable mortgage of Residential Flats at 802Aand 802B, Beach Classic, J.P. Road, Versova, Andheri (W) Mumbai 400061 belonging to Shri Kishore Chand Talwar, Smt. Sharda Talwar and Shri Kundan Talwar and a plot of land at Survey No. 62, 74, 75, 20 Village Devdal (Sagpada), Kaman, Vasai (E), Palghar 401202 belonging to Shri Kundan Talwar; and

(d) also personally guaranteed by Chairman & Managing Director, Whole time Director and two relatives of the Chairman & Managing Director of the Company.

3 (i) Cost of factory building include Rs, 1000.00 (previous year Rs, 1000.00) being cost of shares in the Kandivli Co-operative Industrial Estate Limited.

3 (ii) Pursuant to the requirements of the Companies Act, 2013 ("the Act") the Company has revised the depreciation rates based on the estimated economic useful lives of the fixed assets as prescribed by the Schedule II to the Act from 1st April 2014. Accordingly the unamortized carrying value is being depreciated / amortized over the revised / remaining useful lives. In respect of fixed assets whose useful life is already exhausted as on 1st April 2014, depreciation of Rs, 1255949.79 (net of deferred tax) has been adjusted in opening balance of the Statement of Profit and Loss in accordance with the requirements of the Schedule II of the Act.

(b) Defined benefit plan:

Compensated absences:

Rs, 105998.00 (previous year Rs, 129051.00) is charged off to the statement of profit and loss for the cost of

compensated absences for the year.

Gratuity :

The employee's gratuity scheme is non -fund based. The present value of obligation is determined based on actuarial valuation using the Projected Unit Credit Method, which recognizes each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation

The estimates of future salary growth considered in the actuarial valuation taken into account inflation, seniority, promotion and other relevant factors such as demand and supply in the employment market.

NOTE 4: SEGMENT REPORTING

The segment reporting as required under Accounting Standard 17 "Segment Reporting" is not applicable to the company as the company's operations are predominantly comprises of only one business segment - Instrument cooling fans/ motors.

NOTE 5: RELATED PARTY DISCLOSURES:

I) Names of related parties and description of relationships

a) Individuals owning directly or indirectly, an interest in the voting power of the Company that gives him significant influence over the Company. Shri Kishore Chand Talwar

b) Key management personnel :

Shri Kishore Chand Talwar (Chairman & Managing Director) Smt. Nainy K. Tanna (Whole time Director)

c) Relatives of persons referred in a) and b) above

Smt. Sharda Talwar (Wife of Chairman and Managing Director of the company)

Shri Kundan Talwar (Son of Chairman and Managing Director of the company)

Shri Kunal Tanna (Spouse of Smt. Nainy K. Tanna, Whole time Director of the company)

Excelum Enterprises (A proprietary concern of Shri Kunal Tanna)

NOTE 6: LEASES

The company has taken various residential premises / industrial galas under operating lease or on leave and license basis. These are generally not non- cancellable and for a period ranging between 11 months and above and are renewable at mutual consent on mutually agreeable terms. The company has given refundable interest free security deposits in accordance with the agreed terms. The rent paid in accordance with these agreements is debited to the statement of profit and loss for the year.

NOTE 7: DISCLOSURE UNDER MICRO, SMALL AND MEDIUM ENTERPRISES DEVELOPMENT ACT, 2006

Based on the information available, there are certain vendors who have confirmed that they are registered under the Micro, Small and Medium Enterprises Development Act, 2006 as micro and small enterprises. Disclosures as required by section 22 of The Micro, Small and Medium Enterprises Development Act, 2006, are given below:

NOTE 8: TAXATION MATTERS:

a) The sales tax assessments of the company have been completed up to financial year 2006-2007 for its Daman unit and up to financial year 2011-12 for its Kandivali unit.

b) The income tax assessments of the company have been completed up to assessment Year 2012-2013.

NOTE 9: ISSUE OF SHARE WARRANTS, THEIR CONVERSION AND UTILIZATION OF ITS PROCEEDS

(a) (i) The Company, during the year, has allotted 3478800 Warrants at a price of Rs, 13.40 per warrant carrying an entitlement to subsribe to an equivalent

number of equity shares of face value of Rs, 10/- each within 18 months from the date of allotment of warrants to promoter/promoter group and non promoter group in accordance of Regulations for Preferential Issue contained in Chapter VII of the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009 as amended, on 23rd September 2014 and received 25% of issue price as warrant allotment money aggregating to Rs, 1,16,53,980. The company has utilized this proceeds for its working capital requirements and other corporate purposes in accordance with the object of the issue.

(ii) Out of the above warrants, the Company has allotted 1098300 equity shares on conversion of 1098300 warrants on 13th December 2014 and realized the balance 75% allotment money aggregating to Rs, 11037915. The Company has utilized this proceed for its working capital requirements and other corporate purposes in accordance with the objects of the said Issue.

(b) The Company, further during the year, has allotted 1200000 Warrants at a price of Rs, 24.50 per warrant carrying an entitlement to subscribe to an equivalent number of equity shares of face value of Rs, 10/- each within 18 months from the date of allotment of warrants to promoter/promoter group in accordance of Regulations for Preferential Issue contained in Chapter VII of the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009 as amended, on 23rd December 2014 and received 25% of issue price as warrant allotment money aggregating to Rs, 73,50,000. The company has utilized this proceeds for its working capital requirements and other corporate purposes in accordance with the object of the issue.

NOTE 10: The Company is in process of appointing professional directors to compose the Nomination and Remuneration Committee in conformity with the provisions of the Section 178 of the Companies Act, 2013.

NOTE 11: (i) As per the consistent practice followed by the company in earlier years, the excise duty payable in respect of goods manufactured during the year but not cleared from factory premises at the end of year, are neither included in expenses nor considered in valuation of the inventories of such goods which is contrary to the guidance note "Accounting Treatment for Excise Duty" issued by the Institute of Chartered Accountant Of India . However the same does not have any impact on the profit of the year.

(ii) As per the consistent practice followed by the company in earlier years, the custom duty payable in respect of imported materials lying at custom bonded warehouse at the end of year, are neither included in expenses nor considered in valuation of the inventories of such materials. However this practice does not have any impact on the profit of the year.

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Mar 31, 2014

1.b The company has issued only one class of equity shares having a par value of Rs. 10/- per share. Each shareholder is entitled to one vote per share. The dividend proposed by the board of directors is subject to the approval of shareholders, except in case of interim dividend. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the company, after distribution of preferential amounts, in proportion of their shareholding.

2.c Shareholders holding more than 5% of share capital at the end of the year:

(I) Term loans from HDFC Bank Limited are :

(a) primarily secured by hypothecation of stocks, book debts and plant & machineries of the company ;

(b) further secured by way of equitable mortgage of land and building at Plot No. 92-D Government Industrial Estate, Charkop, Kandivli (W), Mumbai 400067;

(c) further collaterally secured by way of equitable mortgage of Residential Flats at 802Aand 802B, Beach Classic, J.P. Road, Versova, Andheri (W) Mumbai 400061 belonging to Shri Kishore Chand Talwar, Smt. Sharda Talwar and Shri Kundan Talwar and a plot of land at Survey No. 62, 74, 75, 20 Village Devdal (Nagpada), Kaman, Vasal (E) Thane 401202 belonging to Shri Kundan Talwar; and

(d) also personally guaranteed by Chairman & Managing Director, Whole time Director and two relatives of the Chairman & Managing Director of the Company.

Working capital loans from HDFC Bank Limited are :

(a) primarily secured by hypothecation of stocks, book debts and plant & machineries of the company ;

(b) further secured by way of equitable mortgage of land and building at Plot No. 92-D Government Industrial Estate, Charkop, Kandivli (W), Mumbai 400067;

(c) further collaterally secured by way of equitable mortgage of Residential Flats at 802Aand 802B, Beach Classic, J.P. Road, Versova, Andheri (W) Mumbai 400061 belonging to Shri Kishore Chand Talwar, Smt. Sharda Talwar and Shri Kundan Talwar and a plot of land at Survey No. 62, 74, 75, 20 Village Devdal (Nagpada), Kaman, Vasal (E) Thane 401202 belonging to Shri Kundan Talwar; and

(d) also personally guaranteed by Chairman & Managing Director, Whole time Director and two relatives of the Chairman & Managing Director of the Company.

NOTE 3: CONTINGENT LIABILITIES AND COMMITMENTS (TO THE EXTENT NOT PROVIDED FOR)

(Amount in Rs.)

As at 31.03.2014 As at 31.03.2013 (i) Contingent liabilities:

(a) Letter of credit issued by the bankers of the company 18578767.18 9216224.52

(b) Export sales bills discounted with the bankers of the company 11468000.88 0.00

(c) Disputed demand in the matters of Income tax 528937.00 364467.00

(d) Bonds/Undertakings given under duty exemption under advance licence scheme pending fulfilment of export 66950000.00 28473000.00 obligation.

(ii) Contingent commitments

(a) Estimated amount of contracts remaining to be executed on capital account and not provided for (net of 221255.72 361800.00 advances).

NOTE 4: SEGMENT REPORTING

The segment reporting as required under Accounting Standard 17 "Segment Reporting" is not applicable to the company as the company''s operations are predominantly comprises of only one business segment - Instrument cooling fans/ motors.

NOTE 5: RELATED PARTY DISCLOSURES:

I) Names of related parties and description of relationships

a) Individuals owning directly or indirectly, an interest in the voting power of the Company that gives him significant influence over the Company. Shri Kishore Chand Talwar

b) Key management personnel :

Shri Kishore Chand Talwar (Chairman & Managing Director) Smt. Nainy K. Tanna (Whole time Director)

c) Relatives of persons referred in a) and b) above

Smt. Sharda Talwar (Wife of Chairman and Managing Director of the company) Shri Kundan Talwar (Son of Chairman and Managing Director of the company) Shri Kunal Tanna (Spouse of Smt. Nainy K. Tanna, Whole time Director of the company)

NOTE 6: LEASES

The company has taken various residential premises / industrial galas under operating lease or on leave and license basis. These are generally not non- cancellable and for a period ranging between 11 months and above and are renewable at mutual consent on mutually agreeable terms. The company has given refundable interest free security deposits in accordance with the agreed terms. The rent paid in accordance with these agreements is debited to the statement of profit and loss for the year.

NOTE 7: TAXATION MATTERS:

a) The sales tax assessments of the company have been completed upto financial year 2006-2007 for its Daman unit and upto financial year 2010-11 for its Kandivali unit.

b) The income tax assessments of the company have been completed upto assessment Year 2011-2012.

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Mar 31, 2013

NOTE 1: CONTINGENT LIABILITIES AND COMMITMENTS (TO THE EXTENT NOT PROVIDED FOR)

As at 31.03.2013 As at 31.03.2012

(i) Contingent liabilities:

(a) Guarantees given by the banks on behalf of the company 0.00 5372.00

(b) Letter of credit issued by the bankers of the company 9216224.52 177413.37

(c) Disputed demand in the matters of Income tax 364467.00 364467.00

(d) Bonds/Undetakings given under duty exemption under advance licence scheme pending fulflment of export obligation 28473000.00 0.00

(ii) Contingent commitments

(a) Estimated amount of contracts remaining to be executed on capital account and not provided for (net of advances) 361800.00 0.00

NOTE 2: SEGMENT REPORTING

The segment reporting as required under Accounting Standard 17 "Segment Reporting" is not applicable to the company as the company''s operations are predominantly comprises of only one business segment – Instrument cooling fans/ motors.

NOTE 3: RELATED PARTY DISCLOSURES:

I) Names of related parties and description of relationships

a) Individuals owning directly or indirectly, an interest in the voting power of the Company that gives him signifcant infuence over the Company. Shri Kishore Chand Talwar

b) Key management personnel :

Shri Kishore Chand Talwar (Chairman & Managing Director) Smt. Nainy K. Tanna (Wholetime Director)

c) Relatives of persons referred in a) and b) above

Smt. Sharda Talwar (Wife of Chairman & Managing Director of the company) Shri Kundan Talwar (Son of Chairman & Managing Director of the company) Shri Kunal Tanna (Spouse of Smt. Nainy K. Tanna, Wholetime Director of the company)

NOTE 4: LEASES

The company has taken various residential premises / industrial galas under operating lease or on leave and license basis. These are generally not non- cancellable and for a period ranging between 11 months and above and are renewable at mutual consent on mutually agreeable terms. The company has given refundable interest free security deposits in accordance with the agreed terms. The rent paid in accordance with these agreements is debited to the statement of proft and loss for the year.

NOTE 5: DISCLOSURE UNDER MICRO, SMALL AND MEDIUM ENTERPRISES DEVELOPMENT ACT, 2006

Based on the information available, there are certain vendors who have confrmed that they are registered under the Micro, Small and Medium Enterprises Development Act, 2006 as micro and small enterprises. Disclosures as required by section 22 of ‘The Micro, Small and Medium Enterprises Development Act, 2006, are given below:

NOTE 6: TAXATION MATTERS:

a) The sales tax assessments of the company have been completed upto fnancial year 2006-2007 for its Daman unit and upto fnancial year 2004-05 for its Kandivali unit.

b) The income tax assessments of the company have been completed upto assessment Year 2011-2012.

NOTE 7: (i) As per the consistent practice followed by the company in earlier years, the excise duty payable in respect of goods manufactured during the year but not cleared from factory premises at the end of year, are neither included in expenses nor considered in valuation of the inventories of such goods which is contrary to the guidance note "Accounting Treatment for Excise Duty" issued by the Institute of Chartered Accountant Of India . However the same does not have any impact on the proft of the year.

(ii) As per the consistent practice followed by the company in earlier years, the custom duty payable in respect of imported materials lying at custom bonded warehouse at the end of year, are neither included in expenses nor considered in valuation of the inventories of such materials. However this practice does not have any impact on the proft of the year.

NOTE 8: Previous year fguers have been regrouped, rearranged and recasted to make them comparable with the current year fgures in view of change of classifcation of items.

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Mar 31, 2012

1.a The company has issued only one class of equity shares having a par value ofrS. 10/- per share. Each shareholder is entitled to one vote per share. The dividend proposed by the board of directors is subject to the approval of shareholders, except in case of interim dividend. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the company, after distribution of preferential amounts, in proportion of their shareholding.

Gratuity :

The employee's gratuity scheme is non -fund based. The present value of obligation is determined based on actuarial valuation using the Projected Unit Credit Method, which recognizes each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation.

Note 2: Segment reporting

The segment reporting as required under Accounting Standard 17 "Segment Reporting" is not applicable to the company as the company's operations are predominantly comprises of only one business segment - Instrument cooling fans/ motors.

Note 3: Related Party Disclosures:

I) Names of related parties and description of relationships

(a) Individuals owning directly or indirectly, an interest in the voting power of the company that gives him significant influence over the company

Shri. Kishore Chand Talwar

(b) Key management personnel:

Shri. Kishore Chand Talwar (Chairman & Managing Director) Smt. Nainy K. Tanna (Wholetime Director)

(c) Relatives of persons referred in a) and b) above

Smt. Sharda Talwar (Wife of Chairman & Managing Director of the company) Shri. Kundan Talwar (Son of Chairman & Managing Director of the company) Shri. Kunal Tanna (Spouse of Smt. Nainy K. Tanna, Wholetime Director of the company)

Note 4: Leases

a) The company has taken various residential premises industrial galas under operating lease or on leave and license basis. These are generally not non-cancellable and for a period ranging between 11 months and above and are renewable at mutual consent on mutually agreeable terms. The company has given refundable interest free security deposits in accordance with the agreed terms. The rent paid in accordance with these agreements is debited to the statement of profit and loss for the year.

Note 5: Taxation Matters:

a) The sales tax assessments of the company have been completed upto financial year 2006-2007 for its Daman unit and upto financial year 2004-05 for its Kandivali unit.

b) The income tax assessments of the company have been completed upto assessment Year 2010-2011.

Note 6: (i) As per the consistent practice followed by the company in earlier years, the excise duty payable in respect of goods manufactured during the year but not cleared from factory premises at the end of year, are neither included in expenses nor considered in valuation of the inventories of such goods which is contrary to the guidance note "Accounting Treatment for Excise Duty" issued by the Institute of Chartered Accountant Of India . However the same does not have any impact on the profit of the year.

(ii) As per the consistent practice followed by the company in earlier years, the custom duty payable in respect of imported materials lying at custom bonded warehouse at the end of year, are neither included in expenses nor considered in valuation of the inventories of such materials. However this practice does not have any impact on the profit of the year.

Note 7 :Till the year ended 31 st March 2011, the company was using pre-revised Schedule VI to the companies Act, ] 956, for preparation and presentation of its financial statements. During the year ended 31 st March, 2012, the revised Schedule VI notified under the companies Act, 1956, has become applicable to the company. The company has accordingly reclassified previous period figures to conform to this year's classification.

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Mar 31, 2011

1. In the opinion of Board, the current assets, loans and advances are approximately of the value stated if realized in the ordinary course of business. The provisions for all the known liabilities are adequate.

2. Managerial remuneration (remuneration to whole-time directors) paid during the year Rs. 30,00,000/- (excluding the provision for gratuity for which separate figures are not available) (previous year Rs. 24,79,884/-), which is minimum managerial remuneration payable, hence no computation of managerial remuneration under section 349 of the Companies Act, 1956, is given.

*inclusive of service tax wherever applicable however debited to profit & loss account net of cenvat credit of service tax wherever available.

3. A. Contingent liabilities not provided for -

a. Guarantees given by the banks on behalf of the Company Rs. 5,372/- (previous year Rs. 30,372/-)

b. Letter of credit issued by the bankers of the Company Rs. 37,10,200.32 (previous year Rs. 46,66,358.73 )

c. Disputed income tax demand of Rs. 47,308/- (previous yearRs. 47,308/-) for the assessment year 2006-07 against which the Company has filed an application for rectification with the Assessing Officer, which is yet to be decided.

d. Disputed fringe benefit tax demand of Rs. 13,430/- (previous year Rs. 13430/-) for the Assessment year 2007-08 against which the Company has filed an application for rectification with the Assessing Officer, which is yet to be decided.

e. Disputed excise demand of Rs. 5,49,010/- (previous year Rs. 5,49,010/-) plus interest raised by the excise authorities reduced to Rs. 2,90,005/- (previous year Rs. 2,90,005/-) by the Commissioner (Appeal). The excise authorities have preferred an appeal with the Custom Excise & Service Tax Appellate Tribunal (the CESTAT) challenging the order of the Commissioner (Appeal). The Company has also preferred a further appeal with the CESTAT against the order of the Commissioner (Appeal). The CESTAT has stayed the recovery of the said demand. The Company has already provided and paid Rs. 2,59,005/- (previous year Rs. 2,59,005/-) against the said demand.

f Liability, if any, arising on account of Bonds/Undertakings given by the Company under concessional duty / exemption schemes to Custom and Excise authorities, pending fulfillment of specified export obligation.

B. Estimated amount of contracts remaining to be executed on capital account and not provided for (net of advances) Rs. 54,37,061/- (previous year Rs. Nil).

4. The Company had revalued its fixed assets except furniture, factory building and vehicles on 31st March 1994, based on the report of an approved valuer at replacement value. The resultant increase in the book value of the said assets amounting to Rs. 1,13,65,701.78 was credited to Revaluation Reserve.

5. The Company had one foreign national shareholder holding 300000 equity shares ofRs. 10/- each during the year (Previous year - 300000 equity shares).

6. The Sales Tax Assessments of the Company have been completed upto financial year 2006-2007 for its Daman Unit and upto financial year 2004-05 for its Kandivali Unit.

7. The Income Tax Assessments of the Company have been completed upto Assessment Year 2008-2009.

8. The office of the Company Secretary has been vacant since 31st August 1999. The Company is in process of appointing a full time company secretary.

9. Under the Micro Small and Medium Enterprises Development Act, 2006, (MSMED) which came into force 2 October 2006, certain disclosures are required to be made relating to Micro Small and Medium enterprises.

On the basis of the information and records available with Company, the following disclosures are made for the amounts due to the Micro and Small Medium Enterprises:

10. Disclosure as required under Accounting Standard 15 "Employee Benefits".

B. Defined Benefit Plans :

Compensated absences:

Rs. 19195/- (previous yearRs. 31901/-) is charged off to the profit and loss account for the cost of compensated absences.

Gratuity:

The employee's gratuity scheme is non fund based. The present value of obligation is determined based on actuarial valuation using the Projected Unit Credit Method, which recognizes each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation.

The estimates of future salary growth considered in the actuarial valuation take into account inflation, seniority, promotion and other relevant factors such as demand and supply in the employment market.

11. a. During the previous year, the Company, for the first time, made provision for gratuity on actuarial valuation method which was, till earlier year, charged off to profit and loss account on cash basis, therefore, gratuity pertaining to earlier years Rs. 3,41,074/- was taken under the head "Prior period items"; and

b. During the previous year, a sum of Rs. 7,795/-, representing payment towards compensated absences which was, till earlier year, charged off to profit and loss account on cash basis, being pertaining to earlier years, was taken under the head "Prior period items".

12. The segment reporting as required under Accounting Standard 17 "Segment Reporting" is not applicable to the Company as the Company's operations are predominantly comprises of only one business segment - Instrument Cooling Fans/ Motors.

13.a) The Company has taken various residential premises / industrial galas under operating lease or on leave and license basis. These are generally not non-cancellable and for a period ranging between 11 months and above and are renewable at mutual consent on mutually agreeable terms. The Company has given refundable interest free security deposits in accordance with the agreed terms. The rent paid in accordance with these agreements is debited to profit and loss account for the year.

14. Disclosures as required under Accounting Standard 18 "Related Party Disclosure".

1. Relationships:

Key managerial personnel and their relatives:

Shri Kishore Chand Talwar (Chairman & Managing Director)

Smt. Nainy K. Tanna (Wholetime Director)

Shri Ram Bahadur Roka (Wholetime Director till 2nd March 2010)

Smt. Sharda K. Talwar (Wife of Chairman and Managing Director of the Company)

Shri Kundan Talwar (Son of Chairman and Managing Director of the Company)

Shri Kunal Tanna (Spouse of Smt. Nainy K. Tanna, Wholetime Director of the Company)

Note: Related party relationship is identified by the Company and relied upon by the auditors.

15.The Company has taken a land at Village-Devdal, Taluka-Vasai, Dist-Thane on lease for construction of its factory premises. Capital work in progress includes the following expenditure for site development and factory building on the said leasehold land:

16. a. As per the consistent practice followed by the Company in earlier years, the excise duty payable in respect of goods manufactured during the year but not cleared from factory premises at the end of year, are neither included in expenses nor considered in valuation of the inventories of such goods which is contrary to the guidance note "Accounting Treatment for Excise Duty" issued by the Institute of Chartered Accountants of India. However the same does not have any impact on the profit of the year.

b. As per the consistent practice followed by the Company in earlier years, the custom duty payable in respect of imported materials lying at custom bonded warehouse at the end of year, are neither included in expenses nor considered in valuation of the inventories of such materials. However this practice does not have any impact on the profit of the year.

17. Deposit includes deposit given to Mr. Kishore Chand Talwar, Chairman and Managing Director and Mrs. Sharda K. Talwar, Vice President - Facilities Rs.18,25,000/- each as lease deposit for the premises taken on lease from them.

b) Premium (difference between the exchange rate at the date of the inception of the forward exchange contract and forward rate specified in the contract), paid to hedge the risk associated with foreign currency fluctuations relating to existing liabilities, of FEC amortized over the life of the contract, pertaining to the year under review has been accounted for under the head Interest and financial charges;

c) A sum of Rs. 0.85 lacs representing deferred premium on the FEC, adjustable against the profit and loss account of subsequent year, has been clubbed under Loans and advances; and

d) Net of, Forward contracts receivable amounting to Rs. 171.04 lacs and forward contracts payable amounting to Rs. 181.40 lacs, has been clubbed under Current Liabilities.

18. During the previous year, insurance claim receivable Rs. 39,30,341.84, on account of loss of inventories due to flood on 3rd August 2004, being, in the opinion of the management, irrecoverable, was written off to the profit and loss account.

19. Previous year figures have been regrouped, rearranged and recasted wherever necessary to make them comparable with the current year figures.

20. Additional information pursuant to the paragraph 3, 4C and 4D of part II of Schedule VI of the Companies Act, 1956.

I Manufacturing Activities

(a) Particulars of Capacity, Production, Sales and Stock Licensed Capacity : Not Applicable

Installed Capacity : Instrument Cooling Fan 1602000 Pieces

Note: The licensed capacity and installed capacity as mentioned above has been certified by the directors on which auditors have relied without verifying the same.

# It is impracticable to furnish quantitative information of components consumed in view of considerable number of items of diverse size & number.

(c) Separately percentage and value of imported and indigenous raw material, spare parts, components consumed are not exactly ascertainable.

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Mar 31, 2010

1. In the opinion of Board, the current assets, loans and advances are approximately of the value stated if realized in the ordinary course ofbusiness. The provisions for all the known liabilities are adequate.

2. Managerial remuneration (salary) paid during the year Rs. 24,79,8847- (excluding the provision for gratuity for which separate figures are not available) (Previous Year Rs.24,40,500/-), which is minimum managerial remuneration payable, hence no computation of managerial remuneration under section 349 ofthe Companies Act, 1956, is given.

3. The Company had revalued its fixed assets except furniture, factory building and vehicles on 31" March 1994, based on the report of an approved valuer at replacement value. The resultant increase in the book value ofthe said assets amounting to Rs. 1,13,65,701.78 wascreditedto Revaluation Reserve.1

4. The office ofthe Company Secretary has been vacant since 31 "August 1999. The Company is in process of appointing a full time company secretary.

5. The Sales Tax Assessments ofthe company have been completed upto financial year 2006-2007 for its Daman Unit and upto financial year 2004-05 for its Kandivali Unit.

6. The Income Tax Assessments of the company have been completed upto Assessment Year 2008-2009.

7. Contingent Liabilities not provided fora. Guarantees given by the banks on behalf oftheCompanyRs. 30,3727- (PreviousyearRs.30,372/-)

b. Letter of Credit issued by the bankers ofthe company Rs. 2,54,27,099.96 (Previous year Rs.2,58,10,324.23)

c. Disputed Income Tax demands of Rs. Nil (Previous Year Rs. 289,6487-) for the Assessment year 1999-2000 against which the company has preferred an appeal with the Commissioner of Income Tax (Appeals), which is yet to be decided by the said authority.

d. Disputed Income Tax demands of Rs. 47,3087- (Previous Year Rs. 47,3087-) for the Assessment year 2006-07 against which the company has filed an application for rectification with the Assessing Officer, which is yet to be decided.

e. Disputed Fringe Benefit Tax demands of Rs. 13,4307- (Previous Year Nil) for the Assessment year 2007-08 against which the company has filed an application for rectification with the Assessing Officer, which is yet to be decided.

f. Disputed Excise Demand of Rs. 5,49,0107-plus interest raisedbythe Excise Authorities reduced to Rs. 2,84,0057-by the Commissioner (Appeal). The excise authorities have preferred an appeal with the Central Excise & Service Tax Appellate Tribunal (the SESTAT) challenging the order ofthe Commissioner (Appeal). The company has also preferred a further appeal with the CESTAT against the order ofthe Commissioner (Appeal). The CESTAT has stayed the recovery ofthe said demand. The company has alreadyprovided and paid Rs. 2,59,0057- against the said demand.

g. Liability, if any, arising on account of Bonds/Undertakings given by the company under concessional duty/exemption schemes to Custom and Excise authorities, pending fulfillment of specified export obligation.

8. Deposit includes deposit given to Mr. KishoreChandTalwar, Chairman and Managing Director and Mrs. Sharda K.Talwar, Vice President-Facilities Rs. 18,25,0007-each as lease deposit for the premises taken on lease from them.

9. The company has taken a land at village DevdalTalukaVasaiDist- Thane on lease for construction of its factory premises. Capital work in progress includes the following expenditure for site development and factory building on the said leasehold land:

10. a. As per the consistent practice followed by the company earlier years, the excise duty pay able in respect of goods manufactured during the year but not cleared from factory premises at the end of year, are neither included in expenses nor considered in valuation of the inventories of such goods which is contrary to the guidance note "Accounting Treatment for Excise Duty" issued by the Institute of Chartered Accountants of India. However the same does not have any impact on the profit of the year,

b. As per the consistent practice followed by the company in earlier years, the custom duty payable in respect of imported materials lying at custom bonded warehouse at the end of year, are neither included in expenses nor considered in valuation ofthe inventories of such materials. However this practice does not have any impact on the profit ofthe year.

11. Disclosure as required under Accounting Standard 15 "Employee Benefits".

2. Defined Benefit Plans: Compensated absences? During the year 2009-10, Rs. 319017- are charged off to the profit and loss account for the cost of compensated absences.

12. The segment reporting as required under Accounting Standards 17 "Segment Reporting" is not applicable to the company, as the companys operations are predominantly comprises of only one business segment -Instrument Cooling Fans/Motors.

13. Disclosures as required under Accounting Standard 18 "Related Party Disclosure".

1. Relationships:

(a) Key Management Personnel and their relatives:

Shri Kishore Chand Talwar (Chairman & Managing Director)

Smt. Sharda K. Talwar (Wholetime Director till 2nd March 2010)

Smt. Nainy K. Tanna (Wholetime Director)

Shri Ram Bahadur Roka (Wholetime Director till 2"" March 2010)

Shri Kundan Talwar (Son of Chairman and Managing Director of the company)

Shri Kunal Tanna (Spouse of Smt. Nainy K. Tanna, Wholetime Director of the company)

(b) Enterprises over which key management personnel and their relatives have significant influence.

Camy Electronics, Sagar Engineering Works, Shree Engineering Works, Subham Electrnonics (All proprietorship concern of Shri Kundan Talwar) Magnus International (Proprietorship Concern of Shri Kunal Tanna) Gratuity:

The employees gratuity scheme is non fund based. The present value of obligation is determined based on actuarial valuation using the Projected Unit Credit Method, which recognizes each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation.

14. The company has, during the year, shifted its Kandivali and Daman manufacturing facilities at Vasai.

15. Insurance claim receivable Rs. 39,30,341.84, on account of loss of inventories due to flood on 3rd August 2004, being, in the opinion of the management, irrecoverable, written off to profit and loss account.

16. Previous year figures have been regrouped, rearranged and recasted wherever necessary to make them comparable with the current year figures. 28. Additional information pursuant to the paragraph 3, 4C and 4D of part II of Schedule VI of the Companies Act, 1956. cost of respective material accounts.