Notes to Accounts of ZF Steering Gear (India) Ltd.

Mar 31, 2025

2.16 Provisions, Contingent Liabilities and Capital
Commitments

Provisions are recognized when there is a present
obligation (legal or constructive) as a result of a past event,
it is probable that an outflow of resources embodying
economic benefits will be required to settle the obligation
and a reliable estimate can be made of the amount of the
such obligation.

The expenses relating to a provision is presented in the
Statement of Profit and Loss net of reimbursements, if any.

If the effect of the time value of money is material, provisions
are discounted using a current pre-tax rate that reflects,
when appropriate, the risks specific to the liability. When
discounting is used, the increase in the provision due to the
passage of time is recognized as a finance cost.

Contingent liabilities are possible obligations whose
existence will only be confirmed by future events not wholly
within the control of the Company, or present obligations
where it is not probable that an outflow of resources will
be required or the amount of the obligation cannot be
measured with sufficient reliability.

Contingent liabilities are not recognized in the financial
statements but are disclosed unless the possibility of an
outflow of economic resources is considered remote.

Contingent liabilities and Capital Commitments disclosed
are in respect of items which in each case are above the
threshold limit.

2.17 Employee Benefits

(i) Short-term obligations

Liabilities for wages and salaries, including non¬
monetary benefits that are expected to be settled
wholly within 12 months after the end of the period in
which the employees render the related service are
recognised in respect of employees'' services up to
the end of the reporting period and are measured at
the amounts expected to be paid when the liabilities
are settled. The liabilities are presented as current
employee benefit obligations in the balance sheet.

(ii) Other long-term employee benefit obligations

Leave encashment Accumulated leave, which is
expected to be utilized within the next twelve months, is
treated as short-term employee benefit. The Company
measures the expected cost of such absences as the
additional amount that it expects to pay as a result of
the unused entitlement that has accumulated at the
reporting date. The Company treats accumulated leave
expected to be carried forward beyond twelve months,
as long-term employee benefit for measurement
purposes. Such long-term compensated absences
are provided for based on the actuarial valuation using
the projected unit credit method at the reporting date.
Remeasurements, comprising of actuarial gains and
losses are recognized in full in the statement of profit
and loss. Expense on non-accumulating compensated
absences is recognized in the period in which the
absences occur.

(iii) Post-employment obligations

The Company operates the following post-employment
schemes:

(a) defined benefit plans such as gratuity; and

(b) defined contribution plans such as provident fund.

Defined Benefit Plans - Gratuity obligations

The liability or asset recognised in the balance sheet in
respect of defined benefit gratuity plans is the present value
of the defined benefit obligation at the end of the reporting
period less the fair value of plan assets. The defined benefit
obligation is calculated annually by actuaries using the
projected unit credit method.

The present value of the defined benefit obligation
denominated in INR is determined by discounting the
estimated future cash outflows by reference to market
yields at the end of the reporting period on government
bonds that have terms approximating to the terms of the
related obligation.

The net interest cost is calculated by applying the discount
rate to the net balance of the defined benefit obligation

and the fair value of plan assets. This cost is included in
employee benefit expense in the statement of profit and
loss.

Remeasurement gains and losses arising from experience
adjustments and changes in actuarial assumptions are
recognised in the period in which they occur, directly in
other comprehensive income. They are included in retained
earnings in the statement of changes in equity and in the
balance sheet.

Changes in the present value of the defined benefit
obligation resulting from plan amendments or curtailments
are recognised immediately in profit or loss as past service
cost.

Defined contribution plan

The Company pays provident fund contributions to publicly
administered provident funds as per local regulations.
The Company has no further payment obligations once
the contributions have been paid. The contributions are
accounted for as defined contribution plans and the
contributions are recognised as employee benefit expense
when they are due. Prepaid contributions are recognised
as an asset to the extent that a cash refund or a reduction
in the future payments is available.

(iv) Termination benefits

Termination benefits are payable when employment
is terminated by the Company before the normal
retirement date, or when an employee accepts
voluntary redundancy in exchange for these benefits.

2.18 Asset classified as held for sale

The Company classifies non-current assets as held for
sale if their carrying amounts will be recovered principally
through a sale rather than through continuing use.

Non-current assets held for sale are measured at the lower
of their carrying amount and the fair value less costs to
sell. Assets and liabilities classified as held for sale are
presented separately in the balance sheet.

Property, plant, and equipment once classified as held for
sale are not depreciated or amortized.

2.19 Earnings per share

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

(i) Repo rate will be as per rate specified by RBI. Repo rate will be reset quarterly.

First reset date - The External Benchmark rate of the loans / facility will be first reset on the 16th day of second calender month,
excluding the month of disbursement.

Subsequent reset date - The External Benchmark rate will subsequently be reset on the 16th day of 3rd month, which is immediately
succeding the previous reset date.

(ii) The Company has complied the relevant provisions of the Companies Act, 2013 and the transactions are not violative of the
Prevention of Money Laundering Act, 2002 (15 of 2003).

(iii) Refer Note 26 (A) for fair value measurements of financial assets and liabilities and Note 26 (B) for fair value hierarchy disclosures
of financial assets and liabilities.

(iv) Company has issued comfort letter in lieu of Corporate Guarantee on behalf of subsidiary to their banker towards credit facilities.
** The Company has created charge over the 49% shares of Metacast Auto Pvt Ltd, which are held by Suprem Iron (India) Pvt.

Ltd.

(i) Terms/ rights, preferences and restrictions attached to equity shares:

The Company has only one class of equity shares having a par value of Rs. 10/- per share. Each holder of equity shares is entitled
to one vote per share. The Company declares and pays dividend in Indian Rupee.

The Company declares and pays dividend in Indian Rupees except in the case of overseas shareholders where dividend is paid
in respective foreign currencies considering foreign exchange rate applied at the date of remittance. The dividend proposed by
the Board of Directors is subject to the approval of shareholders in the Annual General Meeting.

In the event of liquidation of the Company, the holders of each equity share will be entitled to receive remaining assets of the
Company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held
by shareholders.

The shareholders of the company at its annual general meeting held on 10 September 2024 declared dividend of Rs.8/- per equity
share of Rs. 10 each for the Financial Year 2023-24.

Credit risk is the risk of financial loss to the Company if the counterparty fails to meet its contractual obligations. The Company
is exposed to credit risk from its operating activities (primarily trade receivables). However, the credit risk on account of financing
activities, i.e., balances with banks is very low, since the Company holds all the balances with approved bankers only.

Trade receivables

Credit risk is managed through credit approvals, establishing credit limits and continuously monitoring the customers outstanding
balances to which the Company grants credit terms in the normal course of business. Concentration of credit risk with respect to
trade receivables are limited, as the Company''s customer are reputed and having good credit credentials as well as that they are long
standing customers. All trade receivables are reviewed and assessed for default on a fortnightly basis.

[B] Liquidity risk

Liquidity risk is the risk the Company faces in meeting its obligations associated with its financial liabilities. 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.

Maturities of financial liabilities

The below table analyses the Company''s financial liabilities into relevant maturity groupings based on their contractual maturities.
The amounts disclosed in the table are contractual undiscounted cash flows, balances due within 12 months equal their carrying
balances as the impact of discounting is not significant.

The Company''s size and operations result in it being exposed to the following market risks that arise from its use of financial
instruments:

• Currency risk; and

• Interest rate risk

The above risks may affect the Company''s income and expenses, or the value of its financial instruments.

(i) Foreign currency risk

The Company is subject to the risk that changes in foreign currency values impact the Company''s exports revenue and imports
of raw material. The risk exposure is with respect to various currencies viz. USD, EURO and YEN. The risk is measured through
monitoring the net exposure to various foreign currencies and the same is minimized to the extent possible.

(a) Foreign currency risk exposure

The Company''s exposure to foreign currency risk at the end of the reporting period expressed in INR, are as follows:

(B) FAIR VALUE HIERARCHY

Fair value is the amount for which an asset could be exchanged, or a liability settled between knowledgeable willing parties in an
arm''s length transaction. The Company has made certain judgements and estimates in determining the fair values of the financial
instruments that are (a) recognised and measured at fair value and (b) measured at amortised cost and for which fair values are
disclosed in the financial statements.

To provide an indication about the reliability of the inputs used in determining fair value, the Company as classified the financial
instruments into three levels prescribed under the accounting standard. An explanation of each level is as follows:

Level 1: Level 1 hierarchy includes financial instruments measured using quoted prices. This includes mutual funds that have
quoted price. The mutual funds are valued using the closing NAV.

Level 2: Level 2 hierarchy includes financial instruments that are not traded in an active market is determined using valuation
techniques which maximise the use of observable market data and rely as little as possible on entity-specific estimates.

Level 3: If one or more of the significant inputs is not based on the observable market data, the instrument is included in Level 3
hierarchy.

(C) VALUATION TECHNIQUES

Specific valuation techniques used to value financial instruments include

- the use of quoted market prices for mutual funds

- the fair value of the remaining financial instruments is determined using discounted cash flow analysis or such other acceptable
valuation methodology, wherever applicable

There are no items in the financial instruments, which required level 3 valuation.

27 CAPITAL MANAGEMENT
(a) Risk management

The Company''s objective when managing capital are to:

Safeguard its ability to continue as going concern, so that it can continue to provide returns for its shareholder and benefits
for others.

Maintain an optimal capital structure to reduce the cost of equity

In order to maintain or adjust the capital structure, the Company may adjust the amount of dividends paid to shareholders
return capital to shareholders, issue new shares or sell assets to reduce debts.

Consistent with others in the industry, the Company monitors capital on the basis of the following gearing ratio

Net Debt (Total borrowing net and obligations under finance lease of cash and cash equivalents and other bank balance) and

divided by Total equity (as shown in the Balance Sheet)

28 SEGMENT INFORMATION

[A] Description of segment and principal activities

The Company''s Operating Segments are established on the basis of those components of the Company that are evaluated
regularly by the CODM (the ''Chief Operating Decision Maker'' as defined in Ind AS 108- ''Operating Segments''), in deciding how to
allocate resources and in assessing performance. These have been identified taking into account nature of products and services,
the differing risks and returns and internal business reporting systems.

The Company has two reportable segments :

A) Auto component :- This is related to auto component manufacturing.

B) Renewable energy:-This is related to electricity generation through solar and windmill.

The accounting policies adopted for segment reporting are in line with the accounting policy of the Company with one additional
policies for segment reporting. That Segment Assets and segment liability represent assets and liabilities in respective segments.
Tax related assets/ liabilities and other assets/ liability that cannot be allocated to a segment on reasonable basis have been
disclosed as "unallocable".

[D] Major customers

Revenue of approximately Rs. 317.14 Crore (31 March, 2024 Rs. 319.09 Crore) are derived from three major external customers
of the Company. This revenue is attributed to auto component manufacturing segment.

29 EMPLOYEE BENEFIT OBLIGATIONS
29(a) Defined Contribution plans

Provident Fund: Contribution towards provident fund for employees is made to the regulatory authorities, where the Company
has no further obligations. Such benefits are classified as defined contribution schemes as the Company does not carry any
further obligations, apart from the contributions made on a monthly basis. Amount recognised as expenses in the profit and
loss statement in respect of defined contribution plan is Rs. 0.99 Crore (Previous year - Rs. 0.87 Crore).

29(b) Defined Benefit plans

Gratuity: The Company provides for gratuity, a defined benefit plan (the “Gratuity Plan”) covering eligible employees in ac¬
cordance with the Payment of Gratuity Act, 1972. 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. The Company''s liability is actuarially determined (using the Projected Unit Credit method) at the
end of each year. The fair value of the plan assets of the trust administered by the Company, is deducted from the gross obli¬
gation, and Assumptions used in valuation are discount rate, escalation, mortality rate, etc.

b) As reported earlier, certain employees, who were employed in supervisory category, remained absent from work during the
Financial Year 2018-19 and also submitted the alleged charter of demand. The Company, after taking precautionary steps
and in exercise of its rights as the employer, terminated services of 236 such employees and also denied their claim of salary
/ remuneration for the period of absence, before termination of their services.

As per legal obligation, the company had filed 236 approval applications by way of abandoned cautions. Before the Industrial
Tribunal, Pune out of which 228 approvals are granted by the Tribunal, and 8 cases are pending in court in approval application.
Further, out of 236 dismissal cases, 135 employees have settled their all cases and remaining 101 cases are pending in Pune
courts.

The Company has been advised that, these individuals or any other person have no valid claims, in respect of any of their
demands including but not limited to the demand related to salary / remuneration for unauthorized absenteeism during the
course of their employment with the Company. This disclosure is being made as a matter of caution and without prejudice to
the legal position of the Company before any Judicial Forum or Statutory Authority.

c) The last Wage Settlement dated 01.03.2015, with the workmen of the Company, employed at the Vadu Budruk factory,
expired on 31.08.2018. Thereafter, based on the Charter of Demands submitted by ZF Steering Gear Kamgar Sangathana,
dated 18.03.2018, the conciliation proceedings were initiated before the Assistant Labour Commissioner (Labour Office,
Pune), the Conciliation Officer. The said Officer submitted the Failure Report to the Government and the matter is referred to
the Hon''ble Member, Industrial Tribunal, Pune, which Reference is pending consideration of the Hon''ble Member, Industrial
Tribunal, Pune. Considering the pendency of the said Reference and though strictly not required, the Company, as a matter
of caution, submitted the Approval Applications, in respect of dismissal of 74 workmen of the Company, working at the Vadu
Budruk factory, to whom punishment for misconduct was awarded, after conducting enquiries. The Approval for action of
termination of the workmen was granted by the Hon''ble Member, Industrial Tribunal, Pune and the matter was referred for
adjudication before the Labour Court, Pune, in respect of 74 cases. Out of 74 cases, in case of 44 workmen, the Hon''ble
Labour Court, Pune passed the order dated 12.03.2024 on the preliminary issues that the enquiry conducted against these
workmen is legal, fair and proper. On challenge the said order dated 12.03.2024 by these 44 workmen in writ petition, the
Hon''ble Bombay High Court vide its order dated 05.12.2024 has rejected the said writ petition and upheld the findings of the
Enquiry Officer as legal, fair and proper. Now these 44 workmen are in the process of filing evidences before the Hon''ble
Labour Court, Pune. For the balance 30 workmen, the matter is pending consideration of the Hon''ble Labour Court, Pune.
This disclosure is being made as a matter of caution and without prejudice to the legal position of the Company before any
Judicial Forum or Statutory Authority.

32 COMMITMENTS

a) Estimated amount of contracts remaining to be executed on capital account and not provided for Rs. 18.82 Crore (31 March,
2024 - Rs.24.07 Crore).

b) Total export obligation under the EPCG Scheme was Rs. 33.64 Crores (31 March, 2024 is Rs. 33.91 Crores) and obligation
payable as on 31 March, 2025 is Rs.5.61 Crore (31 March, 2024 Rs.5.65 Crore).

33 There are no transactions and / or disputed balance outstanding with companies struck off under section 248 of the Companies
Act, 2013.

34 The company does not have any charges or satisfaction of charges which is yet to be registered with ROC beyond statutory
period except for one charge satisfaction of which is under process by ROC.

37 As reported earlier, the Company had received a communication dated 19 October 2022, from ZF Friedrichshafen AG (''ZF AG''),
regarding alleged infringement and passing off, of the trademark/mark “ZF” and/or “ZF India” and amongst other alleged demands,
ZF Friedrichshafen AG, has claimed a sum of Rs.100 crores in damages from the Company. The Company continues to be of
the opinion that, it has not committed any act of infringement and/or passing off, in any manner whatsoever. The Company vide
communication dated 12 April 2023, had sent a detailed reply to ZF Friedrichshafen AG. The allegations of ZF Friedrichshafen
AG and/or ZF India Private Limited are neither accepted nor acceptable to the Company. The Company has also sent a letter to
certain affiliates of ZF Friedrichshafen AG, to cease and desist the use of the name “ZF” and/or “ZF India”, in relation to certain
products, as per the terms of the No-Objection Letter dated 28 July 2006, issued by the Company to ZF Friedrichshafen AG.
In addition to the same, the Company has filed 2 (two) commercial suits against ZF Friedrichshafen AG and others, before the
Hon''ble District Court, Pune and the same are pending consideration of the Hon''ble District Court, Pune.

In September 2024, the Company received a communication, from ZF Friedrichshafen AG and ZF India Private Limited, stating
that they have filed a Commercial IP Suit along with Interim Application before the Hon''ble High Court of Judicature at Bombay in
relation to the alleged infringement of the alleged trademarks/mark of ZF Friedrichshafen AG and/or and ZF India Private Limited
and amongst other things, ZF Friedrichshafen AG and ZF India Private Limited have allegedly demanded a sum of Rs.200 crore
in alleged damages, from the Company and prayed for certain interim relief(s) till the conclusion of the aforesaid Commercial
Suit. The said Commercial Suit and the said Interim Application is pending consideration of the Hon''ble High Court of Judicature
at Bombay. In the Company''s opinion, it has not committed any act of infringement and/or passing off and the Company does not
in any manner whatsoever, accepts any allegation of infringement, passing off and/or demands of ZF Friedrichshafen AG & ZF
India Private Limited. This disclosure is made, without prejudice to the rights of the Company and only in order to comply with the
applicable disclosure requirements to the Company, as a listed entity.

38 The ministry of corporate Affairs (MCA) vide its notification No. GSR206 (E) dated 24th March, 24, 2021 has issued Companies
(Audit and Auditors) Amendment Rules, 2021'' read with sub-section 3 of section 143 of Companies Act, 2013 introducing new
Rule 11(g) which is effective from 1st April, 2023.

Rule 11(g) states that every company which uses the accounting software for maintaining its books of accounts shall use only the
accounting software where there is a feature of recording audit trail for each and every transaction, and further creating an edit
log of each change made to books of account along with the date when such changes were made and ensuring that, the audit
trail cannot be disabled.

The ZF India uses SAP HANA as a primary accounting software for maintaining the books of account, which has features of
recording audit trail facility and that has been operative and maintained/preserved throughout the financial year for the transactions
recorded in the software impacting books of account at application level.

39 Figures of the previous financial year have been regrouped, wherever necessary, to confirm to the current period''s classification
and Presented in Rupees Crore.

As per our report of even date For and on behalf of the Board of Directors of ZF Steering Gear (India) Ltd.

CIN: L29130PN1981PLC023734

For Joshi Apte & Co. Dinesh Munot Utkarsh Munot Shrenik gandhi

Firm Registration Number: 104370W Chairman Managing Director Chairman of Audit Committee

Chartered Accountants DIN : 00049801 DIN : 00049903 DIN :10929891

Kaustubh Deshpande Jinendra Jain Satish Mehta

Partner Chief Financial Officer Company Secretary

Membership No. : 131090

Place: Pune Place: Pune

Date: 17 May, 2025 Date: 17 May, 2025

---

Mar 31, 2024

2.16Provisions, Contingent Liabilities and Capital Commitments

Provisions are recognized when there is a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the such obligation.

The expenses relating to a provision is presented in the Statement of Profit and Loss net of reimbursements, if any.

If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that reflects, when appropriate, the risks specific to the liability. When discounting is used, the increase in the provision due to the passage of time is recognized as a finance cost.

Contingent liabilities are possible obligations whose existence will only be confirmed by future events not wholly within the control of the Company, or present obligations where it is not probable that an outflow of resources will be required or the amount of the obligation cannot be measured with sufficient reliability.

Contingent liabilities are not recognized in the financial statements but are disclosed unless the possibility of an outflow of economic resources is considered remote

Contingent liabilities and Capital Commitments disclosed are in respect of items which in each case are above the threshold limit.

2.17 Employee Benefits

(i) Short-term obligations

Liabilities for wages and salaries, including nonmonetary benefits that are expected to be settled wholly within 12 months after the end of the period in which the employees render the related service are recognised in respect of employees'' services up to the end of the reporting period and are measured at the amounts expected to be paid when the liabilities are settled. The liabilities are presented as current employee benefit obligations in the balance sheet.

(ii) Other long-term employee benefit obligations

Leave encashment Accumulated leave, which is expected to be utilized within the next twelve months, is treated as short-term employee benefit. The Company measures the expected cost of such absences as the additional amount that it expects to pay as a result of

the unused entitlement that has accumulated at the reporting date. The Company treats accumulated leave expected to be carried forward beyond twelve months, as long-term employee benefit for measurement purposes. Such long-term compensated absences are provided for based on the actuarial valuation using the projected unit credit method at the reporting date. Remeasurements, comprising of actuarial gains and losses are recognized in full in the statement of profit and loss. Expense on non-accumulating compensated absences is recognized in the period in which the absences occur.

(iii) Post-employment obligations

The Company operates the following post-employment schemes:

(a) defined benefit plans such as gratuity; and

(b) defined contribution plans such as provident fund.

Defined Benefit Plans - Gratuity obligations

The liability or asset recognised in the balance sheet in respect of defined benefit gratuity plans is the present value of the defined benefit obligation at the end of the reporting period less the fair value of plan assets. The defined benefit obligation is calculated annually by actuaries using the projected unit credit method.

The present value of the defined benefit obligation denominated in INR is determined by discounting the estimated future cash outflows by reference to market yields at the end of the reporting period on government bonds that have terms approximating to the terms of the related obligation.

The net interest cost is calculated by applying the discount rate to the net balance of the defined benefit obligation and the fair value of plan assets. This cost is included in employee benefit expense in the statement of profit and loss.

Remeasurement gains and losses arising from experience adjustments and changes in actuarial assumptions are recognised in the period in which they

occur, directly in other comprehensive income. They are included in retained earnings in the statement of changes in equity and in the balance sheet.

Changes in the present value of the defined benefit obligation resulting from plan amendments or curtailments are recognised immediately in profit or loss as past service cost.

Defined contribution plan

The Company pays provident fund contributions to publicly administered provident funds as per local regulations. The Company has no further payment obligations once the contributions have been paid. The contributions are accounted for as defined contribution plans and the contributions are recognised as employee benefit expense when they are due. Prepaid contributions are recognised as an asset to the extent that a cash refund or a reduction in the future payments is available.

(iv) Termination benefits

Termination benefits are payable when employment is terminated by the Company before the normal retirement date, or when an employee accepts voluntary redundancy in exchange for these benefits.

2.18 Asset classified as held for sale

The Company classifies non-current assets as held for sale if their carrying amounts will be recovered principally through a sale rather than through continuing use.

Non-current assets held for sale are measured at the lower of their carrying amount and the fair value less costs to sell. Assets and liabilities classified as held for sale are presented separately in the balance sheet.

Property, plant, and equipment once classified as held for sale are not depreciated or amortized.

2.19 Rounding off amounts

All amounts disclosed in the financial statements and notes have been rounded off to the nearest Crore as per the requirement of Schedule III, unless otherwise stated.

(B) FAIR VALUE HIERARCHY

Fair value is the amount for which an asset could be exchanged, or a liability settled between knowledgeable willing parties in an arm''s length transaction. The Company has made certain judgements and estimates in determining the fair values of the financial instruments that are

(a) recognised and measured at fair value and

(b) measured at amortised cost and for which fair values are disclosed in the financial statements.

To provide an indication about the reliability of the inputs used in determining fair value, the Company as classified the financial instruments into three levels prescribed under the accounting standard. An explanation of each level is as follows:

Level 1: Level 1 hierarchy includes financial instruments measured using quoted prices. This includes mutual funds that have quoted price. The mutual funds are valued using the closing NAV.

Level 2: Level 2 hierarchy includes financial instruments that are not traded in an active market is determined using valuation techniques which maximise the use of observable market data and rely as little as possible on entity-specific estimates.

Level 3: If one or more of the significant inputs is not based on the observable market data, the instrument is included in Level 3 hierarchy.

(C) VALUATION TECHNIQUES

Specific valuation techniques used to value financial instruments include

- the use of quoted market prices for mutual funds

- the fair value of the remaining financial instruments is determined using discounted cash flow analysis or such other acceptable valuation methodology, wherever applicable

There are no items in the financial instruments, which required level 3 valuation.

27 CAPITAL MANAGEMENT

The Company policy is to have robust financial base so as to maintain outsider''s confidence and to sustain future development of the business. Management monitors the return on capital, as well as level of dividends to equity shareholders. The Company monitors capital using a ratio of "adjusted net debt" to "adjusted equity". For this purpose, adjusted net debt is defined as total liability, Comprising interest-bearing loans and borrowing and obligations under financial lease, less cash and cash equivalents. Adjusted equity includes the share capital, reserve and surplus.

28 SEGMENT INFORMATION

[A] Description of segment and principal activities

The Company''s Operating Segments are established on the basis of those components of the Company that are evaluated regularly by the CODM (the ''Chief Operating Decision Maker'' as defined in Ind AS 108- ''Operating Segments''), in deciding how to allocate resources and in assessing performance. These have been identified taking into account nature of products and services, the differing risks and returns and internal business reporting systems.

[D] Major customers

Revenue of approximately Rs. 319.09 Crore (PY- Rs. 293.83 Crore) are derived from three major external customers of the Company. This revenue is attributed to auto component manufacturing segment.

29 EMPLOYEE BENEFIT OBLIGATIONS 29(a) Defined Contribution plans

Provident Fund: Contribution towards provident fund for employees is made to the regulatory authorities, where the Company has no further obligations. Such benefits are classified as defined contribution schemes as the Company does not carry any further obligations, apart from the contributions made on a monthly basis. Amount recognised as expenses in the profit and loss statement in respect of defined contribution plan is Rs. 0.87 Crore (Previous year - Rs. 0.78 Crore).

29(b) Defined Benefit plans

Gratuity: The Company provides for gratuity, a defined benefit plan (the “Gratuity Plan”) covering eligible employees in accordance with the Payment of Gratuity Act, 1972. 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. The Company''s liability is actuarially determined (using the Projected Unit Credit method) at the end of each year. The fair value of the plan assets of the trust administered by the Company, is deducted from the gross obligation, and Assumptions used in valuation are discount rate, escalation, mortality rate, etc.

b) As reported earlier, certain employees, who were employed in supervisory category, remained absent from work during the Financial Year 2018-19 and also submitted the alleged charter of demand. The Company, after taking precautionary steps and in exercise of its rights as the employer, terminated services of 236 such employees and also denied their claim of salary / remuneration for the period of absence, before termination of their services. Out of the legal proceedings initiated against the Company in respect of these matters by these ex-employees; the proceedings related to 100 ex-employees are still pending before the Judicial Forum. The Company has been advised that, these individuals or any other person have no valid claims, in respect of any of their demands including but not limited to the demand related to salary/remuneration for unauthorized absenteeism during the course of their employment with the Company. This disclosure is being made as a matter of caution and without prejudice to the legal position of the Company before any Judicial Forum or Statutory Authority.

c) The last Wage Settlement dated 01.03.2015, with the workmen of the Company, employed at the Vadu Budruk factory, expired on 31.08.2018. Thereafter, based on the Charter of Demands submitted by ZF Steering Gear Kamgar Sangathana, dated 18.03.2018, the conciliation proceedings were initiated before the Assistant Labour Commissioner (Labour Office, Pune), the Conciliation Officer. The said Officer submitted the Failure Report to the Government and the matter is referred to the Hon''ble Member, Industrial Tribunal, Pune, which Reference is pending consideration of the Hon''ble Member, Industrial Tribunal, Pune. Considering the pendency of the said Reference and though strictly not required, the Company, as a matter of caution, submitted the Approval Applications, in respect of dismissal of 74 workmen of the Company, working at the Vadu Budruk factory, to whom punishment for misconduct was awarded, after conducting enquiries. The Approval for action of termination of the workmen was granted by the Hon''ble Member, Industrial Tribunal, Pune and the matter was referred for adjudication before the Labour Court, Pune. Out of 74 cases, in case of 44 workmen, the Hon''ble Labour Court, Pune passed the order on the preliminary issues that the enquiry conducted against these workmen is legal, fair and proper. Now these 44 workmen are in the process of filing evidences before the Hon''ble Labour Court, Pune.

33 COMMITMENTS

a) Estimated amount of contracts remaining to be executed on capital account and not provided for Rs. 24.07 Crore (March 31, 2023 - Rs. 12.85 Crore).

b) Total export obligation under the EPCG Scheme was Rs. 33.91 crores and obligation payable as on March 31, 2024 is Rs. 5.65 Crores (March 2023 - Rs. 9.06 Crores).

34 There are no transactions and / or disputed balance outstanding with companies struck off under section 248 of the Companies Act, 2013.

35 The company does not have any charges or satisfaction of charges which is yet to be registered with ROC beyond statutory period except for one charge satisfaction of which is under process by ROC.

38 As reported earlier, the Company had received a communication dated 19 October 2022, from ZF Friedrichshafen AG (''ZF AG''), regarding alleged infringement and passing off, of the trademark/mark “ZF” and/or “ZF India” and amongst other alleged demands, ZF Friedrichshafen AG, has claimed a sum of Rs.100 crores in damages from the Company. The Company continues to be of the opinion that, it has not committed any act of infringement and/or passing off, in any manner whatsoever. The Company vide communication dated 12 April 2023, had sent a detailed reply to ZF Friedrichshafen AG. The allegations of ZF Friedrichshafen AG and/or ZF India Private Limited are neither accepted nor acceptable to the Company. The Company has also sent a letter to certain affiliates of ZF Friedrichshafen AG, to cease and desist the use of the name “ZF” and/or “ZF India”, in relation to certain products, as per the terms of the No-Objection Letter dated 28 July 2006, issued by the Company to ZF Friedrichshafen AG. In addition to the same, the Company has filed 2 (two) commercial suits against ZF Friedrichshafen AG and others, before the Hon''ble District Court, Pune and the same are pending for adjudication before the Hon''ble District Court, Pune. This disclosure is made, without prejudice to the rights of the Company and only in order to comply with the applicable disclosure requirements to the Company, as a listed entity.''''

39 The ministry of corporate Affairs (MCA) vide its notification No. GSR206 (E) dated 24th March 24, 2021 has issued Companies (Audit and Auditors) Amendment Rules, 2021'' read with sub-section 3 of section 143 of Companies Act, 2013 introducing new Rule 11(g) which is effective from 1st April, 2023.

Rule 11(g) states that every company which uses the accounting software for maintaining its books of accounts shall use only the accounting software where there is a feature of recording audit trail for each and every transaction, and further creating an edit log of each change made to books of account along with the date when such changes were made and ensuring that, the audit trail cannot be disabled.

The ZF India uses SAP HANA as a primary accounting software for maintaining the books of account, which has features of recording audit trail edit logs facility and that has been operative throughout the financial year for the transactions recorded in the software impacting books of account at application level.

40 The Board of Directors have recommended a dividend at the rate Rs. 8 per share on equity shares of Rs.10 each for the financial year ended 31 March 2024, subject to the approval of shareholders in the Annual General Meeting of the Company.

41 Figures of the previous financial year have been regrouped, wherever necessary, to confirm to the current period''s classification and Presented in Rupees Crore.

The accompanying notes are an integral part of these standalone financial statements

As per our report of even date For and on behalf of the Board of Directors of ZF Steering Gear (India) Ltd.

CIN: L29130PN1981PLC023734

For Joshi Apte & Co. Dinesh Munot Chairman

Firm Registration Number: 104370W DIN : 00049801

Chartered Accountants Utkarsh Munot Managing Director

DIN : 00049903

Kaustubh Deshpande S.A. Gundecha Director and Chairman of the Audit Committee

Partner DIN : 00220352

Membership No. : 131090 Jinendra Jain Chief Financial Officer

Satish Mehta Company Secretary

Place: Pune Place: Pune

Date: May 25, 2024 Date: May 25, 2024

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Mar 31, 2023

2.20 Provisions, Contingent Liabilities and Capital Commitments

Provisions are recognized when there is a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the such obligation.

The expenses relating to a provision is presented in the Statement of Profit and Loss net of reimbursements, if any.

If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that reflects, when appropriate, the risks specific to the liability. When discounting is used, the increase in the provision due to the passage of time is recognized as a finance cost.

Contingent liabilities are possible obligations whose existence will only be confirmed by future events not wholly within the control of the Company, or present obligations where it is not probable that an outflow of resources will be required or the amount of the obligation cannot be measured with sufficient reliability

Contingent liabilities are not recognized in the financial statements but are disclosed unless the possibility of an outflow of economic resources is considered remote. Contingent liabilities and Capital Commitments disclosed are in respect of items which in each case are above the threshold limit.

2.21 Employee Benefits

(i) Short-term obligations

Liabilities for wages and salaries, including nonmonetary benefits that are expected to be settled wholly within 12 months after the end of the period in which the employees render the related service are recognised in respect of employees'' services up to

the end of the reporting period and are measured at the amounts expected to be paid when the liabilities are settled. The liabilities are presented as current employee benefit obligations in the balance sheet.

(ii) Other long-term employee benefit obligations

Leave encashment Accumulated leave, which is expected to be utilized within the next twelve months, is treated as short-term employee benefit. The Company measures the expected cost of such absences as the additional amount that it expects to pay as a result of the unused entitlement that has accumulated at the reporting date. The Company treats accumulated leave expected to be carried forward beyond twelve months, as long-term employee benefit for measurement purposes. Such long-term compensated absences are provided for based on the actuarial valuation using the projected unit credit method at the reporting date. Remeasurements, comprising of actuarial gains and losses are recognized in full in the statement of profit and loss. Expense on non-accumulating compensated absences is recognized in the period in which the absences occur.

(iii) Post-employment obligations

The Company operates the following post-employment schemes:

(a) defined benefit plans such as gratuity; and

(b) defined contribution plans such as provident fund.

Defined Benefit Plans - Gratuity obligations

The liability or asset recognised in the balance sheet in respect of defined benefit gratuity plans is the present value of the defined benefit obligation at the end of the reporting period less the fair value of plan assets. The defined benefit obligation is calculated annually by actuaries using the projected unit credit method.

The present value of the defined benefit obligation denominated in INR is determined by discounting the estimated future cash outflows by reference to market yields at the end of the reporting period on government bonds that have terms approximating to the terms of the related obligation.

The net interest cost is calculated by applying the discount rate to the net balance of the defined benefit obligation and the fair value of plan assets. This cost is included in employee benefit expense in the statement of profit and loss.

Remeasurement gains and losses arising from experience adjustments and changes in actuarial assumptions are recognised in the period in which they occur, directly in other comprehensive income. They are included in retained earnings in the statement of changes in equity and in the balance sheet.

Changes in the present value of the defined benefit obligation resulting from plan amendments or curtailments are recognised immediately in profit or loss as past service cost.

Defined contribution plan

The Company pays provident fund contributions to publicly administered provident funds as per local regulations. The Company has no further payment obligations once the contributions have been paid. The contributions are accounted for as defined contribution plans and the contributions are recognised as employee benefit expense when they are due. Prepaid contributions are recognised as an asset to the extent that a cash refund or a reduction in the future payments is available.

(iv) Termination benefits

Termination benefits are payable when employment is terminated by the Company before the normal retirement date, or when an employee accepts voluntary redundancy in exchange for these benefits.

2.22 Earnings per share

(i) Basic earnings per share

Basic earnings per share is calculated by dividing:

- the profit attributable to owners of the Company;

- by the weighted average number of equity shares outstanding during the financial year, adjusted for bonus elements in equity shares issued during the year.

(ii) Diluted earnings per share

Diluted earnings per share adjusts the figures used in

the determination of basic earnings per share to take

into account:

- the after income tax effect of interest and other financing costs associated with dilutive potential equity shares, and

- the weighted average number of additional equity shares that would have been outstanding assuming the conversion of all dilutive potential equity shares.

2.23 Rounding off amounts

All amounts disclosed in the financial statements and notes have been rounded off to the nearest Crore as per the requirement of Schedule III, unless otherwise stated.

(B) fair value hierarchy

Fair value is the amount for which an asset could be exchanged, or a liability settled between knowledgeable willing parties in an arm''s length transaction. The Company has made certain Judgements and estimates in determining the fair values of the financial instruments that are

(a) recognised and measured at fair value and

(b) measured at amortised cost and for which fair values are disclosed in the financial statements.

To provide an indication about the reliability of the inputs used in determining fair value, the Company as classified the financial instruments into three levels prescribed under the accounting standard. An explanation of each level is as follows:

Level 1: Level 1 hierarchy includes financial instruments measured using quoted prices. This includes mutual funds that have quoted price. The mutual funds are valued using the closing NAV.

Level 2: Level 2 hierarchy includes financial instruments that are not traded in an active market is determined using valuation techniques which maximise the use of observable market data and rely as little as possible on entity-specific estimates.

Level 3: If one or more of the significant inputs is not based on the observable market data, the instrument is included in Level 3 hierarchy.

(C) valuation techniques

Specific valuation techniques used to value financial instruments include

- the use of quoted market prices for mutual funds

- the fair value of the remaining financial instruments is determined using discounted cash flow analysis or such other acceptable valuation methodology, wherever applicable There are no items in the financial instruments, which required level 3 valuation.

c) As reported earlier, certain employees, who were employed In supervisory category, remained absent from work during the Financial Year 2018-19 and also submitted the alleged charter of demand. The Company, after taking precautionary steps and in exercise of its rights as the employer, terminated services of 236 such employees and also denied their claim of salary / remuneration for the period of absence, before termination of their services. Out of the legal proceedings initiated against the Company In respect of these matters by these ex-employees; the proceedings related to 100 ex-employees are still pending before the Judicial Forum. The Company has been advised that, these individuals or any other person have no valid claims, in respect of any of their demands including but not limited to the demand related to salary/remuneration for unauthorized absenteeism during the course of their employment with the Company. This disclosure is being made as a matter of caution and without prejudice to the legal position of the Company before any Judicial Forum or Statutory Authority.

d) The last Wage Settlement dated 01.03.2015, with the workmen of the Company, employed at the Vadu Budruk factory, expired on 31.08.2018. Thereafter, based on the Charter of Demands submitted by ZF Steering Gear Kamgar Sangathana, dated 18.03.2018, the conciliation proceedings were Initiated before the Assistant Labour Commissioner (Labour Office, Pune), the Conciliation Officer. The said Officer submitted the Failure Report to the Government and the matter Is referred to the Hon''ble Member, Industrial Tribunal, Pune, which Reference is pending consideration of the Hon''ble Member, Industrial Tribunal, Pune. Considering the pendency of the said Reference and though strictly not required, the Company, as a matter of caution, submitted the Approval Applications, in respect of dismissal of 74 workmen of the Company, working at the Vadu Budruk factory, to whom punishment for misconduct was awarded, after conducting enquiries. The said Applications of the Company are also pending consideration of the Hon''ble Member, Industrial Tribunal, Pune.

33 COMMITMENTS

a) Estimated amount of contracts remaining to be executed on capital account and not provided for Rs. 12.85 Crore (March 31, 2022 - Rs. 12.83 Crore).

b) Total export obligation under the EPCG Scheme was Rs. 37.02 crores and obligation payable as on March 31, 2023 is Rs. 9.06 Crores (March 2022 - Rs. 20.54 Crores).

34 There are no transactions and / or disputed balance outstanding with companies struck off under section 248 of the Companies Act, 2013.

35 The company does not have any charges or satisfaction of charges which is yet to be registered with ROC beyond statutory period except for one charge satisfaction of which is under process by ROC.

38 As reported earlier, the Company has received a communication dated 19 October 2022, from ZF Friedrichshafen AG, regarding alleged infringement and passing off, of the trademark/mark “ZF” and/or “ZF India” and amongst other alleged demands, ZF Friedrichshafen AG, has claimed a sum of Rs. 100 crores in damages from the Company. The Company continues to be of the opinion that, it has not committed any act of infringement and/or passing off, in any manner whatsoever. The Company vide communication dated 12 April 2023, has sent a detailed reply to ZF Friedrichshafen AG. The allegations of ZF Friedrichshafen AG and/or ZF India Private Limited are neither accepted nor acceptable to the Company. The Company has also sent a letter to certain affiliates of ZF Friedrichshafen AG, to cease and desist the use of the name “ZF” and/or “ZF India”, in relation to certain products, as per the terms of the No-Objection Letter dated 28 July 2006, issued by the Company to ZF Friedrichshafen AG. This disclosure is made, without prejudice to the rights of the Company and only in order to comply with the applicable disclosure requirements to the Company, as a listed entity.

39 recent pronouncements

Ministry of Corporate Affairs vide notification dated 31st March,2023 has amended following Indian Accounting Standards (Ind AS) ,effective from 1st April, 2023.

Ind AS 1, Presentation of financial statements

• Companies should now disclose material accounting policies rather than their significant accounting policies.

• Accounting policies information, together with other information, is material when it can reasonably be expected to influences decisions of primary users of general purpose financial statement.

Ins AS 8, Accounting policies, change in accounting estimates and errors

• Definition of ''changes in account estimate'' has been replaced by revised definition of accounting estimate.

• As per revised definition, accounting estimates are monetary amounts in the financial statements that are subject to measurement uncertainly.

• A company develops an accounting estimate to achieve the objective set out by an accounting policy.

• Accounting estimate includes:

A. Selection of measurement technique (estimate or valuation technique).

B. Selecting the inputs to be used when applying the chosen measurement technique.

Ins AS 12, Income taxes

• Narrowed the scope of the initial recognition exemption (IRE)(with regard to leases and decommissioning obligations).

• Now IRE does not apply to transaction that give rise to equal and offsetting temporary differences.

• Accordingly, companies will need to recognize a deferred tax assets and a deferred tax liability for temporary differences arising on transactions such an initial recognition of a lease and a decommissioning provision.]

Company does not see any material impact in next financial year.

40 The Board of Directors have recommended a dividend at the rate Rs. 5 per share on equity shares of Rs.10 each for the financial year ended 31 March 2023, subject to the approval of shareholders in the Annual General Meeting of the Company.

41 Figures of the previous financial year have been regrouped, wherever necessary, to confirm to the current period''s classification and Presented in Rupees Crore.

As per our report of even date For and on behalf of the Board of Directors of ZF Steering Gear (India) Ltd.

CIN: L29130PN1981PLC023734

For Joshi Apte & Co. Dinesh Munot Chairman

Firm Registration Number: 104370W DIN : 00049801

Chartered Accountants Utkarsh Munot Managing Director

DIN : 00049903

Prakash Apte S.A. Gundecha Director and Chairman of the Audit Committee

Partner DIN : 00220352

Membership No. : 033212 Jinendra Jain Chief Financial Officer

Satish Mehta Company Secretary

Place: Pune Place: Pune

April 29, 2023 April 29, 2023

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Mar 31, 2018

1 Company overview

ZF Steering Gear (India) Limited (“the Company”) is a listed Company domiciled in India and was incorporated in1981 under the provision of the Companies Act, 1956. The Company is primarily engaged in the business of production & assembling of steering systems for vehicles, buses and tractors. The Company has plant at Vadu Budruk, Near Pune for production and assembling of steering systems and accessories.

A. Security

As at 31-March-2018, properties worth Rs. 161.19 Million (31-March-2017 Rs.133.79 Million) are subject to first charge against borrowings and as at 31-March-2018 properties worth Rs. 478.60 Million (31-March-2017 Rs. 646.24 Million, 1-April-2016 Rs. 560.04 Million) are pledged as second charges against cash credit facilities. See note-12.

B. Capital work in progress

Capital work in progress includes certain plant and machinery setup under construction.

C. Transition to Ind AS

Ind AS 101 Exemption : The Company has availed the exemption available under Ind AS 101, whereas the carrying value of property, plant and equipment has been carried forward at the amount as determined under the previous GAAP Considering the guidance note on Schedule III issued by the ICAI, regarding application of deemed cost, the Company has disclosed the cost as at 1 April 2016 net of accumulated depreciation. However, information regarding gross block of assets, accumulated depreciation has been disclosed by the Company separately as follows:-

Estimation of Fair value

The above fair valuation is based on the Annual Statement Rate (ASR), commonly known as Ready Reckoner, issued by the State Government of Maharashtra, and are not based on valuation by an independent valuer.

Subsequent events

Subsequent to 31-March-2018, management of the Company has determined its use of building currently recognised as investment property to be owner occupied. Accordingly this would result in reclassification of the asset under investment property to property, plant and equipment.

A. Transition to Ind AS

Ind AS 101 Exemption : The Company has availed the exemption available under Ind AS 101, whereas the carrying value of intangible asset has been carried forward at the amount as determined under the previous GAAP Considering the guidance note on Schedule III issued by the ICAI, regarding application of deemed cost, the Company has disclosed the cost as at 1 April 2016 net of accumulated depreciation. However, information regarding gross block of assets, accumulated depreciation has been disclosed by the Company separately as follows.

Transferred receivables

The carrying amount of trade receivables includes receivables which are discounted with banks. The Company has transferred the relevant receivables to the discounting bank in exchange for cash. However, the Company has retained the late payment and credit risk. Accordingly, the Company continues to recognise the transferred assets in entirely in its balance sheet. The amount repayable under the bill discounting arrangement is presented as borrowing.

(i) Terms/ rights, preferences and restrictions attached to equity shares:

The Company has only one class of equity shares having a par value of Rs. 10/- per share. Each holder of equity shares is entitled to one vote per share. The Company declares and pays dividend in Indian Rupee. The dividend recommended by the Board of Directors is subject to approval of the members at the ensuing Annual General Meeting.

In the event of liquidation of the Company, the holders of each equity share will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by shareholders.

(a) Part I of 1988/ Package Scheme of Incentives and Part I of 1993/ Package Scheme of Incentives

Sales Tax incentive scheme of Govt. of Maharashtra, by way of deferment of Sales Tax liability, for expansion carried out by the Company, being eligible unit under the scheme, implemented then through SICOM (The State Industrial and Investment Corporation Of Maharashtra Limited).

(b) Additional Incentives under Package Scheme 1988

Additional incentive scheme of Govt. of Maharashtra, by way of deferment of sales tax liability, as per Govt. Circular No.IDL1005/ (C.R.354)/ IND-8 Dated 06.11.2006.

(c) 1998 Power Generation promotion policy

Sales Tax incentive scheme of Govt. of Maharashtra, by way of deferment of Sales Tax liability, for achieving required Power Load Factor (PLF) for the Company''s Wind Farm project, implemented through MEDA (Maharashtra Energy Development Agency).

Note (i) - Warranty provision

The Company generally offers a 2 years warranty for its products. Warranty costs are determined as a percentage of sales based on the past trends of the costs required to be incurred for repairs, replacements, material costs and servicing cost. Management estimates the related provision for future warranty claims based on historical warranty claim information, as well as recent trends that might suggest that past information may differ from future claims. The assumptions made in current period are consistent with those in the prior year. As the time value of money is not considered to be material, warranty provisions are not discounted.

B. Expenditure incurred on corporate social responsibility activities

The Expenditure incurred for complying with provisions for the CSR expenditure required under section 135 of Companies Act, 2013 has been done through contribution to Prime Minister''s National Relief Fund and various NGO''s (Non Government Organisation).

2. FINANCIAL RISK MANAGEMENT

The Company''s business activities are exposed to a variety of financial risks, viz liquidity risk, market risk and credit risk. The Management of the Company has the overall responsibility for establishing and governing the Company''s risk policy framework. The risk management policies are formulated after the identification and analysis of the risks and suitable risk limits and controls are set which are monitored & reviewed periodically. The changes in the market conditions and allied areas are accordingly reflected in the changes of the policy. The key risks and mitigating actions are placed before the Audit Committee of the Company who then evaluates and takes the necessary corrective action. The sources of risk, which the Company is exposed to and how the Company manages these risks with their impact on the Financial Statements is given below:

[A] Credit risk

Credit risk is the risk of financial loss to the Company if the counterparty fails to meet its contractual obligations. The Company is exposed to credit risk from its operating activities (primarily trade receivables). However, the credit risk on account of financing activities, i.e., balances with banks is very low, since the Company holds all the balances with approved bankers only.

Trade receivables

Credit risk is managed through credit approvals, establishing credit limits and continuously monitoring the customers outstanding balances to which the Company grants credit terms in the normal course of business. Concentration of credit risk with respect to trade receivables are limited, as the Company''s customer are reputed and having good credit credentials as well as that they are long standing customers. All trade receivables are reviewed and assessed for default on a fortnightly basis.

[B] Liquidity risk

Liquidity risk is the risk the Company faces in meeting its obligations associated with its financial liabilities. 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.

Maturities of financial liabilities

The below table analyses the Company''s financial liabilities into relevant maturity groupings based on their contractual maturities. The amounts disclosed in the table are contractual undiscounted cash flows, balances due within 12 months equal their carrying balances as the impact of discounting is not significant.

[C] Market risk

The Company''s size and operations result in it being exposed to the following market risks that arise from its use of financial instruments:

- Currency risk; and

- Interest rate risk

The above risks may affect the Company''s income and expenses, or the value of its financial instruments.

(i) Foreign currency risk

The Company is subject to the risk that changes in foreign currency values impact the Company''s exports revenue and imports of raw material. The risk exposure is with respect to various currencies viz. USD, EURO and YEN. The risk is measured through monitoring the net exposure to various foreign currencies and the same is minimized to the extent possible.

(b) Foreign currency sensitivity analysis

The sensitivity of profit and loss to changes in the exchange rates arises mainly from foreign currency denominated financial instruments. The following tables demonstrate the sensitivity to a reasonably possible change in USD,EUR and YEN exchange rates, with all other variables held constant:

ii) Interest rate risk

Interest rate risk can be either fair value interest rate risk or cash flow interest rate risk. Fair value interest rate risk is the risk of changes in fair values of fixed interest bearing financial assets or borrowings because of fluctuations in the interest rates, if such assets/ borrowings are measured at fair value through profit or loss. Cash flow interest rate risk is the risk that the future cash flows of floating interest bearing borrowings will fluctuate because of fluctuations in the interest rates.

3. FAIR VALUE MEASUREMENTS

Accounting classification and fair values

The following table shows the carrying amounts and fair values of financial assets and financial liabilities, including their levels in the fair value hierarchy. It does not include fair value information for financial assets and financial liabilities if the carrying amount is a reasonable approximation of fair value.

(B) FAIR VALUE HIERARCHY

Fair value is the amount for which an asset could be exchanged, or a liability settled between knowledgeable willing parties in an arm''s length transaction. The Company has made certain judgements and estimates in determining the fair values of the financial instruments that are (a) recognised and measured at fair value and (b) measured at amortised cost and for which fair values are disclosed in the financial statements.

To provide an indication about the reliability of the inputs used in determining fair value, the Company as classified the financial instruments into three levels prescribed under the accounting standard. An explanation of each level is as follows:

Level 1: Level 1 hierarchy includes financial instruments measured using quoted prices. This includes mutual funds that have quoted price. The mutual funds are valued using the closing NAV.

Level 2: Level 2 hierarchy includes financial instruments that are not traded in an active market is determined using valuation techniques which maximise the use of observable market data and rely as little as possible on entity-specific estimates.

Level 3: If one or more of the significant inputs is not based on the observable market data, the instrument is included in Level 3 hierarchy.

(C) VALUATION TECHNIQUES

There are no items in the financial instruments, which required level 3 valuation.

Specific valuation techniques used to value financial instruments include

- the use of quoted market prices for mutual funds

- the fair value of the remaining financial instruments is determined using discounted cash flow analysis or such other acceptable valuation methodology, wherever applicable

4. CAPITAL MANAGEMENT

A The company policy is to have robust financial base so as to maintain outsider''s confidence and to sustain future development of the business. Management monitors the return on capital, as well as level of dividends to equity shareholders. The company monitors capital using a ratio of "adjusted net debt" to "adjusted equity". For this purpose, adjusted net debt is defined as total liability, Comprising interest-bearing loans and borrowing and obligations under financial lease, less cash and cash equivalents. Adjusted equity includes the share capital, reserve and surplus.

B Event occurring after balance sheet date

The Board of Directors has recommended Equity dividend of Rs. 8 Per Share (Previous year Rs. 8) for the financial year 2017-18.

5. SEGMENT INFORMATION

[A] Description of segment and principal activities

The company''s Operating Segments are established on the basis of those components of the company that are evaluated regularly by the CMD (the ''Chief Operating Decision Maker'' as defined in Ind AS 108- ''Operating Segments''), in deciding how to allocate resources and in assessing performance. These have been identified taking into account nature of products and services, the differing risks and returns and internal business reporting systems.

The Company has two reportable segments :

i) Auto component :- This is related to auto component manufacturing.

ii) Renewable energy:-This is related to electricity generation through solar or windmill.

The accounting policies adopted for segment reporting are in line with the accounting policy of the company with one additional policies for segment reporting. That Segment Assets and segment liabilities represent assets and liabilities in respective segments. Tax related assets/liabilities and other assets/liabilities that cannot be allocated to a segment on reasonable basis have been disclosed as "unallocable".

6. EMPLOYEE BENEFIT OBLIGATIONS

6(a) Defined Contribution plans

Provident Fund: Contribution towards provident fund for employees is made to the regulatory authorities, where the Company has no further obligations. Such benefits are classified as defined contribution schemes as the Company does not carry any further obligations, apart from the contributions made on a monthly basis. Amount recognised as expenses in the profit and loss statement in respect of defined contribution plan is Rs. 13.52 Million (Previous year - Rs. 15.36 Million)

6(b) Defined Benefit plans

Gratuity: The Company provides for gratuity, a defined benefit plan (the “Gratuity Plan”) covering eligible employees in accordance with the Payment of Gratuity Act, 1972. 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. The Company''s liability is actuarially determined (using the Projected Unit Credit method) at the end of each year. The fair value of the plan assets of the trust administered by the Company, is deducted from the gross obligation.

Notes:7

1. Discount rate: The discount rate is based on the prevailing market yields of Indian government securities for the estimated term of the obligations.

2. Salary escalation rate: The estimates of future salary increases considered takes into account the inflation, seniority, promotion and other relevant factors.

3. Assumptions regarding future mortality experience are set in accordance with the statistics published by the Life Insurance Corporation of India.

8. OPERATING LEASES

Company, as lessee, has entered into two non cancellable land lease agreements for a period of 30 years. Company has paid entire lease rentals in advance at the inception of lease. These advance rentals payments have been shown as prepaid lease rentals.

9. MICRO, SMALL AND MEDIUM ENTERPRISES

Under the Micro, Small and Medium Enterprises Development Act, 2006 certain disclosure are required to be made for enterprises which are covered under the Act. Since the company is in a process of compiling relevant information from its suppliers about their coverage under the said Act, no disclosures have been made. However, in view of the management ,the impact of interest, if any, that may be payable in accordance with the provisions of this Act is not expected to be material.

10. COMMITMENTS

a) Estimated amount of contracts remaining to be executed on capital account and not provided for Rs. 426.52 Million (31^st March 2017 - Rs. 63.22 Million, 31^st March 2016 - Rs. 68.58 Million).

b) The Company has deferred payment of certain Sales tax Liability under various Package Scheme of Incentives of Government of Maharashtra. The Company is required to comply with conditions of above package Schemes of Incentives, the various Eligibility Certificates granted under such Schemes, stipulations or undertaking as per the Agreements entered into in connection with the grant of incentive under the said Schemes or on the Eligibility Certificates.

11. The Company has 26% joint venture interest in Robert Bosch Automotive Steering Private Limited, a company incorporated in India. As on March 31, 2018 the Company has further invested Rs. 98.80 Million (previous year Rs. 143.00 Million) in the share capital of this Joint Venture.

12. FIRST-TIME ADOPTION OF IND AS

These are Company''s first financial statements prepared in accordance with 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 Company''s date of transition). In preparing its opening Ind AS balance sheet, the Group has adjusted the amounts reported previously in financial statements prepared in accordance with the accounting standards notified under Companies (Accounting Standards) Rules, 2006 (as amended) and other relevant provisions of the Act (previous GAAP or Indian GAAP).

A. Exemptions and exceptions availed

A.1 Ind AS mandatory exceptions

A.1.1 Estimates

An entity''s estimates in accordance with Ind ASs at the date of transition to Ind AS shall be consistent with estimates made for the same date in accordance with previous GAAP (after adjustments to reflect any difference in accounting policies), unless there is objective evidence that those estimates were in error. Ind AS estimates as at 1 April 2016 are consistent with the estimates as at the same date made in conformity with previous GAAP.

The Company had made estimates for following items in accordance with Ind AS at the date of transition as these were not required under previous GAAP:

1. Investment in equity instruments carried at FVTPL;

2. Investment in debt instruments carried at FVTPL;

3. Impairment of financial assets based on expected credit loss model; and

4. Provision for sales return

A.1.2 De-recognition of financial assets and liabilities

Ind AS 101 requires a first-time adopter to apply the de-recognition provisions of Ind AS 109 prospectively for transactions occurring on or after the date of transition to Ind AS. However, Ind AS 101 allows a first-time adopter to apply the de-recognition requirements
in Ind AS 109 retrospectively from a date of the entity''s choosing, provided that the information needed to apply Ind AS 109 to financial assets and financial liabilities derecognised as a result of past transactions was obtained at the time of initially accounting for those transactions. The Company has elected to apply the de-recognition provisions of Ind AS 109 prospectively from the date of transition to Ind AS.

A.1.3 Classification and measurement of financial assets

Ind AS 101 requires an entity to assess classification and measurement of financial assets (investment in debt instruments) on the basis of the facts and circumstances that exist at the date of transition to Ind AS.

A.2 Ind AS optional exemptions

A.2.1 Deemed cost

Property, Plant and Equipment:

The Company has elected to continue the carrying value measured as per previous GAAP as deemed cost for all property, plant and equipments.

Intangible assets and Investment property:

The Company has elected to continue with the carrying value measured as per the Previous GAAP and use that as its deemed cost for all its intangible assets and investment property at the date of transition to Ind ASs.

A.2.2 Leases

Ind AS 101 provides the option to determine whether an arrangement existing at date of transition is, or contains, a lease based on the facts and circumstances at that date and not at lease start date. Accordingly, the company has elected to determine arrangement existing at the date of transition and not at lease start date.

B. Reconciliations between Previous GAAP and Ind AS

In preparing our opening Ind AS balance sheet, we have adjusted amounts reported in financial statements prepared in accordance with IGAAP. An explaination of how the transition from IGAAP to Ind AS has affected our financial performance, cash flows and financial position is set out in the following tables and the notes that accompany the tables. Further, the Company has also made other adjustments resulting from misapplication of previous GAAP, which as required by paragraph 26 of Ind AS 101 have been identified separately in the notes presented below:

Notes to Reconciliation: Ind AS adjustments

1. Capitalisation of spare parts

Under previous GAAP, spare parts were classified as inventory and charged to profit and loss account in the period in which they were issued for use. Under Ind AS, spare parts used over more than one period are classified as property, plant and equipment and depreciated from the date of purchase. The Company has done the adjustment on transition date retrospectively.

2. Leases

Under previous GAAP leasehold land having lease period of 30 years was recognised as fixed assets. However under Ind AS this arrangement of lease does not meet the criteria of finance lease. Hence it has been reclassified as operating lease.

3. Investments

Under previous GAAP, investments in quoted equity instruments and mutual funds were recorded at cost. Under Ind AS, investments are required to be valued at fair value. The Company has classified these instruments as fair value through profit and loss and adjusted the amounts as on transition date.

4. Provisions for sales return

The Company has a practice of accepting sales returns from the customers for a period of six months. Accordingly under Ind AS, the Company has recorded a sales return based on analysis of historical data. The Company has accordingly adjusted revenue for the year ended 31 March 2017.

5. Provisions for warranty

The Company has an obligation of providing warranty on sales of products for 24 months from the date of sale. Accordingly under Ind AS, the Company has recorded a provision for warranty based on analysis of historical data. The Company has accordingly adjusted warranty expenses and provision for warranty.

6. Trade Receivables (subject to Bill Discounting)

Under previous GAAP, the Company has a practice of derecognizing trade receivables which are subject to bill discounting with banks. However, under Ind AS, if the trade receivables are discounted with recourse, the same are not de-recognised as these receivables do not meet the derecognition criteria as required by Ind AS 109.

7. Remeasurements of post-employment benefit obligations

Under Ind AS, remeasurements i.e. actuarial gains and losses and the return on plan assets, excluding amounts included in the net interest expense on the net defined benefit liability are recognised in Other Comprehensive Income (OCI) instead of profit or loss. Under the previous GAAP, these remeasurements were forming part of the profit or loss for the year. As a result of this change, the profit for the year ended March 31, 2017 increased by Rs. 11.32 Million. There is no impact on the total equity as at 31 March 2016.

8. Deferred tax

Deferred tax have been recognised on various adjustments made on transition to Ind AS.

13. RECENT INDIAN ACCOUNTING STANDARDS (IND AS)

Ministry of Corporate Affairs ("MCA") through Companies (Indian Accounting Standards) Amendment Rules, 2018 has notified the following new and amendments to Ind ASs which the Company has not applied as they are effective for annual periods beginning on or after April 1, 2018:

Ind AS 115 - Revenue from Contracts with Customers Ind AS 21 - The effect of changes in Foreign Exchange rates Ind AS 115 - Revenue from Contracts with Customers

Ind AS 115 establishes a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers. Ind AS 115 will supersede the current revenue recognition standard Ind AS 18 Revenue, Ind AS 11 Construction Contracts when it becomes effective.

The core principle of Ind AS 115 is that an entity should recognise revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. Specifically, the standard introduces a 5-step approach to revenue recognition:

- Step 1: Identify the contract(s) with a customer

- Step 2: Identify the performance obligation in contract

- Step 3: Determine the transaction price

- Step 4: Allocate the transaction price to the performance obligations in the contract

- Step 5: Recognise revenue when (or as) the entity satisfies a performance obligation

Under Ind AS 115, an entity recognises revenue when (or as) a performance obligation is satisfied, i.e. when ''control'' of the goods or services underlying the particular performance obligation is transferred to the customer.

The Company has completed its evaluation of the possible impact of Ind AS 115 and will adopt the standard with all related amendments to all contracts with customers retrospectively with the cumulative effect of initially applying the standard recognised at the date of initial application. Under this transition method, cumulative effect of initially applying IND AS 115 is recognised as an adjustment to the opening balance of retained earnings of the annual reporting period. The standard is applied retrospectively only to contracts that are not completed contracts at the date of initial application. The Company does not expect the impact of the adoption of the new standard to be material on its retained earnings and to its net income on an ongoing basis.

Ind AS 21 - The effect of changes in Foreign Exchange rates

The amendment clarifies on the accounting of transactions that include the receipt or payment of advance consideration in a foreign currency. The appendix explains that the date of the transaction, for the purpose of determining the exchange rate, is the date of initial recognition of the non-monetary prepayment asset or deferred income liability. If there are multiple payments or receipts in advance, a date of transaction is established for each payment or receipt. The Company is evaluating the impact of this amendment on its financial statements.

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Mar 31, 2017

NOTE 1 - THE NET EXCHANGE DIFFERENCES ARISING DURING THE YEAR:

Recognized appropriately in the profit and loss account - net gain - Rs. in Million 1.20 (31st March, 2016 - net loss - Rs. in Million 3.47)

NOTE 2 - DETAILS OF EMPLOYEE BENEFITS AS REQUIRED BY THE ACCOUNTING STANDARD 15 (REVISED) EMLPLOYEES BENEFITS ARE AS UNDER

(A) Defined Contribution Plan

Amount recognized as an expense in the Profit and Loss Account in respect of Defined Contribution Plans is Rs. Million 15.36

(B) Defined Benefit Plan

i) Actuarial gains and losses in respect of defined benefit plans are recognised in the Profit & Loss Account.

ii) The Defined Benefit Plans comprise of Gratuity and Leave Encashment. Gratuity is funded.

Gratuity is a benefit to an employee based on 15 days (depending on the grade/ category of employee and completed year of services) last drawn salary of each year.

a) The Discount rate is based on the prevailing market yields of Indian Government securities as at the Balance Sheet date for the estimated terms of the obligations.

b) Expected Rate of Return of Plan Assets: This is based on the expectation of the average long term rate of return expected on investments of the Fund during the estimated term of obligations.

c) Salary Escalation Rate : The estimates of future salary increases considered takes into account the inflation, seniority, promotion and other relevant factors.

NOTE 3 -

Amount of borrowing costs capitalized during the year Rs. In Million - 0.38 (31st March, 2016- Rs. In Million - NIL)

NOTE 4 - EARNINGS PER SHARE

(a) The amount used as the numerator in calculating basic and diluted earnings per share is the net profit after tax for the year disclosed in the Profit and Loss Statement.

(b) The weighted average number of equity shares used as the denominator in calculating both basic and diluted earnings per share is 9,073,300.

NOTE 5- Details of provisions and movements in each class of provisions as required by the Accounting Standard on Provisions, Contingent Liabilities and Contingent Assets (Accounting Standard-29).

Brief description of the nature of the obligation and the expected timing of any resulting outflows of economic benefits : Warranty Provision :

Warranty cost are accrued at the time of products are sold, based on past experience. The provision is discharged over the warranty period of 24 months from the date of sale.

NOTE 6 - VALUE OF IMPORTED AND INDIGENOUS RAW MATERIALS, COMPONENTS AND PACKING MATERIAL CONSUMED

NOTE 7 - COMMITMENTS

a) Estimated amount of contracts remaining to be executed on capital account and not provided for Rs. In Million - 63.22 (31st March 2016 - Rs. In Million - 68.58).

b) The Company has deferred payment of certain Sales tax Liability under various Package Scheme of Incentives of Government of Maharashtra. The Company is required to comply with conditions of above package Schemes of Incentives, the various Eligibility Certificates granted under such Schemes, stipulations or undertaking as per the Agreements entered into in connection with the grant of incentive under the said Schemes or on the Eligibility Certificates.

NOTE 8 - The Company has 26% joint venture interest in Robert Bosch Automotive Steering Private Limited, a company incorporated in India. As on March 31, 2017 the Company has further invested Rs.143.00 Million (previous year Rs. 176.80 Million) in the share capital of this Joint Venture.

The Company''s share of each of the assets, liabilities, income and expenses (each without elimination of the effect of transaction between the Company and the Joint Venture ), related to its interest in the joint venture as per AS 27

NOTE 9- Details of CSR Expenditure : The Expenditure incurred for complying with provisions for the CSR expenditure required under section 135 of Companies Act, 2013 has been done through contribution to Prime Minister''s National Relief Fund and various NGO''s (Non Government Organization). _R in Million

NOTE 10- DISCLOSURE ON SPECIFIED BANK NOTES (SBNs)

During the year ,The Company had specified bank notes or other denomination note as defined in the MCA notification G.S.R. 308 ( E ) dated March 31, 2017 on the details of Specified Bank Note (SBN) held and transacted during the period from November 8, 2016 to December 30, 2016 , the denomination wise SBNs and other notes as per notification is given below. /In Runcicic''

For the purpose of this clause the term ''Specified Bank notes'' shall have the same meaning provided in the notification of the Government of India, In the Ministry of Finance,

Department of economic Affairs number S.O.3407 ( E ), dated the 8th November, 2016.

NOTE 11- Corresponding Figures of the previous year have been regrouped/ recast, wherever necessary, so as to confirm with the current year''s presentation.

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Mar 31, 2016

When the grant or subsidy relates to revenue, it is recognized as income on a systematic basis in the Statement of Profit and Loss over the periods necessary to match them with the related costs, which they are intended to compensate. Where the grant relates to an asset, it is recognized as deferred income and is allocated to Statement of Profit and Loss over the periods and in the proportions in which depreciation on those assets is charged .

ii) Terms/Rights attached to Equity Shares

The Company has only one class of equity shares having a par value of Rs. 10/- per share. Each holder of equity shares is entitled to one vote per share. The Company declares and pays dividend in Indian Rupee. The dividend recommended by the Board of Directors is subject to approval of the members at the ensuing Annual General Meeting.

During the Year ended on 31st March, 2016, the amount of per share dividend paid as distribution to equity shareholders is Rs.12.50 (P.Y. 10). In the event of liquidation of the Company, the holders of each equity share will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts.

The distribution will be in proportion to the number of equity shares held by shareholders.

Part I of 1988/ Package Scheme of Incentives -

Sales Tax incentive scheme of Govt. of Maharashtra, by way of deferment of Sales Tax liability, for expansion carried out by the Company, being eligible unit under the scheme, implemented then through SICOM (The State Industrial and Investment Corporation Of Part I of 1993/ Package Scheme of Incentives –

Maharashtra Limited)

Additional Incentives under Package Scheme 1988 Additional Incentives Scheme of Govt. of Maharashtra, by way of deferment of Sales Tax liability, as per Govt. Circular No. IDL-1005/(C.R.354)/ IND-8 Dated 06.11.2006.

1998 Power Generation promotion policy- Sales Tax incentive scheme of Govt. of Maharashtra, by way of

deferment of Sales Tax liability, for achieving required Power Load Factor (PLF) for the Company''s Wind Farm project, implemented through MEDA (Maharashtra Energy Development Agency)

Note : Investment which are pledged with the bank are shown in bold (Refer Note No : 6)

NOTE 1- THE NET EXCHANGE DIFFERENCES ARISING DURING THE YEAR:

Recognized appropriately in the profit and loss account - net loss - Rs. in Million 3.47 (31st March, 2015 - net gain - Rs. in Million 9.62)

NOTE 2 - DETAILS OF EMPLOYEE BENEFITS AS REQUIRED BY THE ACCOUNTING STANDARD 15 (REVISED) EMLPLOYEES BENEFITS ARE AS UNDER

(A) Defined Contribution Plan

Amount recognized as an expense in the Profit and Loss Account in respect of Defined Contribution Plans is Rs. Million 12.76.

(B) Defined Benefit Plan

i) Actuarial gains and losses in respect of defined benefit plans are recognized in the Profit & Loss Account.

ii) The Defined Benefit Plans comprise of Gratuity and Leave Encashment. Gratuity is funded.

Gratuity is a benefit to an employee based on 15 days (depending on the grade/ category of employee and completed year of services) last drawn salary of each year.

a) The Discount rate is based on the prevailing market yields of Indian Government securities as at the Balance Sheet date for the estimated terms of the obligations.

b) Expected Rate of Return of Plan Assets : This is based on the expectation of the average long term rate of return expected on investments of the Fund during the estimated term of obligations

c) Salary Escalation Rate : The estimates of future salary increases considered takes into account the inflation, seniority, promotion and other relevant factors

NOTE 3 -

Amount of borrowing costs capitalized during the year Rs. In Million - NIL (31st March, 2015 - Rs. In Million - NIL)

NOTE 4 - RELATED PARTY DISCLOSURES:

A) Name of the related party and nature of relationship where control exists:

Name of Related Party Nature of Relationship

Robert Bosch Automotive Steering GmbH Foreign Collaborator :

ZF Shanghai Steering Co.Ltd., China "] Associated Companies of Robert

ZF Sistemas De Direcao Ltd, Brazil - Bosch Automotive Steering GmbH

ZF Steering Jincheng (Nanjing),China J

Varsha Forgings Ltd. _ Director''s interested company

KCTR Varsha Automotive Pvt. Ltd.

Robert Bosch Automotive Steering Private Limited Joint venture company

(Company has 26% stake in the company)

Mr. Dinesh Munot - Chairman & Managing Director

Mr. Jinendra Munot - Jt. Managing Director ^_ Key Managerial Personnel

Mr. Utkarsh Munot - Chief Executive officer J

Mrs. Eitika Munot Relative of Key Managerial Personnel

NOTE 5- EARNINGS PER SHARE

(a) The amount used as the numerator in calculating basic and diluted earnings per share is the net profit after tax for the year disclosed in the Profit and Loss Statement.

(b) The weighted average number of equity shares used as the denominator in calculating both basic and diluted earnings per share is 9,073,300

NOTE 6- Details of provisions and movements in each class of provisions as required by the Accounting Standard on Provisions, Contingent Liabilities and Contingent Assets (Accounting Standard-29)

Brief description of the nature of the obligation and the expected timing of any resulting outflows of economic benefits : Warranty Provision :

Warranty cost are accrued at the time of products are sold, based on past experience. The provision is discharged over the warranty period of 18 months from the date of sale.

NOTE 7 - COMMITMENTS

a) Estimated amount of contracts remaining to be executed on capital account and not provided for Rs. In Million - 68.58 (31st March 2015 - Rs. In Million - 26.68 ).

b) The Company has deferred payment of certain Sales tax Liability under various Package Scheme of Incentives of Government of Maharashtra. The Company is required to comply with conditions of above package Schemes of Incentives, the various Eligibility Certificates granted under such Schemes, stipulations or undertaking as per the Agreements entered into in connection with the grant of incentive under the said Schemes or on the Eligibility Certificates.

NOTE 8 - Interim Dividend amount paid to Shareholders Rs. 12.50 (P. Y Rs. 10) per share.

NOTE 9 - Under the Micro, Small and Medium Enterprises Development Act, 2006 certain disclosure are required to be made for enterprises which are covered under the Act. Since the Company is in a process of compiling relevant information from its suppliers about their coverage under the said Act, no disclosures have been made. However, in view of the management, the impact of interest, if any, that may be payable in accordance with the provisions of this Act is not expected to be material.

NOTE 10 - In Previous year''s provision for current taxes includes provision for wealth tax of Rs. In Millions - 0.3 NOTE 43 - The Company has 26% joint venture interest in Robert Bosch Steeirng Automotive Private Limited, a company incorporated in India.

As on March 31, 2016 the Company has further invested Rs.176.80 Million (previous year Rs. 317.20 Million) in the share capital of this Joint Venture.

The Company''s share of each of the assets, liabilities, income and expenses (each without elimination of the effect of transaction between the Company and the Joint Venture ), related to its interest in the joint venture as per AS 27 on ''Financial Reporting of interest in Joint Ventures'' (Based on the unaudited accounts of the joint venture for the year ended March 31, 2016 ) are as under.

None of the Company''s Raw Material and Components are greater than 10 percent of total sales and consumption of raw material and hence the disclosure under Broad Heads of Materials has not given.

The above figures are inclusive of Excise duty and Education Cess.

NOTE 11 - During the year, the Company has spent Rs. 8.80 million towards corporate social responsibility (CSR) under section 135 of the Companies Act,2013 and rules thereon. The Company has contributed to various NGO''s (Non-Government Organization)

NOTE 12 - Earlier years, the Company used to charge cost of consumables items to the Profit & Loss Account on issuance to shop floor. With effect from 1st April 2015, such consumable items are charged on actual consumption basis. Had the Company followed the previous method, profit would have been lower by Rs. 12.71 Million.

NOTE 13- Corresponding Figures of the previous year have been regrouped/ recast, wherever necessary, so as to confirm with the current year''s presentation.

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Mar 31, 2015

1. SHARE CAPITAL

i) Terms/Rights attached to Equity Shares

The Company has only one class of equity shares having a par value of Rs. 10/- per share. Each holder of equity shares is entitled to one vote per share The Company declares and pays dividend in Indian Rupee. The dividend recommended by the Board of Directors is subject to approval of the members at the ensuing Annual General Meeting. During the Year ended on 31st March,2015,the amount of per share dividend recognised as distribution to equity shareholders is Rs.10 (P.Y 7).

In the event of liquidation of the Company, the holders of each equity share will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts.

2. THE NET EXCHANGE DIFFERENCES ARISING DURING THE YEAR:

Recognised appropriately in the profit and loss account - net gain - Rs. in Million 9.62 (P.Y. - net gain - Rs. in Million 0.49)

3. DETAILS OF EMPLOYEE BENEFITS AS REQUIRED BY THE ACCOUNTING STANDARD 15 (REVISED) EMLPLOYEES BENEFITS ARE AS UNDER:

(A) Defined Contribution Plan

Amount recognized as an expense in the Profit and Loss Account in respect of Defined Contribution Plans is Rs. Million 9.84

(B) Defined Benefit Plan

i) Actuarial gains and losses in respect of defined benefit plans are recognised in the Profit & Loss Account.

ii) The Defined Benefit Plans comprise of Gratuity and Leave Encashment. Gratuity is funded.

Gratuity is a benefit to an employee based on 15 days (depending on the grade/ category of employee and completed year of services) the last drawn salary of each year.

4. Amount of borrowing costs capitalised during the year Rs. In Million NIL (31st March, 2014- Rs. In Million - NIL)

5. RELATED PARTY DISCLOSURES:

A) Name of the related party and nature of relationship where control exists:

Name of Related Party Nature of Relationship

ZF Lenksysteme, GmbH ( Now Known as Foreign Collaborator : Robert Bosch Automotive Steering GmbH )

ZF Shanghai Steering Co.Ltd., China Associated Companies of ZF ZF Sistemas De Direcao Ltd, Brazil Lenksysteme, GmbH ZF Steering Jincheng (Nanjing),China

Varsha Forgings Ltd. Director's interested company KCTR Varsha Automotive Pvt. Ltd.

ZF Lenksysteme India Pvt Ltd. Joint venture company (Company has 26% stake in the company)

Mr. Dinesh Munot - Chaiman & Managing Director Mr. Jinendra Munot - Jt. Managing Director Key Managerial Personnel Mr. Utkarsh Munot - Executive Director

Mrs. Eitika Munot - Manager-Co- ordination-SAP&HR ( Employee upto 31st Aug. 2014 ) Relative of Key Managerial Mrs.Eitika Munot - Non-executive Personnel Director from 15.09.2014

6. EARNINGS PER SHARE

(a) The amount used as the numerator in calculating basic and diluted earnings per share is the net profit after tax for the year disclosed in the Profit and Loss Statement.

(b) The weighted average number of equity shares used as the denominator in calculating both basic and diluted earnings per share is 9,073,300

7. Contingent Liability:

As at As at Particulars 31st March 31st March 2015 2014 Rs. In Rs. In Million Million

Income Tax matters in dispute in respect of penalty matters pending before ITAT, Pune 32.63 32.63

Service Tax matters under Appeal - 0.66

Co-acceptance of Import bills by the 6.31 24.57 bankers

Bill discounted 254.89 360.96

Bank Guarantees by the Company 15.26 12.10

Claims against the company not acknowledged - 0.57 as debts

Any other matter (vat/cst) Sales tax 3.19 - liability under dispute

Total 312.28 431.49

8. Commitments:

a) Estimated amount of contracts remaining to be executed on capital account and not provided for Rs. In Million - 26.68 (31st March 2014 - Rs. In Million - 59.17).

b) The Company has deferred payment of certain Sales tax Liability under various Package Scheme of Incentives of Government of Maharashtra. The Company is required to comply with conditions of above package Schemes of Incentives,the various Eligibility Certificates granted under such Schemes,stipulations or undertaking as per the Agreements entered into in connection with the grant of incentive under the said Schemes or on the Eligibility Certificates.

9. Dividend amount proposed to be distributed to Shareholders Rs.10 (Rs. 7) per share.

10. Under the Micro, Small and Medium Enterprises Development Act, 2006 certain disclosure are required to be made for enterprises which are covered under the Act. Since the company is in a process of compiling relevant information from its suppliers about their coverage under the said Act, no disclosures have been made. However, in view of the management ,the impact of interest, if any, that may be payable in accordance with the provisions of this Act is not expected to be material.

11. In current year provision for current taxes includes provision for wealth tax of Rs. In Millions - 0.3 (31st March, 2014 - Rs. In Millions - 0.5)

12. The Company has 26% joint venture interest in ZF Lenksysteme India Private Limited (ZFLIPL) , a company incorporated in India. As on March31,2015 the Company has further invested Rs.317.20 Million (previous year Rs. 165.62 Million) in the share capital of this Joint Venture.

The Company's share of each of the assets, liabilities, income and expenses (each without elimination of the effect of transaction between the Company and the Joint Venture ), related to its interest in the joint venture as per AS 27

13. During the year, Company has spent Rs. 10.80 million (Contribution to Prime Minister National Relief Fund) towards Corporate Social Responsibilty (CSR) under Section 135 of the Companies Act, 2013 and rules thereon.As per clarification issued by the Institute of Chartered Accountants of India. CSR expenses have been appropriated from current year profits.

14. The Company based on requirement of schedule II of the Companies Act, 2013 has changed useful life of its fixed assets. In accordance with the transitional provision specified in Schedule II of the the Act , an amount of Rs. 10.40 Million (Net of Deffered Tax) has adjusted in the opening balance of Genral Reserve. If the Company followed earlier method of depreciation then current year's depreciation could have been lower by Rs.18.72 Million.

15. Corresponding Figures of the previous year have been regrouped/ recast, wherever necessary, so as to confirm with the current year's presentation.

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Mar 31, 2014

NOTE 1 - THE NET EXCHANGE DIFFERENCES ARISING DURING THE YEAR:

Recognised appropriately in the profit and loss account - net gain - Rs. in Million 0.49 (31st March, 2013 - net loss - Rs. in Million 0.75)

NOTE 2 - DETAILS OF EMPLOYEE BENEFITS AS REQUIRED BY THE ACCOUNTING STANDARD 15 (REVISED) EMLPLOYEES BENEFITS ARE AS UNDER:

(A) Defined Contribution Plan

Amount recognized as an expense in the Profit and Loss Account in respect of Defined Contribution Plans is Rs. Million 9.40

(B) Defined Benefit Plan

i) Actuarial gains and losses in respect of defined benefit plans are recognised in the Profit & Loss Account. ii) The Defined Benefit Plans comprise of Gratuity and Leave Encashment. Gratuity is funded.

Gratuity is a benefit to an employee based on 15 days (depending on the grade/ category of employee and

completed year of services) the last drawn salary of each year.

NOTE 3 -

Amount of borrowing costs capitalised during the year Rs. In Million - NIL (31st March, 2013- Rs. In Million - NIL)

NOTE 4 - EARNINGS PER SHARE

(a) The amount used as the numerator in calculating basic and diluted earnings per share is the net profit after tax for the year disclosed in the Profit and Loss Statement.

(b) The weighted average number of equity shares used as the denominator in calculating both basic and diluted earnings per share is 9,073,300

NOTE 5 - Contingent Liability:

As at As at Particulars 31st March, 2014 31st March, 2013 Rs. In Million Rs. In Million

Income Tax matters in respect of ''Penalty'' under Appeal 32.63 32.63

Service Tax matters under Appeal 0.66 3.63

Co-acceptance of Import bills by the bankers 24.57 31.52 Bill discounted 360.96 229.38

Bank Guarantees by the Company 12.10 4.30

Claims against the company not acknowledged as debts 0.57 0.16

Total 431.49 301.62

NOTE 6 - Commitments:

a) Estimated amount of contracts remaining to be executed on capital account and not provided for Rs. In Million - 59.17 (31st March 2013 - Rs. In Million - 42.97).

b) The Company has deferred payment of certain Sales tax Liability under various Package Scheme of Incentives of Government of Maharashtra. The Company is required to comply with conditions of above package Schemes of Incentives, the various Eligibility Certificates granted under such Schemes, stipulations or undertaking as per the Agreements entered into in connection with the grant of incentive under the said Schemes or on the Eligibility Certificates.

NOTE 7 - Dividend amount proposed to be distributed to Shareholders Rs.7 (Rs. 8) per share.

NOTE 39 - Under the Micro, Small and Medium Enterprises Development Act, 2006 certain disclosure are required to be made for enterprises which are covered under the Act. Since the company is in a process of compiling relevant information from its suppliers about their coverage under the said Act, no disclosures have been made. However, in view of the management ,the impact of interest, if any, that may be payable in accordance with the provisions of this Act is not expected to be material.

NOTE 8 - In current year provision for current taxes includes provision for wealth tax of Rs. In Millions - 0.5 (31st March, 2013 - Rs. In Millions - 0.4)

NOTE 9 - During the year 2011-12,the company was subject to proceedings under Section 132 of the Income Tax Act,1961(''the Act'').As reported earlier, to avoid long protracted litigation, the company filed an application with the Income Tax Settlement Commission (''ITSC'') on 17 September,2012. On November 29, 2013the ITSC has passed an Order u/S 245D(4)of the Act. Pursuant to the said Order, notice of demand u/S 156 of the Act was received on January 3, 2014(date of Order December 28, 2013),wherein the additional tax-liability has been determined at Rs 181.89 million for 7 Assessment Years from 2006-07 to A.Y. 2012-13 . The Company accordingly accounted additional tax-liability in the Profit & Loss Account under the head Tax Expenses

NOTE 10 - Corresponding Figures of the previous year have been regrouped/ recast, wherever necessary, so as to confirm with the current year''s presentation.

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Mar 31, 2013

I) Terms/Rights attached to Equity Shares

The Company has only one class of equity shares having a par value of Rs. 10/- per share. Each holder of equity shares is entitled to one vote per share. The Company declares and pays dividend in Indian Rupee.The dividend proposed by the Board of Directors is subject to approval in the ensuing Annual General Meeting.

During the Year ended on 31st March, 2013, the amount of per share dividend recognised as distribution to equity shareholders was Rs. 8 (P.Y. Rs.10).

In the event of Liquidation of the Company, the holder of each equity shares will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the Shareholders.

NOTE 1 - THE NET EXCHANGE DIFFERENCES ARISING DURING THE YEAR:

Recognised appropriately in the profit and loss account - net gain - Rs. in Million (0.75) (31st March, 2012 - net gain - Rs. in Million 4.57)

NOTE 2 - DETAILS OF EMPLOYEE BENEFITS AS REQUIRED BY THE ACCOUNTING STANDARD 15 (REVISED) EMLPLOYEES BENEFITS ARE AS UNDER:

(A) Defined Contribution Plan

Amount recognized as an expense in the Profit and Loss Account in respect of Defined Contribution Plans is Rs. Million 10.11.

(B) Defined Benefit Plan

i) Actuarial gains and losses in respect of defined benefit plans are recognised in the Profit & Loss Account.

ii) The Defined Benefit Plans comprise of Gratuity and Leave Encashment. Gratuity is funded.

Gratuity is a benefit to an employee based on 15 days (depending on the grade/ category of employee and the completed years of services) last drawn salary of each year.

NOTE 3 -

Amount of borrowing costs capitalised during the year Rs. In Million -NIL — (31st March, 2012- Rs. In Million 0.46)

NOTE 4 - EARNINGS PER SHARE

(a) The amount used as the numerator in calculating basic and diluted earnings per share is the net profit after tax for the year disclosed in the Profit and Loss Statement.

(b) The weighted average number of equity shares used as the denominator in calculating both basic and diluted earnings per share is 9,073,300

NOTE 5 - Commitments:

a) Estimated amount of contracts remaining to be executed on capital account and not provided for Rs. In Million -42.97 (31st March 2012 - Rs. In Million - 19.18).

b) The Company has deferred payment of certain Sales tax Liability under various Package Scheme of Incentives of Government of Maharashtra. The Company is required to comply with conditions of above package Schemes of Incentives ,the various Eligibility Certificates granted under such Schemes, stipulations or undertaking as per the Agreements entered into in connection with the grant of incentive under the said Schemes or on the Eligibility Certificates.

NOTE 6 - Dividend amount proposed to be distributed to Shareholders Rs.8 (Rs. 10 per share).

NOTE 7 - Under the Micro, Small and Medium Enterprises Development Act, 2006 certain disclosure are required to be made for enterprises which are covered under the Act. Since the company is in a process of compiling relevant information from its suppliers about their coverage under the said Act, no disclosures have been made. However, in view of the management ,the impact of interest, if any, that may be payable in accordance with the provisions of this Act is not expected to be material.

NOTE 8 - In current year provision for current taxes includes provision for wealth tax of Rs. In Million - 0.4 (31st March, 2012 - Rs. In Million - 0.5)

NOTE 9 - The Company has 26% joint venture interest in ZF Lenksysteme India Private Limited, a company incorporated in India. As on 31st March, 2013 the Company has further invested Rs.179.14 Million (previous year Rs. 179.14 Million) in the share capital of this Joint Venture.

The Company''s share of each of the assets, liabilities, income and expenses (each without elimination of the effect of transaction between the Company and the Joint Venture ), related to its interest in the joint venture as per AS 27 on ''Financial Reporting of interest in Joint Ventures'' ( based on the audited accounts of the Joint Venture for the year ended 31st March, 2013) are as under

NOTE 10 - The Company has settled the matter for delay in Project Execution with Solar Project EPC (Engineering, Procurement and Commissioning) Company. i.e. Moser Baer Solar Ltd and Moser Baer Solar System Pvt. Ltd. Both Companies have paid total compensation of Rs.76.25 Million . The amount is reduced from Solar Fixed Asset. Correspondingly excess depreciation of Rs.1.41 Million pertaining to previous year has been adjusted against Current Year''s Depreciation.

NOTE 11 - During the year 2011-12, the Company was subject to proceedings under Section 132 of the Income Tax Act,1961 (''the Act'').

Subsequently, pending the assessment proceedings under Section 153A of the Act, on 17 September, 2012, the Company has filed an application with Income Tax Settlement Commission (''ITSC'') for settlement of cases under Section 245C of the Act. The ITSC has accepted the Company''s application. The Company has paid Rs.116 Million while filing the said application. The final liability of the Company, if any, is dependent on the outcome of the proceedings and will be quantified only on the completion.

NOTE 12 - Corresponding Figures of the previous year have been regrouped/ recast, wherever necessary, so as to confirm with the current year''s presentation.

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Mar 31, 2012

(A) Defined Contribution Plan

Amount recognized as an expense in the Profit and Loss Account in respect of Defined Contribution Plans is Rs. Million 8.61 .

(B) Defined Benefit Plan

i) Actuarial gains and losses in respect of defined benefit plans are recognised in the Profit & Loss Account.

ii) The Defined Benefit Plans comprise of Gratuity and Leave Encashment. Gratuity is funded.

Gratuity is a benefit to an employee based on 15 days (depending on the grade/ category of employee the completed years of services) last drawn salary of each year.

NOTE 1

Amount of borrowing costs capitalised during the year Rs. In Million 0.46 (31st March, 2011- Rs. In Million -Nil)

NOTE 2 - Earning per Share

(a) The amount used as the numerator in calculating basic and diluted earnings per share is the net profit after tax for the year disclosed in the Profit and Loss Statement.

(b) The weighted average number of equity shares used as the denominator in calculating both basic and diluted earnings per share is 9,073,300

Warranty Provision:

Warranty cost are accrued at the time of products are sold, based on past experience. The provision is discharged over the warranty period of 18 months from the date of sale.

NOTE 3 - Contingent Liability:

As at As at

Particulars 31st March, 2012 31st March, 2011

Rs. In Million Rs. In Million

Income Tax matters in dispute in respect of penalty matters pending before CIT (Appeals), Pune 32.63 32.63

Service Tax matters under Appeal 3.63 3.63

Co-acceptance of Import bills by the bankers 41.63 32.61

Bill discounted 274.22 374.10

Bank Guarantees by the Company 33.67 33.67

Claims against the company not acknowledged as debts 0.16 0.16

Total 385.94 476.80

NOTE 4 - Commitments:

a) Estimated amount of contracts remaining to be executed on capital account and not provided for Rs. In Million - 19.18. (31st March 2011 - Rs. In Million - 260.70).

b) The Company has deferred payment of certain Sales tax Liability under various Package Scheme of Incentives of Government of Maharashtra. The Company is required to comply with conditions of above package Schemes of Incentives, the various Eligibility Certificates granted under such Schemes, stipulations or undertaking as per the Agreements entered into in connection with the grant of incentive under the said Schemes or on the Eligibility Certificates.

NOTE 5 - Dividend amount proposed to be distributed to Shareholders Rs.5 (Rs. 10 per share).

NOTE 6 - Under the Micro, Small and Medium Enterprises Development Act, 2006 certain disclosure are required to be made for enterprises which are covered under the Act. Since the company is in a process of compiling relevant information from its suppliers about their coverage under the said Act, no disclosures have been made. However, in view of the management ,the impact of interest, if any, that may be payable in accordance with the provisions of this Act is not expected to be material.

NOTE 7 - In current year provision for current taxes includes provision for wealth tax of Rs. In Million - 0.5 (31st March, 2011 - Rs. In Million - 0.43)

NOTE 8 - The Company has 26% joint venture interest in ZF Lenk systeme India Private Limited, a company incorporated in India. As on March31, 2012 the Company has further invested Rs.179.14 Million (previous year Rs. 33.8 Million) in the share capital of this Joint Venture.

The Company's share of each of the assets, liabilities, income and expenses (each without elimination of the effect of transaction between the Company and the Joint Venture ), related to its interest in the joint venture as per AS 27 on 'Financial Reporting of interest in Joint Ventrures' ( based on the audited accounts of the Joint Venture for the year ended march .31, 2012) are as under

None of the company's Raw Material and Components are greater than 10 percent of total sales and consumption of raw material and hence the disclosure under Broad Heads of Materials has not given.

The above figues are inclusive of Excise duty and Education Cess.

9. The Company has made profit of Rs.104.33 Million on sale of Leasehold Land in MIDC Talegaon Industrial Area and same is shown in exceptional item.

10. On 13th October,2011, the Company was subjected to search operation under section 132 of the Income Tax Act,1961. Company has extended full co-operation during the course of this search operation and has provided all necessary details/information as and when asked for by Tax Authorities. The Company has not yet received Notice as per the provisions of Section 153A of the Income Tax Act,1961 for fresh assessment.

11. Till the year ended 31st March,2011, the Company was using pre revised Schedule VI to the Companies Act,1956 for preparation and presentation of its Financial Statement. During the year ended 31st March,2012, the Revised Schedule VI notified under the Companies Act,1956 has become applicable to the Company. The Company reclassified the Previous Year 's figures to confirm to this year's classification. The adoption of Revised Schedule VI does not impact the Recognition and Measurement Principals followed for preparation of Financial Statements. However, it significantly impact Presentation and Disclosure made in Financial Statement, particularly presentation of Balance Sheet.

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Mar 31, 2011

Rs. 1. CONTINGENT LIABILITY ( Not provided for ) : 2010-2011 2009-2010

i) Income Tax matters in dispute in respect of penalty matters pending before ITAT, Pune 32,631,743 32,631,743

ii) Co-acceptance of Import bills by the bankers 32,609,860 61,312,462

iii) Bank Guarantees on behalf of the Company 33,667,799 4,225,625

iv) Bills discounted 374,103,634 488,087,261

v) Claims against the Company not acknowledged as debts 156,790 156,790

vi) Service Tax matters under Appeal 3,634,012 3,634,012

2. The operations of the Company primarily relate to automotive components, hence there is no seperate reportable segment as per Accounting Standard (AS) 17 Segment Reporting.

3. Related Party Disclosures as per AS18:

a) List of Related Parties with whom transactions have taken place and relationships :

Foreign Collaborator :

ZF Lenksysteme, GmbH

Associate Companies :

- ZF Shanghai Steering Co.Ltd., China. - ZF Boge Elastmettal GmbH

- ZF Sistemas De Direcao Ltd, Brazil. - ZF Great Briton

- ZF Steering Jincheng (Nanjing),China - Varsha Forgings Ltd

Joint venture company : ZF Lenksysteme India Pvt. Ltd. (Company has 26% stake in the company)

Key Managerial Personnel :

- Mr. Dinesh Munot - Chairman & Managing Director

- Mr. Jinendra Munot - Jt. Managing Director

- Mr. Utkarsh Munot - Executive Director

4. Employee Benefits as per AS 15 (Revised 2005)

a) Defined Contribution Plans : Contribution to Provident Fund of Rs.6,716,443 (previous year Rs.5,175,775) is recognized as expense and included in Contribution to Provident Fund and Other Funds in the Profit and Loss Account. b) Defined Benefit Plans : The amounts recognized in respect of Gratuity and Leave Encashment, based on Acturial valuation is as per Annexure.

5. Under the Micro, Small and Medium Enterprises Development Act, 2006 certain disclosures are required to be made for enterprises which are covered under the Act. Since the company is in a process of compiling relevant information from its suppliers about their coverage under the said Act, no disclosures have been made. However, in view of the management, the impact of interest, if any, that may be payable in accordance with the provisions of this Act is not expected to be material.

6. In current year provision for current taxes includes provision for wealth tax of Rs.429,722 (P.Y. - Rs. 400,000)

7. The Company has 26% joint venture interest in ZF Lenksysteme India Private Limited, a company incorporated in India.

As on March 31, 2011, the Company has invested Rs. 33,800,000 (previous year Rs. 2,600,000) in the share capital of this Joint Venture.

8 Foreign Exchange difference(Net) credited to Profit & Loss Account Rs.8,637,914 (Previous year : Credit Rs. 7,565,950)

9. Figures relating to the previous year have been regrouped , rearranged wherever it is necessary.

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Mar 31, 2010

Rs.

1. CONTINGENT LIABILITY ( Not provided for ): 2009-2010 2008-2009

i) Income Tax matters in dispute in respect of penalty matters pending before CIT(A), Pune 32,631,743 32,631,743

ii) Co-acceptance of Import bills by the bankers 61,312,462 2,964,542

iii) Bank Guarantees on behalf of the Company 4,225,625 4,225,625

iv) Bills discounted 488,087,261 258,964,460

v) Sales Tax matter under Appeal - 1,439,044

vi) Claims against the Company not acknowledged as debts 156,790 413,684

vii) Service Tax matters under Appeal 3,634,012 2,566,264

3. Estimated amount of contracts remaining to be executed on capital account 64,494,200 4,867,500 and not provided for 4. The operations of the Company relate to only one segment i.e. automotive components, hence there is no seperate reportable segment as per Accounting Standard (AS) 17 Segment Reporting.

5. Related Party Disclosures as per AS18:

a) List of Related Parties with whom transactions have taken place and relationships : Foreign Collaborator :

ZF Lenksysteme, GmbH Associate Companies :

ZF Shanghai Steering Co.Ltd., China ZF Boge Elastmettal GmbH ZF Sistemas De Direcao Ltd, Brazil. ZF Great Briton ZF Steering Jincheng (Nanjing),China Varsha Forgings Ltd

Joint venture company : ZF Lenksysteme India Pvt. Ltd. (Company has 26% stake in the company)

Key Managerial Personnel : Mr. Dinesh Munot - Managing Director Mr. Jinendra Munot - Jt. Managing Director Mr. Utkarsh Munot - Executive Director

6. Auditors Remuneration :

a) Audit Fees b) Tax Audit Fees c) Vat Audit Fees d) For Certification and other releted work.

7. C.I.F. Value of imports :

i) Raw Materials, Components and consumables ii) Capital Goods

8. Expenditure in Foreign Currency

Travelling and other expenses

9. Earnings per Share as per AS 20 :-

a) Net Profit (Numerator used for calculation) b) Weighted Average number of Equity Shares used as denominator c) Basic and Diluted Earnings per Share (Equity Share of face value of Rs. 10/- each)

10.Employee Benefits as per AS 15 (Revised 2005)

a) Defined Contribution Plans : Contribution to Provident Fund of Rs.5,175,775 (previous year Rs.4,828,044) is recognized as expense and included in Contribution to Provident Fund and Other Funds in the Profit and LossAccount. b) Defined Benefit Plans : The amounts recognized in respect of Gratuity and Leave Encashment, based on Acturial valuation is as perAnnexure.

11. Under the Micro, Small and Medium Enterprises Development Act, 2006 certain disclosures are required to be made for enterprises which are covered under the Act. Since the company is in a process of compiling relevant information from its suppliers about their coverage under the said Act, no disclosures have been made. However, in view of the management ,the impact of interest, if any, that may be payable in accordance with the provisions of this Act is not expected to be material.

12. In current year provision for current taxes includes provision for wealth tax of Rs. 400,000 (P. Y. - Rs. 320,000)

13. The Company has 26% joint venture interest in ZF Lenksysteme India Private Limited, a company incorporated in India.

As on March 31, 2010, the Company has invested Rs. 2,600,000 (previous year Rs. 2,600,000) in the share capital of this Joint Venture.

14. The Company has recognized following provision as per AS 29 Provisions, Contingent Liabilities and Contingent Assets in respect of obligations arising from past events, the settlement of which is expected to result in an outflow embodying economic benefits:

15. Exceptional item- change in depreciation policy for assets acquired prior to April 1,2000

As per Company policy depreciation on Fixed Assets acquired prior to April 1 ,2000 was provided as per the Written Down Value (w.d.v.) method at the following rates:

Building @ 10%, Plant & Machinery @ 25%, Furniture & Fixtures @15%, Office Equipments @25% , Computer @60%, Cars @20%, Two Wheelers @25%

From the current year, depreciation on above assets is provided on Written Down Value at the rates and in manner specified in the Schedule XIV to the CompaniesAct, 1956, to be in tune with the current policy of charging depreciation on assets acquired on or after April 1, 2000. This has resulted in uniform policy of providing depreciation in respect of all fixed assets.

The above change has resulted in a surplus of Rs.4,291,682 for earlier years, which has been credited to Profit & Loss Account .Due to change in method, depreciation for the current year is higher by Rs.2,221,837. Consequently, profit after tax and net block of fixed assets is higher by Rs.2,825,047.

16.The Company has revised its VAT -Returns for the period 2005-06 to 2009-10 by paying Rs. 39 Million (approx.) based on search carried out by Sales Tax Authorities.

17. Figures relating to the previous year have been regrouped , rearranged wherever it is necessary.