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