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

Mar 31, 2018

1 Company overview

ZF Steering Gear (India) Limited (âthe Companyâ) 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.

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 âGratuity Planâ) 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.

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).

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.

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.

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

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 -

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 ).

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.

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.

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.

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 Â (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.

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.

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.

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.

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