To the Members,

The Board of Directors (the Board) is pleased to present the 46th Annual Report of ZF Steering Gear (India) Limited (the Company) , together with the Standalone and Consolidated Financial Statements for the financial year ended March 31, 2026.

I) Performance Review and state of the Company ' s affairs

(Rs. in crore)

II) Dividend

In order to conserve resources of the Company, for the purpose of the Company's ongoing expansion/ diversification plans, through its Subsidiaries, the Board decided not to recommend any dividend for the financial year ended on March 31, 2026.

III) Reserves

During the year under review, the Company does not propose to transfer any amount to the General Reserve.

IV) Changes in the Nature of Business

There has been no change in the nature of the business of the Company, during the period under review.

V) Share Capital

During the year under review, there was no change in the paid-up share capital of the Company. As on March 31, 2026, the paid-up share capital of the Company stood at Rs. 9,07,33,000/- (Rupees Nine Crore Seven Lakh Thirty-Three Thousand only), comprising 90,73,300 equity shares of Rs. 10/- each.

VI) Consolidated Financial Statements

Subsidiaries, Associates and Joint Ventures

The Company has prepared Consolidated Financial

Statements for the financial year ended March 31, 2026, in accordance with the applicable provisions of the Companies Act, 2013 and the relevant accounting standards.

As on March 31, 2026, the Company has three subsidiaries.

A statement containing the salient features of the financial statements of the subsidiaries in the prescribed Form AOC-1 forms part of the Consolidated Financial Statements included in this Annual Report.

Further, details of the subsidiaries, including investments made therein, are provided under the section "Investment in Subsidiaries" in the Management Discussion and Analysis Report, which forms part of this Annual Report.

The Company does not have any associate or joint venture as on March 31, 2026.

The Consolidated Financial Statements, together with the relevant notes and the Auditors' Report thereon, form an integral part of this Annual Report.

Further, pursuant to the provisions of Section 136 of the Act, the audited financial statements including the consolidated financial statement of the Company and all other documents required to be attached thereto are available on the Company's website and can be accessed at http://www.zfindia.com/financial-results.php . The financial statements along with other relevant documents, in respect of subsidiaries, are available on the website of the Company, at the link: http://www.zfindia.com/ financial-statements.php.

VII) Management discussion and Analysis Indian Economy and Industry Scenario

During the financial year under review, the Indian economy continued to demonstrate resilience despite global uncertainties, supported by strong domestic demand, sustained government capital expenditure, and stable financial sector conditions. As per estimates of the Reserve Bank of India, India's GDP growth remained robust in the range of 6.5%–7.0%, positioning it among the fastest-growing major economies globally. Policy support through infrastructure development, Production Linked Incentive (PLI) schemes, and reforms in the Goods and Services Tax (GST) framework, including rationalisation measures and compliance simplification, contributed positively to economic activity. While external risks such as geopolitical tensions and crude oil volatility persist, the medium-term outlook for the Indian economy remains favourable.

The Indian auto components industry continued its growth momentum, supported by steady vehicle demand, increasing localisation, and export opportunities. Government initiatives such as "Make in India", PLI schemes, and the Vehicle Scrappage Policy are expected to drive replacement demand by phasing out older, polluting vehicles, thereby creating incremental opportunities for original equipment manufacturers (OEMs) and component suppliers. In addition, efforts towards GST rationalisation and improved tax and demand visibility. The industry is also witnessing structural transformation driven by electrification, stricter emission norms, and increased technology adoption. However, challenges such as commodity price volatility, supply chain disruptions, and evolving regulatory requirements remain. Notwithstanding these factors, the long-term outlook for the auto components sector remains positive, supported by domestic demand growth, export potential, and deeper integration into global value chains.

Outlook - FY 2026-27

The outlook for FY 2026–27 remains cautiously optimistic, though shaped by expectations of a below-normal monsoon, which may impact agricultural output, rural demand, and inflationary trends. Supply chains are expected to stay relatively stable due to ongoing infrastructure enhancements and diversification efforts, but weather-related disruptions and global uncertainties could pose intermittent challenges. Commodity prices may remain volatile, particularly for food and energy, influenced by climatic conditions and geopolitical factors.

Government policy is likely to continue emphasizing infrastructure development, domestic manufacturing, and stricter regulatory compliance and data governance norms. In this environment, businesses will need to focus on cost management, supply chain resilience, and alignment with evolving policy frameworks to sustain growth and mitigate risks to become a global leader by 2047.

1. Industry Overview

Number of Commercial Vehicles (CV) Sold

The overall Commercial Vehicle sales were 11.6 lakh units in FY 2025-26, as compared to 10.4 lakh units in FY 2024-25, registering growth of 13%. Sales of Medium and Heavy Commercial Vehicles increased from 4 lakh to 4.6 lakh units (15% increase) and Light Commercial Vehicles increased from 6.4 lakh to 7.2 lakh units (12% increase) in FY-2025-26, compared to the previous year.

(Source: SIAM - Society of Indian Automobile Manufactures)

2. Company Overview

Your Company caters to requirements of steering gear systems for a range of Commercial Vehicles (including buses) and Tractors. The Company's Steering

Systems are fitted on Commercial Vehicles as well as on Tractors.

Your Company Sales:

3. Renewable Energy Initiatives Solar Energy

The Company's 5 MW Solar Power Project situated at Gujarat Solar Park, Charnka Village, District Patan (Kutch), Gujarat, generated approximately 65 lakh Units of Electricity, during FY 2025-26, resulting in sales-revenue of Rs.4.4 crore. The entire power generated was purchased by Gujarat Urja Vikas Nigam Limited (GUVNL), a Government of Gujarat Company, pursuant to the multi-year Power Purchase Agreement entered into with the Company. Further, the Company's rooftop solar project, installed at its Vadu Budruk manufacturing plant, generated approximately 8 lakh units of electricity during FY 2025-26. The entire electricity generated was captively consumed at the said plant.

Wind Energy

The Company owns and operates Wind Turbine Generators aggregating to over 8.10 MW capacity, located in the districts of Satara, Ahilyanagar (formerly Ahmednagar) and Sambhajinagar (formerly Aurangabad), Maharashtra. During FY 2025–26, these wind energy facilities generated approximately 94 lakh units of electricity.

Out of the total generation, approximately 70 lakh units were utilized for captive consumption, meeting approximately 65.1% of the total energy consumption requirements of the Company's manufacturing facility at Village Vadu Budruk. The balance 24 lakh units were sold to Maharashtra State Electricity Board.

4. Financials of the Company (based on Standalone figures)

Revenue from Operations

During the financial year under review, revenue from operations from the Company's auto-components business, comprising Steering Gear Systems and related components, registered a growth of 13% over the previous financial year.

Revenue from the Renewable Energy segment increased by 1.5% during FY 2025–26.

Consequently, the Company's overall Revenue from Operations recorded an increase of 13% as compared to the previous financial year.

Finance Cost

Finance cost for FY 2025–26 stood at Rs. 3.4 crore, representing approximately 6.4% of Profit Before Tax ("PBT"), as against Rs. 2.9 crore, representing approximately 5.7% of PBT, in FY 2024–25.

The increase in finance cost during the year was primarily attributable to bill discounting arrangements undertaken by the Company for easing working capital pressures and improving liquidity management.

Other Income

During the year under review, Other Income stood at Rs. 21.1 crore as compared to Rs. 28.2 crore in FY 2024-25.

Other Income mainly comprises realised gains arising on sale of financial investments during the year, Government grants, interest income on financial assets, dividend income and rental income from investment property. For the year under review, there is loss on unrealised loss of Rs. 4.9 crore on mark-to-market is grouped under "Other expenses''.

The financial markets witnessed considerable volatility during the latter part of the financial year, particularly in March 2026, owing to prevailing geo-political developments, which impacted the valuation of investments.

Other Income also includes subsidy income of Rs. 4.2 crore received from the Government of Madhya Pradesh.

Members are requested to refer Note No. 16 to the Financial Statements for detailed particulars of Other Income.

Financial Investments

As on March 31, 2026, the Company's Financial Investments stood at Rs. 148.4 crore as compared to Rs. 168.5 crore as on March 31, 2025.

The aforesaid amounts represent the fair/ market value of the financial investments held by the Company as at the end of the respective financial years, except bonds and equity investments in subsidiaries, which are carried at cost in accordance with the applicable accounting standards.

Members are requested to refer Note No.5(a) to the Financial Statements for complete details of investments held by the Company as on the year-end.

Profitability

Despite a 13% increase in sales during the year, profitability remained largely stable. This was primarily due to a sizeable decline in other income by Rs.7 crore and an increase in material costs from 64.8% to 66.3% of sales, which offset the benefits of higher revenue. Consequently, Profit Before Tax remained almost flat at Rs.52.6 crore as compared to Rs.50.4 crore in FY 2024 25. Profit After Tax stood slightly lower at Rs.31.8 crore versus Rs.33.9 crore in the previous year. Earnings per share for the year was Rs.35.

5. Credit Rating

During the financial year under review, in June 2025, ICRA Limited

Company in respect of its working capital facilities as under:

Long-term fund-based and non-fund-based facilities: [A+]

Short-term fund-based and non-fund-based facilities: [A1+] The outlook on the long-term working capital facilities was also reaffirmed as 'Stable'.

Further, the Company's wholly owned subsidiary,

DriveSys Systems Private Limited, was assigned the following credit ratings by ICRA Limited:

Long-term fund-based and non-fund-based facilities: [BBB+]

Short-term fund-based and non-fund-based facilities: [A2]

The outlook on the long-term working capital facilities of the subsidiary was also reaffirmed as ' Stable ' .

6. Key Financial Ratios

In accordance with Regulation 34 read with Schedule V, Part C to the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (the Listing Regulations), the key financial ratios are as under:

7. Return on Net Worth

Return on Net Worth has dipped from 7.1 to 6.3 in view of dip in Other Income and increase in Material Cost percentage, as explained under

8. Segment wise Profitability

The Company's Auto-Components Segment (comprising OEM and After-Sales business) Segment reported a Profit Before Tax (PBT) of Rs. 33.3 crore, compared to Rs. 20.4 crore in FY 2024-25. Renewable Energy Segment reported PBT of Rs. 8.8 crore as compared to Rs. 8.6 crore in previous year and PBT from other (Un-allocable) segment/ Other Income was Rs.10.5 crore against Rs. 21.5 crore in previous year.

9. Outlook, Opportunities and Threats i) SWOT Analysis – Indian Auto Components Industry Strengths

Strong domestic market base

Large and growing vehicle demand across PV, CV, 2W and tractors

Cost competitiveness

Lower labour and manufacturing costs vs global peers

Established OEM ecosystem

Long-standing relationships with domestic and global OEMs

Growing export presence

Increasing integration with global supply chains (China+1 advantage)

Policy support

Government initiatives such as PLI and "Make in India" enhancing localisation

Weaknesses

High dependence on OEMs

Pricing pressure and limited bargaining power

Fragmented industry structure

Large number of MSMEs with limited scale and technology

Technology gap (vs global leaders)

Lag in advanced electronics, EV components, semiconductors

Low R & D intensity

Limited innovation capability in many players

Working capital intensive

High inventory and receivable cycles

Opportunities

EV transition (largest opportunity)

New product categories: battery systems, power electronics, sensors

Export growth (China+1 strategy)

Global OEMs diversifying sourcing to India

Localization/ import substitution

Reduction in dependency on imports (especially China)

Aftermarket expansion

Growing vehicle parc ? steady replacement demand

Premiumisation trend

Higher value per vehicle ? more content per component

Digital & smart manufacturing Industry 4.0 improving productivity and margins

Threats

Commodity price volatility

Steel, aluminium, crude-linked inputs impacting margins

EV disruption risk

Traditional ICE components may become obsolete

Global demand slowdown

Export exposure to US/ EU cycles

Regulatory changes

Emission norms, safety standards ? capex pressure

Supply chain disruptions

Semiconductor shortages, geopolitical risks

Margin pressure from OEMs

Continuous cost reduction demands

ii) Communication received from ZF Friedrichshafen AG

As reported in the previous year's Board's Report, the Company had 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 crore 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 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.

Further, 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.

iii) Strategic Initiatives, Expansion and Capital Expenditure

1. Investment in Subsidiaries

Your Company, as part of its strategic expansion plan, had undertaken backward integration initiatives through its subsidiaries for manufacturing key components required for its end product, i.e., Steering Gear Systems. These backward integration initiatives have been successfully implemented and are currently operational.

Further, as reported in the previous Board's Report, the Company has embarked upon a diversification strategy through its subsidiaries, by entering into new business segments such as SG Iron castings, Aluminium Extrusion and Electrical Equipment Components manufacturing, as detailed below.

These initiatives are being undertaken through the following subsidiaries: DriveSys Systems Private Limited (DriveSys) NexSteer Systems Private Limited (NexSteer) Metacast Auto Private Limited (Metacast)

DriveSys Systems Private Limited (Wholly Owned Subsidiary)

DriveSys was incorporated to establish a reliable in-house source for supply of semi-finished machined components such as housing machining, sector shaft machining, piston machining, oil tanks, plastic injection moulding, and steering pump assemblies, required for your Company's end products. The facility is located at MIDC Supa, Parner, Ahilyanagar, Maharashtra. DriveSys has commenced manufacturing and supplying these components, primarily catering to the requirements of your Company. Opportunities in the external market are being explored after meeting internal demand.

During the year under review:

DriveSys was identified as a Material Subsidiary, based on its turnover exceeding the prescribed threshold of consolidated turnover.

DriveSys has undertaken the following diversification projects:

I. Aluminium Division

This division involves aluminium melting, extrusion, machining and fabrication activities.

Project Cost: ~Rs. 100 crore

Key Updates:

A significant order was received in December 2025 for manufacture and supply of machined aluminium parts aggregating approximately Rs. 151 crore, with a delivery period of 15 months.

Pursuant to receipt of necessary approvals from MIDC, DriveSys has executed Lease Deed with MIDC and acquired leasehold rights in an industrial plot along with factory building thereon from NexSteer.

The aluminium project at MIDC Supa,

Ahilyanagar Maharashtra is nearing completion, with major capital expenditure incurred.

Capital expenditure incurred to date: Rs. 90 crore, funded mainly through loans from your Company.

II. Electrical Division

This division pertains to manufacturing of electrical components such as MCB/ MCCB, RCB and Mechanism Operated Auxiliary Contactors (MOC).

Project Cost: ~Rs. 12 crore

Key Updates:

Two adjacent industrial premises at MIDC

Nagapur, Ahilyanagar were acquired on sublease basis in January 2026.

The project has reached an advanced stage of completion, with substantial progress in civil works and installation of plant and machinery. Trial runs have commenced, and commercial production is expected to commence shortly, subject to stabilization and necessary approvals like Production Part Approval Process (PPAP) and statutory approvals.

Capital expenditure incurred to date: Rs. 9.2 crore, funded through loans from your Company.

Financial & Operational Highlights – DriveSys

Investment by the Company (as on March 31, 2026): o Equity: Rs. 8 crore o Loans: Rs. 167 crore

External borrowings by DriveSys: Rs. 24.3 crore (closing balance)

Turnover for FY 2024 25: Rs. 24.8 crore (majority to your Company)

Turnover for FY 2025 26: Rs. 88.9 crore (majority to your Company)

Loss for FY 2025-26 Rs. 9 crore (Rs. 14.5 crore in previous year)

Metacast Auto Private Limited (51% Subsidiary/ Joint Venture)

Metacast is a joint venture with Supreme Iron (India) Private Limited and operates in the foundry business.

It functions as a Captive Process Vendor (CPV) for DriveSys, supplying castings.

Commercial production commenced in November 2024

Turnover:

o FY 2024–25: Rs. 8.7 crore

o FY 2025–26: Rs. 59.0 crore (all sales to DriveSys)

o Loss for FY 2025-26: Rs. 6.8 crore (Rs. 4.8 crore previous year)

During the year, Metacast has been identified as a Material Subsidiary upon its turnover crossing the prescribed threshold.

Investment by the Company:

o Equity (51% stake): Rs. 4.9 crore (including rights issue premium)

o Loans: Rs. 18.3 crore

Casting Capacity

Annual Casting Capacity - 10,000 metric tonnes p.a. Utilised Casting Capacity in FY 2025-26 – 74 % Utilised Casting Capacity in March 2026 – 90 % Metacast has made substantial progress in the Project and has achieved record capacity utilisation in March 2026. In view of the strong demand outlook and for improved operational efficiency, it is proposed to further expand the Casting capacity from 10,000 metric tonnes p.a. to 25,000 metric tonnes p.a. by installing one additional production line.

The fresh Investment proposed for this expansion is Rs. 25 crore which will be funded mainly through borrowings.

NexSteer Systems Private Limited (Wholly Owned Subsidiary)

NexSteer has not commenced Business operations as on date.

During the year, NexSteer transferred its leasehold rights in the MIDC plot along with building structure to DriveSys, after complying with applicable legal requirements.

Investment by the Company (as on March 31,

2026): o Equity: Rs. 0.08 crore o Loans: Rs. 0.7 crore

Loss for FY 2025-26 Rs. 0.02 crore (Rs. 0.1 crore in previous year)

2. Capital-Expenditure

In the current Financial Year, your Company has planned Rs. 35 crore towards replacement of old machinery, procurement of balancing equipmentaudit findings, and etc. for its Pune and Pithampur factories. Further, the Company has allocated around Rs. 88 crore towards subsidiaries out which Rs. 25 crore is for expansion plans of their existing business.

3. Financing and Fund Raising

The Company is evaluating various financing options to meet the capital expenditure requirements of its subsidiary companies. Currently, the primary source of funding for such subsidiaries is loans from the Holding Company.

In this regard, the Company audit observations and recommendations is exploring the possibility of strengthening the capital structure of its subsidiaries, including by way of infusion of equity capital and optimization of the debt-equity mix These initiatives are aimed at enhancing financial resilience and supporting long term growth, subject to detailed evaluation and requisite approvals.

10. Internal Control System and its Adequacy

The Company has established and maintained adequate internal financial controls over financial reporting ("IFC-FR"), commensurate with the size, scale and complexity of its operations, in compliance with the requirements of the Companies Act, 2013. The Company's internal control framework is designed to provide reasonable assurance regarding the reliability of financial reporting, the preparation of financial statements in accordance with applicable accounting standards, the safeguarding of assets, prevention and detection of frauds and errors, and the orderly and efficient conduct of its business operations.

The framework is based on a risk-based approach, involving identification, evaluation and mitigation of key business risks.

The Company has a well-defined organisational structure, documented policies and procedures, and a system of authority limits to ensure orderly and efficient conduct of its business. The internal control systems are supported by an internal audit process and appropriate information technology controls. The Audit Committee of the Board, constituted in accordance with the provisions of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, oversees the adequacy and effectiveness of the internal control systems. The Audit Committee periodically reviews the internal audit plans, significant status of implementation of corrective actions.

The Internal Audit function is carried out by an independent firm of Chartered Accountants, M/s. Kirtane & Pandit LLP, who report functionally to the Audit Committee. The scope and coverage of internal audit are approved by the Audit Committee. The Internal Auditors evaluate the adequacy and effectiveness of internal controls, risk management processes, governance processes, and compliance with applicable laws, regulations, and internal policies.

Significant are placed before the Audit Committee and the Board, and corrective actions, wherever necessary, are taken by the management in a time-bound manner. The status of such actions is periodically reviewed.

The Statutory Auditors have also issued a report on the adequacy and operating effectiveness of the Company ' s internal financial controls over financial reporting, as required under Section 143(3)(i) of the Companies Act, 2013.

Based on the evaluation carried out by the management, internal auditors, and the Statutory Auditors, the Audit Committee has concluded that, as at March 31, 2026, the Company ' s internal financial controls over financial and reporting were adequate and operating effectively that no material weaknesses were observed.

11. Cautionary Statement

Statements in the Management Discussion and Analysis Report describing the Company's objectives, projections, estimates, expectations or predictions may be "forward-looking statements" within the meaning of applicable securities laws and regulations.

These forward-looking statements are based on certain assumptions and expectations of future events and are subject to risks, uncertainties and other factors, which may cause actual results, performance or achievements to differ materially from those expressed or implied in such statements. Important factors that could influence the Company ' s operations include economic conditions, changes in government regulations, tax laws, market demand, competition and other factors beyond the control of the Company. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required under applicable laws and regulations.

VIII) Conservation of Energy, Research and Development, Technology Absorption and Innovation, Foreign Exchange Earnings and Outgo

The details as required under the Companies (Accounts) Rules, 2014, are given in Annexure-I to this Report.

IX) Board of Directors and Key Managerial Personnel

As on March 31, 2026, the Board of Directors of the Company comprises seven Directors, possessing an appropriate mix of skills, experience and expertise in diverse fields. The composition of the Board is in conformity with the requirements of the Companies Act, 2013 and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

Out of the total strength, the Board comprises two (2) Executive Directors, one (1) Non-Executive Non-Independent Director and four (4) Independent Directors, including one Woman Independent Director.

During the year under review:

Mr. Shrenik Gandhi and Mr. Bharat Agarwal were appointed as Non-Executive Independent Directors with effect from April 1, 2025;

Mrs. Smita A. Lahoti was re-appointed as a Non-Executive Independent Director with effect from June 27, 2025; and

Based on the recommendation of the Nomination and Remuneration Committee, the Board of Directors has approved the re-appointment of Mr. Dinesh Munot (DIN: 00049801) as Chairman and Whole-time Director of the Company, for a further term of five (5) consecutive years, with effect from July 28, 2026, subject to the approval of the Members of the Company.

The Board has also approved the re-appointment of Mr. Utkarsh Munot (DIN: 00049903) as Managing Director of the Company, for a further term of five (5) consecutive years with effect from May 19, 2026, subject to the approval of the Members.

The necessary resolutions seeking approval of the Members for the aforesaid re-appointments, along with the requisite disclosures and brief profiles as required under the Companies Act, 2013 and SEBI (LODR) Regulations, 2015, form part of the Notice convening the 46th Annual General Meeting of the Company.

In accordance with the provisions of Section 152(6) of the Companies Act, 2013, Mr. Utkarsh Munot retires by rotation at the ensuing 46th Annual General Meeting and, being eligible, offers himself for re-appointment. The Nomination and Remuneration Committee and the Board have recommended his re-appointment for the consideration of the Members.

During the year under review, there was no change in the Key Managerial Personnel of the Company.

1. Board Diversity

The Company recognises and embraces the importance of a diverse Board in enhancing its effectiveness and overall performance. The Company believes that an optimal combination of diversity in terms of skills, experience, gender, age, cultural and geographical background, and domain knowledge fosters balanced decision-making and strengthens corporate governance.

The Board comprises members with diverse backgrounds and expertise, which enables the Company to benefit from varied perspectives and insights, thereby supporting sustainable growth and maintaining a competitive advantage.

2. Independent Directors

Pursuant to the provisions of Section 149 of the Companies Act, 2013 (the Act) and Regulation 25 read with Regulation 16(1)(b) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (Listing Regulations) , the Independent Directors of the Company have submitted necessary declarations confirming that they meet the criteria of independence as laid down under Section 149(6) of the Act and the Listing Regulations.

In terms of Regulation 25(8) of the Listing Regulations, the Independent Directors have also confirmed that they are not aware of any circumstances or situations which exist or may reasonably be anticipated that could impair or impact their ability to discharge their duties with an objective and independent judgment, free from any external influence.

The Company has received declarations from all Independent Directors confirming compliance with the provisions of Rule 6(3) of the Companies (Appointment and Qualification of Directors) Rules, 2014, as amended, relating to their registration with the databank of Independent Directors maintained by the Ministry of Corporate Affairs (MCA). The Independent Directors have also confirmed that they have either passed the online proficiency self-assessment test or are in the process of appearing for the same, or are exempt from the requirement, in terms of the applicable provisions of the Companies (Appointment and Qualification of Directors) Rules, 2014.

The Independent Directors possess integrity, expertise and experience, including proficiency in their respective fields, and fulfil the conditions specified under the Act and the Listing Regulations. In the opinion of the Board, all the Independent Directors are persons of integrity and fulfil the conditions of independence and are independent of the management.

Familiarisation Programmes for Independent Directors

The Company has in place a structured familiarisation programme for Independent Directors to enable them to understand the nature of the industry, business model, operations, regulatory environment and their roles, rights and responsibilities.

Independent Directors are periodically updated on business performance, strategy, risk management practices, internal control systems and regulatory developments. The details of such familiarisation programmes are available on the Company's website at www.zfindia.com.

At the time of appointment of an Independent Director, a formal letter of appointment is issued, setting out the terms and conditions of appointment, roles, functions, duties and responsibilities, and applicable compliance requirements under the Companies Act, 2013, SEBI Listing Regulations and other relevant laws.

3. Performance Evaluation

Pursuant to the provisions of the Companies Act, 2013 and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (Listing Regulations), the Board of Directors has carried out an annual evaluation of its own performance, the performance of its Committees and that of individual Directors.

The Board has constituted the Nomination and Remuneration Committee (NRC) in accordance with the provisions of the Act and the Listing Regulations. The NRC, inter alia, is responsible for:

(i) identifying persons who are qualified to become Directors and who may be appointed in senior management, and recommending their appointment and removal to the Board;

(ii) formulating the criteria for determining qualifications, positive attributes and independence of a Director;

(iii) recommending to the Board a policy relating to remuneration of Directors, Key Managerial Personnel and other employees;

(iv) carrying out evaluation of every Director's performance, including that of Independent Directors; and

(v) formulating policies relating to the identification, appointment, remuneration and performance evaluation of Directors, including Board diversity. The Company has in place a structured policy for performance evaluation of the Board, its Committees and individual Directors, including Independent Directors. The evaluation criteria include, inter alia, the composition of the Board, experience, competencies, effectiveness of Board processes, participation in meetings, quality of deliberations, strategic guidance, and contribution to decision-making.

The Board evaluated its performance after seeking inputs from all the Directors, based on criteria such as Board composition and structure, effectiveness of Board processes, adequacy of information flow and overall functioning. The performance of the Committees was evaluated by the Board after considering inputs from Committee members, based on criteria such as composition, effectiveness of meetings and discharge of functions.

In a separate meeting of the Independent Directors, held in accordance with Schedule IV of the Companies Act, 2013 and Regulation 25 of the Listing Regulations, the performance of the Non-Independent Directors, the Board as a whole and the Chairman of the Company was evaluated, taking into account the views of the Executive and Non-Executive Directors.

The performance evaluation of the Independent Directors was carried out by the entire Board, excluding the Independent Directors being evaluated.

The evaluation framework is broadly in line with the Guidance Note on Board Evaluation issued by the Securities and Exchange Board of India.

The Board is satisfied with the effectiveness of the evaluation process and its outcomes for the financial year under review.

X) Directors' Responsibility Statement

Pursuant to the provisions of Section 134(5) of the Companies Act, 2013, your Directors confirm that:

(a) in the preparation of the annual financial statements for the financial year ended March 31, 2026, the applicable Accounting Standards have been followed along with proper explanation relating to material departures, if any;

(b) the Directors have selected such Accounting Policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2026, and of the profit Company for the financial date; year ended on that

(c) the Directors have taken proper and for the maintenance of adequate accounting records in accordance with the provisions of the Act, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

(d) the Directors have prepared the annual financial statement on a ' going concern ' basis;

(e) the Directors have laid down internal financial controls to be followed by the Company and that such internal financial controls, in their opinion, are adequate and are operating effectively; and

(f) the Directors have organised/ devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.

XI) Corporate Governance

Pursuant to Regulation 34(3) read with Schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (Listing Regulations) , a separate report on Corporate Governance, along with the Certificate from the Statutory Auditors confirming compliance with the conditions of Corporate Governance, forms an integral part of this Annual Report as Annexure – II .

XII) Business Responsibility and Sustainability Report

Pursuant to the provisions of Regulation 34(2)(f) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the requirement of submission of a Business Responsibility and Sustainability Report (BRSR) is not applicable to the Company, for the financial year ended March 31, 2026, as the Company does not fall within the prescribed applicability criteria.

XIII) Other Aspects

1. Particulars of Loans given, Investments made, Guarantees given and Securities provided

The Particulars of Loans given, Investments made, Guarantees given and Securities provided by the Company, are disclosed in the Financial Statements forming part of this Annual Report.

2. Contracts and Arrangements with Related Parties

All contracts, arrangements and transactions entered into by the Company with related parties during the financial year 2025 26 were in the ordinary course of business and on an arm's length basis.

Prior approval of the Audit Committee of the(comprising Independent Directors) was obtained for all related party transactions in accordance with the provisions of care Regulation 23(2) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (Listing Regulations). Certain repetitive transactions were approved by the Audit Committee through omnibus approvals, and the details of such transactions were reviewed by the Audit Committee on a quarterly basis.

All material related party transactions entered into during the year were duly approved by the Members of the Company in terms of Regulation 23(4) of the Listing Regulations.

All related party transactions were in compliance with the applicable provisions of the Companies Act, 2013 and the Listing Regulations. The details of related party transactions are disclosed in Note 35 to the Financial Statements forming part of this Annual Report.

Since all related party transactions, entered into by the Company, during the year, were in the ordinary course of business and on an arm's length basis, the disclosure in Form AOC-2, pursuant to Section 134(3)(h) of the Companies Act, 2013 read with Rule 8(2) of the Companies (Accounts) Rules, 2014 is not applicable and accordingly does not form part of this Report.

During the year under review, the Non-Executive Directors had no pecuniary relationship or transactions with the Company, other than sitting fees, reimbursement of expenses for attending meetings of the Board and its Committees, and dividend on equity shares held by them, if any.

Further, certain related party transactions proposed to be entered into the financial year 2026-27, though in the ordinary course of business and on an arm's length basis, are likely to exceed the materiality thresholds as prescribed under Regulation 23 of the Listing Regulations and are therefore considered Material Related Party Transactions.

In accordance with the provisions of the Listing Regulations, such Material Related Party Transactions require approval of the Members. Accordingly, the Company proposes to seek approval of the Members at the ensuing 46th Annual General Meeting. All such transactions have been reviewed and approved by the Audit Committee and the Board of Directors, subject to the approval of the Members.

It may be noted that the Company had earlier obtained approval of the Members for these material related party transactions for a period of three financial years.

However, pursuant to the amendments to Regulation 23 of the Listing Regulations, which provide that approval of Members for material related party transactions shall not be valid for a period exceeding one financial year, the Company is seeking fresh approval of the Members for such transactions for the financial year 2026–27.

The detailed information with respect to the Material Related Party Transactions, as required under Regulation 23 of the Listing Regulations is provided in the Notice convening the ensuing Annual General Meeting.

The Company has formulated a Policy on Related Party Transactions for identification, review, approval and monitoring of such transactions in accordance with the provisions of the Companies Act, 2013 and the Listing Regulations. The said Policy is available on the Company's website at: www.zfindia.com.

3. Corporate Social Responsibility (CSR)

Pursuant to the provisions of Section 135 of the Companies Act, 2013 read with the Companies (Corporate Social Responsibility) Rules, 2014, as amended from time to time, the Company has in place a Corporate Social Responsibility (CSR) Policy. The CSR Policy outlines the Company's approach towards undertaking CSR activities and is available on the Company's website at www.zfindia.com.

The Annual Report on CSR activities, in the prescribed format, forms part of this Report as Annexure – III.

4. Risk Management

The Company has in place a comprehensive Risk Management Framework designed to identify, assess, mitigate and monitor key business risks, taking into account applicable statutory requirements, industry practices, stakeholder inputs and expert assessment. In terms of the applicable provisions of the Companies Act, 2013 and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Company is not required to constitute a separate Risk Management Committee.

The Audit Committee of the Board has been entrusted with the responsibility of overseeing the risk management framework, including identification, evaluation and mitigation of risks, and reviewing the implementation of risk mitigation plans. In addition, the Senior Management of the Company is responsible for managing risks within their respective functional areas, including strategic, operational, financial, information technology and compliance risks.

The Risk Management Framework, inter alia, provides for:

(i) establishing proactive processes for identification, reporting, evaluation and mitigation of risks;

(ii) assessment of risks associated with business decisions prior to their implementation;

(iii) enabling informed decision-making at all levels in alignment with the Company ' s risk appetite;

(iv) protection of stakeholders' interests through an assess integrated approach to risk identification, -ment, mitigation, monitoring and reporting;

(v) implementation of appropriate risk mitigation measures to support sustainable business growth; and

(vi) periodic review of the Company ' s risk profile and risk tolerance levels.

The Company continuously monitors and reviews its risk management processes to ensure their effectiveness and has implemented measures to strengthen internal controls and adopt an integrated approach towards risk management and assurance activities.

5. Auditors and Auditors' Report Statutory Auditors

M/s. Joshi Apte & Company, Chartered Accountants (Firm Registration No. 104370W), were re-appointed as Statutory Auditors of the Company at the 44th Annual General Meeting held on September 10, 2024, for a second term of five office from the conclusion of the 44th Annual General Meeting until the conclusion of the 49th Annual General Meeting of the Company.

The Statutory Auditors have confirmedthat they satisfy the eligibility criteria and are not disqualified from holding office as Statutory Auditors of the Company. The Auditors ' Report on the financial statements for the financial year ended March 31, 2026 does not contain any qualification, reservation, adverse remark or disclaimer. The said Report forms part of the Annual Report.

Secretarial Auditors

The Members of the Company at the 45th Annual General Meeting approved the appointment of M/s. SIUT & Co. LLP, Company Secretaries, as Secretarial Auditors of the Company for a period of five consecutive years commencing from the financial year 2025 26 up to the financial year 2029 30, in accordance with the provisions of Regulation 24A of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

The Secretarial Auditors have confirmed that they satisfy the eligibility criteria and are not disqualified from holding office as Secretarial Auditors of the Company.

The Secretarial Audit Report for the financial year ended March 31, 2026, issued by M/s. SIUT & Co. LLP, is annexed to this Report as Annexure – IV.

There are no qualifications in the Secretarial Audit Report for FY 2025-26, however, the Secretarial Audit Report contains an observation which is as follows: The Stock Exchange on April 2, 2026 sought additional details from the Company, in respect of a Disclosure made by the Company under Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, citing discrepancy pertaining to delay in disclosure, in respect of developments in the ongoing litigations before the Commissioner of Income Tax (Appeals) (CIT(A))-28, Delhi and requested the Company to submit reasons for the same. The Company submitted its clarification for delay vide letter dated April 02, 2026. The aforesaid letter is available on BSE Limited portal and on the Company's website. It may please be noted that no further communication has been received from BSE Limited, subsequent to the submission of the consecutive years, said clarification. to hold Further, in terms of Regulation 24A of the SEBI Listing Regulations, secretarial audit has also been conducted for the Company's material unlisted subsidiaries incorporated in India, namely:

DriveSys Systems Private Limited

Metacast Auto Private Limited

The Secretarial Audit Reports of the aforesaid material subsidiaries are annexed to this Report as Annexure – IV and available on the website of the Company and can be accessed at: www.zfindia.com.

6. Disclosures

Meetings of the Board

Five Meetings of the Board of Directors were held during the financial year 2025-26. Detailed information is given in the Report on Corporate Governance, forming part of this Annual Report.

7. Committees of the Board Audit Committee

The Company has constituted an Audit Committee in accordance with the provisions of the Companies Act, 2013 read with the rules made thereunder and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (Listing Regulations) .

The composition, terms of reference and other details of the Audit Committee are provided in the Corporate Governance Report, which forms part of this Annual Report.

The Audit Committee performs its functions in accordance with the provisions of the Companies Act, 2013 and Part C of Schedule II to the Listing Regulations.

During the year under review, all recommendations made by the Audit Committee were accepted by the Board of Directors.

Nomination and Remuneration Committee

The Company has constituted a Nomination and Remuneration Committee (NRC) in accordance with the provisions of Section 178 of the Companies Act, 2013 read with the rules made thereunder and Regulation 19 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (Listing Regulations) .

The composition, terms of reference and other relevant details of the NRC are provided in the Corporate Governance Report, which forms part of this Annual Report.

The NRC performs its functions in accordance with the provisions of the Companies Act, 2013 and Part D of Schedule II to the Listing Regulations.

During the year under review, all recommendations made by the NRC were accepted by the Board of Directors.

Remuneration Policy

The Board of Directors, on the recommendation of the Nomination and Remuneration Committee, has approved a policy for selection, appointment and remuneration of Directors, Key Managerial Personnel and Senior Management personnel.

The Nomination and Remuneration Policy, inter alia, lays down the criteria for determining qualifications, positive attributes and independence of Directors and the framework for remuneration of Directors, Key Managerial Personnel and Senior Management personnel.

The said Policy is available on the Company's website at www.zfindia.com.

Stakeholders' Relationship Committee

The Board of Directors has constituted a Stakeholders' Relationship Committee in accordance with the provisions of Section 178 of the Companies Act, 2013 read with the rules made thereunder and Regulation 20 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (Listing Regulations) .

The Committee performs its functions in accordance with the provisions of the Companies Act, 2013 and Part D of Schedule II to the Listing Regulations. The composition, terms of reference and other relevant details of the Committee are provided in the Corporate Governance Report, which forms part of this Annual Report.

Corporate Social Responsibility Committee

The Board of Directors has constituted a Corporate Social Responsibility (CSR) Committee in accordance with the provisions of Section 135 of the Companies Act, 2013 read with the Companies (Corporate Social Responsibility) Rules, 2014.

The composition, terms of reference and other relevant details of the CSR Committee are provided in the Corporate Governance Report, which forms part of this Annual Report.

8. Vigil Mechanism/ Whistle Blower Policy

The Company has established a Vigil Mechanism in accordance with the provisions of Section 177 of the Companies Act, 2013 and Regulation 22 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

The Company has also adopted a Whistle Blower Policy to provide a formal mechanism for Directors and employees to report genuine concerns about unethical behaviour, actual or suspected fraud, or violation of the Company's code of conduct.

The Audit Committee periodically reviews the functioning of the Vigil Mechanism and ensures that:

(a) all Directors and employees are adequately informed about the Vigil Mechanism;

(b) the mechanism provides adequate safeguards against victimisation of persons who use such mechanism and provides for direct access to the Chairman of the Audit Committee in appropriate or exceptional cases; and

(c) the mechanism ensures proper procedures for reporting, investigation and resolution of complaints.

During the financial year under review, no concerns were reported under the Vigil Mechanism.

The Whistle Blower Policy and Vigil Mechanism are available on the Company's website at www.zfindia.com.

9. Annual Return

Pursuant to the provisions of Section 92(3) of the Companies Act, 2013, the Annual Return of the Company as on March 31, 2026 is available on the Company's website at www.zfindia.com.

10. Industrial Relations

Industrial relations at all locations of the Company remained cordial during the financial year under review.

The Company continues to focus on improving product quality, reducing costs, enhancing operational efficiencyand environment across all its operations. The Company health also places significant and wellness initiatives for its employees.

Details of certain pending litigations, which are not material in nature, are disclosed in Note No. 31 to the financial statements forming part of this Annual Report.

11. Particulars of Employees and related disclosures

In terms of the provisions of Section 197 of the Companies Act, 2013 read with the relevant rules made thereunder and Section 136(1) of the Act, the Board's Report and the Annual Report are being sent to the Members excluding the statement containing particulars of employees and related disclosures. The said information is available for inspection at the

Registered Office of the Company during working hours on any working day. Any Member interested in obtaining a copy of such information may write to the Company Secretary, and the same will be furnished upon request.

12. Disclosures – Policy on Prevention of Sexual Harassment at Workplace

The Company has in place, a policy on Prevention of Sexual Harassment at Workplace in line with the requirements of 'The Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013' and the Rules framed there under. An Internal Complaints Committee (ICC) has been set up to redress complaints received regarding sexual harassment. All employees (permanent, temporary, trainee etc.) are covered under this Policy. During the year, no complaint with allegation of sexual harassment was received by the Company. Details of Complaints Received by the ICC During the Financial Year.

Details of Complaints Received by the ICC During the Year:

13. General

(i) The Company did not have deposits at the beginning of the financial year nor it accepted any de -posits during the year, within the meaning of Chapter V of the Companies Act, 2013 and the rules made thereunder.

(ii) All equity shares of the Company rank pari passu in all respects, including dividend entitlement and voting rights.

(iii) During the year under review, the Company has not issued any sweat equity shares.

(iv) The Company had three subsidiaries during the financial year under review. No remuneration or commission was received by any Whole-time Director or employee of the Company from any of its subsidiaries.

(v) During the year under review, no material orders or strictures were passed by any regulator, court or tribunal which could impact the going concern status of the Company or its future operations.

(vi) During the year under review, no instance of fraud has been reported by the Statutory Auditors under Section 143(12) of the Companies Act, 2013 read with the rules made thereunder, either to the Company or to the Central Government.

(vii) The maintenance of cost records as specified under Section 148(1) of the Companies Act, 2013 is not applicable to the Company.

(viii) The Company has complied with all applicable Secretarial Standards issued by the Institute of Company Secretaries of India.

(ix) There have been no material changes or commitments affecting the financial position of the Company which have occurred between the end of the financial year to which the financial statements relate and the date of this Report.

(x) The Company has neither filed any application nor are any proceedings pending against it under the Insolvency and Bankruptcy Code, 2016 during the year under review.

(xi) The Company has not made any one-time settlement with any bank or financial institution during the year and accordingly, disclosure relating to the difference between the amount of valuation done at the time of one-time settlement and the valuation done at the time of availing loan is not applicable.

(xii) The Company has complied with the provisions of the Maternity Benefit Act, 1961.

(xiii) Your Company has adopted a Code of Conduct to regulate, monitor and report trading by designated persons and their immediate relatives as per the requirements under the Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015. This Code of Conduct also includes the code for practices and procedures for fair disclosure of unpublished price sensitive information which has been made available at http://www.zfindia.com/pdf/ miscellaneous/Code-of-Practices-and-Procedures-for-Fair-Disclosure-of-UPSI.pdf

XIV) Acknowledgement

The Board of Directors places on record its sincere appreciation for the continued support and cooperation extended by the Company's Members, customers, suppliers, bankers, business partners, employees and the Central and State Governments. The Board looks forward to their continued support in the future.