1.8 Provisions, Contingent Liabilities and Contingent Assets

The assessments undertaken in recognising provisions and contingencies have been made in accordance with the
applicable Ind AS-37 “Provisions, Contingent Liabilities and Contingent Assets”.

A. Provisions

Provisions are recognized when the Company has a present obligation (legal or constructive), as a result of
past events, and it is probable that an outflow of resources, that can be reliably estimated, will be required
to settle such an obligation. If the effect of the time value of money is material, provisions are determined by
discounting the expected future cash flows to net present value using an appropriate pre-tax discount rate
that reflects current market assessments of the time value of money and, where appropriate, the risks specific
to the liability. Unwinding of the discount is recognized in the statement of profit and loss as a finance cost.
Provisions are reviewed at each reporting date and are adjusted to reflect the current best estimate.

B. Contingent Liabilities

The Contingent Liabilities are disclosed by way of a note to the Financial Statements, after careful evaluation
by the management of the facts and legal aspects of the matter involved.

Company has significant capital commitments in relation to various capital projects which are not recognized
on the balance sheet. In the normal course of business, contingent liabilities may arise from litigation and
other claims against the Company. Guarantees are also provided in the normal course of business. There are
certain obligations which management has concluded, based on all available facts and circumstances, are
not probable of payment or are very difficult to quantify reliably, and such obligations are treated as contingent
liabilities and disclosed in the notes but are not reflected as liabilities in the financial statements. Although
there can be no assurance regarding the final outcome of the legal proceedings in which the Company is
involved, it is not expected that such contingencies will have a material effect on its financial position or
profitability.

C. Contingent Assets

A Contingent Asset is a possible asset that arises from past events and whose existence will be confirmed
only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control
of the entity.

A contingent asset, if any is not recognised but disclosed where an inflow of economic benefit is probable.

1.9 Selling/Marketing Expenses

a) Commission, Discount and other expenses payable on sales are recognized on determination of amount
payable in accordance with arrangement/contracts with the parties.

1.10 Employee Benefits

A. Short Term Employee Benefits

Short Term Employee benefits are recognised as an expense at the undiscounted amounts in the Statement
of Profit & Loss of year in which the related services are rendered.

B. Defined Contribution Plans

Provident Fund & ESIC are defined contribution schemes established under a State Plan. The contributions
to the schemes are charged to the Statement of Profit & Loss in the year of incurrence.

C. Defined Benefits Plans

The company has a defined benefit gratuity plan. Every employee who has completed five years or more of
service gets a gratuity on post-employment at 15 days' salary (last drawn salary) for each completed year of
services as per the rules of the company. The aforesaid liability is provided for on the basis of an actuarial
valuation made using Projected Unit Credit Method at the end of financial year. The scheme is funded with
an insurance company in the form of a qualifying insurance policy. Remeasurement gains/losses arising from
experience adjustments and changes in actuarial assumptions are recognised in the period in which they
occur in Other Comprehensive Income. These gains/ losses which are recognised in Other Comprehensive
Income are reflected in retained earnings and are not reclassified to profit or loss.

D. Compensated Absences

Employees are entitled to accumulate leave subject to certain limits for future encashment. The liability in
respect of compensated absences is provided for on the basis of actuarial valuation made at the end of the
financial year using Projected Unit Credit Method. The said liability is not funded.

1.11 Dividends

Provision is made for the amount of any final dividend declared in the accounts on the date of its approval by the
shareholders and no longer at the discretion of the board. Interim dividends, if any are recorded as a liability on the
date of declaration by the company's board of directors.

1.12 Earnings Per Share

The Earnings considered for ascertaining the Company's Earnings Per Share (EPS) comprises the Net Profit /
Loss after Tax. The Number of Shares used in computing Basic EPS is the Weighted Average Number of Shares
outstanding during the year. The number of shares used in computing diluted EPS comprises weighted average
number of shares considered for deriving basis EPS, and also the weighted average number of equity shares that
would be issued on the conversion of all dilutive potential equity shares. In case of dilutive potential equity shares,
the difference between the number of shares issuable and number of shares that would have been issued at fair
value are treated as diluted potential equity shares. Dilutive potential equity shares are deemed converted as of the
beginning of the period, unless issued at a later date.

1.13 Share-based payment arrangements

Equity-settled share-based payments to employees (employee stock option plan) are measured by reference to
the fair value of the equity instruments at the grant date. The fair value determined at the grant date of the equity-
settled share-based payments is expensed over the vesting period, based on the Company's estimate of equity
instruments that will eventually vest, with a corresponding increase in equity at the end of the year. At the end of
each year, the Company revises its estimate of the number of equity instruments expected to vest. The impact of
the revision of the original estimates, if any, is recognised in profit or loss such that the cumulative expense reflects
the revised estimate, with a corresponding adjustment to the share options outstanding account.

1.14 Exceptional items

When an item of income or expense within Statement of profit and loss from ordinary activity is of such size, nature
or incidence that its disclosure is relevant to explain more meaningfully the performance of the Company for the
year, the nature and amount of such items is disclosed as exceptional items.

1.15 Summary Critical Estimates & Judgments

The preparation of financial statements requires the use of accounting estimates which, by definition, will seldom
equal the actual results. The management also needs to exercise judgment in applying the Company's accounting
policies. This note provides an overview of the areas that involved a higher degree of judgment or complexity, and
of items which are more likely to be materially adjusted due to estimates and assumptions turning out to be different
than those originally assessed. Detailed information about each of these estimates and judgments is included
below.

A. Deferred taxes

The company recognises that net future tax benefit related to deferred income tax assets to the extent that
it is probable that the deductible temporary differences will reverse in the foreseeable future. Assessing the
recoverability of deferred income tax assets requires the company to make significant estimates related
to expectations of future taxable income, which may have a scope of causing a material adjustment to the
carrying amounts of assets and liabilities.

B. Contingent liabilities

In the normal course of business, contingent liabilities may arise from litigations and other claims against
the Company. Where the potential liabilities have a low probability of crystallizing or are very difficult to
quantify reliably, the Company treats them as contingent liabilities. Such liabilities are disclosed in the notes
but are not provided for in the financial statements. Although there can be no assurance regarding the final
outcome, the Company does not expect them to have a materially adverse impact on our financial position or
profitability.

C. Fair Value Measurements and Valuation Processes

Some of the Company's assets and liabilities are measured at fair value for financial reporting purposes. The
Management determines the appropriate valuation techniques and inputs for the fair value measurements.
In estimating the fair value of an asset or a liability, the Company used market-observable data to the extent
it is available. Where Level 1 inputs are not available, the Company engaged third party qualified valuers to
perform the valuations in order to determine the fair values based on the appropriate valuation techniques
and inputs to fair value measurements. Fair Value of Financial Guarantees extended by the Company to
secure credit facilities availed by the Company's subsidiaries from bank, has been determined based on
estimated amount that would be payable to a third party for assuming the obligations.

(a) Investments in other related entities, Subsidiaries/Joint Venture have been made in terms of investment limits
approved by Board of Directors of the company from time to time.

(b) This investment in 0% Redeemable Preference Shares is, in substance investment in Equity instruments based on
terms of the said instruments and hence treated accordingly at Deemed Cost.

(c) Pending compliance of bank condition, company could not remit amount towards share capital to Setco MEA DMCC,
resulting to non-issuance of share certificate to the company. The company has recognized it as investment in the
wholly owned foreign subsidiary based on 100% control. The Company has decided to close this subsidiary vide
Board Resolution dated 09.02.2021. However, due to the pending compliance procedures of DMCC, the Subsidiary
could not be winded up. The matter will be handled afresh as per new guidelines to be complied.

(d) Nominee shareholders are Harish Sheth & Sneha Sheth - 70 Shares, Udit Sheth - 10 Shares, Sneha Sheth - 10
Shares, and Neethu Sheth - 10 Shares.

31 Contingent Liabilities and Commitments :

A. Contingent Liabilities :

(i) Guarantee given for maximum Rs. 16,678.00 lakhs (Rs. 16,678.00 lakhs) to Bank of Baroda, Mumbai,
India, for subsidiary's credit facilities. The carrying amounts of related financial guarantee contracts are
recognised in books of account are Rs. 653.45 lakhs as at 31.03.2025 (Rs. 675.61 lakhs).

(ii) Guarantee given for maximum Rs. 56,500.00 lakhs (Rs. 56,500.00 lakhs) to Vistra ITCL (India) Limited,
Mumbai, India (Debenture Trustee) for non convertible debentures issued by the company in previous
year and its subsidiary Setco Auto Systems Private Limited.

B. Note on Pending Litigation :

(i) The Company had filed a case against a competitor for cancellation of registration of design granted by
Controller of Patents and Designs in Kolkata High Court. In view of the settlement of differences under
a consent terms, the said case became infructuous and the process of withdrawal of the case is under
process.

(ii) The Company has received Assessment Orders under section 143(3) read with section 144C (3) for
A.Y. 2017-18 & A.Y2018-19 in which certain additions are made resulting in demand of Rs.0.35 lakhs
and Rs Nil amount respectively. The matters on which additions are made in respect of product
development expenses, are adjudicated in favour of the Company by the Income tax Appellate Tribunal.
These adjudicated matters are not contested further by the Income tax Department.

The company's appeals in which additions are made are contested before the Commissioner of
Income tax (Appeals) which are pending for disposal. Based on adjudication by the Income tax
appellate tribunal, the appeal before the CIT Appeals are expected to decide in favour of the company.
Therefore, the demand arising on account of such additions are expected to be deleted and hence not
provided for.

The penalty proceedings initiated by the Department under section 271(1)(c) of the Income tax Act,
1961 based on additions made in the assessments referred to above are requested to be kept in
abeyance till the disposal of appeal. Based on adjudication of the matters decided in favour of the
company it is expected that such proceedings will be dropped.

(iii) During the year Company received order from GST Authorities raising a demand of Rs. 208 lakhs
along with interest and penalties amount of Rs. 104 lakhs. The Company has contested the matter
before GST CIT (Appeals) and made part payment of Rs. 10.43 lakhs against the demand raised as
prescribed. The matter is pending for final adjudication.

(iv) During the year under review, the Securities and Exchange Board of India (“SEBI”) issued a show cause
notice dated October 14, 2024, to, inter alia, the Company, alleging contraventions of: (i) the SEBI Act,
1992; (ii) the SEBI (Prohibition of Fraudulent and Unfair Trade Practices relating to Securities Market)
Regulations, 2003; and (iii) the SEBI (Listing Obligations and Disclosure Requirements) Regulations,
2015. The allegations pertain to certain related party transactions undertaken in prior financial years.

The Company has submitted detailed responses to SEBI, denying the allegations and asserting, inter alia,
that the said transactions were undertaken in compliance with applicable laws and regulatory requirements.
The matter is currently pending adjudication before SEBI's Quasi-Judicial Authority. The Company continues
to believe that the transactions were entered into in compliance with applicable law.

The company's management reasonably expects that these cases when ultimately concluded/
adjudicated will not have any material or adverse effect on the company's results or the operations or
financial condition.

32 Trade payable and receivables

Trade payables' balances for which balance confirmations have been received, have been reconciled and necessary
adjustments, if any, has been accounted. In respect of trade receivables and other debit/credit balances, for which
balance confirmations have been received, have been reconciled and necessary adjustments, if any, has been
accounted.

33 Employee Benefits

Disclosure pursuant to Ind AS - 19 “Employee Benefits”

i) Defined Contribution Plans

An amount of Rs 0.02 lakhs (Rs. 1.29 lakhs) (Provident Fund & ESIC) is recognized as an expense and
included in Note 20 under the head “Employee Benefits”.

(ii) Fair value hierarchy :

This section explains the judgements and estimates made in determining the fair values of the financial instruments
that are (a) recognised and measured at fair value. To provide an indication about the reliability of the inputs used in
determining fair value, the entity has classified its financial instruments into 3 levels prescribed under the accounting
standard.

Level 1: Level 1 hierarchy includes financial instruments measure quoted prices.

Level 2: The fair values of financial instruments that are not traded in an active market are determined using
valuation techniques which maximise the use of observable market data and rely as little as possible on entity-
specific estimates. If all the significant inputs required to fair value an instrument are observable, the instrument is
included in level 2.

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

37 Capital Management :

Risk Management

The Company manages its capital to ensure that it will be able to continue as going concern and to maximise
shareholders value. The Company monitors capital using Debt-Equity ratio which is total debt divided by total equity.

For the purposes of Capital Management, the Company considers following components of its Balance sheet to
manage Capital:

Total equity includes Share Capital and Other Equity (Free Reserves). Total Debt includes current debt plus non¬
current debt.

(i) In respect of aforesaid mentioned ratios, there is no significant change (25% or more) in FY 2024-25 in comparison
to FY 2023-24.

39 Audit Trail :

The company has used an accounting software for maintaining its books of account which has a feature of recording
audit trail (edit log) facility and the same has operated throughout the year for all relevant transactions recorded in
the software. There are two exceptions noted by the Company's management

a) Table schema level changes carried out from the application are not tracked; and

b) The company uses SAP application, which is operated by a third-party software service provider, for
maintaining its books of account and said party has not provided either SOC2 report or Independent auditor's
report.

However, these exceptions do not impact the internal control environment of the Company.

40 The company has not advanced or loaned or invested funds (either borrowed funds or share premium or any
other sources or kind of funds) to any other person(s) or entity(ies), including foreign entities (Intermediaries) with
the understanding (whether recorded in writing or otherwise) that the Intermediary (i) directly or indirectly lend or
invest in other persons or entities identified in any manner whatsoever by or on behalf of the company (Ultimate
Beneficiaries) or (ii) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries.

41 The Company has not received any fund from any person(s) or entity(is), including foreign entities (Funding Party)
with the understanding (whether recorded in writing or otherwise) that the Company shall: (a) directly or indirectly
lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party
(Ultimate Beneficiaries) or (b) provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

42 The Company has not traded or invested in Crypto currency or Virtual Currency.

43 No proceedings have been initiated or are pending against the Company for holding any benami property under the
Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and rules made thereunder.

44 The Company has not entered any transactions with companies struck off under section 248 of the Companies Act,
2013 or section 560 of the Companies Act, 1956.

45 The Company has not made any contribution to the political parties.

46 Figures in brackets represent previous year's figures.

47 Previous year's figures have been regrouped/ reclassified wherever necessary to correspond with the current year's
classification/ disclosure.

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

For Sharp & Tannan Associates

Chartered accountants

(ICAI Firm registration No. : 109983W)

HARISH SHETH UDIT SHETH

[DIN: 01434459] [DIN: 00187221]

Chairman & Managing Director Vice Chairman and Whole time Director

(CA Pramod Bhise) ANURAG JAIN HIREN VALA

Partner Chief Financial Officer Company Secretary

Membership No. : 047751 Membership No. : A42685

Place : Mumbai Place : Mumbai

Date : 27^th May, 2025 Date : 27^th May, 2025