(n) Provisions
A provision is recognised if, as a result of a past event, the Company has a present obligation that can be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation. Provisions are recognised at the best estimate of the expenditure required to settle the present obligation at the balance sheet date.
(o) Revenue recognition
Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured, regardless of when the payment is being made..
However, Goods and Services Tax (GST) is not received by the Company on its own account. Rather, it is tax collected on value added to the commodity or supplies made by the seller on behalf of the government. Accordingly, it is excluded from revenue.
Sale of goods
Revenue from sale of goods is recognised based on a 5-Step Methodology which is as follows:
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
Revenue from sale of goods is recognised at the point in time when control of the goods is transferred to the customer, generally on delivery of the goods and there are no unfulfilled obligations. Revenue is measured based on the transaction price, which is the consideration, adjusted for volume discounts, turnover discounts, scheme discounts and cash discounts, if any, as specified in the contract with the customer. Revenue also excludes taxes collected from customers.
Sale of services
The Company recognises revenue from sales of services over time, because the customer simultaneously receives and consumes the benefits provided by the Company. Revenue from services provided is recognised upon rendering of the services, in accordance with the agreed terms with the customers where ultimate collection of the revenue is reasonably expected.
Other operating revenue
All export benefits and incentives under various policies of Government of India are recognised on accrual basis when no significant uncertainties as to the amount of consideration that would be derived and as to its ultimate collection exist.
Other income
Interest income is recognised on accrual basis using the effective interest method.
Contract assets
Contract assets is right to consideration in exchange for goods or services transferred to the customer and performance obligation satisfied. If the Company performs by transferring goods or services to a customer before the customer pays consideration or before payment is due, a contract asset is recognised for the earned consideration that is conditional, in the nature of unbilled receivables. Upon completion of the attached condition and acceptance by the customer, the amounts recognised as contract assets is reclassified to trade receivables upon invoicing. A receivables represents the Company’s right to an amount of consideration that is unconditional. Contract assets are subject to impairment assessment.
Contract liabilities
A contract liability is the obligation to transfer goods or services to a customer for which the Company has received consideration (or an amount of consideration is due) from the customer or has raised the invoice in advance. If a customer pays consideration before the Company transfers goods or services to the customer, a contract liability is recognised when the payment is made or the payment is due (whichever is earlier). Contract liabilities
are recognised as revenue when the Company performs under the contract (i.e., transfers control of the related goods or services to the customer).
(p) Government grants
Government grants related to property, plant and equipment under Export Promotion Capital Goods (EPCG) are included in the non¬ current liabilities as deferred government grant and are credited to Profit or loss on the basis of fulfillment of export obligation and presented within other income in accordance with the primary conditions associated with purchase of assets and related grants.
Government grants not related to assets are recognised in the Standalone Statement of Profit and Loss when the right to receive benefits is established and the realisation is reasonably certain.
(q) Leases
A lease is defined as ‘a contract, or part of a contract, that conveys the right to use an asset (the underlying asset) for a period of time in exchange for consideration’.
Classification of leases
The Company enters into leasing arrangements for various assets. The assessment of the lease is based on several factors, including, but not limited to, transfer of ownership of leased asset at end of lease term, lessee’s option to extend/purchase etc.
Recognition and initial measurement
At lease commencement date, the Company recognises a right-of-use asset and a lease liability on the balance sheet. The right-of- use asset is measured at cost, which is made up of the initial measurement of the lease liability, any initial direct costs incurred by the Company, an estimate of any costs to dismantle and remove the asset at the end of the lease (if any), and any lease payments made in advance of the lease commencement date (net of any incentives received).
Subsequent measurement
The Company depreciates the right-of-use assets on a straight-line basis from the lease commencement date to the earlier of the end of the useful life of the right-of-use asset or
the end of the lease term. The Company also assesses the right-of-use asset for impairment when such indicators exist.
At lease commencement date, the Company measures the lease liability at the present value of the lease payments unpaid at that date, discounted using the interest rate implicit in the lease if that rate is readily available or the Company’s incremental borrowing rate (IBR). Lease payments included in the measurement of the lease liability are made up of fixed payments (including in substance fixed payments) and variable payments based on an index or rate. Subsequent to initial measurement, the liability will be reduced for payments made and increased for interest. It is re-measured to reflect any reassessment or modification, or if there are changes in in¬ substance fixed payments. When the lease liability is re-measured, the corresponding adjustment is reflected in the right-of-use asset.
The Company has elected to account for short¬ term leases using the practical expedients. Instead of recognising a right-of-use asset and lease liability, the payments in relation to these are recognised as an expense in standalone statement of profit and loss on a straight-line basis over the lease term.
Estimating the incremental borrowing rate
The Company cannot readily determine the interest rate implicit in the lease, therefore, it uses its IBR to measure lease liabilities. The IBR is the rate of interest that the Company would have to pay for last long-term funds raised.
(r) Income-tax
Tax expense recognised in the standalone statement of profit and loss comprises the sum of deferred tax and current tax not recognised in other comprehensive income or directly in equity.
Current tax is determined as the tax payable in respect of taxable income for the year and is computed in accordance with relevant tax regulations. Current tax are recognised as an expense or income in the standalone statement of profit and loss, except when they relate to items credited or debited either in other comprehensive income or directly in equity, in which case the tax is also recognised in other comprehensive income or directly in equity.
Deferred tax is recognised in respect of temporary differences between carrying amount of assets and liabilities for financial reporting purposes and corresponding amount used for taxation purposes. Deferred tax assets on unrealised tax loss are recognised to the extent that it is probable that the underlying tax loss will be utilised against future taxable income. This is assessed based on the Company’s forecast of future operating results, adjusted for significant non-taxable income and expenses and specific limits on the use of any unused tax loss. Unrecognised deferred tax assets are re-assessed at each reporting date and are recognised to the extent that it has become probable that future taxable profits will allow the deferred tax asset to be recovered.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the year when the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the reporting date. Deferred tax are recognised as an expense or income in the consolidated statement of profit and loss, except when they relate to items credited or debited either in other comprehensive income or directly in equity, in which case the tax is also recognised in other comprehensive income or directly in equity.
(s) Earnings per share
Basic earnings per share are calculated by dividing the standalone net profit for the year attributable to equity shareholders by the weighted average number of equity shares outstanding during the year.
For the purpose of calculating diluted earnings per share, the standalone net profit or loss for the year attributable to equity shareholders and the weighted average number of shares outstanding during the year are adjusted for the effects of all dilutive potential equity shares except where the results will be anti-dilutive
(t) Contingent liabilities and contingent assets
A contingent liability exists when there is a possible but not probable obligation, or a present obligation that may, but probably will not, require an outflow of resources, or a present obligation whose amount cannot be estimated reliably. Contingent liabilities do not warrant
provisions, but are disclosed. Contingent assets are neither recognised nor disclosed in the standalone financial statements. However, contingent assets are assessed continually and if it is virtually certain that an inflow of economic benefits will arise, the asset and related income are recognised in the period in which the change occurs.
(u) Cash and cash equivalents
For the purpose ofpresentation in the statement of cash flows, cash and cash equivalents includes cash on hand, deposits held at call with financial institutions, other short-term, highly liquid investments with original maturities of three months or less that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities in the standalone balance sheet.
(v) Borrowing cost
Borrowing costs directly attributable to acquisition, construction or erection of qualifying assets are capitalised. Capitalisation of borrowing costs ceases when substantially all the activities necessary to prepare the qualifying assets for their intended use are complete.
Other borrowing costs are recognised as an expense in the standalone statement of profit and loss in the year in which they are incurred.
(w) Recent Accounting Pronouncements
(i) The Ministry of Corporate Affairs (‘MCA’) vide its notifications dated 12 August 2024 and 09 September 2024 has issued Companies (India AccountingNew Standards) Amendment Rules, 2024 and Companies (India Accounting Standards) Second Amendment Rules, 2024, which introduced amendments in certain Indian Accounting Standards that are effective from 1 April 2024:
(a) Ind AS 117 - Insurance contracts - MCA/Amendments notified Ind AS 117, a comprehensive standard that prescribe, recognition, measurement and disclosure requirements, to avoid diversities in practice for accounting
insurance contracts and it applies to all companies i.e., to all “insurance contracts” regardless of the issuer. However, Ind AS 117 is not applicable to the entities which are insurance companies registered with IRDAI.
(b) Ind AS 116- The amendments require an entity to recognise lease liability including variable lease payments which are not linked to index or a rate in a way it does not result into gain on right-of-use asset it retains.
The Company has reviewed the new pronouncements and based on its evaluation has determined that these amendments do not have a significant impact on the financial statements.
(ii) Standards issued but not yet effective:
The Ministry of Corporate Affairs notifies new standards or amendments to the existing standards. There is amendment to Ind AS 21 “Effects of Changes in Foreign Exchange Rates” such amendments would have been applicable from 01 April 2025.
The Effects of Changes in Foreign Exchange Rates specify how an entity should assess whether a currency is exchangeable and how it should determine a spot exchange rate when exchangeability is lacking. The amendments also require disclosure of information that enables users of its financial statements to understand how the currency not being exchangeable into the other currency affects, or is expected to affect, the entity’s financial performance, financial position and cash flows.
The amendments are effective for the period on or after 1 April 2025. When applying the amendments, an entity cannot restate comparative information.
The Company has reviewed the new pronouncement and based on its evaluation has determined that these amendments do not have a significant impact on the Company’s Standalone Financial Statements.
4. Right of use assets, Goodwill & Other intangible assets (Contd..)
use. The value in use for Goodwill is determined based on discounted cash flow projections. These calculations uses management assumptions and discounted pre tax cash flow projections based on financial budgets covering a 5 year period. Cash flow projection beyond 5 years time period are extrapolated using the estimated terminal growth rate. Certain key assumptions considered by the management for impairment testing of CGU are stated below:
• Weighted average cost of capital: 31 March 2025: 16.92% (31 March 2024: 16.34%)
• Revenue growth rate: 31 March 2025: 10% (31 March 2024: 12%)
• Terminal growth rate: 31 March 2025: 4% (31 March 2024: 4%)
The management believes that no reasonably possible change in any of the key assumptions used in the value in use calculation would cause the carrying value of the CGU to materially exceed its value in use.
5. Investments (Contd..)
5.1 Refer to note 35 for details of investments in subsidiary and joint ventures.
5.2 The Company has invested an amount of INR 10.71 crore (INR Ten crores seventy one lakhs) in AISIN ASK India Private Limited, Joint Venture of the Company during the current financial year for subscription of its 1,07,10,000 (One Crore Seven Lakhs Ten Thousand ) equity shares of INR 10/- each.
5.3 The Company has performed an impairment assessment annually of its investment in ASK Fras-Le Friction Private Limited at the balance sheet date to ascertain the recoverable amount and has not found any indicator of impairment as at 31 March 2025 and 31 March 2024. The recoverable amount is determined based on value in use calculation. These calculations uses management assumptions and discounted pre tax cash flow projections based on financial budgets covering a 5 year period. Cash flow projection beyond 5 years time period are extrapolated using the estimated terminal growth rate. Certain key assumptions considered by the management for impairment testing are stated below:
• Weighted average cost of capital: 31 March 2025: 21.54% (31 March 2024: 20.09%)
• Terminal growth rate: 31 March 2025: 4% (31 March 2024: 4%)
The management believes that no reasonably possible change in any of the key assumptions used in the value in use calculation would cause the carrying value of the investment to materially exceed its value in use.
17. Provisions (Contd..)
17.1 Defined benefit plan and long term employment benefits
A General description:
Gratuity (Defined benefit plan):
Gratuity liability is a defined benefit obligation and is provided for on the basis of an actuarial valuation on projected unit credit method made at the end of each year. The gratuity plan is governed by the Payment of Gratuity Act, 1972. Every employee who has completed five years or more of service gets a gratuity on departure at 15 days salary (last drawn salary) for each completed year of service. The scheme is unfunded. Actuarial gains or losses are recognised in other comprehensive income.
Compensated absence (other long term employee benefits):
The employees of the Company are entitled to leave as per the leave policy of the Company. Since the Company have an unconditional right to defer settlement for any of the leave obligations beyond 12 months, the Company treats accumulated leave expected to be carried forward beyond twelve months as long term employee benefit for measurement purposes. Such long term compensated absences are provided for based on actuarial valuation using the projected unit credit method at the year end. The expense related to compensated absences are recognised in standalone statement of profit and loss as employee benefits expense.
(ii) Others
(a) The Company has received a demand under Goods and Services Tax Act,2017 of INR 1.18 Crore on 9 August 2023 from Goods and Service Tax (GST) department out of which INR 0.04 Crore has been paid by the Company. The Company has further deposited INR 0.06 Crore towards disputed tax liability and has filed an appeal against the demand order on 31 October 2023. During the year, Company has submitted required documents to the department on 18 September 2024. The Company believes that the case will be decided in their favour and hence no provision has been considered.
(b) The Company has received an order dated 23 May 2023 from the Assistant Director, Directorate of Enforcement, in connection with an investigation under the Foreign Exchange Management Act, 1999, as amended, directing the Company to submit certain information, including, inter alia, details of the Directors, the Company’s business, the bank accounts of Company, imports and exports made by Company till date and certain information for financial year 2016-2017, such as, all foreign investments made by Company, import/export advance payments for which import and export had not been made by Company and imports/ exports for which payments had not been made/realized by Company, during the aforementioned year. The Company has submitted the required information pursuant to the aforementioned order and no further communication has been recieved from the Directorate of Enforcement in this matter till the adoption of this financial information. The Company believes that this was information seeking by the authorities and is not likely to have any implication on the financial position of the Company.
38. Financial instruments - Fair values measurement and risk management (Conts..)
B Financial risk management
The Company has exposure to the following risks arising from financial instruments:
- Credit risk;
- Liquidity risk;
- Market risk - Foreign exchange;
- Market risk - Interest rate; and
- Commodity price risk
(I) Risk management framework
The Company’s board of directors has overall responsibility for the establishment and oversight of the Company’s risk management framework. The board of directors have authorised senior management to establish the processes, who ensures that executive management controls risks through the mechanism of properly defined framework.
The Company’s risk management policies are established to identify and analyse the risks faced by the Company, to set appropriate risks limits and controls, to monitor risks and adherence to limits. Risk management policies are reviewed regularly to reflect changes in market conditions and the Company’s activities. The Company, through its training and management standards and procedures, aims to maintain a disciplined and constructive control environment in which all employees understand their roles and obligations.
(a) Credit risk
The maximum exposure to credit risks is represented by the total carrying amount of these financial assets in the balance sheet are as follows:
Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from the Company’s receivables from customers, loans.
Credit risk on cash and cash equivalents is limited as the Company generally invests in deposits with banks and other bank balances with high credit ratings assigned by domestic credit rating agencies. While cash and cash equivalents are also subject to the impairment requirements of Ind AS 109, the identified impairment loss was immaterial.
The maximum exposure to the credit risk at the reporting date is primarily from trade receivables. Trade receivables are unsecured and are derived from revenue earned from customers primarily located in India. The Company does monitor the economic environment in which it operates.
The Company considers the probability of default upon initial recognition of loan and whether there has been a significant increase in credit risk on an ongoing basis throughout each reporting period. To assess whether there is a significant increase in credit risk, the Company compares the risk of a default occurring on the loan as at the reporting date with the risk of default as at the date of initial recognition. It considers available reasonable and supportive forwarding-looking information. Especially the following indicators are incorporated:
• Actual or expected significant adverse changes in business, financial or economic conditions that are expected to cause a significant change to the borrower’s ability to meet its obligations
• Actual or expected significant changes in the operating results of the borrower
Credit risk has always been managed by the Company through credit approvals, establishing credit limits and continuously monitoring the creditworthiness of customers to which the Company grants credit terms in the normal course of business. On account of adoption of Ind AS 109, the Company uses expected credit loss (ECL) model to assess the impairment loss or gain. The Company uses a provision matrix to compute the expected credit loss allowance for trade receivables. The provision matrix takes into account available external and internal credit risk factors such as Company’s historical experience for customers.
(b) Liquidity risk
Prudent liquidity risk management implies maintaining sufficient cash and marketable securities and the availability of funding through an adequate amount of committed credit facilities to meet obligations when due. Due to the nature of the business, the Company maintains flexibility in funding by maintaining availability under committed facilities. Management monitors rolling forecasts of the Company’s liquidity position and cash and cash equivalents on the basis of expected cash flows. The Company takes into account the liquidity of the market in which the entity operates. In addition, the Company’s liquidity management policy involves projecting cash flows in major currencies and considering the level of liquid assets necessary to meet these, monitoring balance sheet liquidity ratios against internal and external regulatory requirements and maintaining debt financing plans.
(i) Maturities of financial liabilities
The tables below analyses the Company’s financial liabilities into relevant maturity groupings based on their contractual maturities for all non-derivative financial liabilities. The amounts disclosed in the table are the contractual undiscounted cash flows. Balances due within 12 months equal their carrying balances as the impact of discounting is not significant.
*Amortised amount of upfront fees/charges paid at the time of sanction/disbursement of loan in the above outstanding is INR NIL (31 March 2024: INR 0.01 Crore). This amount further includes future undiscounted cash flows for interest on term loans INR 2.69 Crore (31 March 2024: INR 9.80 Crore).
(c) Market risk
Market risk is the risk that the future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises two types of risk: currency risk and interest rate risk. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimising the return.
(i) Currency risk
Currency risk is the risk that the future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates. The Company is exposed to the effects of fluctuation in the prevailing foreign currency exchange rates on its financial position and cash flows. Exposure arises primarily due to exchange rate fluctuations between the functional currency and other currencies from the Company’s operating, investing and financing activities.
(d) Commodity price risk
Fluctuation in commodity price in market affects directly or indirectly the price of raw material and components used by the Company. The Company sells its products mainly to Original Equipment Manufacturers for whom it is manufacturing auto components. The Company does regular negotiation / adjustment of prices on the basis of changes in commodity prices.
(II) Capital management
For the purpose of the Company’s capital management, capital includes issued equity share capital, securities premium reserve and all other equity reserves attributable to the equity holders of the Company. The primary objective of the management of the Company’s capital structure is to maintain an efficient mix of debt and equity in order to achieve a low cost of capital, while taking into account the desirability of retaining financial flexibility to pursue business opportunities and adequate access to liquidity to mitigate the effect of unforeseen events on cash flows.
The Company manages its capital structure and makes adjustments to it in light of changes in economic conditions. To maintain or adjust the capital structure, the Company may return capital to shareholders, raise new debt or issue new shares.
45. Other disclosures required as per schedule III- (Contd..)
(b) The Company has not invested or traded in crypto currency & virtual currency.
(c) The Company has not advanced or loaned or invested funds to any other person(s) or entity(ies), including foreign entities (intermediaries) with the understanding that the intermediary shall:
(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;
(d) The Company has not received any fund from any person(s) or entity(ies), including foreign entities (Funding Party) with the understanding (whether recorded in writing or otherwise) that the Company shall:
(i) 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
(ii) provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.
(e) The borrowings obtained by the company from banks and financial institutions have been applied for the purposes for which such loans were taken.
(f) The Company has not been declared willful defaulter by any bank or financial Institution or other lender.
(g) The Company does not have any such transaction which is not recorded in the books of accounts that has been surrendered or disclosed as income during the period in the tax assessments under the Income Tax Act, 1961 (such as, search or survey or any other relevant provisions of the Income Tax Act, 1961.
(h) There has not been any proceedings initiated or pending against the Company for holding any benami property under the Benami transactions (Prohibition) Act, 1988 (45 of 1988) and rules made thereunder.
(i) Relationship with struck off companies
The Company has no transaction/ balance with companies struck off under section 248 of the Act to the best of the knowledge of the Company’s management.
(j) The Company does not have any charges or satisfactions, which is yet to be registered with Registrar of companies, beyond the statutory year prescribed under the Companies Act, 2013 and the rules made thereunder.
(k) The title deeds of all the immovable properties (other than properties where the company is the lessee and the lease agreements are duly executed in favour of the lessee), as disclosed in note 3 to the financial statements, are held in the name of the company except the one disclosed in note 3.4.
(l) The Company has complied with the number of layers prescribed under clause (87) of section 2 of the Act read with the Companies (Restriction on number of layers) Rules 2017.
(m) The Company has not revalued its property, plant and equipment (including right-of-use assets) or intangible assets or both during the current or previous year.
46. The Ministry of Corporate Affairs (MCA) has prescribed a requirement for companies under the proviso to Rule 3(1) of the Companies (Accounts) Rules, 2014 inserted by the Companies (Accounts) Amendment Rules, 2021 requiring companies, which uses accounting software for maintaining its books of account, shall use only such accounting software which has a feature of recording audit trail of each and every transaction, creating an edit log of each change made in the books of account along with the date when such changes were made and ensuring that the audit trail cannot be disabled.
The Company has used accounting software for maintaining its books of account which has a feature of audit trail (edit log) facility and the same was enabled at the application level. During the year ended 31 March 2025, the Company has not enabled the feature of recording audit trail (edit log) at the database level for the said accounting software to log any direct data changes on account of recommendation in the accounting software administration guide which states that enabling the same all the time consume storage space on the disk and can impact database performance significantly.
47. Certain amounts (currency value or percentages) shown in various tables and paragraphs included in these standalone financial statements have been rounded off or truncated as deemed appropriate by the management of the Company.
48. Previous year figure regrouped / reclassified wherever necessary to confirm to current period's classification pursuant to amendment in Schedule III of the Act.
49. No significant subsequent events have occurred post the balance sheet date 31 March 2025 which may require an adjustment to the standalone financial statements.
50. Authorisation of financial statements
The standalone financial statements for the year ended 31 March 2025 were approved by the board of directors on 13 May 2025.
For Walker Chandiok & Co For and on behalf of the Board of Directors of LLP
Chartered Accountants ASK Automotive Limited
Firm’s Registration No.:
001076N/N500013
Anamitra Das Kuldip Singh Rathee Aman Rathee Naresh Kumar Rajani Sharma
Partner Chairman and Managing Executive Director Chief Financial Officer Company
Membership No.: 062191 Director DIN: 00041130 Secretary
DIN: 00041032 M.No. A14391
Place: Gurugram Place: Gurugram
Date: 13 May 2025 Date: 13 May 2025
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