NOTE: 1 SIGNIFICANT ACCOUNTING POLICIES
1.1 Corporate Information
IM Capitals Limited ("the Company") is a company limited by shares incorporated and domiciled in India. The
company is primarily engaged in the business of investment /finance/ Consultancy. In the previous year, the company
has shifted its registered office from 72, Ground Floor, World Trade Center, Babar Road, Connaught Place, New Delhi
- 110001 to C-15, RDC Rajnagar, Ghaziabad, Uttar Pradesh- 201001. Consequently, CIN number of the company has
changed from CIN: L74140DL1991PLC340407 to CIN: L74140UP1991PLC201030. The Equity shares of the company
are listed on Bombay Stock Exchange.
1.2 Statement of Compliance
The Standalone Financial Statements have been prepared in accordance with Companies Act 2013, Indian Accounting
Standard (Ind AS) and complies with other requirements of law and were authorised for issue in accordance with a
resolution of the Board of Directors of the company passed on 30.05.2025
1.3 Basis of Preparation
The financial statements of the company are consistently prepared and presented under historical cost convention on
an accrual basis in accordance with Ind AS except for certain financial assets and liabilities that are measured at fair
values.
The company's functional currency and presentation currency is Indian Rupees (INR). All amounts disclosed in the
financial statements and notes are in INR except otherwise indicated and rounded off to lakh & upto two decimals.
Classification of Assets and Liabilities into current and Non-Current
The Company presents its assets and liabilities in the Balance Sheet based on current/ non-current
classification.
As asset is treated as current when it is:
a) expected to be realised or intended to be sold or consumed in normal operating cycle;
b) held primarily for the purpose of trading;
c) expected to be realised within twelve months after the reporting period; or
d) cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least twelve
months after the reporting period.
All other assets are classified as non-current.
A liability is treated as current when:
a) it is expected to be settled in normal operating cycle;
b) it is held primarily for the purpose of trading;
c) it is due to be settled within twelve months after the reporting period; or
d) there is no unconditional right to defer the settlement of the liability for at least twelve months after the reporting
period
All other liabilities are classified as non-current.
Based on the nature of products and the time between the acquisition of assets for processing and their realisation
in cash and cash equivalents, the company has ascertained its operating cycle being a period within twelve months
for the purpose of current and non-current classification of assets and liabilities.
1.4 Use of judgements, estimates and assumptions
The preparation of the company's financial statements required management to make judgements, estimates and
assumptions that affect the reported amount of revenues, expenses, assets and liabilities, and the accompanying
disclosures, and the disclosures of contingent liabilities. Uncertainty about these assumptions and estimates could
result in outcomes that require a material adjustment in the future periods in the carrying amount of assets or liabilities
affected.
In the company's accounting policies, management has made judgements in respect of evaluation of recoverability of
deferred tax assets, which has the most significant effect on the amounts recognised in the financial statements:
The following are the key assumptions concerning the future, and other other key sources of estimation uncertainty
at the end of reporting period that may have significant risk of causing material adjustments to the carrying amounts
of assets and liabilities with in: -
a) Useful life of property, plant and equipment and intangible assets: The company has estimated useful life of the
Property, Plant and Equipment as specified in Schedule II to Companies Act 2013. However, the actual useful life for
individual equipments could turn out to be different, there could be technology changes, breakdown, unexpected
failure leading to impairment or complete discard. Alternatively, the equipment may continue to provide useful service
well beyond the useful assumed.
b) Fair value measurement of financial instruments: When the fair values of financial assets and financial liabilities
cannot be measured based on quoted process in active market, the fair value is measured using valuation techniques
including book value and discounted cash flow (DCF) model. The inputs to these models are taken from observable
markets where possible, but where this is not possible, a degree of judgement is required in establishing fair values.
c) Impairment of financial and non-financial assets: The impairment provisions for the financial assets are based on
assumptions about risk of default and expected loss rates. The company uses judgement in making these assumptions
and selecting the input for the impairment calculations, based on Company's past history, existing market conditions,
technology, economic developments as well as forward looking estimates at the end of each reporting period.
d) Taxes: Taxes have been paid / provided, exemptions availed, allowances considered etc. are based on the extent
laws and the company's interpretation of the same based on the legal advice received wherever required. These could
differ in the view taken by the authorities, clarifications issued subsequently by the government and court,
amendments to statues by the government etc.
e) Defined benefit plans: The cost of defined benefit plans and other post-employment benefits plans and the present
value of such obligations are determined using acturial valuations. An acturial valuation involves making various
assumptions that may differ from actual developments in the future.
f) Provisions: The Company makes provisions for leave encashment and gratuity, based on report received from the
independent actuary. These valuation reports use complex valuation models using not only the inputs provided by the
Company but also various other economic variables. Considerable judgement is involved in the process. However,
during the FY 2024-2025, company has no such obligations.
g) Contingencies: A provision is recognised when an enterprise has a present obligation as a result of past event and
it is probable that an outflow of resources will be required to settle the obligation in respect of which a reliable estimate
can be made. Provisions are measured at the present value of management's best estimate of the expenditure required
to settle the present obligations at the end of the reporting period. However, the actual liability could be considerably
different.
1.5 Property, Plant and Equipment
Freehold land is carried at historical cost. All other property, plant and equipment are stated at cost, net of recoverable
taxes, trade discounts and rebates less accumulated depreciation and impairment loss, if any. The cost of tangible
assets comprises its purchase price, borrowing cost, any costs directly attributable to bringing the asset into the
location and condition necessary for it to be capable of operating in the manner intended by management, initial
estimation of any decommissioning obligations and finance cost.
When significant parts of the Property, Plant and Equipment are required to be replaced at intervals, the company
derecognises the replaced part, and recognises the new part with its own associated useful life and depreciated
accordingly. Likewise, when a major inspection is performed, its cost is recognised in the carrying amount of the plant
and equipment as a replacement, if the recognition criteria are satisfied. All other repair and maintenance costs are
recognised in the Statement of Profit and Loss as incurred.
Cost of Software directly identified with hardware is recognised along with the cost of hardware.
An item of Property, Plant and Equipment and any significant part initially recognised is derecognised upon disposal
or when no future economic benefits are expected from its use. Any gain or loss arising on derecognition of the asset
is included in the Statement of Profit and Loss when the asset is derecognised.
Capital Work-in- progress includes cost of Property, Plant and Equipment which are not ready for their
intended use.
The residual values and useful lives of Property, Plant and Equipment are reviewed at each financial year end, and
changes, if any, are accounted prospectively.
Depreciation on Property, Plant & Equipment are provided at the rate specified in accordance with Schedule II of the
Companies Act, 2013 using written down value method stated as under:
Property, Plant and Equipment which are added/ disposed off during the year, depreciation is provided on pro rata
basis with reference to the month of addition / deletion.
In line with the provisions of Schedule II of the Companies Act 2013, the Company depreciates significant components
of the main asset (which have different useful lives as compared to the main asset) based on the individual useful life
of those components. Useful life for such components has been assessed based on the historical experience and
internal technical inputs.
1.6 Intangible Assets
Intangible Assets are recognised only if they are separately identifiable and the Company expects to receive future
economic benefits arising out of them. Intangible Assets are stated at cost of acquisition net of recoverable taxes less
accumulated amortisation/ depletion and impairment loss, if any. The cost comprises purchase price, borrowing costs,
and any cost directly attributable to bringing the asset to its working condition for the intended use.
Intangible assets with finite lives are amortised on straight line basis over their useful economic life and assessed for
impairment whenever there is an indication that the intangible asset may be impaired. The amortisation period and
the amortisation method for an intangible asset with a finite useful life are reviewed at each year end. The amortised
expense on intangible assets with finite lives and impairment loss is recognised in the Statement of Profit and Loss.
The useful lives of intangible assets are reviewed periodically at each financial year end. However, during the FY 2024¬
25, company not having any intangible assets.
Gains or losses arising from derecognition of an intangible asset are recognised in the Statement of Profit and Loss
when the asset is derecognised.
Intangible assets with indefinite useful lives, are not amortised, but are tested for impairment annually. The
assessment of indefinite life is reviewed annually to determine whether the indefinite life continues to be supportable.
If not, the change in useful life from indefinite to finite is made on a prospective basis. The impairment loss on
intangible assets with indefinite life is recognised in the Statement of Profit and Loss.
1.7 Impairment of Non- Financial assets
At each Balance Sheet date, the Company assesses whether there is an indication that an asset may be impaired and
also whether there is an indication of reversal of impairment loss recognised in the previous periods. If any indication
exists, or when annual impairment testing for an asset is required, the Company determines the recoverable amount
and impairment loss is recognised when the carrying amount of an asset exceeds its recoverable amount.
An asset's recoverable amount is the higher of an asset's or cash-generating unit's (CGU) fair value less costs of
disposal and its value in use. Recoverable amount is determined for an individual asset, unless the asset does not
generate cash inflows that are largely independent of those from other assets or groups of assets.
When the carrying amount of an asset or CGU exceeds its recoverable amount, the asset is considered impaired and
is written down to its recoverable amount.
In assessing the value in use, the estimated future cash flows are discounted to their present value using a pre-tax
discount rate that reflects current market assessments of the time value of money and the risks specific to the asset.
In determining fair value less costs of disposal, recent market transactions are taken into account. If no such
transactions can be identified, an appropriate valuation model is used.
1.8 Cash and cash Equivalents
Cash and cash equivalent in the Balance Sheet comprise cash at banks and on hand and short-term deposits with an
original maturity of three months or less, which are subject to insignificant risk of changes in value.
For the purpose of statement of cashflows, cash and cash equivalents consist of cash and short-term deposits as
defined above, net of outstanding bank overdrafts as they are considered as an integral part of the Company's cash
management.
Cash Flow Statement
Cash flows are reported using the indirect method, whereby profit for the period is adjusted for the effects of
transactions of a non-cash nature, any deferrals or accruals of past or future operating cash receipts or payments and
item of income or expenses associated with investing or financing cash flows. The cash flows from operating, investing
and financing activities of the Company are segregated.
Bank Balances other than above
Dividend escrow account balances, deposits with banks as margin money for guarantees issued by the banks, deposits
kept as security deposits for statutory authorities are accounted as bank balances other than Cash and Cash
equivalents.
1.9 Non-current Assets Held for Sale
Non-current assets classified as held for sale are measured at the lower of carrying amount or fair value less
costs to sell.
Non-current assets are classified as held for sale if their carrying amounts will be recovered through a sale transaction
rather than through continuing use. This condition is regarded as met only when the sale is highly probable and the
asset is available for immediate sale in its present condition subject only to terms that are usual and customary for
sales of such assets
Property, plant and equipment and intangible assets are not depreciated or amortized once classified as held for
sale.
1.10 Financial Instruments
A Financial instrument is any contract that gives rise to a Financial asset of one entity and a Financial liability or equity
instrument of another entity.
A. Financial Assets:
(i) Classification:
The Company classifies financial assets as subsequently measured at amortised cost, fair value through other
comprehensive income, or fair value through profit and loss on the basis of its business model for managing the
financial asset and the contractual cash low characteristics of the financial asset.
(ii) Initial recognition and measurement
All Financial assets are recognised initially at fair value plus, in the case of financial assets not recognised at fair value
through profit and loss, transaction costs that are attributable to the acquisition of the Financial asset.
(iii) Financial assets measured at amortised cost:
Financial assets are subsequently measured at amortised cost using effective interest rate method (EIR), if these
financial assets are held within a business whose objective is to hold these assets in order to collect contractual cash
flows and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments
of principal and interest on the principal outstanding. The losses arising from the impairment are recognised in the
Statement of Profit and Loss.
(iv) Financial assets at fair value through other comprehensive income
Financial assets are measured at fair value through other comprehensive income if these financial assets are held
within a business whose objective is achieved by both collecting contractual cash lows and selling financial assets and
the contractual terms give rise to cash flows that are solely payments of principal and interest on the principal
outstanding. On derecognition of the assets, cumulative gain or loss previously recognised in other comprehensive
income is transferred from other comprehensive income to Reserve & Surplus.
(v) Financial assets measured at fair value through profit and loss
Financial assets under this category are measured initially as well as at each reporting date at fair value. Fair value
movements are recognised in profit and loss.
(vi) Derecognition of financial assets
A financial asset is primarily derecognised when the rights to receive cash flows from the asset have expired or the
Company has transferred its rights to receive cash flows from the asset.
AA. Impairment of Financial Assets
In accordance with Ind-AS 109, the Company applies Expected Credit Loss (ECL) model for measurement and
recognition of impairment loss.
The Company follows 'simplified approach' for recognition of impairment loss allowance on trade receivables. The
application of simplified approach does not require the Company to track changes in credit risk. Rather, it recognises
impairment loss allowance based on lifetime eCls at each reporting date, right from its initial recognition.
B. Financial Liabilities
(i) Classification
The Company classifies all financial liabilities as subsequently measured at amortised cost, except for financial liabilities
at fair value through profit and loss. Such liabilities, including derivatives that are liabilities, shall be subsequently
measured at fair value.
(ii) Initial recognition and measurement
All financial liabilities are recognised initially at fair value, in the case of loans, borrowings and payables, net of directly
attributable transaction costs. Financial liabilities include trade and other payables, loans and borrowings including
bank overdrafts and derivative financial instruments.
(iii) Subsequent measurement
All financial liabilities are re-measured at fair value through statement of profit and loss include financial liabilities held
for trading and financial liabilities designated upon initial recognition as at fair value through statement of profit and
loss. Financial liabilities are classified as held for trading if they are incurred for the purpose of repurchasing in the
near term.
(iv) Loans and borrowings
Interest bearing loans and borrowings are subsequently measured at amortised cost using effective interest rate (EIR)
method. Gains and losses are recognised in Statement of Profit and Loss when the liabilities are derecognised as well
as through EIR amortisation process. The EIR amortisation is included as finance cost in the Statement of Profit and
Loss.
(v) Derecognition of financial liabilities
A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expires. When
an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms
of an existing liability are substantially modified, such an exchange or modification is treated as the derecognition of
the original liability and the recognition of a new liability. The difference in the respective carrying amounts is
recognised in the Statement of Profit and Loss.
(vi) Derivative financial instruments
The Company uses derivative financial instruments such as forward currency contracts and options to hedge its foreign
currency risks. Such derivative financial instruments are initially recognized at fair value on the date on which a
derivative contract is entered into and are subsequently re-measured at fair value. The gain or loss in the fair values
is taken to Statement of Profit and Loss at the end of every period. Profit or loss on cancellations / renewals of forward
contracts and options are recognised as income or expense during the period.
C. Offsetting of financial instruments
Financial assets and financial liabilities are offset and the net amount is reported in the Balance Sheet if there is a
currently enforceable legal right to offset the recognised amounts and there is an intention to settle on a net basis to
realise the assets and settle the liabilities simultaneously.
1.11 Fair value measurement
The Company measures certain financial assets and financial liabilities including derivatives and defined benefit
plans at fair value.
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction
between market participants at the measurement date. The fair value measurement is based on the presumption that
the transaction to sell the asset or transfer the liability takes place either:
In the principal market for the asset or liability; or
In the absence of a principal market, in the most advantageous market for the asset or liability
The fair value of an asset or a liability is measured using the assumptions that market participants would use when
pricing the asset or liability, assuming that market participants act in their best economic interest.
All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorised within
the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value
measurement as a whole:
Level 1 — Quoted (unadjusted) market prices in active markets for identical assets or liabilities.
Level 2 — Valuation techniques for which the lowest level input that is significant to the fair value measurement is
directly or indirectly observable.
Level 3 — Valuation techniques for which the lowest level input that is significant to the fair value measurement
is unobservable.
For assets and liabilities that are recognised in the financial statements on a recurring basis, the Company determines
whether transfers have occurred between levels in the hierarchy by re-assessing categorisation (based on the lowest
level input that is significant to the fair value measurement as a whole) at the end of each reporting period.
1.12 Borrowing cost
Borrowing costs directly attributable to the acquisition, construction or production of an asset are capitalised as part
of the cost of the asset. All other borrowing costs are expensed in the period in which they occur.
Borrowing costs consist of interest and other costs that an entity incurs in connection with the borrowing of funds.
Borrowing cost also includes exchange differences to the extent regarded as an adjustment to the borrowing costs.
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