1: Corporate information : IMP Powers Limited is a public Company domiciled in India and incorporated under
the provisions of the Companies Act applicable in India. The Company's principal business is manufacturing of
transformers. The Company caters to both domestic and international markets. The company's stock is listed on two
recognized stock exchanges in India.
Note 2: Basis of preparation measurement and significant accounting policies
2.1 Basis of Preparation:- These financial statements for the year ended 31st March, 2025, comprising of Balance Sheet,
Statement of Profit and Loss (Including other comprehensive income), Statement of Changes in Equity and Statement
of Cash Flows have been prepared in accordance with the Indian Accounting Standards (hereinafter referred to as the
'Ind AS') as notified by Ministry of Corporate Affairs pursuant to Section 133 of the Companies Act, 2013 ('Act') read
with of the Companies (Indian Accounting Standards) Rules, 2015 as amended and other relevant provisions of the
Act.
2.2 Measurement:- These financial statements have been prepared on accrual basis and under historical cost basis.
Accounting policies have been consistently applied except where a newly issued accounting standard is initially
adopted or a revision to an existing accounting standard requires a change in the accounting policy hitherto in use.
The Company has prepared these financial statements as per the format prescribed in Schedule III to The Companies
Act, 2013.
2.3 Current versus non-current classification
The Company presents assets and liabilities in the balance sheet based on current/noncurrent classification. An asset
is treated as current when it is:
• Expected to be realized or intended to be sold or consumed in normal operating cycle.
• Held primarily for the purpose of trading
• Expected to be realized within twelve months after the reporting period, or
• 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 current when:
• It is expected to be settled in normal operating cycle
• It is held primarily for the purpose of trading
• It is due to be settled within twelve months after the reporting period, or
• There is no unconditional right to defer the settlement of the liability for at least twelve months after the
reporting period.
The Company classifies all other liabilities as non-current.
Deferred tax assets and liabilities are classified as noncurrent assets and liabilities.
The operating cycle is the time between the acquisition of assets for processing and their realization in cash and
cash equivalents. The Company has identified twelve months as its operating cycle.
2.4. Revenue recognition
Revenue fr!om Products:
Revenue from sale of products and services are recognized at a time at which the properties in goods are transferred
to the buyer. In determining whether an entity has right to payment, the entity shall consider whether it would have
an enforceable right to demand or retain payment for good supplied.
Revenue is recognized at the transaction price. Transaction price is the amount of consideration to which a company
expects to be entitled in exchange for transferring promised goods or services to a customer, excluding amounts
collected on behalf of third parties.
The Company does not expect to have any contracts where the period between the transfer of the promised goods
or services to the customer and payment by the customer exceeds one year. As a consequence, it does not adjust any
of the transaction prices for the time value of money.
Interest and Dividend Income: Interest income is recognized on a time proportion basis taking into account the
amount outstanding and the rate applicable. Dividend income is recognized when the shareholders' right to receive
dividend is established.
Insurance Claim: Claims receivable are accounted at the time when such income has been earned by the Company
depending on the certainty of receipts. The specific recognition criteria described below must also be met before
revenue is recognized.
Contract Assets
A contract asset is the right to consideration in exchange for goods or services transferred to the customer. 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.
Trade receivables
A receivable represents the Company's right to an amount of consideration that is unconditional i.e. only the passage
of time is required before payment of consideration is due.
Contract Liability
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. Contract liabilities are recognised as revenue
when the Company performs obligations under the contract. The same is disclosed as "Advance from Customers"
under Other Current Liabilities.
2.5. Export incentives
Export Incentives such as Merchandise Export Incentive Scheme, is recognized in the Statement of Profit and Loss as
a part of other operating revenues.
2.6. Current income tax
Current income tax assets and liabilities are measured at the amount expected to be recovered from or paid to
the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or
substantively enacted, at the reporting date in India where the Company operates and generates taxable income.
Current income tax relating to items recognized outside profit or loss is recognized outside profit or loss (either
in other comprehensive income or in equity). Current tax items are recognized in correlation to the underlying
transaction either in statement of profit and loss or directly in equity. Management periodically evaluates positions
taken in the tax returns with respect to situations in which applicable tax regulations are subject to interpretation and
establish provisions where appropriate.
2.7. Deferred tax
Deferred tax is provided using the liability method on temporary differences between the tax bases of assets and
liabilities and their carrying amounts for financial reporting purposes at the reporting date. Deferred tax liabilities are
recognized for all taxable temporary differences, except:
• When the deferred tax liability arises from the initial recognition of an asset or liability in a transaction that is
not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable
profit or loss.
Deferred tax assets are recognized for all deductible temporary differences, the carry forward of unused tax
credits and any unused tax losses. Deferred tax assets are recognized to the extent that it is probable that taxable
profit will be available against which the deductible temporary differences and the carry forward of unused tax
credits and unused tax losses can be utilized, except:
• When the deferred tax asset relating to the deductible temporary difference arises from the initial recognition of
an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects
neither the accounting profit nor taxable profit or loss
The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it
is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to
be utilized. Unrecognized deferred tax assets are re-assessed at each reporting date and are recognized 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 realized 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 relating to items recognized outside profit or loss is recognized outside profit or loss (either in
other comprehensive income or in equity). Deferred tax items are recognized in correlation to the underlying
transaction neither in OCI nor directly in equity.
Deferred tax assets and deferred tax liabilities are offset if a legally enforceable right exists to set off current
tax assets against current tax liabilities and the deferred taxes relate to the same taxable entity and the same
taxation authority.
2.8. Goods and Service Tax / value added taxes paid on acquisition of assets or on incurring expenses
Expenses and assets are recognized net of the amount of GST/ paid, except:
• When the tax incurred on a purchase of assets or services is not recoverable from the taxation authority, in which
case, the tax paid is recognized as part of the cost of acquisition of the asset or as part of the expense item, as
applicable
• When receivables and payables are stated with the amount of tax included the net amount of tax recoverable
from, or payable to, the taxation authority is included as part of receivables or payables in the balance sheet.
2.9. Property, plant and equipment and Intangible assets
Property, plant and equipment is stated at cost, net of accumulated depreciation and accumulated impairment
losses, if any. Capital work in progress is stated at cost. Cost comprises the purchase price and any attributable cost
of bringing asset to its working condition for its intended use only. Such cost includes the cost of replacing part of
the plant and equipment and borrowing costs for long-term construction projects if the recognition criteria are met.
Subsequent expenditure related to an item of fixed asset is added to its book value only if it increases the future
benefits from the existing asset beyond its previously assessed standard of performance. When significant parts
of plant and equipment are required to be replaced at intervals, the Company depreciates them separately based
on their specific useful lives. Likewise, when a major inspection is performed, its cost is recognized 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 recognized in profit or loss as incurred.
Depreciation is calculated as per schedule II of the companies act 2013 on a straight-line basis using the rates arrived
at based on the useful lives estimated by the management. The Company has used the following useful lives to
provide depreciation on its fixed assets. The identified components are depreciated over their useful lives; the
remaining asset is depreciated over the life of the principal asset.
The management believes that the depreciation rates fairly reflect its estimation of the useful lives and residual
values of the fixed assets.
An item of property, plant and equipment and any significant part initially recognized is derecognized upon disposal
or when no future economic benefits are expected from its use or disposal. Any gain or loss arising on derecognition
of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is
included in the income statement when the asset is derecognized.
The residual values, useful lives and methods of depreciation of property, plant and equipment are reviewed at each
financial year end and adjusted prospectively, if appropriate.
Intangible assets
I ntangible assets acquired separately are measured on initial recognition at cost. Following initial recognition,
intangible assets are carried at cost less any accumulated amortization and accumulated impairment losses. Internally
generated intangibles, excluding capitalized development costs, are not capitalized and the related expenditure is
reflected in statement of profit and loss in the period in which the expenditure is incurred.
The useful lives of intangible assets are assessed as either infinite or finite. Intangible assets with finite lives are
amortized over the useful economic life and assessed for impairment whenever there is an indication that the
intangible asset may be impaired. The amortization period and the amortization method for an intangible asset with
a finite useful life are reviewed at least at the end of each reporting period. Changes in the expected useful life or the
expected pattern of consumption of future economic benefits embodied in the asset are considered to modify the
amortization period or method, as appropriate, and are treated as changes in accounting estimates. The amortization
expense on intangible assets with finite lives is recognized in the statement of profit and loss unless such expenditure
forms part of carrying value of another asset.
Intangible assets with infinite useful lives are not amortized, but are tested for impairment annually, either
individually or at the cash-generating unit level. The assessment of infinite life is reviewed annually to determine
whether the infinite life continues to be supportable. If not, the change in useful life from indefinite to finite is made
on a prospective basis.
Gains or losses arising from derecognition of an intangible asset are measured as the difference between the net
disposal proceeds and the carrying amount of the asset and are recognized in the statement of profit and loss when
the asset is derecognized.
Intangible assets are amortized on straight line method asunder:
• Software expenditure is amortized over a period of three years.
• Technical Knowhow expenditure is amortized over a period of ten years.
2.10 Impairment of Property, Plant and Equipment's and Intangible Assets
At the end of each reporting period, the Company reviews the carrying amounts of its tangible and intangible assets
to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication
exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if
any). When it is not possible to estimate the recoverable amount of an individual asset, the Company estimates the
recoverable amount of the cash-generating unit to which the asset belongs. When a reasonable and consistent basis
of allocation can be identified, corporate assets are also allocated to individual cash-generating units, or otherwise
they are allocated to the smallest group of cash-generating units for which a reasonable and consistent allocation
basis can be identified.
Recoverable amount is the higher of fair value less costs of disposal and value in use. In assessing 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 for which the estimates of future
cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the
carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is
recognised immediately in the statement of profit or loss.
When an impairment loss subsequently reverses, the carrying amount of the asset (or a cash-generating unit) is
increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not
exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset
(or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss.
2.11. Borrowing costs
Borrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily takes
a substantial period of time to get ready for its intended use or sale are capitalized 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. To the extent that the Company borrows
funds specifically for the purpose of obtaining a qualifying asset, the Company determines the amount of borrowing
costs eligible for capitalization as the actual borrowing costs incurred on that borrowing during the period less any
investment income on the temporary investment of those borrowings.
To the extent that the Company borrows funds generally and uses them for the purpose of obtaining a qualifying
asset, the Company determines the amount of borrowing costs eligible for capitalization by applying a capitalization
rate to the expenditures on that asset. The capitalization rate is the weighted average of the borrowing costs
applicable to the borrowings of the Company that are outstanding during the period, other than borrowings made
specifically for the purpose of obtaining a qualifying asset.
2.12 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.
Financial assets and financial liabilities are initially measured at fair value. Transaction costs that are directly attributable
to the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities
at fair value through profit or loss) are added to or deducted from the fair value of the financial assets or financial
liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial
assets or financial liabilities at fair value through profit or loss are recognised immediately in Statement of Profit and
Loss.
An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting all of
its liabilities. Equity instruments issued by a Company are recognised at the proceeds received, net of direct issue
costs.
A) Financial Assets
All financial assets, except investment in joint venture are recognised initially at fair value. Investment in joint venture
are measured at cost less impairment in accordance with Ind AS 27 "Separate Financial Statements".
The subsequent measurement of financial assets depends on their classification, as described below:
1) At amortised cost
This category is the most relevant to the Company. After initial measurement, such financial assets are
subsequently measured at amortised cost using the effective interest rate (EIR) method. Amortised cost is
calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral
part of the EIR. The EIR amortisation is included in finance income in the Statement of Profit and Loss. The losses
arising from impairment are recognised in the Statement of Profit and Loss. This category generally applies to
trade and other receivables.
2) At Fair Value through Other Comprehensive Income (FVTOCI)
A financial asset is classified as the FVTOCI if both of the following criteria are met:
(a) The objective of the business model is achieved both by collecting contractual cash flows and selling the
financial assets, and
(b) Contractual terms of the asset give rise on specified dates to cash flows that are solely payments of principal
and interest (SPPI) on the principal amount outstanding.
Debt instruments included within the FVTOCI category are measured initially as well as at each reporting
date at fair value. Fair value movements are recognised in the other comprehensive income (OCI) and on
derecognition , cumulative gain or loss previously recognised in OCI is reclassified to Statement of Profit
and Loss. For equity instruments, the Company may make an irrevocable election to present subsequent
changes in the fair value in OCI. If the Company decides to classify an equity instrument as at FVTOCI,
then all fair value changes on the instrument, excluding dividends, are recognised in the OCI. There is no
recycling of the amounts from OCI to Statement of Profit and Loss, even on sale of investment.
3) At Fair Value through Profit & Loss (FVTPL)
FVTPL is a residual category for debt instruments and default category for equity instruments. Financial assets
included within the FVTPL category are measured at fair value with all changes recognised in the Statement of
Profit and Loss.
I n addition, the Company may elect to designate a debt instrument, which otherwise meets amortised cost
or FVTOCI criteria, as at FVTPL. However, such election is allowed only if doing so reduces or eliminates a
measurement or recognition inconsistency (referred to as 'accounting mismatch').
Derecognition
The Company derecognises a financial asset when the contractual rights to the cash flows from the financial
asset expire, or it transfers the rights to receive the contractual cash flows in a transaction in which substantially
all of the risks and rewards of ownership of the financial asset are transferred or in which the Company neither
transfers nor retains substantially all of the risks and rewards of ownership and does not retain control of the
financial asset.
On derecognition of a financial asset, the difference between the asset's carrying amount and the sum of
the consideration received and receivable and the cumulative gain or loss that had been recognised in other
comprehensive income and accumulated in equity is recognised in Statement of Profit and Loss if such gain or
loss would have otherwise been recognised in Statement of Profit and Loss on disposal of that financial asset.
Impairment of financial assets
The Company applies Expected Credit Loss (ECL) model for measurement and recognition of impairment loss
on the financial assets and credit risk exposure. The Company assesses on a forward looking basis the expected
credit losses associated with its receivables based on historical trends and past experience."
The Company follows 'Simplified Approach' for recognition of impairment loss allowance on all trade receivables
or contractual receivables. Under the simplified approach, the Company does not track changes in credit risk,
but it recognises impairment loss allowance based on lifetime ECLs at each reporting date, right from its initial
recognition. If credit risk has not increased significantly, 12 month ECL is used to provide for impairment loss.
However, if credit risk has increased significantly, lifetime ECL is used. ECL impairment loss allowance (or reversal)
recognised during the period is recognised as income / (expense) in the Statement of Profit and Loss.
B) Financial Liabilities and equity instruments
Classification as debt or equity
Debt and equity instruments issued by the Company are classified as either financial liabilities or as equity in
accordance with the substance of the contractual arrangements and the definitions of a financial liability and an
equity instrument.
Financial Liabilities
Financial liabilities are classified, at initial recognition as at amortised cost or fair value through profit or loss. The
measurement of financial liabilities depends on their classification, as described below:
1) At amortised cost
This is the category most relevant to the Company. After initial recognition, financial liabilities are subsequently
measured at amortised cost using the EIR method. Gains and losses are recognised in Statement of Profit and
Loss when the liabilities are derecognised as well as through the EIR amortisation process. Amortised cost is
calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral
part of the EIR. The EIR amortisation is included as finance costs in the Statement of Profit and Loss.
2) At Fair Value through Profit or Loss (FVTPL)
A financial liability may be designated as at FVTPL upon initial recognition if:
• such designation eliminates or significantly reduces a measurement or recognition inconsistency that
would otherwise arise;
• the financial liability whose performance is evaluated on a fair value basis, in accordance with the Company's
documented risk management;
It include financial liabilities held for trading and financial liabilities designated upon initial recognition as
such. Subsequently, any changes in fair value are recognised in the Statement of Profit and Loss.
Derecognition of financial liability
The Company derecognises financial liabilities when, and only when, the Company's obligations are
discharged, cancelled or have expired. An exchange with a lender of debt instruments with substantially
different terms is accounted for as an extinguishment of the original financial liability and the recognition
of a new financial liability. Similarly, a substantial modification of the terms of an existing financial liability is
accounted for as an extinguishment of the original financial liability and the recognition of a new financial
liability. The difference between the carrying amount of the financial liability derecognised and the
consideration paid and payable is recognised in the statement of profit and loss.
2.13 Leases
The Company has entered into various arrangements like lease of premises which has been disclosed accordingly
under Ind AS 116 at inception of a contract, the Company assesses whether contract is, or contains, lease. A contract
is, or contains, a lease is the contract convey the right of control the use of an identified assets for the period of time in
exchange for consideration. The assessment of whether a contract convey the right to control the use of as identified
assets depends on whether the Company obtains substantially all the economic benefits from the use of the assets
and whether the Company has a right to direct the use of the assets.
2.13.1 Company as a lessee
The Company applies a single recognition and measurement approach for all leases, except for short-term leases and
leases of low value assets. The Company recognizes to make lease payments and right-of-use assets representing the
right to use the underlying assets.
2.13.1.1 Right-of-use assets
The Company recognizes right-of-assets at the commencement date of the lease (i.e, the date the underlying assets is
available for use). The cost of right-of-use assets includes the amount of lease liabilities recognized, initial direct costs
incurred, and lease payments made at or before the commencement date less any lease incentives received. Right-
of-use assets are measured at cost, less any accumulated depreciation and impairment losses, and adjusted for any
remeasurement of liabilities. Right-of-use assets are depreciated on a straight- basis over shorter of the lease term or
the estimated useful life of the underlying assets as follows.
If ownership of the leased asset transfers to the Company at the end of the lease term or the cost reflects the exercise
of a purchase option, depreciation is calculated using the estimated useful life of the assets. The company presents
right-of-use assets separately in the balance sheet.
2.13.1.2 Lease Liabilities
At the commencements date of the lease, the Company recognizes lease liabilities measured at the present value of
lease payments to be made over the lease term. The lease payment includes fixed payments (including in-substance
fixed payments) less any lease incentives receivable, variable lease payments that depend on an index or rate, and
amounts expected to be paid under residual value guarantees. The lease payment also includes the exercise price of
a purchase option reasonably certain to be exercised by the Company and payments of penalties for terminating the
lease, if the lease term reflects the Company exercising the option to terminate. Variable lease payments that do not
depend on an index or rare recognized as expenses (unless the cons is included in the carrying value of inventor) in
the period in which the event or condition that triggers the payments occurs.
In calculating the present value of lease payment, the Company uses its incremental borrowing rate at the
lease commencement date because the interest rate implicit in the lease is not readily determinable. After the
commencement date, the amount lease liabilities are increased to reflect the accretion of interest and reduces for the
lease payment made. In addition, the carrying amount of lease liabilities is remeasured if there is a modification, a
change in the lease terms, a change in the lease payments (e.g., changes to future payments resulting from a change
in an index or rate used to determine such lease payments) or a change in the assessment of an option to purchase
the underlying assets.
The Company's lease liabilities are included in current and non-current financial liabilities. Lease liabilities have been
separately presented in the Balance Sheet and lease payments have been classified as financing cash flows.
2.13.1.3 Short-term lease and leases of low value assets
The Company applies the short-term lease recognition exemption to the contracts which have a lease term of 12
months or less from the date of commencement date and do not contain a purchase option. It also applies the lease
of lowvalue assets recognition exemption to the lease contract that are considered to the low value. Lease payments
on short-term leases and leases of low-value assets are recognized as expenses on a straight-line basis over the lease
term.
2.14 Inventories
Inventories are valued at the lower of cost and net realizable value.
Costs incurred in bringing each product to its present location and conditions are accounted for as follows:
• Raw materials, components, stores and spares are valued at lower of cost and net realizable value. However,
materials and other items held for use in the production of inventories are not written down below cost if the
finished products in which they will be incorporated are expected to be sold at or above cost first in first out
basis.
• Work-in-progress and finished goods are valued at lower of cost and net realizable value. Cost includes direct
materials and labor and a proportion of manufacturing overheads based on normal operating capacity but
excluding borrowing cost. Cost of finished goods excluding GST. Cost is determined on a first in first out basis.
• Traded goods are valued at lower of cost and net realizable value. Cost includes cost of purchase and other costs
incurred in bringing the inventories to their present location and condition. Cost is determined on a first in first
out basis.
Net realizable value is the estimated selling price in the ordinary course of business, less estimated costs of
completion and the estimated costs necessary to make the sale.
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