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Accounting Policies of Diamond Power Infrastructure Ltd. Company

Mar 31, 2014

1. Method of Accounting: The Financial Statements have been prepared on historical cost convention. The Company follows the accrual basis of accounting. The Financial Statements are prepared in accordance with the accounting standards specified in the Companies (Accounting Standards) Rules 2006 notified by the Central Government in terms of Section 211(3C) of the Companies Act 1956.

2. Revenue Recognition: Sales includes inter-divisional transfers sale of scrap Sales, Outsource Products, Sales related to Engineering Procurement and Contract Services, Excise duty Paid, Value Added tax and Invoices for price escalation as per Contracts with the relevant customers on accrual basis.

3. Fixed Assets: Fixed Assets are stated at cost less accumulated depreciation up to the year.

Expenditure incurred on improvement or replacement, which in the opinion of the management is likely to substantially increase the life of the assets and future benefits from it is capitalized. Capital expenditure includes advances for assets under erection/installation are being grouped under capital work in progress.

4. Depreciation on Fixed Assets: Depreciation on fixed assets is calculated on a straight-line basis using the rates arrived at based on the useful lives estimated by the management or those prescribed under the Schedule XIV to the Companies Act, 1956 whichever is higher. The Company has used the following rates to provide depreciation on its fixed assets.

5. Expenditure during construction period: All pre- operative project expenditure (net of income accrued) including interest on borrowings incurred up to the date of installation is capitalized are added pro-rata to the cost of fixed assets. Foundation costs are allocated as certified by management.

6. Investment: Long-term investments are valued at cost. Provision is made for diminution other than temporary in the value of investments.

7. Inventories:

a) Inventories of finished goods are valued at

lower of costs or net realizable value inclusive of excise duty. Work in process (including finished stock pending QC inspection) is valued at cost representing material labour and apportioned overheads as certified by the management. Other inventories are valued at cost. Materials related to Projects under implementation are valued at standard cost.

b) Cost of work-in-progress and finished goods includes material cost, labour cost and manufacturing overheads absorbed on the basis of normal capacity of production.

8. provident Fund and Retirement Benefits: Contribution to Provident Fund is accounted on actual liability basis. Provision for Gratuity and Leave Encashment is made based on actuarial valuation.

9. excise Duty: Excise Duty payable on finished goods held as stock in the works is included in the expenditure and in such stocks as per the provisions of Section 145 of the Income tax Act 1961.

10. Amortisation: Expenditure on Fire Resistant Low Smoke Project (FRLS) & High Sensitivity & High Conductivity Conductors (HSHC) have been amortized over a period of five years. One- fifth portion of the expenses deferred on Aerial Bunch Cable Project (ABC Project) have been charged to the revenue for the financial period.

11. Foreign Currency Transactions: The Company has no Branch offices outside India. The Foreign currency transaction are recorded on initial recognition in the reporting currency by applying the exchange rate prevailing at the date of transaction .Any Income or Expense on account of exchange rate difference is recognized in the Income and Expenditure Account

12. borrowing Costs: Borrowing costs that are attributable to the acquisition construction or production of qualifying assets are capitalized as part of the cost of such assets. A qualifying asset is one that necessarily takes a substantial period of time to get ready for its intended use. All other borrowing costs are charged to revenue.

13. Income tax: Provision for Current Income Tax is made after considering Company''s claims under the Income Tax Act, 1961. This Liability is calculated at the applicable tax rate or Minimum Alternate Rate under Section 115JB of the Income Tax Act, 1961 as the case may be.

14. Deferred tax: Deferred Tax is Calculated at the tax rates and Laws that have been enacted or substantially enacted as of Balance Sheet date and is recognized on timing differences that originated in one period and are capable of reversal in one or more subsequent periods. Deferred tax assets subject to consideration of prudence are recognized and carried forward only to the extent that they can be released.

15. Impairment of Assets: The Company has examined carrying cost of its identified Cash Generating Units (CGU) by comparing present value of estimated future cash flows from such CGUs in terms of Accounting Standard-28 on impairment of Assets and in absence of any indication of being potential impairment of Assets no provision for impairment is required as assets of none of CGUs are impaired during the financial year under consideration.

16. uses of estimates: The preparation of financial statement in conformity with India GAAP requires the management to make judgments estimates and assumptions that affect the reported amounts of revenues expenses assets and liabilities and the disclosure of contingent liabilities at the end of the reporting period. Although these estimates are based on the management''s best knowledge of current events and actions uncertainly about these assumptions and estimates could result in the outcomes requiring a material adjustment to the carrying amounts of assets or liabilities in future periods.

17. Derivative Contracts: Company as such in the current financial year has not entered into any such Derivative Contracts.

18. Operating Cycle : Assets and liabilities other than those relating to long-term contracts (i.e. supply or turnkey contracts) are classified as current if it is expected to realise or settle within 12 months after the balance sheet date. In case of long-term contracts the time between acquisition of assets for processing and realisation of the entire proceeds under the contracts in cash or cash equivalent exceeds one year. Accordingly for classification of assets and liabilities related to such contracts as current duration of each contract is considered as its operating cycle part B Notes to Accounts

1. Contingent Liabilities

(a) Letter of Credit opened Rs.1933.09 Million (Previous Year Rs. 3879.16 Million); materials under all letters of credit have been received and accounted for as Creditors. Buyer''s credit opened Rs. 74.76 Million (Previous Year Rs. NIL) materials under all Buyer''s credit have been received and accounted for as Creditors.

(b) Outstanding Inland Bank Guarantees as of March 31 2014 is Rs. 1403.11 Million (Previous Year Rs.1775.00 Million) and outstanding Foreign Bank Guarantees as of March 312014 is $ 5.51 Million (Previous Year NIL)

(c) Income tax demands being in appeal not provided for Rs. NIL (previous year Rs Nil).

(d) There are no outstanding Claims against the Company.

(e) Corporate guarantees issued to wholly owned subsidiary - Diamond Power Transformers Ltd. In favour of Indian Overseas Bank

2. The company has been sanctioned the fund based and non- fund based working capital facilities of Rs. 1280 Millions from the Axis Bank Ltd. ; Rs. 3500 Million from the Bank of India; Rs. 1590 Million from the ICICI Bank Ltd.: Rs. 2860 Million from the Bank of Baroda Rs 2100 Million from Allahabad Bank &

Rs 840.7 Millions from Dena Bank Rs. 622 Millions from Indian Overseas Bank Rs 500 Millions from State Bank of Mysore

& Rs. 1000 Millions against the security of first pari passu charge on the entire current assets of the company by way of Hypothecation agreement and the second pari passu charge on the entire fixed assets of the company.

3. Balance confirmation letters were sent out to various debtors and creditors. The confirmation of most of the Debtors and creditors is received.

4. The method of valuation of inventories adopted by the company is in accordance with the requirements of

Accounting Standard 2 (Valuation of Inventories and as revised from time to time) issued by the Institute of Chartered Accountants of India.

5. In the opinion of the Management all the current assets loans and advances and deposits are realizable at value stated in the ordinary course of the business which are at least equal to the amount at which they are stated in the books unless otherwise explicit.

6. Segmental Reporting:

The company is primarily engaged in the manufacture of conductors, cables and selling out- sourced products and EPC Contracts. As the company''s manufacturing facilities are inter woven/ inter- mix due to the nature of its business with the EPC business it is not possible to directly and specifically attribute or allocate on a reasonable basis the expenses assets & liabilities in different Segments. The segmental Sales product wise are as follows:

7. Share Holding in Various Companies :

The Company holds the following shares

(1) 99.60% in its Subsidiary Diamond Power Transformers Ltd.

(2) 100% in its Subsidiary Diamond Power Global Holding Ltd - Dubai

Note: The above Information regarding Small Scale Industrial undertaking has been determined to the extent such parties has been identified on the basis of information available with the company. The same has been relied upon by the Auditors, to confirm names/figures

11. Sales include an amount of Rs Nil (Net of Duty) of inter- unit Transfer (Previous year Rs NIL).

12. Aggregate directors'' Remuneration is Rs. 59.67 Million (Previous year Rs. 17.12 Million). The remuneration of directors is as per the approval accorded by Remuneration Committee shareholders and Central Government as per the provisions of section 311 read with Schedule XIII of the Companies Act, 1956.

13. Aggregate Auditor''s Remuneration is fixed at Rs. 1.62 Million (Previous year Rs 1.62 Million) which includes Rs 1.50 Million as Audit Fees (Previous year Rs 1.50 Millions).

14. As per Accounting Policy (10) on excise duty the excise duty payable on finished goods in stocks at works amounting to Rs 7.13 Million (previous year Rs 104.43 Million) has been included in the expenditure and in such stocks. However the same has no impact on the profit for the year.

15. There are no amounts due and outstanding to be credited to Investor Education and Protection Fund.


Mar 31, 2012

1. Method of Accounting: The Financial Statements have been prepared on historical cost convention. The Company follows the accrual basis of accounting. The Financial Statements are prepared in accordance with the accounting standards specified in the Companies (Accounting Standards) Rules, 2006 notified by the Central Government in terms of Section 211(3C) of the Companies Act, 1956.

2. Revenue Recognition: Sales includes inter-divisional transfers, sale of scrap, Sales Outsource Products, Sales related to Engineering Procurement and Contract Services, Excise duty Paid, Value Added tax and Invoices for price escalation as per Contracts with the relevant customers on accrual basis.

3. Fixed Assets: Fixed Assets are stated at cost less accumulated depreciation up to the year. Expenditure incurred on improvement or replacement, which in the opinion of the management is likely to substantially increase the life of the assets and future benefits from it, is capitalized. Capital expenditure includes advances for assets under erection/ installation are being grouped under capital work in progress.

4. Depreciation: Depreciation is charged on Straight Line basis at rates specified in Schedule XIV of the Companies Act.1956. Depreciation on addition / deletion or discarded Fixed Assets during the year is charged on pro - rata basis.

5. Expenditure during construction period: All pre-operative project expenditure (net of income accrued), including interest on borrowings incurred up to the date of installation is capitalized are added pro-rata to the cost of fixed assets. Foundation costs are allocated as certified by management.

6. Investment: Long-term investments are valued at cost. Provision is made for diminution, other than temporary, in the value of investments.

7. Inventories:

a) Inventories of finished goods are valued at lower of costs or net realizable value inclusive of excise duty. Work in process (including finished stock pending QC inspection) is valued at cost representing material, labour and apportioned overheads as certified by the management.

Other inventories are valued at cost. Materials related to Projects under implementation are valued at standard cost.

b) Cost of work-in-progress and finished goods includes material cost, labour cost, and manufacturing overheads absorbed on the basis of normal capacity of production.

8. Provident Fund and Retirement Benefits: Contribution to Provident Fund is accounted on actual liability basis. Provision for Gratuity and Leave Encashment is made based on actuarial valuation.

9. Excise Duty: Excise Duty payable on finished goods held as stock in the works is included in the expenditure and in such stocks as per the provisions of Section 145 of the Income tax Act, 1961.

10. Foreign Currency Transactions: The Company has no Branch offices outside India. The Foreign currency transaction are recorded on initial recognition in the reporting currency by applying the exchange rate prevailing at the date of transaction. Any Income or Expense on account of exchange rate difference is recognized in the Income and Expenditure Account.

11. Borrowing Costs: Borrowing costs that are attributable to the acquisition, construction or production of qualifying assets are capitalized as part of the cost of such assets. A qualifying asset is one that necessarily takes a substantial period of time to get ready for its intended use. All other borrowing costs are charged to revenue.

12. Income Tax: Provision for Current Income Tax is made after considering Company's claims under the Income Tax Act, 1961. This Liability is calculated at the applicable tax rate or Minimum Alternate Rate under Section 115JB of the Income Tax Act 1961 as the case may be.

13. Deferred Tax : Deferred Tax is Calculated at the tax rates and Laws that have been enacted or substantially enacted as of Balance Sheet date and is recognized on timing differences that originated in one period and are capable of reversal in one or more subsequent periods. Deferred tax assets, subject to consideration of prudence are recognized and carried forward only to the extent that they can be released.

14. Impairment of Assets: The Company has examined carrying cost of its identified Cash Generating Units (CGU) by comparing present value of estimated future cash flows from such CGUs, in terms of Accounting Standard-28 on impairment of Assets, and in absence of any indication of being potential impairment of Assets, no provision for impairment is required as assets of none of CGUs are impaired during the financial year under consideration.

15. Uses of Estimates: The preparation of financial statements requires estimates and assumptions to be made that affect the reported amount of assets and liabilities on the date of financial statements and the reported amount of revenue and expenses during the reporting period. Difference between the actual results and estimates are recognised in the period in which results are known/materialised.

16. Derivative Contracts: Company as such in the current financial year has entered into any such Derivative Contracts.

17. Operating Cycle: Assets and liabilities other than those relating to long- term contracts (i.e. Supply or turnkey contracts) are classified as current if it is expected to realise or settle within 12 Months after the balance sheet date.

In case of long-term contracts, the time between acquisition of assets for processing and realisation of the entire proceeds under the contracts in cash or cash equivalent exceeds one year. Accordingly for classification of assets and liabilities related to such contracts as current, duration of each contract is considered as its operating cycle


Mar 31, 2011

1. Method of Accounting: The Financial Statements are prepared as a going-concern under historical cost convention on an accrual basis except those with significant uncertainty and comply with the Accounting Standards prescribed by Companies (Accounting Standards) Rules, 2006, as amended, other pronouncements of the Institute of Chartered Accountants of India (ICAI) and the relevant provisions of the Companies Act, 1956, (the 'Act') to the extent applicable. Accounting Policies not stated explicitly otherwise are consistent with generally accepted accounting principles (GAAP).

2. Revenue Recognition: Sales includes inter- divisional transfers, sale of scrap, Sales of Outsource Products, Sales related to Engineering Procurement and Contract Services, Excise duty Paid, Value Added tax and Invoices for price escalation as per Contracts with the relevant customers on accrual basis.

3. Fixed Assets: Fixed Assets are stated at cost less accumulated depreciation up to the year. Expenditure incurred on improvement or replacement, which in the opinion of the management is likely to substantially increase the life of the assets and future benefits from it, is capitalized. Capital expenditure includes advances for assets under erection/ installation are being grouped under capital work in progress.

4. Depreciation: Depreciation is charged on Straight Line basis at rates specified in Schedule XIV of the Companies Act.1956. Depreciation on addition / deletion or discarded Fixed Assets during the year is charged on pro - rata basis.

5. Expenditure during construction period: All pre-operative project expenditure (net of income accrued), including interest on borrowings incurred up to the date of installation is capitalized and added pro-rata to the cost of fixed assets. Foundation costs are allocated as certified by management.

6. Investment: Long-term investments are valued at cost.

7. Inventories: Inventories of finished goods are valued at lower of costs or net realizable value inclusive of excise duty. Work in process (including finished stock pending QC inspection) is valued at cost representing material, labour and apportioned overheads as certified by the management. Other inventories are valued at cost. Materials related to Projects under implementation are valued at standard cost.

8. Provident Fund and Retirement Benefits:

Contribution to Provident Fund is accounted on actual liability basis. Provision for Gratuity and Leave Encashment is made based on actuarial valuation.

9. Excise Duty: Excise Duty payable on finished goods held as stock in the works is included in the expenditure and in such stocks as per the provisions of Section 145 of the Income tax Act, 1961.

10. Miscellaneous Expenditure: Expenditure on Fire Resistant Low Smoke Project (FRLS) & High Sensitivity & High Conductivity Conductors (HSHC) have been amortized over a period of five years. One- fifth portion of the expenses deferred on Aerial Bunch Cable Project (ABC Project) have been charged to the revenue for the financial period.

11. Foreign Currency Transactions: The Company has no Branch offices outside India. The Foreign currency transactions are recorded on initial recognition in the reporting currency by applying the exchange rate prevailing at the date of transaction .Any Income or Expense on account of exchange rate difference is recognized in the Income and Expenditure Account.

12. Borrowing Costs: Borrowing costs that are attributable to the acquisition, construction or production of qualifying assets are capitalized as part of the cost of such assets. A qualifying asset is one that necessarily takes a substantial period of time to get ready for its intended use. All other borrowing costs are charged to revenue.

13. Income Tax: Provision for Current Income Tax is made after considering Company's claims under the Income Tax Act, 1961 .This Liability is calculated at the applicable tax rate or Minimum Alternate Rate under Section 115JB of the Income Tax Act 1961 as the case may be.

14. Deferred Tax : Deferred Tax is Calculated at the tax rates and Laws that have been enacted or substantially enacted as of Balance Sheet date and is recognized on timing differences that originated in one period and are capable of reversal in one or more subsequent periods. Deferred tax assets, subject to consideration of prudence are recognized and carried forward only to the extent that they can be released.

15. Impairment of Assets: The Company has examined carrying cost of its identified Cash Generating Units (CGU) by comparing present value of estimated future cash flows from such CGUs, in terms of Accounting Standard-28 on impairment of Assets, and in absence of any indication of being potential impairment of Assets, no provision for impairment is required as assets of none of CGUs are impaired during the financial year under consideration.













 
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