Accounting Policies of Diamond Power Infrastructure Ltd. Company

Mar 31, 2025

3. Significant Accounting Policies:

3.1 Property, Plant & Equipments

Recognition and initial measurement

Property, Plant & Equipment are initially recognized at their
cost of acquisition.

The cost of acquisition includes freight, installation cost,
duties & taxes (other than those subsequently recoverable
from taxing authorities such as the Goods and Services Tax
for which Input Tax Credit is availed by the Company) including
borrowing costs for qualifying assets, if capitalization criteria
are met, and other incidental expenses, identifiable with the
asset or part of common expenses of the company indirectly
attributable to the same, incurred during the installation /
construction stage in order to bring the assets to their
working condition for intended use. Any trade discount and
rebates are deducted in arriving at the purchase price.

Cost incurred subsequent to putting an item of PPE into
operation such as repair and maintenance costs are usually
recognized in statement of profit or loss as incurred.
Subsequent costs are included in the asset''s carrying
amount or recognized as a separate asset, as appropriate,
only when it is probable that future economic benefits
associated with the item will flow to the Company.

Subsequent measurement (depreciation and useful
lives)

Property, Plant and Equipment are subsequently measured
at cost less accumulated depreciation and impairment
losses, if any. Freehold Land, if any, is not depreciated.

Depreciation is recognized so as to write-off the cost of
assets less their residual values over their useful lives.
Depreciation on property, plant and equipment has been
provided using straight line method using rates determined
based on management''s assessment of useful economic
lives of the asset and the actual usage of the asset.

Following are the estimated useful lives of various category
of assets used which are aligned with useful lives defined in
schedule II of Companies Act, 2013:

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.

For the Property, Plant and Equipment Block being carried
forward with balances appearing from the Pre-NCLT / RP
period at the time of takeover by the new management,
depreciation @ 20% of applicable depreciation is presently
being provided. Reference is invited to Note 4 to these
Financial Statements

Derecognition

An item of property, plant and equipment and any significant
part initially recognized is de- recognized upon disposal or
when no future economic benefits are expected from its
use or disposal. Any gain or loss arising on de-recognition
of the asset (calculated as the difference between the net
disposal proceeds and the carrying amount of the asset) is
recognized in the statement of profit and loss, when the
asset is de-recognized.

3.2 Capital work-in-progress (CWIP)

Costs incurred for PPE not ready for use or in the course
of construction of being ready for intended use as at the
reporting date are disclosed as capital work-in progress.
At the point when an item is started to be operated for its
intended use, the accumulated costs are transferred to the
appropriate category of PPE and depreciation is commenced.

3.3 Investment property

Property that is held for long term rental yield or for capital
appreciation or both, and that is not occupied by the
Company, is classified as Investment property. Investment
properties measured initially at cost including related
transitions cost and where applicable borrowing cost.
Subsequent to initial recognition, Investment Properties are
measured in accordance with Ind AS 16. Subsequent costs
are included in the asset''s carrying amount or recognized
as a separate asset, as appropriate, only when it is probable
that future economic benefits associated with the item will

flow to the Company. All other repairs and maintenance
costs are expensed when incurred.

An Investment Property is de-recognized upon disposal or
when no future economic benefits are expected from its
use or disposal. Any gain or loss arising on de-recognition
of the asset (calculated as the difference between the net
disposal proceeds and the carrying amount of the asset)
is recognized in the statement of profit and loss, upon de¬
recognition.

3.4 Intangible assets

Recognition and Measurement

Intangible assets are recognized when the asset is
identifiable, is within the control of the company, it is
probable that the future economic benefits that are
attributable to the asset will flow to the company and cost
of the asset can be reliably measured.

Intangible assets acquired by the company that have finite
useful lives are measured at cost.

Expenditure on research activities is recognized in the
statement of profit and loss as incurred. Development
expenditure is capitalized only if the expenditure can be
measured reliably, the product or process is technically
and commercially feasible, future economic benefits are
probable and the company intends to and has sufficient
resources to complete development and to use or sell
the asset.

Subsequent expenditure is capitalized only when it increases
the future economic benefits embodied in the specific asset
to which it relates.

Subsequent Measurement

Intangible assets are stated at their cost less accumulated
amortization and any accumulated impairment losses.
Intangible assets with indefinite useful lives are not
amortized, but are tested for impairment annually, either
individually or at the cash-generating unit level.

Amortisation

Amortisation is calculated over the cost of the asset, or
other amount substituted for cost, less its residual value.
Amortisation is recognised in statement of profit and loss
on a straight-line basis over the estimated useful lives of

intangible assets from the date that they are available for
use, since this most closely reflects the expected pattern of
consumption of the future economic benefits embodied in
the asset.

3.5 Intangible Assets under Development

Costs incurred for Intangible Assets not ready for use or in
the course of development of being ready for intended use
as at the reporting date are disclosed as intangible assets
under development. At the point when an item is started to
be operated for its intended use, the accumulated costs are
transferred to the appropriate category of Intangible Assets
and amortization is commenced as relevant to that category.

3.6 Leases

The Company determines whether an arrangement contains
a lease at the inception of the Contract by assessing whether
the fulfilment of a transaction is dependent on the use of a
specific asset and whether the transaction conveys the right
to control the use of that asset to the Company in return
for payment.

To assess whether a contract conveys the right to control the
use of an identified asset, the Company assessees whether:

• the Contract involves use of an identified asset

• the Company has substantially all of the economic
benefits from use of the asset through the period of
the lease and

• the Company has the right to direct the use of the asset.

The Company as lessee

The Company recognizes right of-use asset representing
its right to use the underlying asset for the lease term at
the lease commencement date. The cost of the right-of-
use asset measured at inception comprises of the amount
of initial measurement of the lease liability adjusted for any
lease payments made at or before the commencement date
plus any indirect costs less any lease incentives.

The right-of-use assets are subsequently measured at cost
less any accumulated depreciation, accumulated impairment
losses, if any and adjusted for any re- measurement of
the lease liability. The right-of-use assets are depreciated
using the straight-line method from the commencement

date over the shorter of lease term or useful life of right-
of-use asset.

Right-of-use assets are tested for impairment whenever
there is any indication that their carrying amounts may not
be recoverable. Impairment loss, if any, is recognized in the
statement of profit and loss.

Lease liability is measured at the present value of the lease
payments that are not paid at the commencement date of
the lease. The lease payments are discounted using the
interest rate implicit in the lease, if that rate can be readily
determined. If that rate cannot be readily determined, the
Company uses incremental borrowing rate.

The lease liability is subsequently remeasured by increasing
the carrying amount to reflect interest on the lease liability,
reducing the carrying amount to reflect the lease payments
made and remeasuring the carrying amount to reflect any
reassessment or lease modifications.

The Company recognizes the amount of the re-measurement
of lease liability as an adjustment to the right-of-use asset.
Where the carrying amount of the right-of-use asset
is reduced to zero and there is a further reduction in the
measurement of the lease liability, the Company recognizes
any remaining amount of the re-measurement in statement
of profit and loss.

Variable lease payments not included in the measurement of
the lease liabilities are expensed to the statement of profit
and loss in the period in which the events or conditions
which trigger those payments occur.

Certain lease arrangements include options to extend
or terminate the lease before the end of the lease term.
The right-of-use assets and lease liabilities include these
options when it is reasonably certain that such options
would be exercised.

The Company accounts for each lease component within the
contract as a lease separately from non-lease components
of the contract and allocates the consideration in the
contract to each lease component on the basis of the relative
stand-alone price of the lease component and the aggregate
stand-alone price of the non-lease components.

In a sale and lease back transaction, the Company measures
right-of-use asset arising from the leaseback as the
proportion of the previous carrying amount of the asset that
relates to the right-of-use retained. The gain or loss that the
company recognizes in the statement of profit and loss is
limited to the proportion of the total gain or loss that relates
to the rights transferred to the buyer.

Right of use asst and Lease Liability are presented separately
in the Balance Sheet and lease payments are classified as
Financing Cash Flows.

The Company follows the above accounting policies where
it is a lessee for all leases except where the term is twelve
months or less or the leases are of very low value. For these
short term or low value leases, the Company recognizes the
lease payments as on operating expense on a straight-line
basis over the term of the lease.

The Company as lessor
Operating lease:

Rental income from operating leases is recognised in the
statement of profit and loss on a straight- line basis over the
term of the relevant lease unless another systematic basis is
more representative of the time pattern in which economic
benefits from the leased asset is diminished. Initial direct
costs incurred in negotiating and arranging an operating
lease are added to the carrying value of the leased asset
and recognised on a straight-line basis over the lease term.

Finance Lease:

When assets are leased out under a finance lease, the
present value of minimum lease payments is recognised as a
receivable. The difference between the gross receivable and
the present value of receivable is recognised as unearned
finance income. Lease income is recognised over the term
of the lease using the net investment method before tax,
which reflects a constant periodic rate of return.

3.7 Impairment of Non-Financial Assets

At each reporting date, the Company reviews the carrying
amounts of its non-financial assets to determine whether
there is any indication of impairment. If any such indication
of impairment exists, then the asset''s recoverable
amount is estimated. For impairment testing, assets are
grouped together into the smallest group of assets that
generates cash inflows from continuing use that are largely

independent of the cash inflows of other assets or cash
generating units (CGUs).

The recoverable amount of an asset or CGU is the greater of
its value in use and its fair value less costs to sell. Value in
use is based on the estimated future cash flows, discounted
to their present value using a discount rate that reflects
current market assessments of the time value of money
and the risks specific to the asset or CGU. An impairment
loss is recognised if the carrying amount of an asset or CGU
exceeds its estimated recoverable amount. Impairment
losses are recognised in the Statement of Profit and Loss.

An impairment loss is reversed if there has been a change in
the estimates used to determine the recoverable amount.
Such a reversal is made only to the extent that the asset''s
carrying amount does not exceed the carrying amount
that would have been determined, net of depreciation or
amortisation, if no impairment loss had been recognised.

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Mar 31, 2024

3. Significant Accounting Policies:

3.1 Property, Plant & Equipments Recognition and initial measurement

Property, Plant & Equipment are initially recognized at their cost of acquisition.

The cost of acquisition includes freight, installation cost, duties & taxes (other than those subsequently recoverable from taxing authorities such as the Goods and Services Tax for which Input Tax Credit is availed by the Company) including borrowing costs for qualifying assets, if capitalization criteria are met, and other incidental expenses, identifiable with the asset, incurred during the installation / construction stage in order to bring the assets to their working condition for intended use. Any trade discount and rebates are deducted in arriving at the purchase price.

Cost incurred subsequent to putting an item of PPE into operation such as repair and maintenance costs are usually recognized in statement of profit or loss as incurred. Subsequent costs are included in the asset''s carrying amount or recognized as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Company.

Subsequent measurement (depreciation and useful lives)

Property, Plant and Equipment are subsequently measured at cost less accumulated depreciation and impairment losses, if any. Freehold Land, if any, is not depreciated.

Depreciation is recognized so as to write-off the cost of assets less their residual values over their useful lives. Depreciation on property, plant and equipment has been provided using straight line method using rates determined based on management''s assessment of useful economic lives of the asset and the actual usage of the asset.

Followings are the estimated useful lives of various category of assets used which are aligned with useful lives defined in schedule II of Companies Act, 2013:

Building 30 Years

Plant & Machinery / ETP Plant 15 Years

Furniture & Fixture 10 Years

Computers 03 Years

Electrical Installation 10 Years

Vehicles 08 Years

Office Equipment 05 Years

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.

Derecognition

An item of property, plant and equipment and any significant part initially recognized is de- recognized upon disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss arising on de-recognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is recognized in the statement of profit and loss, when the asset is de-recognized.

3.2 Capital work-in-progress (CWIP)

Costs incurred for PPE not ready for use or in the course of construction of being ready for intended use as at the reporting date are disclosed as capital work-in progress. At the point when an item is started to be operated for its intended use, the accumulated costs are transferred to the appropriate category of PPE and depreciation is commenced.

3.3 Investment property

Property that is held for long term rental yield or for capital appreciation or both, and that is not occupied by the Company, is classified as Investment property. Investment properties measured initially at cost including related transitions cost and where applicable borrowing cost. Subsequent to initial recognition, Investment Properties are measured in accordance with Ind AS 16. Subsequent costs are included in the asset''s carrying amount or recognized as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Company. All other repairs and maintenance costs are expensed when incurred.

An Investment Property is de-recognized upon disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss arising on de-recognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is recognized in the statement of profit and loss, upon de-recognition.

3.4 Intangible assets Recognition and Measurement

Intangible assets are recognized when the asset is identifiable, is within the control of the company, it is probable that the future economic benefits that are attributable to the asset will flow to the company and cost of the asset can be reliably measured.

Intangible assets acquired by the company that have finite useful lives are measured at cost.

Expenditure on research activities is recognized in the statement of profit and loss as incurred. Development expenditure is capitalized only if the expenditure can be measured reliably, the product or process is technically and commercially feasible, future economic benefits are probable and the company intends to and has sufficient resources to complete development and to use or sell the asset.

Subsequent expenditure is capitalized only when it increases the future economic benefits embodied in the specific asset to which it relates.

Subsequent Measurement

Intangible assets are stated at their cost less accumulated amortization and any accumulated impairment losses. Intangible assets with indefinite useful lives are not amortized, but are tested for impairment annually, either individually or at the cash-generating unit level.

Amortisation

Amortisation is calculated over the cost of the asset, or other amount substituted for cost, less its residual value. Amortisation is recognised in statement of profit and loss on a straight-line basis over the estimated useful lives of intangible assets from the date that they are available for use, since this most closely reflects the expected pattern of consumption of the future economic benefits embodied in the asset.

3.5 Intangible Assets under Development

Costs incurred for Intangible Assets not ready for use or in the course of development of being ready for intended use as at the reporting date are disclosed as intangible assets under development. At the point when an item is started to be operated for its intended use, the accumulated costs are transferred to the appropriate category of Intangible Assets and amortization is commenced as relevant to that category.

3.6 Leases

The Company determines whether an arrangement contains a lease at the inception of the Contract by assessing whether the fulfilment of a transaction is dependent on the use of a specific asset and whether the transaction conveys the right to control the use of that asset to the Company in return for payment.

To assess whether a contract conveys the right to control the use of an identified asset, the Company assessees whether:

• the Contract involves use of an identified asset

• the Company has substantially all of the economic benefits from use of the asset through the period of the lease and

• the Company has the right to direct the use of the asset.

The Company as lessee

The Company recognizes right of-use asset representing its right to use the underlying asset for the lease term at the lease commencement date. The cost of the right-of-use asset measured at inception comprises of the amount of initial measurement of the lease liability adjusted for any lease payments made at or before the commencement date plus any indirect costs less any lease incentives.

The right-of-use assets are subsequently measured at cost less any accumulated depreciation, accumulated impairment losses, if any and adjusted for any re- measurement of the lease liability. The right-of-use assets are depreciated using the straight-line method from the commencement date over the shorter of lease term or useful life of right-of-use asset.

Right-of-use assets are tested for impairment whenever there is any indication that their carrying amounts may not be recoverable. Impairment loss, if any, is recognized in the statement of profit and loss.

Lease liability is measured at the present value of the lease payments that are not paid at the commencement date of the lease. The lease payments are discounted using the interest rate implicit in the lease, if that rate can be readily determined. If that rate cannot be readily determined, the Company uses incremental borrowing rate.

The lease liability is subsequently remeasured by increasing the carrying amount to reflect interest on the lease liability, reducing the carrying amount to reflect the lease payments made and remeasuring the carrying amount to reflect any reassessment or lease modifications.

The Company recognizes the amount of the re-measurement of lease liability as an adjustment to the right-of-use asset. Where the carrying amount of the right-of-use asset is reduced to zero and there is a further reduction in the measurement of the lease liability, the Company recognizes any remaining amount of the re-measurement in statement of profit and loss.

Variable lease payments not included in the measurement of the lease liabilities are expensed to the statement of profit and loss in the period in which the events or conditions which trigger those payments occur.

Certain lease arrangements include options to extend or terminate the lease before the end of the lease term. The right-of-use assets and lease liabilities include these options when it is reasonably certain that such options would be exercised.

The Company accounts for each lease component within the contract as a lease separately from non-lease components of the contract and allocates the consideration in the contract to each lease component on the basis of the relative stand-alone price of the lease component and the aggregate stand-alone price of the non-lease components.

In a sale and lease back transaction, the Company measures right-of-use asset arising from the leaseback as the proportion of the previous carrying amount of the asset that relates to the right-of-use retained. The gain or loss that the company recognizes in the statement of profit and loss is limited to the proportion of the total gain or loss that relates to the rights transferred to the buyer.

Right of use asst and Lease Liability are presented separately in the Balance Sheet and lease payments are classified as Financing Cash Flows.

The Company follows the above accounting policies where it is a lessee for all leases except where the term is twelve months or less or the leases are of very low value. For these short term or low value leases, the Company recognizes the lease payments as on operating expense on a straight-line basis over the term of the lease.

The Company as lessor

Operating lease:

Rental income from operating leases is recognised in the statement of profit and loss on a straight- line basis over the term of the relevant lease unless another systematic basis is more representative of the time pattern in which economic benefits from the leased asset is diminished. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying value of the leased asset and recognised on a straight-line basis over the lease term.

Finance Lease:

When assets are leased out under a finance lease, the present value of minimum lease payments is recognised as a receivable. The difference between the gross receivable and the present value of receivable is recognised as unearned finance income. Lease income is recognised over the term of the lease using the net investment method before tax, which reflects a constant periodic rate of return.

3.7 Impairment of Non-Financial Assets

At each reporting date, the Company reviews the carrying amounts of its non-financial assets to determine whether there is any indication of impairment. If any such indication of impairment exists, then the asset''s recoverable amount is estimated. For impairment testing, assets are grouped together into the smallest group of assets that generates cash inflows from continuing use that are largely independent of the cash inflows of other assets or cash generating units (CGUs).

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Mar 31, 2023

A. CORPORATE INFORMATION:

Diamond Power Infrastructure Limited (DPIL) is public limited companies domiciled and headquarters in India & incorporated on 26 August 1992, under the provisions of Companies Act, 1956. Its Shares are listed on two stock exchanges in India. The company is engaged in manufacturing & selling of conductor, cables and transmission towers.

B. SIGNIFICANT ACCOUNTING POLICIES

B.1 BASIS OF PREPARATION & PRESENTATION

The Financial Statements have been prepared on the historical cost basis except for following assets and liabilities which have been measured at fair value amount:

i. Investment in Mutual Fund, preference share liability and financial derivatives

ii. Defined benefit plans - Plan assets

The Financial Statements of the company have_been prepared to comply with the Indian Accounting standards (''IND AS''), including the rules notified under the relevant provisions of the companies Act, 2013, except Non compliances of IND AS (As directed by NCLT order) reported in other paras of the notes of accounts, main independent audit report in Basis for Disclaimer of opinion and as reported in notes of financial statements.

We are not able to conduct our audit in accordance with the Standards on A uditing practices issued by the Institute of Chartered Accountants of India in previous financial years as detailed out as under, (we draw attention on our qualification note ) and we are not able to comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the Statement is free from material misstatement due to nonavailability of accounting records, information and audit evidence as required in previous financial years and in current year opening balances of pervious FS carried forwards as it is.

Company''s financial statements are presented in Indian Rupees (Rs.), which is also its functional currency.

Material information for events accrued in the company as on date:

1. On the basis of CBI FIR, the Enforcement Directorate, Ahmedabad (ED) has registered case, bearing no. ECIR/AMZO/03/2018 dated April 05, 2018 under the provision of Section 17 of the Prevention of Money-Laundering Act, 2002 and conducted search at all the places of the company on April 09, 2018 & attached properties of company & directors by provisionally attached order no. PAO No. 02/2018 dated April 24, 2018. The ED has filled ECIR sheet on December 22, 2018 with The Hon''ble Court of Principal District & Sessions Judge (Ahmedabad Rural) and Hon''ble Designated special court under the prevention of Money-Laundering Act, 2002, At Ahmedabad, the matter is under legal proceeding.

2. On the basis of CBI FIR, the Directorate of Investigation of Income Tax department has carried out search and seizure U/s 132 of the Act on 10/04/2018 and subsequently a notice U/s 153

A of the Act was issued on 25/10/2018 to file Income Tax returns, the company has filled Income tax returns U/s 139(4) and declared losses of Rs. 715.67 Crs., which was marked as defective returns by IT department. Against that, various notices were given to the company to file ITR of the company but the company has not filled Income tax returns, subsequently as required notices were served by IT department to the company and due to non-availability of information and records special audit was carried out U/s 142(2A) by the M/s Talati & Talati LLP Chartered Accountants and IT department has added various addition and Assessment order for FY 2017-18 / AY 2018-19 dated 01/07/2022 is received by the company with tax demand of Rs. 37,98,22,980.00 and addition was done for subsequent years.

The other regulators / departments like GST, Income Tax, SIFO, Serious fraud investigation department of BSE / NSES & others, over and above details give for ED and CBI have also initiated legal proceeding against the directors, employees, other persons and company, at present legal proceeding are going on and we have no details, other than reported in respective paras of this report. The Company has undergone CIRP with cutoff date being 24.08.2018 in terms of the provisions of the Code vide order dated 24.08.2018 passed by the NCLT, accordingly accounting of applicable interest on borrowed debts after cut of date i.e. 24/08/2018 have not been accounted as per applicable rules under code.

3. The Hon''ble National Company Law Tribunal, Ahmedabad ("NCLT") by an order dated 20^th June 2023 has approved resolution plan submitted by RP under Section 30(6) of the IBC, 2016 and approved resolution plan submitted by M/s GSEC and consortium of Mr. Rakesh Ramanlal Shah at total offer price of Rs.2401Cr., all required necessary accounting provisions will be provided by the new management, so we have not recommended required necessary provisions in Assets and liabilities in the financial statements provided to us by RP up and new management team with suspended management up to September 2022 and afterward new management.

4. After trigger date new management has taken over administration and management of the company and reconstituted board of directors, the above result has been adopted by the Board of Directors on May 30^th, 2023 in the audit committee meeting and board of directors'' meetings respectively, which was prepared by the new management.

5. During CIRP process, company has defaulted in submission of past quarterly results, half yearly and annual audited financial results of the company to stock exchanges and defaulted in all applicable Acts, Rules Regulations, Guidelines, Standards and provisions of Companies Act, 2013 for filling, conducting, submission and records maintenances etc. After trigger date the new management of the company has started compliances, as required under Companies Act, 2013. The company has not prepared consolidated financial statements in view of ongoing insolvency proceedings with the subsidiaries / associate / group companies and unavailability of the updated financial statements of such subsidiaries / associate / group companies of old management prior to trigger date.

6. In compliance with the NCLT orders, company has provided for the various investments made by old management amounting to Rs. 11.67 Crs. However, said amount was written off by giving necessary entries in books of accounts. Accordingly, there is no investment in shares of

any company. Hence, company has no subsidiary and/ or associates as on end of the year 2023 and no requirement for preparation of consolidated financial statement.

7. The Results of the Company comprise of only one segment i.e. Cables and conductors division only. However, no major operational activities during the reporting period.

8. The company has passed necessary accounting entries in compliances with NCLT approved resolutions plan via / through capital reserves for Rs. 748.55 Crs.(Net). write-off/write-back/adjustment of the creditor & liabilities amounts to bring the outstanding as per the approved resolution plan and necessary all provision entries for assets reduction passed through capital reserves, the passed accounting entries are not in compliances with Ind AS and to that, extent non-compliances to Ind AS.

9. During the period under reporting, no major production activities in the company were undertaken, so company has provided pro-rata 20 % (p.a.) of applicable depreciation rate for PPE block as per part C of Schedule II of the Companies Act, 2013 for normal wear and tear.

10. During the CIRP process and up to trigger date, various expenses incurred related to CIRP process, accounting vouchers were not signed and approved by the Resolution Professional. However, we understand that as per IBC, during CIRP, all expenses are incurred based on and after approval of CoC and due to confidentiality, the minutes of CoC / monitoring committee were not shared with us, so to that extent we give our disclaimer of opinion.

11. Previous periods figures have been re-arranged / re-grouped wherever considered necessary to confirm to the presentation of the current period.

12. No impairment test was carried out for the reporting period as per requirement of the IND AS and accordingly no provision/reserve were accounted.

13. Current legal status for advance paid to Group/associate company were not available hence total provision was made during the reporting period against the outstanding balance.

14. After the trigger date, company has written of negative balances of bank margin moneys and current accounts balances based on bank statements of old period, the necessary accounting effect given through capital reserve account, this is not in compliances with Ind AS provisions.

Approved Resolution Plan Execution:

15. In compliance with approved resolution plan, new management has infused Rs. 50 Crs. as equity share capital, the equity shares are allotted to respective shareholders, company has filled application to stock exchanges BSE and NSE for approval.

16. In compliance with approved resolution plan, company has reduced the equity share capital and has filled necessary application to BSE & NSE, company has received in principle approval from NSE on 14.03.2023. However, approval from BSE is yet to be receive.

17. In compliance with approved resolution plan, company has paid upfront amount of Rs. 72.30 Cr. to the secured financial creditors..

18. In compliances with approved resolution plan, Rs. 20 Crs. which are earmarked towards the CIRP costs with RP for CIRP expenditures, required details for expenditure yet to be receive from RP.

19. In compliance with approved resolution plan, company has to pay Rs. 1,899 Crs at end of 30 years to secured financial creditors, accordingly the company has issued unsecured bond with maturity amount of Rs. 1,899 Crs. at coupon rate 0.001 % per annum and necessary accounting entries were passed in given FS. These bonds are repurchased by Gomex Aviation Pvt. Ltd. (SPV of RA) from respective banks / FIs through repurchase agreements. In compliance with Ind AS 109, company has to discount the bond at present NPV of Rs. 25.67 Crs., however company has booked full value of bond of Rs. 1899 Crs in FS and to that, extent non compliances with IND AS.

20. In compliance with approved resolution plan, company has taken unsecured loan from the group companies at the interest rate of 10% p.a. to start the operation of the company but formal agreement was yet to be received. However, Board resolution for interest payment on unsecured loan are yet to be passed & adopted in board except "GSEC Ltd.".

21. In compliance with approved resolution plan, company has accounted long term borrowing liabilities of Rs.400.57 Crs. (after payment of 2^nd instalment of Rs. 29.70 Cr.) payable to secured financial creditors within total period of 5 years.

22. In compliance with approved resolution plan, company had allocated to pay Rs.2.40 Crs. towards the admitted claims of workmen and employees, however, the company has not paid amount as per the claim admitted by the Resolution professional, since mistakes were found in claim admission, accordingly the company has taken stay order for the payment to the workmen and employees and the matter under legal proceedings.

23. In compliance with approved resolution plan, company has accounted operational creditors outstanding as per the revised claim admitted by RP reduced by amount paid as per the resolution plan, in the books of accounts certain creditors amount reflected as debit balance and necessary accounting entries passed as advances paid to vendors and recovery procedure has been undertaken towards the amounts due to respective vendors/operational creditors.

24. In compliance with approved resolution plan, the company has passed various accounting entries for secured financial creditors banks / FIs & other current and non-current liabilities and assets based on available records with the company and created capital reserves for Rs. 748.55 Crs. write-off/write-back/adjustment of the creditor amounts to bring the outstanding as per the approved resolution plan.

25. The reported figures in enclosed FS of current assets and non-current assets are under reconciliation & outstanding confirmation work is in progress and subject to confirmation by respective parties. The reported figures of current assets and non-current assets are the carried forward figures from FY 2017-18 onwards, as a statutory auditor of the company, we have given our disclaimer of opinion on it in current and previous audited financial statements.

26. As informed to us by the new management is in process of physical verification and revaluation of inventories. The reported figures of inventories as accounted and carried forward are from 2017 onwards, our firm has given disclaimer of opinion for audited FS of the company.

27. The new management has sent debtors balance confirmation letter to major debtors and the same is awaited as on reporting date, due to uncertainty about realizability on account of liquidated damages (LD), penalties and others deductions, accordingly full provision entries have been passed for debtor''s outstanding amount which was carried forward from 2017 onwards. So based on verification and confirmation it will be accounted accordingly and necessary written off entries will be passed in future as informed by management of the company.

B.2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

As reported in main audit report in Basis for Disclaimer of opinion and above said para, due to non-availability of required data, information and documents, we have carried out audit based on system data only, so we have given our DISCLAIMER OF OPINION about audit and compliances with various applicable statutory laws, Company Acts, SEBI etc. and compliances with below given standards applicable under statutory Act & Rules.

a) Property, plant and equipment

Property, plant and equipment are stated at cost less accumulated depreciation and impairment losses if any. Cost comprises the purchase price and any attributable cost of bringing the asset to its working condition for its intended use.

Asset under installation or under construction as at the Balance Sheet date are shown as capital work in progress.

Subsequent costs are included in the assets carrying amount or recognized as a separate asset, as appropriate, only when it is probable that future economic benefit associated with the item will flow to the entity and the cost can be measured reliably.

Assets costing up to Rupees five thousand are fully depreciated in the year of purchase.

b) Depreciation

Depreciation on property, plant and equipment is provided Straight Line Method based on useful life of the assets as prescribed in Schedule II of Companies Act, 2013, which were considered reasonable by the management.

c) Leases

The Company has taken office premises at various locations under cancellable operating lease. These are recognized as operating lease. The period of such lease ranges from less than one year to four years.

d) Finance Cost

Borrowing costs are interest and other costs (including exchange differences arising from foreign currency borrowings to the extent that they are regarded as an adjustment to interest costs) incurred by the Company in connection with the borrowings of funds. Borrowing costs directly attributable to acquisition or construction of those tangible fixed assets which necessarily take a substantial period of time to get ready for their intended use are capitalised. Other borrowing costs are recognised as an expense in the period in which they are incurred.

e) Inventories

Inventories which comprise raw materials, work-in-progress, finished goods, stock-intrade, stores and spares are carried at lower of cost and net realisable value.

Cost of inventories comprises all costs of purchase, cost of conversion and other costs incurred in bringing the inventories to their present location and condition. The Company follows weighted average cost method for its valuation purpose.

Net realisable value is the estimated selling price in the ordinary course of business less the estimated costs of completion and the estimated costs necessary to make the sale.

The net realisable value of work-in-progress is determined with reference to the selling prices of related finished products. Raw materials and other supplies held for use in production of finished products are not written down below cost except in cases where material prices have declined and it is estimated that the cost of the finished products will exceed their net realisable value.

The comparison of cost and net realisable value is made on item-by-item basis.

f) The Company assesses at each reporting date as to whether there is any indication that any property, plant and equipment and intangible assets or group of assets, called cash generating units (CGU) may be impaired. If any such indication exists the recoverable amount of an asset or CGU is estimated to determine the extent of impairment, if any. When it is not possible to estimate the recoverable amount of an individual asset, the Company estimates the recoverable amount of the CGU to which the asset belongs.

An impairment loss is recognised in the Statement of Profit and Loss to the extent, asset''s carrying amount exceeds its recoverable amount. The recoverable amount is higher of an asset''s fair value less cost of disposal and value in use. Value in use is based on the estimated future cash flows, discounted to their present value using pretax discount rate that reflects current market assessments of the time value of money and risk specific to the assets.

The impairment loss recognised in prior accounting period is reversed if there has been a change in the estimate of recoverable amount.

g) Provisions

A provision is recognised if as a result of a past event the Company has a present legal or constructive 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 determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability. Contingent Liabilities are not recognised but are disclosed in the notes. Contingent Assets are not recognised but disclosed in the Financial Statements when economic inflow is probable

h) Employee Benefits Expense Short Term Employee Benefits:

The undiscounted amount of short-term employee benefits expected to be paid in exchange for the services rendered by employees are recognised as an expense during the period when the employees render the services.

Post-Employment Benefits Defined Contribution Plans

A defined contribution plan is a post-employment benefit plan under which the company pays specified contributions to a separate entity. The company makes specified monthly contributions towards Provident Fund, Superannuation Fund and Pension Scheme. The Company''s contribution is recognised as an expense in the Statement of Profit and Loss during the period in which the employee renders the related service.

Defined Benefit Plans

The Company pays gratuity to the employees whoever has completed five years of service with the Company at the time of resignation/superannuation. The gratuity is paid @ 15 days salary for every completed year of service as per the Payment of Gratuity Act 1972.

The gratuity liability amount is contributed to the approved gratuity fund formed exclusively for gratuity payment to the employees. The gratuity fund has been approved by respective IT authorities.

The liability in respect of gratuity and other post-employment benefits is calculated using the projected Unit Credit Method and spread over the period during which the benefit is expected to be derived from employee''s services.

Re-measurement of defined benefit plans in respect of post-employment are charged to the Other Comprehensive Income.

i) Tax Expenses

The tax expense for the period comprises current and deferred tax. Tax is recognised in Statement of Profit and Loss, except to the extent that it relates to items recognised in the comprehensive income or in equity. In which case, the tax is also recognised in other comprehensive income or equity.

Current Tax

Current tax assets and liabilities are measured at the amount expected to be recovered from or paid to the taxation authorities, based on tax rates and laws that are enacted or substantively enacted at the Balance sheet date.

Deferred Tax

Deferred tax is recognised on temporary differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit.

Deferred tax liabilities and assets are measured at the tax rates that are expected to apply in the period in which the liability is settled or the asset realised, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period. The carrying amount of deferred tax liabilities and assets are reviewed at the end of each reporting period.

Deferred tax assets are recognized for unused tax losses 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 losses can be utilized.

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 profit will be available.

j) Foreign currencies transactions

Foreign exchange transactions are recorded into Indian rupees using the average of the opening and closing spot rates on the dates of the respective transactions.

Monetary assets and liabilities denominated in foreign currencies as at the balance sheet date are translated into Indian rupees at the closing exchange rates on that date. The resultant exchange differences are recognised in the statement of profit and loss except that:

i. Exchange differences pertaining to long term foreign currency monetary items are accumulated in ''Foreign Currency Monetary Item Translation Difference Account'' (FCMITDA), and are amortised over the balance period of the relevant foreign currency item.

ii. Exchange differences arising on other long-term foreign currency monetary items are accumulated in ''Foreign Currency Monetary Item Translation Difference Account'' (FCMITDA), and are amortised over the balance period of the relevant foreign currency item.

A foreign currency monetary item is classified as long-term if it has original maturity of one year or more.

Exchange differences arising on a monetary item that, in substance, forms part of the Company''s net investment in a non-integral foreign operation are accumulated in a foreign currency translation reserve until the disposal of the net investment, at which time the accumulated amount is recognised as income or expense.

The premium or discount on a forward exchange contract taken to hedge foreign currency risk of an existing asset / liability is recognised over the period of the contract. The amount so recognised in respect of forward exchange contracts which are taken to hedge long-term foreign currency monetary items is added to / deducted from the carrying amounts of depreciable assets or accumulated in FCMITDA as discussed above. In respect of other forward exchange contracts, it is recognised in the Statement of Profit and Loss.

The forward exchange contracts taken to hedge existing assets or liabilities are translated at the closing exchange rates and resultant exchange differences are recognised in the same manner as those on the underlying foreign currency asset or liability.

Derivative Instruments

Apart from forward exchange contracts are taken to hedge existing assets or liabilities, the Company also uses derivatives to hedge its foreign currency risk exposure relating to firm commitments and highly probable transactions. In accordance with the relevant announcement of the Institute of Chartered Accountants of India, the company provides for losses in respect of such outstanding derivative contracts at the balance sheet date by marking them to market. Net gain, if any, is not recognised. The contracts are aggregated category-wise, to determine net gain/loss.

k) Revenue recognition

Revenue from sale of goods in the course of ordinary activities is recognised when property in the goods or all significant risks and rewards of their ownership are transferred to the customer and no significant uncertainty exists regarding the amount of the consideration that will be derived from the sale of the goods and regarding its collection. Revenue from sale of goods is measured at the fair value of

the consideration received/receivable, taking into account contractually defined terms of the payment.

Revenue from services is recognised under the proportionate completion method provided the consideration is reliably determinable and no significant uncertainty exists regarding the collection of the consideration.

The amount recognised as revenue is exclusive of sales tax, value added taxes (VAT) and service tax, and is net of returns, trade discounts and quantity discounts.

Dividend income is recognised when the right to receive payment is established.

Interest income is recognised on a time proportion basis taking into account the amount outstanding and the interest rate applicable. Discount or premium on debt securities held is accrued over the period to maturity.

l) Operating Cycle

Based on the nature of activities of the Company and the normal time between acquisition of assets and their realisation in cash or cash equivalents, the Company has determined its operating cycle as 12 months for the purpose of classification of its assets and liabilities as current and non-current.

m) 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.

i. Financial Assets

A. Initial recognition and measurement

All financial assets and liabilities are initially recognized at fair value. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities, which are not at fair value through profit or loss, are adjusted to the fair value on initial recognition. Purchase and sale of financial assets are recognised using trade date accounting.

Fair value is the price that would be received to sell an asset or settle a liability in an ordinary transaction between market participants at the measurement date. The fair value of an asset or a liability is measured using the assumption that market participants would use when pricing an asset or a liability acting in their best economic interest. The Company used valuation techniques, which were appropriate in circumstances and for which sufficient data were available considering the expected loss/ profit in case of financial assets or liabilities.

B. Subsequent measurement

i. A financial asset is measured at amortised cost if it is held within a business model whose objective is to hold the asset 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 amount outstanding.

Such financial assets are subsequently measured at amortised cost using the effective interest rate (EIR) method. The losses arising from impairment are recognised in the profit or loss. This category generally applies to trade and other receivables.

ii. A financial asset is measured at FVTOCI if it is held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets 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 amount outstanding.

iii. A financial asset which is not classified in any of the above categories are measured at FVTPL.

C. Investment in subsidiaries and Associates

The Company has accounted for its investments in subsidiaries and associates at cost.

D. Other Equity Investments

All other equity investments are measured at fair value, with value changes recognised in Statement of Profit and Loss, except for those equity investments for which the Company has elected to present the value changes in ''Other Comprehensive Income''

E. Impairment of financial assets

In accordance with IND AS 109, the Company uses ''Expected Credit Loss'' (ECL) model, for evaluating impairment of financial assets other than those measured at fair value through profit and loss (FVTPL).

Expected credit losses are measured through a loss allowance at an amount equal to:

> The 12-months expected credit losses (expected credit losses that result from those default events on the financial instrument that are possible within 12 months after the reporting date); or

> Full lifetime expected credit losses (expected credit losses that result from all possible default events over the life of the financial instrument)

For trade receivables Company applies ''simplified approach'' which requires expected lifetime losses to be recognised from initial recognition of the receivables. The Company uses historical default rates to determine impairment loss on the portfolio of trade receivables. At every reporting date these historical default rates are reviewed and changes in the forward looking estimates are analysed.

For other assets, the Company uses 12 month Expected Credit Loss to provide for impairment loss where there is no significant increase in credit risk. If there is significant increase in credit risk full lifetime ECL is used.

F. 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.

ii. Financial Liabilities

A. Initial recognition and measurement

All financial liabilities are recognized at fair value and in case of loans, net of directly attributable cost. Fees of recurring nature are directly recognised in the Statement of Profit and Loss as finance cost.

B. Subsequent measurement

Financial liabilities are carried at amortized cost using the effective interest method. For trade and other payables maturing within one year from the balance sheet date, the carrying amounts approximate fair value due to the short maturity of these instruments.

iii. The Company uses various derivative financial instruments such as interest rate swaps, currency swaps, forwards & options and commodity contracts to mitigate the risk of changes in interest rates, exchange rates and commodity prices. Such derivative financial instruments are initially recognised at fair value on the date on which a derivative contract is entered into and are also subsequently measured at fair value. Derivatives are carried as financial assets when the fair value is positive and as financial liabilities when the fair value is negative.

iv. Any gains or losses arising from changes in the fair value of derivatives are taken directly to Statement of Profit and Loss, except for the effective portion of cash flow hedges which is recognised in Other Comprehensive Income and later to Statement of Profit and Loss when the hedged item affects profit or loss or treated as basis adjustment if a hedged forecast transaction subsequently results in the recognition of a non-financial assets or nonfinancial liability.

n) Segment Reporting

In accordance with its business and organization structure and internal financial reporting, the company has concluded that Transmission and Distribution of Power (T&D) related business is its primary business segment. As the Company''s revenue is mainly from T&D business, no separate information in line with IND AS 108 "Operating Segments" is required.

o) Fair value measurement

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 principal or the most advantageous market must be accessible by the Company.

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 economic best interest.

A fair value measurement of a non-financial asset takes into account a market participant''s ability to generate economic benefits by using the asset in its highest and best use or by selling it to another market participant that would use the asset in its highest and best use.

The Company uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximizing the use of relevant observable inputs and minimizing the use of unobservable inputs.

All assets and liabilities for which fair value is measured or disclosed in the Financial Statements are categorized 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.

The Company''s Management determines the policies and procedures for both recurring and non - recurring fair value measurement, such as derivative instruments and unquoted financial assets measured at fair value.

At each reporting date, the Management analyses the movements in the values of assets and liabilities which are required to be re-measured or re-assessed as per the Company''s accounting policies. For this analysis, the Management verifies the major inputs applied in the latest valuation by agreeing the information in the valuation computation to contracts and other relevant documents

The management also compares the change in the fair value of each asset and liability with relevant external sources to determine whether the change is reasonable.

For the purpose of fair value disclosures, the Company has determined classes of assets and liabilities on the basis of the nature, characteristics and risks of the asset or liability and the level of the fair value hierarchy as explained above.

This note summarizes accounting policy for fair value. Other fair value related disclosures are given in the relevant notes.

C. The preparation of the Company''s financial statements requires management to make judgement, estimates and assumptions that affect the reported amount of revenue, expenses, assets and liabilities and the accompanying disclosures. Uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of assets or liabilities affected in future periods.

a) Property, plant and equipment / intangible assets are depreciated / amortised over their estimated useful lives, after taking into account estimated residual value. Management reviews the estimated useful lives and residual values of the assets annually in order to determine the amount of depreciation / amortisation to be recorded during any reporting period. The useful lives and residual values are based on the Company''s historical experience with similar assets and take into account anticipated technological changes. The depreciation / amortisation for future periods is revised if there are significant changes from previous estimates.

b) Recoverability of trade receivable

Judgements are required in assessing the recoverability of overdue trade receivables and determining whether a provision against those receivables is required. Factors considered include the credit rating of the counterparty, the amount and timing of anticipated future payments and any possible actions that can be taken to mitigate the risk of non-payment.

c) Provisions

Provisions and liabilities are recognized in the period when it becomes probable that there will be a future outflow of funds resulting from past operations or events and the amount of cash outflow can be reliably estimated. The timing of recognition and quantification of the liability requires the application of judgement to existing facts and circumstances, which can be subject to change. The carrying amounts of provisions and liabilities are reviewed regularly and revised to take account of changing facts and circumstances.

d) Impairment of non-financial assets

The Company assesses at each reporting date whether there is an indication that an asset may be impaired. If any indication exists, the Company estimates the asset''s recoverable amount. An asset''s recoverable amount is the higher of an asset''s or Cash Generating Units (CGU''s) fair value less costs of disposal and its value in use. It is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or a groups of assets. Where 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 value in use, the estimated future cash flows are discounted to their present value using 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.

e) Impairment of financial assets

The impairment provisions for financial assets are based on assumptions about risk of default and expected cash loss rates. The Company uses judgement in making these assumptions and selecting the inputs to the impairment calculation, based on Company''s past history, existing market conditions as well as forward looking estimates at the end of each reporting period.

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Mar 31, 2016

1 Background

Diamond Power Infrastructure Limited is a public limited company domiciled and headquartered in India and incorporated on 26 August 1992 under the provisions of the Companies Act,1956. Its shares are listed on two stock exchanges in India. The Company is engaged in manufacturing and selling of conductor, cables and transmission towers.

2 Significant accounting policies

The accounting policies set out below have been applied consistently to the periods presented in these financial statements.

2.1 Basis of preparation of financial statements

These financial statements are prepared in accordance with Indian Generally Accepted Accounting Principles (‘Indian GAAP'') under the historical cost convention on the accrual basis. Indian GAAP comprises mandatory Accounting Standards (‘AS'') as prescribed under Section 133 of the Companies Act, 2013 (‘the Act'') read with Rule 7 of the Companies (Accounts) Rules, 2014 and the relevant provisions of the Act. The financial statements are presented in Indian rupees rounded off to the nearest lakhs.

All assets and liabilities have been classified as current or non-current as per the Company''s normal operating cycle and other criteria set out in the Schedule III of the Companies Act, 2013. Operating cycle is the time from acquisition of asset for processing / start of the project to their realization in cash or cash equivalents.

2.2 Going concern

The Company had undertaken its expansion project which got delayed due to land acquisition and various other factors. The adverse economic scenario of the country and more particularly in the power sector, coupled with delay in expansion project led to serious financial dent in the company. The lenders in the year 2015, had approved financial restructuring package for revival of the company including completion of the project with cost overrun. The lenders have recognized the challenges faced by the Company and taken a decision to invoke Strategic Debt Restructuring (SDR) coupled with induction of strategic investor which would give long term solution to the financial requirements of the Company. The Company got such investor and informed the lenders about the term sheet signed with the proposed investor The investors are in the process of taking approval from their respective authorities and the Company is hopeful of receiving the same shortly. Considering all the facts stated above, the accounts for the year ended 2016 are prepared on a going concern basis.

2.3 Use of estimates

The preparation of financial statements in conformity with generally accepted accounting principles (‘GAAP'') in India requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent liabilities as of the date of the financial statements, and the reported amounts of revenues and expenses during the reported period. The estimates and assumptions used in the accompanying financial statements are based upon management''s evaluation of the relevant facts and circumstances as of the date of the financial statements. Actual results may differ from the estimates used in preparing the accompanying financial statements. Any revision to accounting estimates is recognized prospectively in current and future periods.

2.4 Tangible fixed assets

Tangible fixed assets are stated at cost less accumulated depreciation and impairment losses if any. Cost comprises the purchase price and any attributable cost of bringing the asset to its working condition for its intended use.

Assets under installation or under construction as at the Balance Sheet date are shown as capital work in progress.

If signifi cant parts of an item of property, plant and equipment have different useful lives, then they are accounted for as separate items (major components), plant and equipment.

Assets costing up to Rupees five thousand are fully depreciated in the year of purchase

2.5 Depreciation

Depreciation is charged on straight line basis as per useful life prescribed under schedule II to the Companies Act, 2013. With effect from 1 April 2014, pursuant to the requirements of Schedule II to the Companies Act, 2013, the Company has reassessed the useful life of the assets.

2.6 Impairment of assets

In accordance with AS 28 on ‘impairment of assets'', fixed assets are reviewed at each reporting date to determine if there is any indication of impairment. For assets in respect of which any such indication exists, the asset''s recoverable amount is estimated. An impairment loss is recognized if the carrying amount of an asset exceeds its recoverable amount.

For the purpose of impairment testing, assets are grouped together into the smallest group of assets (cash generating unit or CGU) that generates cash inflows from continuing use that are largely independent of the cash inflows of other assets or CGUs. The recoverable amount of an asset or CGU is the greater of its value in use and its net selling price. 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 or CGU.

Impairment losses are recognized in statement of profit or loss. However, an impairment loss on a revalued asset is recognized directly against any revaluation surplus to the extent that the impairment loss does not exceed the amount held in the revaluation surplus for that same asset.

If at the balance sheet date there is an indication that a previously assessed impairment loss no longer exists or has decreased, the assets or CGU''s recoverable amount is estimated. The impairment loss is reversed to the extent that the asset''s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortization, if no impairment loss had been recognized. Such a reversal is recognized in the statement of profit or loss; however, in the case of revalued assets, the reversal is credited directly to revaluation surplus except to the extent that an impairment loss on the same revalued asset was previously recognized as an expense in the statement of profit or loss.

2.7 Borrowing costs

Borrowing costs are interest and other costs (including exchange differences arising from foreign currency borrowings to the extent that they are regarded as an adjustment to interest costs) incurred by the Company in connection with the borrowings of funds. Borrowing costs directly attributable to acquisition or construction of those tangible fixed assets which necessarily take a substantial period of time to get ready for their intended use are capitalized. Other borrowing costs are recognized as an expense in the period in which they are incurred.

2.8 Revenue recognition

Revenue from sale of goods in the course of ordinary activities is recognized when property in the goods or all significant risks and rewards of their ownership are transferred to the customer and no significant uncertainty exists regarding the amount of the consideration that will be derived from the sale of the goods and regarding its collection.

Revenue from services is recognized under the proportionate completion method provided the consideration is reliably determinable and no significant uncertainty exists regarding the collection of the consideration.

The amount recognized as revenue is exclusive of sales tax, value added taxes (VAT) and service tax, and is net of returns, trade discounts and quantity discounts.

Dividend income is recognized when the right to receive payment is established.

Interest income is recognized on a time proportion basis taking into account the amount outstanding and the interest rate applicable. Discount or premium on debt securities held is accrued over the period to maturity.

2.9 Inventories

Inventories which comprise raw materials, work-in-progress, finished goods, stock-in-trade, stores and spares are carried at lower of cost and net realizable value.

Cost of inventories comprises all costs of purchase, cost of conversion and other costs incurred in bringing the inventories to their present location and condition. The Company follows weighted average cost method for its valuation purpose.

Net realizable value is the estimated selling price in the ordinary course of business less the estimated costs of completion and the estimated costs necessary to make the sale.

The net realizable value of work-in-progress is determined with reference to the selling prices of related finished products. Raw materials and other supplies held for use in production of finished products are not written down below cost except in cases where material prices have declined and it is estimated that the cost of the finished products will exceed their net realizable value.

The comparison of cost and net realizable value is made on item-by-item basis.

2.10 Operating leases

Lease where the less or effectively retains substantially all the risks and benefit of ownership of the leased item are classified as operating lease. Operating lease payments are recognized as an expense on a straight-line basis over the non cancellable period of the lease term and charged to the statement of profit and loss unless other systematic basis is more representative of the time pattern of the benefit. Any modifications in respect of lease terms or assumptions are recorded prospectively

2.11 Investments

Investments that are readily realizable and intended to be held for not more than a year from the date of acquisition are classified as current investments. All other investments are classified as long-term investments. Long-term investments are stated at cost. Provision for diminution in value is made only when in the opinion of the management there is a diminution other than temporary in the carrying value of such investments determined separately for each investment. Current investments are valued at lower of cost and market value. Any reduction in the carrying amount and any reversals of such reductions are charged or credited to statement of profit and loss.

2.12 Employee benefits

Short term employee benefits:

All employee benefits payable wholly within twelve months of rendering the service are classified as short-term employee benefits. These benefits include salaries and wages, bonus, ex-gratia and compensated absences such as paid annual leave and sickness leave. The undiscounted amount of short-term employee benefits expected to be paid in exchange for the services rendered

by employees is recognized as an expense during the

period.

Long term employment benefits:

(i) Defined contribution plans:

The Company''s Employee State Insurance and Provident fund schemes are defined contribution plans.

The Company''s contribution paid/payable under the Schemes is recognized as expense in the statement of profit and loss during the period in which the employee renders the related service. The Company makes specified monthly contributions towards employee provident fund and Employees'' State Insurance Scheme.

(ii) Defined benefit plans:

The Company''s gratuity benefit scheme is a defined benefit plan. The Company''s net obligation in respect of the gratuity benefit scheme is calculated by estimating the amount of future benefit that employees have earned in return for their service in the current and prior periods; that benefit is discounted to determine its present value, and the fair value of any plan assets is deducted.

The present value of the obligation under such defined benefit plan is determined based on actuarial valuation by an independent actuary at each balance sheet date using the Projected Unit Credit Method, which recognizes each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation.

The obligation is measured at the present value of the estimated future cash flows. The discount rates used for determining the present value of the obligation under defined benefit plans, are based on the market yields on Government securities as at the balance sheet date.

Actuarial gains and losses are recognized immediately in the statement of profit and loss.

(iii) Other long term employment benefits:

Company''s liabilities towards compensated absences to employees are determined on the basis of valuations, as at balance sheet date, carried out by an independent actuary using Projected Unit Credit Method. Actuarial gains and losses comprise experience adjustments and the effects of changes in actuarial assumptions and are recognized immediately in the statement of profit and loss.

2.13 Earnings per share (EPS]

Basic EPS is computed by dividing the net profit

attributable to shareholders by the weighted average number of equity shares outstanding during the year Diluted EPS is computed using the weighted average number of equity and dilutive equity equivalent shares outstanding during the year-end, except where the results would be anti dilutive.

2.14 Foreign Currency Transactions

Foreign exchange transactions are recorded into Indian rupees using the average of the opening and closing spot rates on the dates of the respective transactions.

Monetary assets and liabilities denominated in foreign currencies as at the balance sheet date are translated into Indian rupees at the closing exchange rates on that date. The resultant exchange differences are recognized in the statement of profit and loss except that :

a. exchange differences pertaining to long term foreign currency monetary items are accumulated in ‘Foreign Currency Monetary Item Translation Difference Account'' (FCMITDA), and are amortized over the balance period of the relevant foreign currency item.

b. exchange differences arising on other long-term foreign currency monetary items are accumulated in ‘Foreign Currency Monetary Item Translation Difference Account'' (FCMITDA), and are amortized over the balance period of the relevant foreign currency item.

A foreign currency monetary item is classified as long-term if it has original maturity of one year or more.

Exchange differences arising on a monetary item that, in substance, forms part of the Company''s net investment in a non-integral foreign operation are accumulated in a foreign currency translation reserve until the disposal of the net investment, at which time the accumulated amount is recognized as income or expense.

The premium or discount on a forward exchange contract taken to hedge foreign currency risk of an existing asset / liability is recognized over the period of the contract. The amount so recognized in respect of forward exchange contracts which are taken to hedge long-term foreign currency monetary items is added to / deducted from the carrying amounts of depreciable assets or accumulated in FCMITDA as discussed above. In respect of other forward exchange contracts, it is recognized in the Statement of Profit and Loss

The forward exchange contracts taken to hedge existing assets or liabilities are translated at the closing exchange rates and resultant exchange differences are recognized in the same manner as those on the underlying foreign currency asset or liability.

Derivative Instruments

Apart from forward exchange contracts are taken to hedge existing assets or liabilities, the Company also uses derivatives to hedge its foreign currency risk exposure relating to firm commitments and highly probable transactions. In accordance with the relevant announcement of the Institute of Chartered Accountants of India, the company provides for losses in respect of such outstanding derivative contracts at the balance sheet date by marking them to market. Net gain, if any is not recognized. The contracts are aggregated category-wise, to determine net gain/loss.

2.15 Taxes on income Income tax

Income tax expense comprises current tax and deferred tax charge or credit (reflecting the tax effects of timing differences between accounting income and taxable income for the period). Current tax provision is made based on the tax liability computed after considering tax allowances and exemptions, in accordance with the Income tax Act, 1961.

Deferred tax

Deferred tax charge or credit and the corresponding deferred tax liability or asset is recognized for timing differences between the profits/losses offered for income taxes and profits/ losses as per the financial statements. Deferred tax assets and liabilities are measured using the tax rates and tax laws that have been enacted or substantively enacted at the balance sheet date. Deferred tax assets are recognized only to the extent there is reasonable certainty that the assets can be realized in future; however, where there is unabsorbed depreciation or carry forward of losses, deferred tax assets are recognized only if there is a virtual certainty of realization of such assets. Deferred tax assets are reviewed as at each balance sheet date and written down or written-up to reflect the amount that is reasonably/ virtually certain (as the case may be) to be realized.

2.16 Provisions and contingencies

A provision is recognized 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 recognized at the best estimate of the expenditure required to settle the present obligation at the balance sheet date. The provision are measured on an undiscounted basis.

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 unless the possibility of outflow of resources is remote. Contingent assets are neither recognized nor disclosed in the 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 recognized in the period in which the change occurs.

(B) Rights, preferences and restrictions attached to equity shares

(i) The Company has a single class of equity shares. Accordingly all equity shares rank equally with regard to dividends and share in the Company''s residual assets. The equity shares are entitled to receive dividend as declared from time to time subject to payment of dividend to preference shareholders. The voting rights of shareholders are in proportion to its share of paid up equity capital of the Company. Voting rights cannot be exercised in respect of shares on which any call or other sums presently payable have not been paid.

(ii) Failure to pay any amount called up on shares may lead to forfeiture of shares

(iii) On winding up of the Company the holders of equity shares will be entitled to receive the residual assets of the Company remaining after distribution of all preferential amounts in proportion to the number of equity shares held.

(iv) Each holder of Equity share is entitled to one vote for share.

0.1% Redeemable cumulative preference shares

(i) 0.1 % C cumulative redeemable Preference Shares of Rs. 10 each were privately placed with Diamond Projects Limited and Madhuri Fin serve Private Limited on 30 September 2013 at a premium of Rs. 171 per share. These shares are redeemable after 10 years from the date of issue. The holders of these shares are entitled to a cumulative dividend of 0.1%.

(ii) Preference shares carry a preferential right as to dividend over equity shareholders. Where dividend on cumulative preference shares is not declared for a financial year, the entitlement thereto is carried forward. The preference shares are entitled to one vote per share at meetings of the Company on any resolutions of the Company directly affecting their rights. However, a cumulative preference shareholder acquires voting rights on par with an equity shareholder if the dividend on preference shares has remained unpaid for a period of not less than two years. In the event of liquidation, preference shareholders have a potential right over equity shareholders to be repaid to the extent of capital paid-up and dividend in arrears on such shares.

(E) Aggregate number of bonus shares issued, shares issued for consideration other than cash and shares bought back during the period of five years immediately preceding the reporting date :

During the five year period ended 31 March 2016

a) 12,402,124 equity shares of Rs. 10 each, fully paid up have been allotted as bonus shares in financial year 2013-14.

b) No shares have been allotted pursuant to a contract without payment being received in cash.

c) No shares have been bought back

(F) Forfeited shares

Out of total 5,500,000 share warrants, the company has issued equity shares against 3,000,000 share warrants and the balance 2,500,000 share warrants are forfeited due to unpaid call during the year

(G) Shares pledged (refer note 5)

18,745,449 (previous year 18,745,449) unencumbered equity shares and 4,141,500 (previous year 4,141,500) preference shares of the Company are pledged in favor of all existing lenders by directors, relatives of directors and enterprises over which such directors and their relatives exercise significant influence.

* Amount disclosed under other current liabilities

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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.

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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

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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.