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
2 Significant accounting policies
The accounting policies set out below have been applied consistently to the periods presented in these
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
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
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
Assets under installation or under construction as at the Balance Sheet date are shown as capital work in
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
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
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
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
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
Long term employment benefits:
(i) Defined contribution plans:
The Company''s Employee State Insurance and Provident fund schemes are defined contribution
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
(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
(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
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
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.
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 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
(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