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Diamond Power Infrastructure Ltd.

BSE: 522163 Sector: Engineering
NSE: DIAPOWER ISIN Code: INE989C01012
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VOLUME 6094
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OPEN 22.80
CLOSE 23.30
VOLUME 6094
52-Week high 63.15
52-Week low 20.25
P/E
Mkt Cap.(Rs cr) 618
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Diamond Power Infrastructure Ltd. (DIAPOWER) - Director Report

Company director report

To

The Members

Your Directors are pleased to present the Twenty Third Annual Report together with theAudited Financial Accounts of the Company for the year ended on 31st March 2015.

FINANCIAL RESULTS

Rs. in Lacs

Particulars

STANDALONE

CONSOLIDATED

Year Ended on 31.03.2015 Year Ended on 31.03.2014 Year Ended on 31.03.2015 Year Ended on 31.03.2014
Income 243304.01 268088.01 285009.49 318534.11
Expenditure 233232.53 241202.01 279751.57 289554.21
Exceptional items 3001.34 - 3001.34 -
Gross Profit / (Loss) before Interest Depreciation & Tax 7070.13 26886.00 2256.58 28979.90
Interest 12779.56 11179.79 14558.26 12263.34
Depreciation 5302.86 3509.34 5593.05 3613.42
Profit Before Tax (11012.28) 12196.87 (17894.73) 13103.14
Provision for taxation / Deferred Tax 562.00 1800.00 548.00 2010.00
Profit After Tax (11574.28) 10396.87 (18442.73) 11093.14
Share Capital 5814.20 5814.20 5814.20 5814.20
Reserves & Surplus 78550.22 86717.00 75589.02 92403.93
EPS (21.43) 19.25 (34.15) 20.54

 

important performance parameters
Particulars

2014-15

2013-14

Standalone consolidated Standalone Consolidated
Gross Profit Margin (%) 2.91 0.79 10.03 9.10
Asset Turnover (times) 0.81 2.11 0.97 1.08
Interest Coverage (times) 0.55 0.45 2.40 2.36
Earning per Shares (diluted) (Rs.) (21.43) (34.15) 19.25 20.54

RESULTS OF OPERATIONS AND THE STATE OF COMPANY'S AFFAIRS

Our total income on a standalone basis decreased to INR 2422.76 Crore from INR 2674.29Crore in the previous year. Our Conductors generated revenue of INR 671.78 Crore comparedto last year INR 738.90 Crore. Power Cable generated total revenue of INR 1350.78 Crore ascompared to last year INR 1485.74 Crore Power Infrastructure generated total revenue ofINR 103.83 Crores as compared to last year INR 157.87 Crore. Tower generated total revenueof INR 341.94 Crore as compared to Last Year INR 383.29 Crores. Our total income on astandalone basis Increased to INR 10.28 Crore from INR 6.59 Crore in the previous year.Our total Loss for the financial year 2014-15 is Rs. 115.74 Crores Compared to past yearsprofit Rs. 103.96 Crores.

The cash flow mismatch is cumulative impact of certain external factors combined withother economic factors. The rising cost of finance and execution delays have resulted intransmission and distribution projects not being taking off as expected translating toslower demand growth for conductors and cables. Further delay in implementation of theExpansion Project has also contributed significantly towards the current stressed positionof the Company. The detailed reasons for current liquidity constraints are presented asbelow:

(i) Slowdown in economy - resulting in sluggish growth in Power Sector:

Growth of the transmission and distribution equipment industry (viz. conductorscables towers) majorly depends on the growth of the economy and investment in powersector by public as well as private sectors. However from 2012-13 to 2014-15 growth hasslowed down considerably resulting into cascading effect on all industries. As the Powersector is positively correlated with the growth of the economy the decline GDP growth hasresulted in sluggish growth in Power sector.

(ii) increase in Price of Key raw material (viz. Aluminium XLPE compound):

Aluminium and XLPE Compound are key raw materials used in manufacturing of conductorscables and towers. Aluminium comprises approximately 80-95% of the total raw material costof the finished goods based on the type of product (viz. conductors cables etc.). Theprice of Aluminium and other key raw material has increased consistently over a period oflast 1 year which has lead to significant increase in the cost of production.

Further it is important to note that the Company was unable to pass on the cost of thehigher input costs to the customers and has eroded margins of the company as cost ofproduction has significantly increased with no corresponding increase in price of existingorders due to following factors:

(i) Fixed rate orders taken up at the time of lower Aluminium prices have become lossmaking and cannot be re-negotiated due to nature of contract.

(ii) There are orders with price escalation clauses which have also become loss makingas the variations is received only on 60/90 trailing though prices are varying every 6/7days.

Further for some orders price escalation clauses are ineffectual in case actualdelivery is not as per pre-agreed delivery schedule. The Company was unable to meetpre-agreed delivery schedule due to inadequate working capital funds and hence it couldnot take benefit of the said price escalation clauses.

(iii) Lack of adequate working capital:

In Feb 2014 the Company's working capital requirement (both fund-based and non-fundbased limits) for FY-14 & FY-15 was assessed by the Lead Bank at Rs. 1710 Cr and Rs.2250 Cr for an estimated turnover of Rs. 2702 Cr and Rs. 3774 Cr respectively.However the revised working capital limits were not available for FY-14 and FY-15 eventhough the Company has achieved Gross Sales of approx. Rs. 2764 Cr and Rs. 1611 Cr inFY-14 and FY-15 respectively. Therefore it is very evident that company has inadequateworking capital facility and is facing stress on liquidity.

Hence due to the non-release of sanctioned working capital facility for FY-14 by banksthe company had a total working capital limits shortfall of about Rs. 280 Cr as per theassessed limits.

It is pertinent to note that additional WC of Rs. 281 Cr (i.e. increase from Rs. 1429Cr to Rs. 1710 Cr) for FY- 14 is assessed by considering Aluminium price of Rs. 136/ Kgvis-a-vis actual average purchase price of Rs. 164/ Kg (Nov-2014). Further the workingcapital limit presently available to the Company of Rs. 1429 Cr was assessed in FY-13(i.e. in Oct-2012) by considering Aluminium price of Rs. 115/ Kg. In the above backdropit is very much evident that there is significant difference in the actual purchase priceof key raw material and the purchase price considered during FY-13 assessment at whichworking capital limits are currently available to the Company.

Non availability of adequate bank guarantee has also contributed to the stress onliquidity as the Company could not raise advance payments from clients. Presently theCompany could not take advance payment of approximately Rs. 33 Cr from PGCIL alone due tolack of APBG.

(iv) Elongated working capital cycle:

The Company has been facing elongated working capital cycle due to various industryissues. The stress on working capital cycle can be seen from increasing trend in inventoryholding period:

Rs. in Cr

Particulars FY-12 FY-13 FY-14 FY-15
Inventory 590.67 849.12 1149.53 962.65
Inventory Days 141 165 176 176

As can be seen from above the aggregate of inventory holding period has increased from141 days to 176 days in Sep-14.

(v) Disproportionate debt repayment obligations of Term Loans and High finance cost:

It is important to note that significant amount of term loan repayment obligations(excluding interest) aggregating to about Rs. 246 Cr is falling due in next 2 years (i.e.till FY-17). The aggregate payment includes principal payment towards Expansion Term Loansof about Rs. 75 Cr. Continuous repayment of the said term loans more particularlyexpansion loans will create cash flow mismatch as the expansion project is expected now tobe completed by 31st December 2015. As the cash generation from expansion project willget delayed the company does not expect to generate adequate cash flows in FY-15 andFY-16 for servicing of entire debt repayment obligations.

Further increase in overall finance cost has also contributed to deterioration inliquidity position of the company. The company is currently paying interest rate from 12%to 15.55% on various loans.

(vi) delay in Receipt of Payments from customers:

The payment from customers in the power segment have been delayed in the recent pastdue to cash flow problems faced by the individual customers on account of the globalmeltdown of the economy as discussed above. Receivable amounting to Rs. 84 Cr isoutstanding for more than 180 days as on 30th November 2014 out of which Rs. 70 Cr isslow moving and the same are expected to be recovered over a period of 2-3 years. Alsodue to the delay in release of appraised working capital limits the Company was unable toprogress on various orders in hand leading to further delay in receipt of the operationalcash flows. However now the industry scenario is changing which will help streamline thecash flows going forward.

(vii) other reasons

a. Slow moving stock:

The Company has implemented Quality Control system to minimize material rejection atthe time of sale. At the time of stock audit it was observed that stock costing Rs.65.28Cr was slow moving. Since major raw material required for production is Aluminium Copperwire and PVC compound. This stock can be reprocessed and converted into raw material forre-use. This stock is now re-valued by stock auditor at Rs. 56.32 Cr.

b. Loss due to Penalty on account of delayed delivery:

The Company has defaulted in several contracts during the year as it was unable todeliver goods as per the schedule committed in contract due to working capital issue. Onaccount of delayed delivery company have to now bear penalty of about Rs. 15 Cr on thesecontracts.

c. Loss of goods due to floods:

There were unprecedented rains in Gujarat in FY15 which lead to flooding and loss ofmaterial at site. Material worth Rs. 70 Cr was affected by the flood for which only Rs. 40Cr of Insurance claim was admitted and due to which company has incurred loss of Rs. 30Cr. However damaged stock is expected to yield Rs. 7.50 Cr as salvage value. Moreover theinsurance claim of Rs. 40 Cr is yet to be received which lead to cash flow shortfall.

(viii) Cost & Time Overrun in Expansion Project:

The Company envisaged the total cost of expansion project at Rs. 753.37 Cr which wasstipulated to be funded by Term Loan Internal Accrual & Fresh Equity of Rs. 440 CrRs. 163 Cr and Rs. 150 Cr respectively. However in view of the unforeseen delay in theimplementation the overall project cost has increased from Rs. 753.37 Cr to Rs. 1003.22Cr. An escalation of Rs. 150.63 Cr in the Hard Cost of the Project is estimated. Besidesan increase in IDC by Rs. 72.39 Cr on account of time overrun and escalation inpre-operative expenses of Rs. 26.83 Cr is estimated.

Our Company principally being in conductor & cables industry was directly impacteddue to the slowdown in execution of ongoing projects on account of delay owing to landacquisition environmental clearances rising interest rates considerable increase in rawmaterial cost owing to inflation. The aforesaid project level issues constrained abilityof Company's private customers' to mobilize additional funds and execute projects on timewhich impacted off take of finished goods by the Company's customers on time leading tobuild up of inventory. However the Management would like to submit that there has beenpositive movement in both the macro level indicators such as GDP & IIP numbers andalso improvement in industry level issues. The Company is well positioned to take benefitof the expected improvement in the industry provided timely implementation of theexpansion project by December 2015 and adequate support from our esteemed stakeholders.

consolidated accounts

The consolidated financial statements of your Company for the financial year 2014-15are prepared in compliance with applicable provisions of the Companies Act 2013Accounting Standards and listing Agreement as prescribed by the Securities and ExchangeBoard of India (SEBI). The consolidated financial statements have been prepared on thebasis of audited financial statements of the Company its subsidiary and associatecompanies as approved by their respective Board of Directors.

subsidiaries & associate companies

Separate financial statements of all subsidiary of your Company are provided in thisreport and said financials forms part of consolidated financial statements in compliancewith Section 129 and other applicable provisions if any of the Companies Act 2013.

M/s. Diamond Power Transformers Limited and M/s. Diamond Power Global Holdings Limitedare wholly owned subsidiaries of your company. However M/s. Maktel Power limited and M/s.Maktel Control & Systems Pvt. ltd. are the two Companies which are associate Companiesof M/s. Diamond Power Transformers Ltd.

Please refer Annexure [A] to the Board Report.

management's discussion and analysis report

Management's Discussion and Analysis Report for the year under review as stipulatedunder Clause 49 of the listing Agreement with the Stock Exchanges in India is presentedin a separate section forming part of the Annual Report.

dividend

Looking into the long term interest of the Company your Directors have not recommendedany dividend for the financial year ended on 31st March 2015.

transfer to reserves

Since company incurred negative profit during the financial year under review there isno amount transfer to general reserve.

public deposits

During the financial year 2014-15 your Company has not accepted any deposit within themeaning of Sections 73 and 74 of the Companies Act 2013 read together with the Companies(Acceptance of Deposits) Rules 2014.

corporate governance report

In compliance with the provisions of Clause 49 of the listing Agreement a separatereport on Corporate Governance along with a certificate from the Auditors on itscompliance forms an integral part of this Report.

industrial relations

The Company is having its presence in middle east countries and planning to expand itsbusiness in overseas countries too. Further Company has strong dealer network toaccelerate growth of the Company. Company's ambitious project is expected to completearound end of 2015 and after completion Company will backed up with additional productioncapacity.

disclosure relating to remuneration of directors key managerial personnel andparticulars of employees

In accordance with Section 178 and other applicable provisions if any of the CompaniesAct 2013 read with the Rules issued thereunder and Clause 49 of the listing Agreementthe Board of Directors at their meeting held on 13th August 2014 reconstituted theNomination and Remuneration Policy of your Company on the recommendations of theNomination and Remuneration Committee. The salient aspects covered in the Nomination andRemuneration Policy covering the policy on appointment and remuneration of Directors andother matters have been outlined in the Corporate Governance Report which forms part ofthis Report

The Managing Director and Jt. Managing Director of your Company do not receiveremuneration from any of the subsidiaries of your Company.

The information required under Section 197 of the Companies Act 2013 read withCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 in respect ofDirectors/ employees of your Company is set out in "Annexure [B]".

directors and key managerial personnel

Appointments:

During the financial year 2014-15 in compliance with the provisions of Sections 149152 Schedule IV and other applicable provisions if any of the Companies Act 2013 readwith Companies (Appointment and Qualification of Directors) Rules 2014 Shri Ashok KumarKrishan Singh Gautam (DIN 06947087) and Shri Ashok Kumar Singh (DIN 01489637) wereappointed as Additional/Non- Executive Directors of your Company on 9th August 2014 and3rd September 2014 respectively and subsequently they were appointed as a NonExecutiveIndependent Directors by the shareholders at the AGM held on 30th September 2014 to holdoffice up to 5 (five) consecutive years up to 31st March 2019.

Further Ms. Nivedita Muljibhai Pandya (DIN 02992638) was appointed as Additional Non-Executive Director of your Company on 31st March 2015.

Resignations/Retirements:

Shri Karthik Athreya (DIN 01797014) Non-Executive/ Nominee Director of the Companyresigned from the Board due to his pre-obligation on 26th September 2014.

Shri Kirit Vyas (DIN : 01376501) Non-Executive/Independent Director of the Companyresigned from the Board due to his health reasons on 22nd December 2014.

Shri S N Bhatnagar (DIN : 01661444) Executive Chairman of the Board of Director andFounder Promoter of the Company resigned from the Board to infuse young blood into theManagement on 31st March 2015.

The Board places on record its appreciation for their valuable contribution duringtheir association with your Company.

DIRECTORS RETIRE BY ROTATION

Shri Amit Bhatnagar (DIN : 00775880) and Shri Sumit Bhatnagar (DIN : 00776129) areliable to retire by rotation at the ensuing AGM pursuant to the provisions of Section 152of the Companies Act 2013 read with the Companies (Appointment and Qualification ofDirectors) Rules 2014 and the Articles of Association of your Company and being eligiblehave offered themselves for reappointment.

Appropriate resolutions for their re-appointment are being placed for your approval atthe ensuing AGM. The brief resume of the Directors and other related information has beendetailed in the Notice convening the 23rd AGM of your Company. Your Directors recommendtheir re-appointment.

Evaluation of Board’s Performance:

In terms of the provisions of the Companies Act 2013 read with Rules issued thereunderand Clause 49 of the Listing Agreement the Board of Directors on recommendation of theNomination and Remuneration Committee have evaluated the effectiveness of theBoard/Director(s) at their meeting held on 14th February 2015.

number of meetings of the board and audit committee

The details of the number of Board and Audit Committee meetings of your Company are setout in the Corporate Governance Report which forms part of this Report.

declaration of independence

Your Company has received declarations from all the Independent Directors confirmingthat they meet the criteria of independence as prescribed under the provisions ofCompanies Act 2013 read with the Schedules and Rules issued thereunder as well as Clause49 of the listing Agreement.

director’s responsibility statement

Pursuant to Section 134(3)(c) of the Companies Act 2013 the Directors confirm that:

a) in the preparation of the annual accounts for the financial year ended on 31stMarch 2015 the applicable accounting standards and Schedule III of the Companies Act2013 have been followed and there are no material departures from the same;

b) the Directors have selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of your Company as at 31 st March 201 5 and of theprofit and loss of the Company for the financial year ended 31 st March 2015;

c) proper and sufficient care has been taken for the maintenance of adeguate accountingrecords in accordance with the provisions of the Companies Act 2013 for safeguarding theassets of the Company and for preventing and detecting fraud and other irregularities;

d) the annual accounts have been prepared on a 'going concern' basis;

e) proper internal financial controls laid down by the Directors were followed by theCompany and that such internal financial controls are adeguate and were operatingeffectively; and

f) proper systems to ensure compliance with the provisions of all applicable laws werein place and that such systems were adeguate and operating effectively.

auditors and auditors’ report

Statutory Auditors

At the 22nd AGM of your Company M/s. Vijay N. Tewar & Co. Chartered Accountants(Firm Registration No. 111422W) was appointed as the Auditor to hold office till theconclusion of the 23rd AGM of your Company. The Companies Act 2013 has introduced theconcept of rotation of auditors as well as audit firms. It states that in case of listedcompanies it would be mandatory to rotate auditors every five years in case of theappointment of an individual as an auditor and every 10 years in case of the appointmentof an audit firm with a uniform cooling off period of five years in both the cases. TheAct has allowed a transition period of three years for complying with the requirements ofthe rotation of auditors. Further the Companies Act 2013 also grants an option toshareholders to further require rotation of the audit partner and staff at such intervalsas they may choose. In light of this provisions M/s. Vijay N. Tewar & Co. is retiringin ensuing AGM and the Board of Directors at its meeting held on 30th May 2015 and on therecommendations of the Audit Committee in accordance with the provisions of Section 139(8) of the Companies Act 2013 appointed M/s. B S R & Co. LLP and M/s. A. Yadav &Associates Chartered Accountants to act as the Joint Statutory Auditors of your Companytill the conclusion of the 24th AGM of the Company. The Board places on record itsappreciation for the contributions of erstwhile M/s. Vijay N. Tewar & Co. CharteredAccountants.

Cost Auditor

The Board of Directors had appointed M/s. S. S. Puranik & Associates. CostAccountants as the Cost Auditor of your Company for the financial year 2014-15 to conductthe audit of the cost records of your Company. As per Section 148 and other applicableprovisions if any of the Companies Act 2013 read with Companies (Audit and Auditors)Rules 2014 the Board of Directors of your Company has appointed M/s. S. S. Puranik &Associates. Cost Accountants as the Cost Auditor for the financial year 2015-16 on therecommendations made by the Audit Committee. The remuneration proposed to be paid to theCost Auditor subject to the ratification by the members at the ensuing AGM would be notexceeding Rs. 90000 (Rupees Ninety Thousand only) excluding service tax and out of pocketexpenses if any.

Your Company has received consent from M/s. S. S. Puranik & Associates. CostAccountants to act as the Cost Auditor of your Company for the financial year 2015-16along with a certificate confirming their independence.

Secretarial Auditor

Pursuant to the provisions of Section 204 of the Companies Act 2013 read with theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 your Companyhas appointed M/s. Devesh Vimal & Co. Practicing Company

Secretaries to conduct the Secretarial Audit of your Company. The Secretarial AuditReport is annexed herewith as "Annexure - [C]" to this Report. The SecretarialAudit Report does not contain any qualification reservation or adverse remark.

EXTRACT OF ANNUAL RETURN

The details forming part of the extract of the Annual Return in Form MGT- 9 inaccordance with Section 92(3) of the Companies Act 2013 read with the Companies(Management and Administration) Rules 2014 are set out herewith as "Annexure[D]" to this Report.

RELATED PARTY TRANSACTIONS

During the financial year 2014-15 your Company has entered into transactions withrelated parties as defined under Section 2(76) of the Companies Act 2013 read withCompanies (Specification of Definitions Details) Rules 2014 which were in the ordinarycourse of business and on arms' length basis and in accordance with the provisions of theCompanies Act 2013 Rules issued thereunder and Clause 49 of the Listing Agreement.During the financial year 2014-15 there were no transactions with related parties whichqualify as material transactions under the Listing Agreement.

The details of the related party transactions as required under Accounting Standard -18 are set out in Notes to the financial statements forming part of this Annual Report.

The Form AOC- 2 pursuant to Section 134 (3)(h) of the Companies Act 2013 read withRule 8(2) of the Companies (Accounts) Rules 2014 is set out as "Annexure [E]"to this Report.

loans and INVESTMENTS

The details of loans guarantees and investments under Section 186 of the CompaniesAct 2013 read with the Companies (Meetings of Board and its Powers) Rules 2014 are asfollows:

A. Details of investments made by the company as on 31st march 2015:

(i) Investments in equity shares:

Name of entity As at 31st March 2015
Diamond Power Transformers Ltd. 99.60%
Diamond Power Global Holdings Ltd. 100%

(ii) Investment in debt instrument:

Amount in Rs
Name of entity Amount in Rs as at 31st March 2015
Not Applicable

B. Details of loan given by the Company are as follow:

Amount in Rs.

Name of entity As at 31st March 2015 As at 31st March 2014
Apex Power Equipments Pvt. Ltd 123058073.89 230665729.89
Diamond E.H.V. Conductors 4000.00 4000.00
Maktel Power Limited 5512877.00 5512877.00
Diamond Power Transformers Limited 68876502.08 68547042.08
Diamond Power Global Holdings Ltd 34125326.38 15220742.50
231576779.35 319950391.47

C. There are no guarantees issued by your Company in accordance with Section 186 of theCompanies Act 2013 read with the Rules issued thereunder except for subsidiary Company.

RISK MANAGEMENT

Your Company recognizes that risk is an integral part of business and is committed tomanaging the risks in a proactive and efficient manner. Your Company periodically assessesrisks in the internal and external environment along with the cost of treating risks andincorporate risk treatment plans in its strategy business and operational plans.

Your Company through its risk management process strives to contain impact andlikelihood of the risks within the risk appetite as agreed from time to time with theBoard of Directors.

VIGIL MECHANISM

Your Company is committed to highest standards of ethical moral and legal businessconduct. Accordingly the Board of Directors has formulated a Whistle Blower Policy whichis in compliance with the provisions of Section 177 (10) of the Companies Act 2013 andClause 49 of the Listing Agreement. The policy provides for a framework and processwhereby concerns can be raised by its employees against any kind of discriminationharassment victimization or any other unfair practice being adopted against them. Moredetails on the vigil mechanism and the Whistle Blower Policy of your Company have beenoutlined in the Corporate Governance Report which forms part of this report.

CORPORATE SOCIAL RESPONSIBILITY

In accordance with Section 135 of the Companies Act 2013 the Board of Directors of theCompany at their meeting held on 30th May 2014 framed CSR Committee. On therecommendations of the CSR Committee. The CSR Policy outlines the CSR vision of yourCompany which is based on embedded tenets of trust fairness and care.

The initiatives undertaken by your Company during the financial year 2014-15 in CSRhave been detailed in this Annual Report. The Annual Report on CSR activities inaccordance with the Companies (Corporate Social Responsibility Policy) Rules 2014 is setout herewith as "Annexure [F]" to this Report.

SHARE CAPITAL DURING THE YEAR UNDER REVIEW

Your Company in the financial year 2013-14 has increased its Authorised Share Capitalfrom 55858500 (Five Crores Fifty Eight Lacs Fifty Eight Thousand Five Hundred Only)Equity Shares of Rs.10/- (Rupees Ten) each and 4141500 (Forty One Lacs Forty OneThousand Five Hundred Only) Preference Shares of Rs. 10/- (Rupees Ten) Each to 80000000(Eight Crores Only) divided into 75858500 (Seven Crores Fifty Eight Lacs Fifty EightThousand Five Hundred Only) Equity Shares of Rs. 10 /- (Rupees Ten) each and 4141500(Forty One Lacs Forty One Thousand Five Hundred Only) Preference Share of Rs. 10/- (RupeesTen) each.

Further Company has issued 5500000 Share Warrants during the year under reviewconvertible into Equity Shares ranking parri passu with existing Equity Shares of theCompany.

conservation of energy technology absorption and foreign exchange earnings and outgo

The information on conservation of energy technology absorption and foreign exchangeearnings and outgo as stipulated under Section 134 of the Companies Act 2013 read withthe Companies (Accounts) Rules 2014 is set out herewith as "Annexure [G]" tothis Report.

details of internal financial controls related to financial statements

Your Company has put in place adequate internal financial controls with reference tothe financial statements some of which are outlined below:

Your Company has adopted accounting policies which are in line with the AccountingStandards prescribed in the Companies (Accounting Standards) Rules 2006 that continue toapply under Section 133 and other applicable provisions if any of the Companies Act2013 read with Rule 7 of the Companies (Accounts) Rules 2014 and relevant provisions ofthe Companies Act 1956 to the extent applicable. These are in accordance with generallyaccepted accounting principles in India. Changes in policies if any are approved by theAudit Committee in consultation with the Auditors.

significant/material orders passed by the regulators

There are no significant/material orders passed by the Regulators or Courts orTribunals impacting the going concern status of your Company and its operations in future.

GENERAL

a) Your Company has not issued equity shares with differential rights as to dividendvoting or otherwise; and

b) Your Company does not have any ESOP scheme for its employees/Directors.

appreciation

Your Directors wish to convey their gratitude and place on record their appreciationfor all the employees at all levels for their hard work solidarity cooperation anddedication during the year. Your Directors sincerely convey their appreciation tocustomers shareholders vendors bankers business associates regulatory and governmentauthorities for their continued support.

For & on behalf of the Board
Amit Bhatnagar
Managing Director &
Chairman of the Meeting
Date : 13th August 2015
Place : Vadodara

Annexure [A] to Board' Report

The financial performance of each of the subsidiary and associate companies included inthe consolidated financial statement are detailed below:

Rs. in Lacs

Sr. No. Particulars

turnover

profit (loss) before tax

profit (loss) AFTER TAX

2014-15 2013-14 2014-15 2013-14 2014-15 2013-14
A) Diamond Power Transformers Ltd. (Indian Subsidiary) 328.85 503.29 (56.18) 9.06 (56.04) 6.96
B) Diamond Power Global Holdings Ltd. (Foreign Subsidiary)* - - - - - -
C) Associate Companies** - Maktel Power ltd. 32.13 (1.53) (1.53)
- Maktel Control & Systems Pvt. ltd. 50.69 - (9.48) - (9.48) -

*Since there are no sales and purchase transaction for the period under review and thesame is only operated as foreign Branch Office of the Company so all the expenses incurredat such foreign branch are added only to the consolidated annual accounts of the HoldingCompany

**Maktel Power limited and Maktel Control & Systems Pvt. ltd are consolidated withDPTL for first time henceforth there are no any previous year figures

AOC-i

(Pursuant to first proviso to sub-section (3) of section 129) read with rule 5 ofcompanies (Accounts) Rule 2014) statement containing salient features of the financialstatement of subsidiaries/associate companes/joint ventures

PART A: Subsidiary

(information in respect of each subsidiary to be presented.)

Sr. No. Particulars Name of the Subsidiary
1 Name of the Subsidiary Diamond Power Transformers ltd.
2 Reporting period for the subsidiary concerned if different from the holding company's reporting period 31st March 2015
3 Reporting currency and Exchange rate as on the last date of the relevant Financial year in the case of foreign subsidiaries. INR
4 Share Capital 100000000
5 Total Assets 1280712186
6 Total Liabilities 1280712186
7 Investments 115818750
8 Turnover 3288536349
9 Profit before taxation (561851866)
10 Deferred Tax(Asset) 1400000
11 Profit after taxation (560451866)
12 Proposed dividend NIL
13 % of shareholding 99.60%

PART B: Associates and Joint Ventures

STATEMENT PURSUANT TO SECTION 129(3) OF THE COMPANIES ACT 2013 RELATED TO ASSOCIATECOMPANIES AND JOINT VENTURES

Sr. No. Name of Associates/Joint Ventures Maktel Power limited* Maktel Control & Systems Private limited*
1 Latest audited Balance Sheet date 28.05.2015 28.05.2015
2. Shares of Associate/joint ventures held by the company on the year end
No of Shares 741715 1500000
Amount of Investment in Associates/Joint Venture 7417150.00 15000000.00
Extent of Holding % 50% 40%
3. description of how there is significant influence Share Purchase Share Purchase
Agreement Agreement
4. reason why the associate/joint venture is not consolidated Not Applicable Not Applicable
5. Networth attributable to Shareholding as per latest audited Balance Sheet 44893417 (38218267)
6. Profit/Loss for the year
i. Considered in Consolidation (15262082) (94817144)
ii. Not Considered in Consolidation - -

‘Associate Company of Diamond Power Transformers Ltd.

Annexure [B] to Board' Report

Information Required Under Section 197 Of The Companies Act 2013 Read With Companies(Appointment and remuneration of managerial Personnel) rules 2014

A. Ratio of remuneration of each Director to the median remuneration of all theemployees of your Company for the financial year 2014-15 is as follow:

Sr. No. Name of the Director Designation Total Remuneration Ratio of remuneration of Director to the Median remuneration
1 Shri S N Bhatnagar* Chairman* 22869253 11.23%
2 Shri Amit Bhatnagar Managing Director 21787234 10.70%
3 Dr. Sumit Bhatnagar Jt. Managing Director 21787234 10.70%
4 Shri Ranvir Singh Shekhawat Independent Director NIL NIL
5 Shri Aswini Sahoo* Independent Director NIL NIL
6 Ms. Nivedita Pandya Women Director (additional) NIL NIL
7 Shri Kirit Vyas* Independent Director nil NIL
8 Shri Ashok Kumar Gautam Independent Director NIL NIL
9 Shri Ashok Kumar Singh Independent Director NIL NIL
10 Shri Karthik Athreya* Nominee Director NIL NIL
11 Shri Bhavin Shah Nominee Director NIL NIL
12 Shri Jaideep Nigam Independent Director (additional) NIL NIL

*Resigned

- Median remuneration of the Company for all its employees is Rs. 203657846.04 forthe financial year 2014-15.

B. Details of percentage increase in the remuneration of each Director and CompanySecretary in the Financial Year 2014-15 are as follow:

Sr. No. Name Designation

Remuneration

Increase %
2014-15 2013-14
1 Shri S N Bhatnagar* Chairman* 22869253 21217604 7.78%
2 Shri Amit Bhatnagar Managing Director 21787234 18860089 15.52%
3 Dr. Sumit Bhatnagar Jt. Managing Director 21787234 18860089 15.52%
4 Shri Ranvir Singh Shekhawat Independent Director NIL NIL NIL
5 Shri Aswini Sahoo* Independent Director NIL NIL NIL
6 Ms. Nivedita Pandya Women Director (additional) NIL NIL NIL
7 Shri Kirit Vyas* Independent Director nil NIL NIL
8 Shri Ashok Kumar Gautam Independent Director nil NIL NIL
9 Shri Ashok Kumar Singh Independent Director NIL NIL NIL
10 Shri Karthik Athreya* Nominee Director NIL NIL NIL
11 Shri Bhavin Shah Nominee Director NIL NIL NIL
12 Shri Jaideep Nigam Independent Director (additional) NIL NIL NIL
13 Shri Naba Mukherjee** CFO NA NA NA
14 Shri Nishant Javlekar Company Secretary 659616 605904 8.86%

‘Resigned

"Appointed on 30th May 2015

C. Percentage increase in the median remuneration of all employees in the financialyear 2014-15:

Particulars 2014-15 2013-14 Increase (%)
Median Remuneration of all employees per annum 203657846.04 176386625.04 15.46%

D. Number of permanent employees on the rolls of the Company as on 31st March 2015:

Particulars Numbers
Executive/Manager Cadre 181
Staff 195
Operators/Workmen 48
Total 424

E. Explanation on the relationship between average increase in remuneration and CompanyPerformance:

The increase in average remuneration of all employees in the financial year 2014-15 ascompared to the financial year 2013-14 was 15.46%.

The key indices of Company's performance are:

Rs. in Lacs

Sr. No. Particulars 2014-15 2013-14
1 Net Revenue From Operation 285009.49 318534.11
2 Profit Before Tax (17894.73) 13103.14
3 Profit After Tax (18442.73) 11093.14

Your Company is committed in ensuring fair pay and a healthy work environment for allits employees. Your Company offers competitive compensation to its employees. The pay alsoincorporates external factors like cost of living to maintain concurrence with theenvironment. Your Company maintains a simple compensation structure which allows theemployees to have flexibility in the way in which they realize their salaries. Internalequity is ensured by appropriate fitment at the time of the employee joining a particularcadre and grade. The fixed pay for an employee depends on his/ her performance against theobjectives set for the year. The variable pay is paid out to the employee on the basis ofthe performance of your Company and the corresponding business unit or function. Regularcommunication on methods adopted by your Company is made and published throughout the yearto ensure transparency and a better understanding of the applicable compensation policyand practices.

Thus there will be a positive correlation in the increase in remuneration of employeesand your Company's performance; however a perfect correlation will not be visible giventhe dependency on the other factors stated above.

F. Comparison of the remuneration of the Key Managerial Personnel against theperformance of your Company:

The remuneration of Key Managerial Personnel increased by around Rs. 659616 in2014-15 Rs. 605904 compared to 2013-14 whereas the Profit Before Tax and exceptionalitems increased by 8.86% in 2014-15 compared to 2013-14.

G. Details of Share price and market capitalization:

The details of variation in the market capitalization and price earnings ratio as atthe closing date of the current and previous financial years are as follows:

Sr. No. Particulars As on 31st March 2015 As on 31st March 2014
1 Price Earning Ratio (2.10) 2.52
2 Market Capitalization (Rs. in Crores) 242.57 261.68

Comparison of share price at the time of first public offer and market price of theshare at 31st March 2015:

Sr. No. Particulars Amount in Rs.
1 Market Price as on 31st March 2015 44.92
2 Price at the time of Initial Public offer 10
3 % increase of Market Price over the price at the time of IPO 44.92%

Note:

1. Closing share price on National Stock Exchange of India Limited (NSE) has been usedfor the above tables. The above does not consider the various bonus share issues madeafter the initial public offer.

H. Comparison of average percentage increase in salary of employees other than the keymanagerial personnel and the percentage increase in the key managerial remuneration:

(Amount in Rs. Per month basis)

Sr. No. Particulars 2014-15 2013-14 Growth (%)
1 Average Salary of all Employees (Other than Key Managerial Personnel) 11379542.00 9736911.00 16.87%
2 Salary of MD & JMD 1815602.00 1571674.00 15.52%
3 Salary of CS 54968.00 50492.00 8.86%

The increase in remuneration of employees other than the managerial personnel is inline with the increase in remuneration of managerial personnel.

I. Key parameters for the variable component of remuneration paid to the Directors:

The key parameters for the variable component of remuneration to the Directors aredecided by the Nomination and Remuneration Committee. However No variable component ofremuneration paid by the Company to any Director of the Company.

J. There are no employees of the Company who receive remuneration in excess of thehighest paid Director of the Company.

K. Affirmation:

Pursuant to Rule 5(1)(xii) of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 it is affirmed that the remuneration paid to the Directors KeyManagerial Personnel and senior management is as per the Policy of your Company.

L. Statement containing the particulars of employees in accordance with Rule 5 (2) ofthe Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014:

1 list of employees of the Company employed throughout the financial year 2014-15 andwere paid remuneration not less than Rs. 60 lakhs per annum:

Sr. No. Name Designation Remuneration in Rs. Qualification Experience Joining Age last Employment
- - - - - - - - -

2. Employees employed for the part of the year and were paid remuneration during thefinancial year 2014-15 at a rate which in aggregate was not less than Rs. 5 lakhs permonth:

Sr. No. Name Designation Remuneration in Rs. Qualification Experience Joining Age last Employment
- - - - - - - - -

Annexure [C] to Board' Report

SECRETARIAL AUDiT REPORT FOR THE FiNANCiAL YEAR ENDED 31st MARCH 2015

[Pursuant to Section 204(1) of the Companies Act 2013 and Rule 9 of the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014]

form no. Mr-3

To

The Members

diamond Power infrastructure Limited

Phase-II Village-Vadadala Ta.Savli Baroda Gujarat

We have conducted the secretarial audit of the compliance of applicable statutoryprovisions and the adherence to good corporate practices by DIAMOND POWER INFRASTRUCTURELIMITED (hereinafter called 'the Company'). Secretarial Audit was conducted in a mannerthat provided us a reasonable basis for evaluating the corporate conducts/statutorycompliances and expressing our opinion thereon.

Based on our verification of the DIAMOND POWER INFRASTRUCTURE LIMITED'S books papersminute books forms and returns filed and other records maintained by the Company and alsothe information provided by the Company its officers agents and authorizedrepresentatives during the conduct of secretarial audit we hereby report that in ouropinion the Company has during the audit period covering the financial year ended on31st March 2015 materially complied with the statutory provisions listed hereunder andalso that the Company has proper Board-processes and compliance- mechanism in place to theextent in the manner and subject to the reporting made hereinafter:

We have examined the books papers minute books forms and returns filed and otherrecords maintained by the Company for the financial year ended on 31st March 2015according to the provisions of:

(i) The Companies Act 2013 ('the Act') and the rules made thereunder;

(ii) The Securities Contracts (Regulation) Act 1956 ('SCRA') and the rules madethereunder;

(iii) The Depositories Act 1996 and the Regulations and Byelaws framed thereunder;

(iv) Foreign Exchange Management Act 1999 and the rules and regulations madethereunder to the extent of Foreign Direct Investment Overseas Direct Investment andExternal Commercial Borrowings;

(v) The following Regulations and Guidelines prescribed under the Securities andExchange Board of India Act 1992 ('SEBI Act'):-

(a) The Securities and Exchange Board of India

(Substantial Acquisition of Shares and Takeovers) Regulations 2011;

(b) The Securities and Exchange Board of India

(Prohibition of Insider Trading) Regulations 1992;

(c) The Securities and Exchange Board of India

(Issue of Capital and Disclosure Requirements) Regulations 2009;

(d) The Securities and Exchange Board of India

(Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines 1999;

(e) The Securities and Exchange Board of India (Issue and Listing of Debt Securities)Regulations 2008;

(f) The Securities and Exchange Board of India

(Registrars to an Issue and Share Transfer Agents) Regulations 1993 regarding theCompanies Act and dealing with client;

(g) The Securities and Exchange Board of India (Delisting of Equity Shares)Regulations 2009; and

(h) The Securities and Exchange Board of India (Buyback of Securities) Regulations1998;

(vi) Further we confirm that as per representation of management letter there are nolaws specifically applicable to the Company considering its product process or location.

We have also examined compliance with the applicable clauses of the following:

(i) Secretarial Standards issued by The Institute of Company Secretaries of India.

(ii) The Listing Agreements entered into by the Company with BSE Ltd. and NationalStock Exchange of India Ltd.

During the period under review the Company has complied with the provisions of theAct Rules Regulations Guidelines Standards etc. mentioned above subject to thefollowing observations:

(a) Since the Company has not issued any securities to its employees during the periodunder review nor stock options:

- The Securities and Exchange Board of India (Employee Stock Option Scheme and EmployeeStock Purchase Scheme) guidelines 1999

- The Securities and Exchange Board of India (Issue and Listing of Debt Securities)Regulations 2008 were not applicable during the period under review.

(b) In view of neither delisting of Equity Shares nor buy back of any security of theCompany

- The Securities and Exchange Board of India (Delisting of Equity Shares) Regulations2009 and

- The Securities and Exchange Board of India (Buyback of Securities ) Regulations 1998were not applicable during the period under review

(c) Secretarial Standards issued by the Institute Of Company Secretaries of India werenot mandatorily applicable during the period under review.

We Further Report That

The Board of Directors of the Company is duly constituted with proper balance ofExecutive Directors Non-Executive Directors and Independent Directors. The changes in thecomposition of the Board of Directors that took place during the period under review werecarried out in compliance with the provisions of the Act.

Adequate notice is given to all directors to schedule the Board Meetings agenda anddetailed notes on agenda were sent at least seven days in advance and a system exists forseeking and obtaining further information and clarifications on the agenda items beforethe meeting and for meaningful participation at the meeting.

Majority decision is carried through while the dissenting members' views are capturedand recorded as part of the minutes.

We further report that there are adequate systems and processes in the Companycommensurate with the size and operations of the Company to monitor and ensure compliancewith applicable laws rules regulations and guidelines.

We further report that

- The members of the Company at their Annual General Meeting held on 30th September2014 have granted authority to the Board of Directors of the Company to borrow upto Rs.3500 Crores pursuant to Section 180 (1)(c) of the Companies act 2013 by Specialresolution

- The members of the Company at their Annual General Meeting held on 30th September2014 have granted authority to the Board of Directors of the Company to mortgage/ Chargethe whole or substantially whole of the undertakings to secure loans/ borrowings of theCompany pursuant to section 180(1)

(a) of the Companies Act 2013 by Special resolution.

In pursuit of the Special Resolution passed by the members of the Company at theirExtraordinary General Meeting held on 30th June 2014 Share Allotment Committee of theBoard

of Directors of the Company at its meeting held on 10th July 2014 allotted 5500000fully convertible warrants convertible into Equity Shares of Rs. 10/- each of the Companyat any time within 18 months from the date of allotment of the warrants in one or moretranches for cash at an exercise price of Rs. 94/- per warrant.

For Devesh Vimal & Co.
Practicing Company Secretaries
CS Devesh A. Pathak
Partner
Date: 30th May 2015 FCS: 4559
Place: Vadodara CP No. 2306

Note: This report is to be read with our letter of even date which is enclosed as perAnnexure forming integral part of this report.

Annexure [E] to Board's Report

FORM AOC - 2

(Pursuant To Section 134(3)(H) Of The Companies Act 2013 Read With Rule 8(2) Of TheCompanies (Accounts) Rules 2014) Form For Disclosure Of Particulars OfContracts/Arrangements Entered Into By The Company With Related Parties Referred To InSection 188(1) Of The Companies Act 2013 Including Certain Arms' Length TransactionsUnder Third Proviso Thereto

1. Details of contracts or arrangements or transactions not at arm's length basis:

Sr No. Particulars Amount in Rs.
A Name(s) of the related party and nature of relationship
B Nature of contracts/arrangements/transactions
C Duration of the contracts / arrangements/transactions
D Salient terms of the contracts or arrangements or transactions including the value if any
E Justification for entering into such contracts or arrangements or transactions

NIL

F Date(s) of approval by the Board
G Amount paid as advances if any
H I Date on which the special resolution was passed Amount paid as advances if any
J Date on which (a) the special resolution was passed in general meeting as required under first proviso to Section 188 of the Companies Act 2013

2. Details of material contracts or arrangement or transactions at arm's length basis:

Rs. in lacs

Sr No. Particulars
A Name(s) of the related party and nature of relationship
Diamond Projects Ltd. * 5434.73
Diamond Infosystems ltd.* 128.46
B Nature of contracts/arrangements/transactions
Diamond Projects ltd. Supply of Machinery for projects
Diamond Infosystems ltd. ERP Service Contract
C Duration of the contracts/arrangements/transactions Every 5 Year
D Salient terms of the contracts or arrangements or transactions including the value if any
Diamond Projects Ltd Supply of Machinery for Projects.
Diamond Infosystems ltd. Provides ERP Services
E Date(s) of approval by the Board if any Not Applicable
F Amount paid as advances if any Not Applicable

 

*Promoter Group Company
For & on Behalf of the Board
Amit Bhatnagar
Date: 13th August 2015 Managing Director &
Place: Vadodara Chairman of the Meeting

Annexure [F] to Board's Report

CORPORATE SOCIAL RESPONSIBILITY (CSR) ACTIVITIES

1. BRIEF OUTLINE OF THE COMPANY'S CSR POLICY:

The primary focus of CSR activities of Diamond primarily has been EnvironmentalSustainability Education Health and supporting missions like "Swacha BharatAbhiyan". The intention of integrating these objectives with the operations andgrowth of each entity in Diamond is to pursue a higher level of performance in the CSRwhich will create sound systems for purposeful contribution to societal causes.

2. THE Composition OF THE CSR Committee:

The composition of the CSR Committee as on 31st March 2015 is as follows:

Ms. Nivedita Pandya Chairman & Independent Director
Shri Amit Bhatnagar Managing Director
Shri Sumit Bhatnagar Jt. Managing Director

3. average NET PROFIT OF THE Company FOR THE LAST 3 FINANCIAL Years: Rs. 2676.78 LACS

4. PRESCRIBED CSR EXPENDITURE (2% OF THIS AMOUNT AS IN SR. NO. 3 ABOVE): Rs. 53.54 LACS

5. Details OF CSR spend FOR THE FINANCIAL YEAR:

(a) Total amount spent for the financial year: 10.20 Lacs

(b) Amount unspent if any: 89.80 Lacs

(c) Manner in which the amount spent during the financial year is detailed below:

Sr No. CSR Project/activities Sector in which the project covered Location where project is undertaken: State (Local Area/District) Amount spent on the projects or programs Cumulative Expenditure upto the reporting period Amount spent: District or through implementing agency
1 Health Check-up - Free Medicine and Medical check-up for poor people at Vadadala Village Health Care activities Health awareness camp - for organising Blood Donation camp. Promoting preventive health care and sanitation. Vadadala (Tal. Savli) Dist. Vadodara 3.50 lacs 3.50 lacs 3.50 lacs
2 Training to College / Institution Students Scholarship to children Vocational Skills Donations to Institutions and promoting education. Promoting education including special education and vocation skills. Vadadala (Tal. Savli) Dist. Vadodara Vadodara 02.00 lacs 02.00 lacs 02.00 lacs
3 Tree plantations in villages. Ensuring environmental sustainability. Vadadala (Tal. Savli) Dist. Vadodara 0.40 lacs 0.40 lacs 0.40 lacs
4 Drainage lines and donation of cleaning equipment and RO system for clean drinking water. Promoting preventive health Care and sanitation. Vadadala (Tal. Savli) Dist. Vadodara 4.30 lacs 4.30 lacs 4.30 lacs
Total 10.20 lacs 10.20 lacs 10.20 lacs

6. IN CASE THE COMPANY HAS FAILED TO SPEND THE Two PERCENT OF THE average NET PROFIT OFTHE LAST THREE FINANCIAL YEARS OR ANY PART THEREOF THE COMPANY SHALL provide THE REASONSFOR NOT SPENDING THE amount IN ITS BOARD'S REPORT:

As mentioned in the Directors Report the shortfall in the spend Rs. 89.80 lacs duringthe year is intended to be utilized in a phased manner in coming years upon identificationof suitable projects in accordance with the Company's CSR Policy.

For & on Behalf of the Board
Date: 13th August 2015 Amit Bhatnagar Nivedita Pandya
Place: Vadodara Managing Director Chairperson of the Committee