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Diamond Power Infrastructure Ltd.

BSE: 522163 Sector: Engineering
NSE: DIAPOWER ISIN Code: INE989C01012
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VOLUME 3210
52-Week high 32.40
52-Week low 2.17
P/E
Mkt Cap.(Rs cr) 73
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
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OPEN 2.69
CLOSE 2.83
VOLUME 3210
52-Week high 32.40
52-Week low 2.17
P/E
Mkt Cap.(Rs cr) 73
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 Fifth Annual Report together with theAudited Financial Accounts of the Company for the year ended on 31st March2017.

FINANCIAL RESULTS

(Rs. In Lacs)

Standalone Consolidated
Particular Year ended on 2017 Year ended on 2016 Year ended on 2017 Year ended on 2016
Income 116348.78 208980.68 116355.24 228729.48
Expenditure 180733.30 213172.65 180735.99 231884.04
Gross Profit / (Loss) before (64384.52) (4191.97) (64380.75) (3154.56)
Interest Depreciation & Tax
Finance Cost 18402.52 18459.54 18403.11 19591.33
Depreciation 9394.60 5746.06 9394.60 5815.84
Exceptional items (11396.72) - (11396.72) 10.86
Net Profit / (Loss) after (80784.92) (28397.57) (80781.74) (28572.59)
Depreciation & Financial Cost
Income Tax:
Current Tax (1312.12) - (1312.11) -
Deferred tax - (1462.00) - (1462.00)
Profit after tax (79472.80) (26935.57) (79469.63) (27110.59)
Consolidated Share in the Profit / - - (1006.44) (170.49)
(Loss) of Associate
Profit/(Loss) for the year (79472.80) (26935.57) (80476.06) (27281.08)
Share Capital 26971.07 5700.05 26971.07 5700.05
Other Equity 38691.40 56390.95 38511.35 56492.23
EPS (71.89) (48.13) (72.79) (48.75)

IMPORTANT PERFORMANCE PARAMETERS

Standalone Consolidated
Particular Year ended on 2017 Year ended on 2016 Year ended on 2017 Year ended on 2016
Gross Profit Margin (%) (55.34) (2.01) (55.33) (1.38)
Asset Turnover (times) 0.81 1.43 0.83 1.54
Interest Coverage (times) (3.39) (0.54) (3.39) (0.46)
Earning per Shares (diluted) (Rs.) (71.89) (48.13) (72.79) (48.75)

RESULTS OF OPERATIONS AND THE STATE OF COMPANY'S AFFAIRS

The year under review continued to be challenging one for your Company. The Companyunderwent through debt restructuring process with its lenders under JLF Mechanism.However due to various factors coupled with the economic slowdown of the country and moreso in the Power Sector and envisaged. For the long term solutions it was felt necessary towork out a mechanism to address the infusion of fund and sustainable debt in to thesystem. For infusion of funds the Company has identified a prospective investor who hasshared the terms sheet which is based on the sustainable debt. The same is being sharedwith the lenders and it is under their considerations. Based on the development and thefuture scenario the lenders have decided to adopt the strategic debt restructuringmechanism (SDR) which the Company believes that the same will protect the interest of theesteemed investors and stakeholders. The Company is also working on various alternativesto come out from the situation.

Our total income on a standalone basis decreased to Rs. 116348.78 Lacs from Rs.208980.68 Lacs in the previous year. Our total Profit/Loss for the financial year2016-17 is Rs. (79472.80) Lacs Compared to previous year loss Rs. (26935.57) Lacs.

BOARDS' EXPLANATION ON AUDIT QUALIFICATION (STAND ALONE)

With respect to the qualifications marked by M/s. A Yadav & AssociatesChartered Accountants vide there Independent Statutory Auditor's Report on standalonebasis annexed with this Annual Report your board would like to clarify that the Companydoes not have adequate details of cost of each assets its significant component andcapital work in progress capitalized during the year and in earlier years. As a result ofwhich the Company is unable to calculate the correct depreciation and hence themanagement is unable to estimate the impact on the profit for the year reserves at theyear end and the value of the net assets carried forward in the standalone financialstatements. The Company is in process of updating its fixed assets register having all therequired details to calculate the impact of depreciation which will be adjusted in thebooks of accounts on completion.

The Company has noted the Auditor's observations with respect to internal control overfinancials reporting. The Company has taken the cognition of the control aspect and is inthe process of evaluating suitable measures to be adopted to implement the internalcontrol system wherever it is lacking and needs improvement for ensuring the orderly andefficient conduct of its business including adherence to Company's policies thesafeguarding of its assets the prevention and detection of frauds and errors theaccuracy and completeness of the accounting records and the timely preparation ofreliable financial information as required under the Companies Act 2013.

CONSOLIDATED ACCOUNTS

The consolidated financial statements of your Company for the financial year 2016-17are prepared in compliance with applicable provisions of the Companies Act 2013 IndianAccounting Standards (IND AS) and Listing Agreement as prescribed by the Securities andExchange Board of India (SEBI). The consolidated financial statements have been preparedon the basis of audited financial statements of the Company its subsidiary and associatecompanies as approved by their respective Board of Directors.

BOARDS' EXPLANATION ON AUDIT QUALIFICATION (CONSOLIDATED)

With respect to the qualifications marked by M/s. A Yadav & Associates CharteredAccountants vide there Independent Statutory Auditor's Report on consolidated basisannexed with this Annual

Report your board would like to clarify that the Company does not have adequatedetails of cost of each assets its significant component and capital work in progresscapitalized during the year and in earlier years. As a result of which the Company isunable to calculate the correct depreciation and hence the management is unable toestimate the impact on the profit for the year reserves at the year end and the value ofthe net assets carried forward in the consolidated financial statements. The Company is inprocess of updating its fixed assets register having all the required details to calculatethe impact of depreciation which will be adjusted in the books of accounts on completion.

The Company has also noted the Auditor's observations with respect to internal controlover financials reporting. The Company has taken the cognition of the control aspect andis in the process of evaluating suitable measures to be adopted to implement the internalcontrol system wherever it is lacking and needs improvement for ensuring the orderly andefficient conduct of its business including adherence to Company's policies thesafeguarding of its assets the prevention and detection of frauds and errors theaccuracy and completeness of the accounting records and the timely preparation ofreliable financial information as required under the Companies Act 2013.

SUBSIDIARIES & ASSOCIATE COMPANIES

Separate financial statements of all subsidiaries and associate Companies of yourCompany are provided in this report and said financials forms part of consolidatedfinancial statements in compliance with Section 129 and other applicable provisions ifany of the Companies Act 2013. M/s. Diamond Power Global Holdings Limited is whollyowned subsidiary of your company. However M/s. Diamond Power Transformers Limited is anassociate company of your Company.

Please refer Annexure [A] to the Board Report.

MANAGEMENT'S DISCUSSION AND ANALYSIS REPORT

In terms of the provisions of Regulation 34 of the Securities and Exchange Board ofIndia (Listing Obligations and Disclosure Requirements) Regulations 2015 theManagement's Discussion and analysis is set out in this 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 2017.

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 2016-17 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

A separate report on Corporate Governance along with a certificate from the Auditors onits compliance forms an integral part of this Report.

INDUSTRIAL RELATIONS

The Company is having its presence in medal east countries and planning to expand itsbusiness in overseas countries too. Further Company has strong dealer network toaccelerate growth of the Company.

DISCLOSURE RELATING TO REMUNERATION OF DIRECTORS KEY MANAGERIAL PERSONNEL ANDPARTICULARS OF EMPLOYEES

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 2016-17 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 SumitBhatnagar (DIN 00776129) was re-appointed on 19th August 2016 Shri ShailendraPal Singh (DIN 02296585) was regularize from Additional Director on 19thAugust 2016 and Shri S K Negi (DIN 00533049) was appointed as an Additional Director ofthe Company on 4th March 2017.

Resignations/Retirements:

During the year Shri Jaideep Nigam (DIN 07253279) was heavenly aborted due to his badhealth. Shri Nigam was one of the core members of the Board and during his tenure Companynailed down many great opportunities. The Board places on record its appreciation for hisvaluable contribution during his association with the Company. Shri S K Negi (DIN00533049) also resigned due to his pre-obligation on 24th April 2017.

DIRECTORS RETIRE BY ROTATION

Shri Amit Bhatnagar is liable to retire by rotation at the ensuing AGM pursuant to theprovisions of Section 152 of the Companies Act 2013 read with the Companies (Appointmentand Qualification of Directors) Rules 2014 and the Articles of Association of yourCompany and being eligible have offered himself for the re-appointment. Appropriateresolution for his re-appointment is being placed for your approval at the ensuing AGM.The brief resume of the Director and other related information has been detailed in theNotice convening the 25th AGM of your Company. Your Directors recommend hisre-appointment.

Evaluation of Board's Performance:

In terms of the provisions of the Companies Act 2013 read with Rules issued thereunderand Listing Obligations the Board of Directors on recommendation of the Nomination andRemuneration Committee have evaluated the effectiveness of the Board/Director(s) at theirmeeting held on 14th February 2017.

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 SEBI(LODR) Regulation 2015.

DIRECTORS' 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 31st March2017 the applicable accounting standards and Schedule III of the Companies Act 2013have 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 31st March 2017 and of the profitand loss of the Company for the financial year ended 31st March 2017;

c) proper and sufficient care has been taken for the maintenance of adequate 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 adequate and were operatingeffectively; and

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

AUDITORS AND AUDITORS' REPORT

Auditors

The Company at its 23rd Annual General Meeting held on 30thSeptember 2015 has appointed M/s. B S R & Co. LLP Chartered Accountants (FirmRegistration Number 101248W/W-100022) and M/s. A Yadav & Associates (earlier known asABCJPR & Company) Chartered Accountants (Firm Registration No.: 129725W) as JointIndependent Statutory Auditors of the Company which was also rectified by the Members attheir 24th Annual General Meeting held on 19th August 2016.However due to pre-obligations of M/s. B S R & Co. they have resigned as Auditorsfrom 14th December 2016 and M/s. A Yadav & Associates continued asIndependent Statutory Auditors of the Company accordingly the appointment of M/s. A Yadav& Associates Chartered Accountants (Firm Registration Number 129725W) as IndependentStatutory Auditor of the Company has been placed before the Shareholders of the Companyfor ratification.

The Auditors' Report for is enclosed with the financial statements in this AnnualReport.

Cost Auditor

As per Section 148 and other applicable provisions if any of the Companies Act 2013read with Companies (Audit and Auditors) Rules 2014 the Board of Directors of yourCompany has appointed M/s. S. S. Puranik & Associates. Cost Accountants (FirmRegistration No. 100133) as the Cost Auditor for the financial year 2017-18 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 taxes 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 2017-18along with a certificate confirming their independence.

Secretarial Audit

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 theSecretarial Audit of your Company. The Secretarial Audit Report is annexed herewith as "Annexure- [C]" to this Report. The Secretarial Audit Report does not contain anyqualification 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 2016-17 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 SEBI (LODR) Regulations 2015. During thefinancial year 2016-17 there were no transactions with related parties which qualify asmaterial transactions.

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 with Rule8(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 2017 (includinginvestments made in the previous years):

i. Investments in equity shares:

(Rs. In Lacs)

Name of entity Amount as at 31st March 2017
Diamond Power Transformers Ltd 1006.44
Diamond Power Global Holdings Ltd 12.88

ii. Investment in debt instrument:

Amount in Rs.

Name of entity Amount as at 31st March 2017
Not Applicable

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

Rs. In Lacs

Name of entity Amount as at 31st March 2017 Amount as at 31st March 2016
Apex Power Equipments Private Limited 1229.45 1229.45
Diamond E.H.V. Conductors - -
Maktel Power Limited 54.55 54.55
Diamond Power Transformers Limited 1265.70 1265.70
Diamond Global Holdings Limited 70.77 58.94
Madhuri Finserve Pvt ltd 166.15 166.15

B. There are no guarantees issued by your Company in accordance with Section 186 of theCompanies Act 2013 read with the Rules issued there under 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 andincorporates 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 andSEBI (LODR) Reg. 2015. The policy provides for a framework and process whereby concernscan be raised by its employees against any kind of discrimination harassmentvictimization or any other unfair practice being adopted against them. More details on thevigil mechanism and the Whistle Blower Policy of your Company have been outlined in theCorporate 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 2016-17 in CSRhave been detailed in this Annual Report. However the Company has occurred loss in theyear under review and henceforth your company is unable to spend amount for the CSRactivities. The Annual Report on CSR activities in accordance with the Companies(Corporate Social Responsibility Policy) Rules 2014 is set out herewith as "Annexure[F]" to this Report.

SHARE CAPITAL DURING THE YEAR UNDER REVIEW

Your Company in the financial year 2016-17 has increased its Authorized Share Capitalto Rs. 4500000000 (Rupees Four Hundred Fifty Crores Only) divided into 385858500(Thirty Eight Crores Fifty Eight Lacs Fifty Eight Thousand Five Hundred Only) EquityShares of Rs.10/- (Rupees Ten) each 4141500 (Forty One Lacs Forty One Thousand FiveHundred Only) 0.01% Cumulative Non-Convertible Preference Shares of Rs. 10/- (Rupees Ten)Each and 60000000 (Six Crore only) 0.01% optionally convertible redeemable preferenceshares of Rs. 10/- Each.

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]" to this 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.

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 debenture holders vendors bankers institutions businessassociates regulatory and government authorities for their continued support.

For & on Behalf of the Board
Date: 10th August 2017 Shri Amit Bhatnagar
Place: Vadodara Chairman & Managing Director of the Meeting