We have audited the accompanying Annual Financial Statements
of DIAMOND POWER INFRASTRUCTURE LIMITED ("the
Company") which comprises the Balance sheet as at 31st
March, 2026, the Statement of Profit & Loss (including Other
Comprehensive Income), the Statement of Cash Flows and
Statement of Changes in Equity for the year then ended, and
notes to the financial statements, including a summary of
significant accounting policies and other explanatory information
(hereinafter referred to as "Standalone Financial Statements").
Qualified Opinion
In our opinion and to the best of our information and according
to the explanations given to us, subject to the effect of the
matter described in the "Basis of Qualified Opinion" section
of our Report hereinbelow, the aforesaid standalone financial
statements give the information required by the Companies Act,
2013 (the "Act") in the manner so required and give a true and
fair view in conformity with the Indian Accounting Standards
prescribed under section 133 of the act read with the Companies
(Indian Accounting Standards) Rules, 2015, as amended, ("Ind
AS") and other accounting principles generally accepted in India,
of the State of Affairs of the Company as at March 31, 2026, and
its Total Comprehensive Income comprising its Profit and Other
Comprehensive Income, Changes in Equity and its Cash Flows for
the year ended on that date.
Basis for Qualified Opinion
Attention is Invited to Note 4 of the Notes to the Standalone
Financial Results wherein Management has disclosed the fact
relating to the ongoing exercise relating to updation of the
Property Plant & Equipment Register with all necessary details,
physical verification and reconciliation with books of accounts
including Capital Work-in-Progress and giving appropriate effect
to the outcome of the same, including depreciation thereon, for
which the task has been allotted to an Independent Agency by
the Company.
As the end of the year, the Agency has completed primary
Physical Verification of the Property, Plant and Equipment and
reconciliation of the same with the data available with a cut-off
date of 31st March, 2024 as also a preliminary value allocation of
costs and accumulated depreciation. However, the determination
of the final value-in-use of each item of Property, Plant and
Equipment as also the estimated remaining useful lives which
will enable to calculate prospective depreciation was still under
process. The Management has stated the reasons for delay
and also the new developments leading to its expectation of
completion of the exercise in the first quarter of next fiscal year.
Due to the pendency of the exercise, the Property, Plant &
Equipment Block is being carried forward with the balances as
appearing from the NCLT / RP Period prior to takeover by the new
Management while fresh additions made are being added to the
respective blocks.
Further, the Company has also appropriated and capitalised
electricity, manpower and interest costs to CWIP block which are
identified and / or worked out as relating to ongoing expansion
/ commissioning of CWIP as well as proportionate allocation
towards estimated capacity utilisation of Property, Plant,
Equipment Block.
The Depreciation on the unreconciled / pending to be updated
values which are being carried forward from the NCLT / RP period
has been provided only @ 20% of the applicable depreciation on
such values citing that the manufacturing operations were not
operating at optimum capacity and the same has been considered
based on estimates of capacity utilization and normal wear and
tear which, in the opinion of the management, is expected to
fairly represent the depreciation charge for the year. Depreciation
on fresh additions including capitalization of Capital Work-in¬
Progress commissioned during the year is being provided at
appropriate rate.
Accordingly, the total depreciation charge for the year amounted
to ' 2,922.33 lacs which comprised of depreciation of ' 1,903.69
on pre-NCLT Property, Plant and Equipment @ 20% and ' 1,018.64
lacs on the new additions post takeover by the new management
at regular rates.
The Management has stated that upon completion of the exercise
as aforesaid in the next fiscal year, once the final value-in-use of
each item of Property, Plant and Equipment is crystallised the
necessary effect of the same, including impairment, if any, shall
be provided in the books in the next fiscal year, considering that it
relates to period prior to takeover by new management. Further,
as the estimated remaining useful lives are finalised, the exact
amount of prospective depreciation charge will also be worked
out and provided for from the next fiscal year.
Since the exercise of updation and reconciliation of Property, Plant
& Equipment Register and Capital Work-in-Progress is going
on including working of value-in-use and remaining estimated
useful lives of each item of Property, Plant and Equipment, we
will be able to verify and opine on the correctness of the values
of Property, Plant & Equipment and Capital Work-in-Progress as
appearing in the books as at the end of the year end, as well as for
appropriation / capitalization of power, manpower and borrowing
costs to Capital Work-in-Progress and on the depreciation
provided including the veracity of the management estimate of
20% for calculation of depreciation and appropriation, only upon
completion of the exercise as aforesaid.
Hence, the Net Profit and Other Financial Information for the year
ended March 31, 2026 are subject to the effect of this matter.
Our audit report for the previous year ended March 31, 2025 as
well as our limited review reports for the first, second and third
quarters of the current financial year were also qualified in respect
of this matter.
Conduct of Audit
We conducted our audit in accordance with the Standards on
Auditing (SAs) specified under section 143(10) of the Companies
Act, 2013 (the Act). Our responsibilities under those Standards are
further described in the Auditor's Responsibilities for the Audit
of the Standalone Financial Results section of our report. We are
independent of the Company in accordance with the Code of Ethics
issued by the Institute of Chartered Accountants of India together
with the ethical requirements that are relevant to our audit of
the financial results under the provisions of the Companies Act,
2013 and the Rules there under, and we have fulfilled our other
ethical responsibilities in accordance with these requirements and
the Code of Ethics. We believe that the audit evidence we have
obtained is sufficient and appropriate to provide a basis for our
opinion on the standalone annual financial results.
Key Audit Matters
Key audit matters are those matters that, in our professional
judgment, were of most significance in our audit of the financial
statements of the current period. These matters were addressed
in the context of our audit of the financial statements as a whole,
and in forming our opinion thereon, and we do not provide a
separate opinion on these matters.
We have determined the matter described below to be the key
audit matters to be communicated in our report.
Existence and Valuation of Returnable Drums
Included in Inventory:
The Company's inventory includes returnable drums used
for dispatching cables to customers. These drums constitute
approximately 17% of the total inventory value as at the balance
sheet date. A substantial portion of such drums was lying at
customer premises, with the normal return cycle ranging from
45 days to 6 months.
As per the terms of the purchase orders, the Company is entitled
to raise debit notes for drums not returned within six months.
While the Company has raised debit notes in certain cases
during the year, there were instances where drums continued
to remain with customers beyond the stipulated period and
debit notes had not been raised due to business and customer
relationship considerations.
Further, confirmations for drums lying with customers are
obtained through balance confirmation emails containing a
deemed acceptance clause in the absence of any response within
a specified period.
Considering the materiality of the balances involved, the
significant judgement associated with assessing the recoverability
and existence of drums lying with customers, the operational
complexities in monitoring such inventory spread across multiple
locations, and the risk associated with delayed / non-return of
drums, we considered this matter to be a Key Audit Matter.
How the Key Audit Matter was addressed in our
Audit:
Our audit included, but was not limited to, the following procedures:
• Obtained an understanding and evaluated the design and
implementation of controls relating to tracking, recording
and monitoring of returnable drums.
• Tested, on a sample basis, dispatch records, inward return
records and inventory reconciliation statements relating to
drums outstanding at the year end.
• Reviewed the ageing analysis of drums lying with
customers and assessed management's assumptions
regarding recoverability.
• Verified subsequent receipts/returns of drums after the
balance sheet date on a sample basis.
• Examined purchase order terms relating to return obligations.
• Tested debit notes raised during the year for non-return
of drums beyond the stipulated period and assessed the
consistency of management's practices.
• I n respect of long-outstanding drums where debit notes
were not raised, evaluated management's rationale and
assessed whether any adjustment or provision was required
in the financial statements.
• Obtained and reviewed balance confirmations from selected
customers, including assessment of responses and alternate
audit procedures performed in cases of non-response.
• Assessed the adequacy of disclosures made in the financial
statements in respect of such inventory balances.
Based on the audit work performed, we found that the procedure
followed by the Company for these drums was consistent with
applicable accounting principles and appropriately supported.
Information Other than the Standalone Financial
Statements and Auditor's Report Thereon
The Company's Board of Directors is responsible for the other
information. The other information comprises the information
included in the Management Discussion and Analysis, Board's
Report including Annexures to Board's Report, Business
Responsibility Report, Corporate Governance, Shareholder's
Information and Other Information included in the Company's
Annual Report, but does not include the consolidated financial
statements, standalone financial statements and our auditor's
reports thereon.
Our opinion on the standalone financial statements does not
cover the other information and we do not express any form of
assurance conclusion thereon.
In connection with our audit of the standalone financial
statements, our responsibility is to read the other information
and, in doing so, consider whether the other information is
materially inconsistent with the standalone financial statements
or our knowledge obtained during the course of our audit or
otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that
there is a material misstatement of this other information, we
are required to report that fact. We have nothing to report in
this regard.
Management's Responsibility for the Financial
Statements
The Company's Board of Directors is responsible for the matters
stated in Section 134(5) of the Companies Act, 2013 (“the Act")
with respect to the preparation and presentation of these financial
statements that give a true and fair view of the financial position,
financial performance, total comprehensive income, changes in
equity and cash flows of the Company in accordance with the IND-
AS and other accounting principles generally accepted in India,
including the Accounting Standards specified under Section 133
of the Companies Act, 2013 read with Rule 7 of the Companies
(Account) Rules, 2014.
This responsibility also includes maintenance of adequate
accounting records in accordance with the provisions of the Act
for safeguarding the assets of the Company and for preventing
and detecting frauds and other irregularities; selection and
application of appropriate accounting policies; making judgments
and estimates that are reasonable and prudent; and design,
implementation and maintenance of adequate internal financial
controls, that were operating effectively for ensuring the accuracy
and completeness of the accounting records, relevant to the
preparation and presentation of the financial statements that
give a true and fair view and are free from material misstatement,
whether due to fraud or error.
In preparing the financial statements, management is responsible
for assessing the Company's ability to continue as a going concern,
disclosing, as applicable, matters related to going concern and
using the going concern basis of accounting unless management
either intends to liquidate the Company or to cease operations,
or has no realistic alternative but to do so.
Those Board of Directors are also responsible for overseeing the
Company's financial reporting process.
Auditor's Responsibility
Our objectives are to obtain reasonable assurance about whether
the financial statements as a whole are free from material
misstatement, whether due to fraud or error, and to issue an
auditor's report that includes our opinion. Reasonable assurance
is a high level of assurance, but is not a guarantee that an audit
conducted in accordance with SAs will always detect a material
misstatement when it exists. Misstatements can arise from
fraud or error and are considered material if, individually or in
the aggregate, they could reasonably be expected to influence
the economic decisions of users taken on the basis of these
financial statements.
As part of an audit in accordance with SAs, we exercise
professional judgment and maintain professional skepticism
throughout the audit.
We also:
• Identify and assess the risks of material misstatement of the
financial statements, whether due to fraud or error, design and
perform audit procedures responsive to those risks, and obtain
audit evidence that is sufficient and appropriate to provide
a basis for our opinion. The risk of not detecting a material
misstatement resulting from fraud is higher than for one
resulting from error, as fraud may involve collusion, forgery,
intentional omissions, misrepresentations, or the override of
internal control.
• Obtain an understanding of internal control relevant to the
audit in order to design audit procedures that are appropriate
in the circumstances. Under section 143(3)(i) of the Companies
Act, 2013, we are also responsible for expressing our opinion
on whether the company has adequate internal financial
controls system in place and the operating effectiveness of
such controls.
• Evaluate the appropriateness of accounting policies used
and the reasonableness of accounting estimates and related
disclosures made by management.
• Conclude on the appropriateness of management's use of
the going concern basis of accounting and, based on the audit
evidence obtained, whether a material uncertainty exists
related to events or conditions that may cast significant doubt
on the Company's ability to continue as a going concern. If we
conclude that a material uncertainty exists, we are required
to draw attention in our auditor's report to the related
disclosures in the financial statements or, if such disclosures
are inadequate, to modify our opinion. Our conclusions are
based on the audit evidence obtained up to the date of our
auditor's report. However, future events or conditions may
cause the Company to cease to continue as a going concern.
• Evaluate the overall presentation, structure and content of the
financial statements, including the disclosures, and whether
the financial statements represent the underlying transactions
and events in a manner that achieves fair presentation.
We communicate with those charged with governance regarding,
among other matters, the planned scope and timing of the audit
and significant audit findings, including any significant deficiencies
in internal control that we identify during our audit.
We also provide those charged with governance with a statement
that we have complied with relevant ethical requirements
regarding independence, and to communicate with them
all relationships and other matters that may reasonably be
thought to bear on our independence, and where applicable,
related safeguards.
From the matters communicated with those charged with
governance, we determine those matters that were of most
significance in the audit of the financial statements of the current
period and are therefore the key audit matters. We describe these
matters in our auditor's report unless law or regulation precludes
public disclosure about the matter or when, in extremely rare
circumstances, we determine that a matter should not be
communicated in our report because the adverse consequences
of doing so would reasonably be expected to outweigh the public
interest benefits of such communication.
Report on Other Legal and Regulatory
Requirements
1. As required by the Companies (Auditors Report) Order, 2020
(“the Order") issued by the Central Government in terms of
section 143 (11) of the Companies Act, 2013, we enclose
in the Annexure-A, a statement on the matters specified in
paragraph 3 & 4 of the said Order, to the extent applicable.
2. As required by Section 143(3) of the Act, we report that:
a) We have sought and obtained all the information and
explanations, which, to the best of our knowledge and
belief, were necessary for the purpose of our Audit;
b) In our opinion, proper books of accounts as required
by the law have been kept by the Company, so far as
appears from our examination of the said books;
c) The Balance Sheet, Statement of Profit & Loss including
Other Comprehensive Income, Statement of Changes
in Equity and Cash Flow Statement dealt with by this
report are in agreement with the books of accounts of
the Company;
d) I n our opinion, the aforesaid Financial Statements
comply with the Ind AS specified under Section 133 of
the Act, read with Rule 7 of the Companies (Accounts)
Rules, 2014.
e) On the basis of written representations received from
the directors, as on 31st March, 2026, and taken on
record by the Board of Directors, we report that none
of the directors is disqualified as on 31st March, 2026
from being appointed as a director of the Company in
terms of Section 164(2) of the Act.
f) With respect to the adequacy of the internal financial
controls over financial reporting and the operating
effectiveness of such controls; refer to our separate
report in Annexure - B attached herewith.
g) With respect to the matter to be included in the
Auditors Report u/s. 197(16) of the Act, in our opinion
and according to information and explanations given to
us, the remuneration paid by company to its directors
is in accordance with the provisions of Section 197
of the Act read with Schedule V in terms of requisite
approvals obtained as mandated therein and is not in
excess of the limits specified therein.
h) With respect to the other matters to be included in our
Report in accordance with Rule 11 of the Companies
(Audit and Auditors) Rules, 2014, in our opinion and
to the best of our information and according to the
explanations given to us:
(i) The impact of pending litigations on the financial
position are disclosed Note 37 of Notes to the
Standalone Financial Statements.
(ii) There are no long-term contracts for which
there were material foreseeable losses for which
provision is required
(iii) There has been no delay in transferring amounts
required to be transferred to the Investor
Protection Fund by the Company.
(iv) (a) The Management has represented that,
to the best of its knowledge and belief, no
funds (which are material either individually
or in the aggregate) have been advanced or
loaned or invested (either from borrowed
funds or share premium or any other
sources or kind of funds) by the Company
to or in any other person or entity, including
foreign entity (“Intermediaries"), with the
understanding, whether recorded in writing
or otherwise, that the Intermediary shall,
whether, directly or indirectly lend or invest
in other persons or entities identified in
any manner whatsoever by or on behalf of
the Company (“Ultimate Beneficiaries") or
provide any guarantee, security or the like
on behalf of the Ultimate Beneficiaries;
(b) The Management has represented, that,
to the best of its knowledge and belief, no
funds (which are material either individually
or in the aggregate) have been received by
the Company from any person or entity,
including foreign entity (“Funding Parties"),
with the understanding, whether recorded
in writing or otherwise, that the Company
shall, whether, directly or indirectly, lend or
invest in other persons or entities identified
in any manner whatsoever by or on behalf of
the Funding Party (“Ultimate Beneficiaries")
or provide any guarantee, security or the like
on behalf of the Ultimate Beneficiaries;
(c) Based on the audit procedures that
have been considered reasonable and
appropriate in the circumstances, nothing
has come to our notice that has caused us
to believe that the representations under
sub-clause (i) and (ii) of Rule 11(e), as
provided under (a) and (b) above, contain
any material misstatement.
(v) The Board of Directors of the Company has not
declared or paid any dividend during the year.
(vi) Based on our examination which included test
checks, the company has used an accounting
software for maintaining its books of account
which has a feature of recording audit trail
(edit log) facility and the same has operated
throughout the year for all relevant transactions
recorded in the software. Further, during the
course of our audit we did not come across any
instance of audit trail feature being tampered
with and the audit trail has been preserved by
the company as per the statutory requirements
for record retention.
For Naresh & Co.
Chartered Accountants
(F.R.N. 106928W)
CA Abhijeet Dandekar
Partner
Place: Ahmedabad (M. R. N. 108377)
Date: 26/05/2026 UDIN: 26108377BLPDKJ1784
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