DIRECTORS REPORT

The Directors take pleasure in presenting the Twenty Third Annual Report and Audited Accounts of the Company for the financial year ended March 31, 2016.

RESULTS FROM OPERATION

(Rs. In lacs)

DEPOSITS

The Company has not accepted any deposits during the year within the meaning of the Companies (Acceptance of Deposits) Rules, 1975.

CURRENT OPERATIONS

“In today’s rapidly changing business scenario, information is the power to propel ahead.”

Today with the advancement of science and technology, information is growing not merely by bytes but by terabytes and dealing with such voluminous information is a huge challenge for businesses to make quick and speedy decisions.

Diamond Info systems Limited, a group company of Diamond Power, is amongst the fastest upcoming and growing services, BPO and Product Engineering companies.

The operations of the Company now can be classified into following segments:

1. IMG DIVISION (INFRASTRUCTURE MANAGEMENT GROUP)

Under the IMG Division Diamond Info systems has a wide array of products and services to offer under the following heads:-

i. SYSTEM INTEGRATION

- Hardware sales & services

DIL offers a large and varied set of product sales and services including a full range of hardware solutions from entry level PCs/Notebooks to high-end servers for the needs of Corporate, Small Business and Home customers. We also provide/sell various hardware devices from various business alliances like DELL, HCL, Intel, HP, IBM, Toshiba to name a few.

- Network Integration

Our Network Integration solutions and services ensure that your communication networks deliver the performance your business relies on. Our Network Integration solutions and services ensure that your communication networks deliver the performance your business relies on.

- Peripheral Sales & Services

DIL also provides peripheral sales and services from various partners with competitive market rates and enables quick after sales service.

- System Maintenance & Up gradation

DIL has a very prompt customer helpdesk for quick reporting and on-phone guidance. It is also equipped with latest debugging tools & equipment.

ii. WEB SOLUTIONS

- Diamond Info systems is helping companies leapfrog into the future by creating a strong web presence. Our web solutions are helping turn 9 to 5 business operations into 24*7 revenue generating machines. Our web services and solutions include:

- Domain Registration

Domain names from DIL give you a complete web presence. Registering your domain names with DIL ensures you great customer service, the best pricing along with a host of other features.

- Website Hosting

We are one of the most competitive web service providers offering host of services for building your web presence. We specialize in composite, managed servers, dedicated servers, dedicated hosting, virtual private servers (VPS hosting), ASP. NET and LAMP web hosting solutions. We provide hosting solution for both Windows and Linux platform both.

- Website Designing

Diamond Info systems specializes in highest quality interactive websites, logos, and templates as well as ecommerce website design and also specializes in Website User Interface, Website Re-design, Web 2.0 based Layout Designing, HTML/CSS, DIV/CSS (Table less Designs) and JS/DHTML.

- E-Commerce Development

DIL focuses on custom Ecommerce solutions & custom web site development that fit your business challenges. Our Ecommerce initiatives improve sales performances, customer satisfaction and marketing initiatives undertaken by a company

iii. APPLICATIONS IT Enabled Services

- Networking Management Solutions

The company has revived the business of hardware and networking solutions it had expertise of, the basic reason of reviving the sector was to offer the small and medium sector ERP customers for MICROSOFT products with one stop solutions to their hardware and networking needs along with the software.

- Microsoft Dynamics CRM

Diamond Info systems Ltd offers you the benefit of working with the most experienced Microsoft Dynamics CRM implementation team in the world. Our Microsoft Dynamics CRM team members have on average more than eight years of product experience.

2. AMG Division (APPLICATION MANAGEMENT GROUP)

We offer the following services under our AGM division:

- Enterprise Resource Planning (ERP)

Based on the experience and expertise gained on implementation and maintenance of SAP, R/3 and ERP package; now the Company is equipped to take scale assignments for AS-IS, TO-BE, GAP Analysis, Business reengineering, Customization, Implementation and going live. Basically this expertise and presence in the market has positioned as strategically in the market to sell and implement the products offered by MICROSOFT India as MICROSOFT Certified Partner.

- Microsoft Dynamics NAV

Diamond Info systems offers you the benefit of working with one of the most experienced Microsoft Dynamics NAV implementation team which possesses more than eight years of product experience. They are experts at devising back-end financial, supply chain management, and e-commerce solutions for manufacturing and distribution environments.

- SAP Business One

SAP has designed SAP Business One, a business management software application, specifically for small and midsize businesses (SMBs) which are used by over 10,000 customers today. It is an affordable, easy-to-use way to manage critical business functions across sales, distribution, and financials. Diamond Info systems offers SAP Business One, which has enabled owners to increase profitability and achieve new levels of control.

FUTURE PROSPECTS

Your Company sustains a relentless competitive focus as the economic climate is expected to remain challenging. Your Company will continue to deploy resources in a focused manner to secure stakeholder interest and pursue growth.

The future prospectus of the industry is grim thus it is very important for us to sustain and venture into new and better areas within the IT industry to survive and make the entity profitable. As a measure of the same, it gives us immense pleasure to inform you that Diamond Info systems Limited would be soon opening an office in Dubai followed by South Africa and New Zealand to manage its business operations abroad.

DIRECTORS RETIRING BY ROTATION

In accordance with the Companies Act, 2013 and the Articles of Association of the Company Shri Sumit Bhatnagar (DIN 00776129) retire by rotation at the ensuing annual general meeting and being eligible offers himself from re-appointment.

DIVIDEND

Looking into the long term interest of the Company, your Directors have not recommended any dividend for the financial year ended on 31^st March, 2016.

FIXED DEPOSITS

During the financial year 2015-16, your Company has not accepted any deposit within the meaning of Sections 73 and 74 of the Companies Act, 2013 read together with the Companies (Acceptance of Deposits) Rules, 2014

INSURANCE

All the insurable interests of our Company including inventories, buildings and liabilities under legislative enactments are adequately insured.

PERSONNEL

“Growth is never by mere chance, it is the result of forces working together”

The employees of your company being firm believers of the cited quotation with their loyalty, dedication and hard work have nurtured Diamond Info systems Limited resulting to what it is today. Due to the trained and qualified personnel, we are uniquely positioned to offer superior and distinctive services to our clients.

QUALITY CONTROL

Your company’s mission is to cater to the needs of its clients by providing high quality services which would strengthen the customer loyalty. In terms of quality, the Company is certified by ISO 9001 -2008 which acts as a benchmark to the Company ensuring continued high quality services enabling customer satisfaction.

RISK MANAGEMENT

As part of the Risk Management Process, during the year, the Company reviewed the various risks and finalized mitigation plans. These were reviewed periodically by the Management and closely monitored and reviewed the risk plans periodically.

CORPORATE GOVERNANCE

As per the requirement of in Clause 49 of the Listing Agreement (‘Listing Agreement’) of the company with the Stock Exchanges for the period April 01, 2015 to November 30, 2015 and as per the relevant provisions of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (‘Listing Regulations’) as referred to in Regulation 15(2) of Listing Regulations for the for the period December 01, 2015 to March 31, 2016 a detailed report on Corporate Governance is set out in this report. The Statutory Auditors of the Company have examined the Company’s Compliance in this regard and have certified the same. As required under the SEBI Guidelines, such certificate is reproduced in the Report. A separate Management Discussion and Analysis Report on the company’s performance are attached to this report.

The declaration given by the Chairman and Managing Director with regard to compliance of Company’s code of conduct by the Board members and senior management is furnished to this report.

TRANSFER TO RESERVES

Your Company proposes to transfer Rs. NIL to the general reserve. An amount of Rs. NIL is proposed to be retained in the Statement of Profit and Loss.

DISCLOSURE RELATING TO REMUNERATION OF DIRECTORS, KEY MANAGERIAL PERSONNEL AND PARTICULARS OF EMPLOYEES

The salient aspects covered in the Nomination and Remuneration Policy, covering the policy on appointment and remuneration of Directors and other matters have been outlined in the Corporate Governance Report which forms part of this Report.

NUMBER OF MEETINGS OF THE BOARD AND AUDIT COMMITTEE

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

DECLARATION OF INDEPENDENCE

Your Company has received declarations from all the Independent Directors confirming that they meet the criteria of independence as prescribed under the provisions of Companies Act, 2013 read with the Schedules and SEBI (LODR), regulations, 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 31^stMarch, 2016, the applicable accounting standards and Schedule III of the Companies Act, 2013, have been followed and there are no material departures from the same;

b) the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of your Company as at 31^stMarch, 2016 and of the profit and loss of the Company for the financial year ended 31^stMarch, 2016;

c) proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets 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 the Company and that such internal financial controls are adequate and were operating effectively; and

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

AUDITORS AND AUDITORS’ REPORT Auditors

At the 23^rd 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 the conclusion of the 24^th AGM of your Company. The Companies Act, 2013 has introduced the concept of rotation of auditors as well as audit firms. It states that in case of listed companies, it would be mandatory to rotate auditors every five years in case of the appointment of an individual as an auditor and every 10 years in case of the appointment of an audit firm with a uniform cooling off period of five years in both the cases. The Act has allowed a transition period of three years for complying with the requirements of the rotation of auditors. Further, the 2013 Act also grants an option to shareholders to further require rotation of the audit partner and staff at such intervals as they may choose.

AUDITORS’ REPORT

The Auditors’ Report to the shareholders does not contain any qualification.

SECRETARIAL AUDIT

Pursuant to the provisions of Section 204 of the Companies Act, 2013 read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, your Company has appointed M/s D Patel & Associate, CS Divyesh Patel, Practicing Company Secretary to conduct the Secretarial Audit of your Company. The Secretarial Audit Report is annexed herewith as “Annexure - [A]” to this Report. The Secretarial Audit 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 in accordance with Section 92(3) of the Companies Act, 2013 read with the Companies (Management and Administration) Rules, 2014, are set out herewith as “Annexure [B]” to this Report.

RELATED PARTY TRANSACTIONS

During the financial year 2015-16, your Company has entered into transactions with related parties as defined under Section 2(76) of the Companies Act, 2013 read with Companies (Specification of Definitions Details) Rules, 2014, which were in the ordinary course of business and on arms’ length basis and in accordance with the provisions of the Companies Act, 2013, Rules issued there under and SEBI (LODR), Regulations, 2015. During the financial year 2015-16, there were no transactions with related parties which qualify 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 with Rule 8(2) of the Companies (Accounts) Rules, 2014 is set out as “Annexure [C]” to this Report.

LOANS AND INVESTMENTS

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

A. Details of investments made by the Company as on 31st March, 2016 (including investments made in the previous years):

(i) Investments in equity shares:

(Rs. In Lacs)

(ii) Investment in debt instrument:

(Rs. In Lacs)

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

(Rs. In Lacs)

B. There are no guarantees issued by your Company in accordance with Section 186 of the Companies Act, 2013 read with the Rules issued there under.

VIGIL MECHANISM

Your Company is committed to highest standards of ethical, moral and legal business conduct. Accordingly, the Board of Directors has formulated a Whistle Blower Policy which is in compliance with the provisions of Section 177 (10) of the Companies Act, 2013 and SEBI (LODR), Regulations,

2015. The policy provides for a framework and process whereby concerns can be raised by its employees against any kind of discrimination, harassment, victimization or any other unfair practice being adopted against them. More details on the vigil mechanism and the Whistle Blower Policy of your Company have been outlined 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 the Company at their meeting held on 30^th May, 2014 framed CSR Committee on the recommendations of the CSR Committee The CSR Policy outlines the CSR vision of your Company which is based on embedded tenets of trust, fairness and care.

APPRECIATION

Your Directors wish to convey their gratitude and place on record their appreciation for all the employees at all levels for their hard work, solidarity, cooperation and dedication during the year. Your Directors sincerely convey their appreciation to customers, shareholders, vendors, bankers, business associates, regulatory and government authorities for their continued support.

By Order of the Board,

Sd/-

Date: 10^th August, 2016 S N Bhatnagar

Place: Vadodara

Chairman Registered Office:

Essen Info Park 5/9-10 BIDC Gorwa,

Vadodara-390016, (Gujarat) India