Diamond Infosystems Ltd Management Discussions.

Industry overview

To paw with dream of our Honble Prime Minister Shri Narendra Modi for digital India and with the emergence of the internet and inexpensive connectivity, the global delivery model of service delivery has risen to become the preferred model in sourcing of IT services, business process services and research and development services.

In this period, service providers have gained technological expertise, domain competency and delivery capability. With the emergent needs of IT Services and Government initiatives, we believe the IT Services industry has significant growth potential. According to the Strategic Review 2017 of NASSCOM (the "NASSCOM Report") in FY17, IT export revenues, from India grew by 7.6%, to an estimated $117 billion. In the last few years, enterprises around the world are embracing the reality that digital transforms every aspect of business. Experiences, consumers, entire industries, business models and ways of working are all rapidly and fundamentally changing. Recognition of these trends, combined with the realization that enterprises may not be able keep up with this pace of change, has a profound impact on our clients. This requires new business models, new ways of working and integrated capability across strategy, design and technology. NASSCOM Report projects the Indian technology and services industry to reach $200 billion to $225 billion in revenues by 2020 and over $350 billion by 2025, from a base of $154 billion in 2017.

Business overview

The Company is taking toddler steps in the field of expansion of its network and human assets to develop and to reap new heights of success. Presently, The Company is in the business of fitment analysis, product implementation, application enhancement, migration, support & maintenance. The Company possesses expert team of domain specialists. We develop and integrate innovative solutions that enable our clients to leverage IT to achieve their business objectives at competitive costs. We use our quality processes and global talent pool to deliver "time to development" advantages, cost savings and productivity improvements. Our IT

Services business provides a range of IT and IT-enabled services which include digital strategy advisory, customer centric design, technology consulting, IT consulting, custom application design, development, re-engineering and maintenance, systems integration, package implementation, global infrastructure services, analytics services, business process services, research and development and hardware and software design to leading enterprises worldwide.

IT Products

The key components of the hardware industry are servers, desktops, notebooks and tablet computers, storage devices, peripherals, printers and networking equipment. According to the NASSCOM Report, the hardware segment of the IT-Business Process Management exports from India is estimated to be $14 billion in fiscal year 2017. The domestic market in India is also estimated at $14 billion in fiscal year 2017. Emergence of cloud computing technologies is negatively affecting demand for IT products such as servers.

Business strategy

Technology has become increasingly central and core to enterprises across industry segments. In addition, consumerization of IT has led to blurring of boundaries between business needs and technology enablement. Keeping in view of the same the Company is expanding its horizon in the various line of business more precisely on ERP services, SAP Business one implementation, Microsoft Dynamics NAV, Application Development And Management, Data Services Management, Facility Management, System Integration, Managed Security System.

DISCLOSURES

(a) RELATED PARTY TRANSACTIONS

Details of materially significant related party transactions i.e. transactions of the Company of material nature with its promoters, the Directors or the management, their subsidiaries or relatives, etc. are presented under Notes of the Balance Sheet. All details on the financial and commercial transactions, where Directors may have a potential interest, are provided to the Board. The interested Directors neither participate in the discussion, nor vote on such matters. During 2016-17, there were no related party transactions of material nature that may have a potential conflict with the interests of the Company.

(b) ACCOUNTING TREATMENT IN PREPARATION OF FINANCIAL STATEMENTS

The Company has followed the Accounting standards notified by The Companies (Accounting Standards) Rules, 2006, as amended from time to time, in preparation of its financial statements.

(c) RISK MANAGEMENT

The Company has established a well-documented and robust risk management framework. Under this framework, risks are identified across all business processes of the Company on continuous basis. Once identified, these risks are systematically categorised as strategic risks, business risks or reporting risks. The former looks at all risks associated with the longer term interests of the Company. The latter look at risks associated with the regular functioning of each of the processes and the risks associated with incorrect or untimely financial and non-financial reporting. To address these risks in a comprehensive manner, each risk is mapped to the concerned department for further action. Based on this framework, Company has set in place various procedures for Risk Management.

(d) CODE FOR PREVENTION OF INSIDER TRADING PRACTICES

The Company has instituted a comprehensive code for prevention of Insider Trading, for its Directors and designated employees, in compliance with Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015, as amended from time to time.

(e) CEO/CFO CERTIFICATION

As required under SEBI (LODR), regulations, 2015 of the Stock Exchanges, the Chairman & Managing Director and the Group Chief Financial Officer of the Company have certified to the Board regarding the Financial Statements for the year ended on 31st March, 2017 which is annexed to this Report.

GENERAL BODY MEETINGS:

Particulars about the last Three Annual General Meetings of the Company are:

Sr. No AGM Particulars & Date Venue Time Special Resolution passed in the AGM
1 23rd Annual General Meeting (2015-16) held on 30/09/2016 Registered Office 02:00 P.M. N.A.
2 22nd Annual General Meeting (2014-15) held on 30/09/2015 Registered Office 02.00 P.M. N.A.
3 21st Annual General Meeting (2013-14) held on 30/09/2014 Registered Office 02.00 P.M. N.A.

MATERIAL DISCLOSURES:

There are no matters pertaining to non-compliance by the company, penalties imposed on the company by Stock Exchange or SEBI or any statutory authority, on any matter related to capital markets, during the last three years. The Company strongly believes in Corporate Governance and advocates Whistle Blower policy, affirmation is hereby given that no personnel has been denied access to the audit committee.

1. Means of Communication

Your company uses several modes of communication with its external stakeholders by means of announcements, press releases in newspapers and other reports to the members. Your Companys Quarterly

Results are published in one English Daily newspaper and one Vernacular Daily newspaper and also forwarded to BSE. Shareholders can also visit the Companys website www.diinsy.com for all the latest updates.

2. Stock Exchange:

Your Company makes timely disclosures of necessary information to BSE Limited (BSE) in terms of the Listing Agreement(s) and other rules and regulations issued by SEBI.

3. BSE Corporate Compliance & Listing Centre:

BSE Listing is a web-based application designed by BSE for corporates. All periodical compliance filings, inter alia, Shareholding pattern, Corporate Governance Report, Corporate announcements, amongst others are also filed electronically on the Listing Centre.

GENERAL SHAREHOLDER INFORMATION:

i. 24th Annual General Meeting Date: 29th September, 2017
Time: 03:00 pm
Venue: Registered Office of the Company
"Essen Info Park" 5/9-10 BIDC, Gorwa,
Vadodara -390016
ii. Financial Year Commencing from 1st April, 2016 to 31st March, 2017
iii. Date of Book Closure From Friday, 22nd September, 2017 to Friday, 29th September, 2017
iv. Record Date 22nd September, 2017
v. Listed on The BSE Limited, Mumbai
The Listing Fees to BSE Limited has already been paid for the year
2017-18
vi. Stock Code BSE: - 530801
vii. Market Price Data The Market price data (Monthly High / Low) of the companys Equity shares traded on the Bombay Stock Exchange (BSE) during the period from 01/04/2016 to 31/03/2017 are given below:

Stock Exchange Month & Year

BSE
High (Rs) Low (Rs) No of Shares traded during the month
Apr-16 33.50 32.00 50.00
May-16 42.40 33.60 286.00
Jun-16 50.90 44.40 130.00
Jul-16 54.00 48.70 3434.0
Aug-16 48.70 39.10 550.00
Sep-16 54.00 47.50 101684.00
Oct-16 56.70 01.90 11475.00
Nov-16 02.90 02.30 156377.00
Dec-16 03.23 02.17 240408.00
Jan-17 02.75 02.22 132391.00
Feb-17 02.45 02.02 18014.00
Mar-17 03.04 02.07 48595.00

 

viii. Registrar and Transfer Agent Karvy Computershare Pvt. Ltd.
Karvy Selenium Tower B,
Plot 31-32, Gachibowli Financial District,
Nanakramguda, Hyderabad - 500 032
ix. Share Transfer System Share Transfers in physical form can be lodged with Karvy Computer share Private Limited, Independent Share Transfer Agent, at the above mentioned address. Transfers are normally processed within 15 days from the date of receipt. If the documents are complete in all respects, Registrar, in consultation with Share Transfer Committee, is empowered to approve transfers, in addition to the powers with the Members of the Stakeholders Grievance & Relationship Committee.

x. Details of investors complaints received during 1st April, 2016 to 31st March, 2017 are as follows:

Sr. No. Nature of Complaint* Receipt Disposed Pending Remarks
1 Non- receipt of dividend warrant 0 0 0 N.A.
2 Excess/ Short payment of Dividend Warrant 0 0 0 N.A.
3 Non-receipt of Annual Reports 2 2 0 N.A.
4 Legal Notice 0 0 0 N.A.
5 Non- receipt of refund order 0 0 0 N.A.
6 Correction of name on securities 0 0 0 N.A.
7 Non Receipt of Security- Complaint relating to transfer of Shares 4 4 0 N.A.
8 Clarification regarding shares 2 2 0 N.A.

* Information is based on reports prepared by Independent Share Transfer Agent.

xi. Shareholding Pattern and Distribution of Shareholding

Shareholding pattern as on 31st March, 2017

Category No. of holders Total Shares % To Equity
Resident Individuals / HUF 402 100196857 24.92
Promoters Bodies Corporate 3 107302350 26.69
Indian Financial Institutions 1 21750000 5.41
Directors 1 7297500 1.82
Bodies Corporates 14 165451193 41.16
Non Resident Indians/ Clearing Members 2 2200 0.00
TOTAL 423 402000000 100.00

Distribution Schedule Consolidated as on 31.03.2017.

Sr. No. Category Cases % of Cases Total shares Amount % of Amount
1 Upto 1 - 5000 244 57.68 469186 469186.00 0.12
2 5001 - 10000 78 18.44 551294 551294.00 0.14
3 10001 - 20000 39 9.22 561600 561600.00 0.14
4 20001 - 30000 24 5.67 628717 628717.00 0.16
5 30001 - 40000 4 0.95 133179 133179.00 0.03
6 40001 - 50000 3 0.71 127940 127940.00 0.03
7 50001 - 100000 3 0.71 172084 172084.00 0.04
8 100001 & ABOVE 28 6.62 399356000 399356000.00 99.34
Total 423 100.00 402000000 402000000.00 100.00

The Shareholders are requested to follow exact ISIN for the purpose of dealing in the respected securities. Presently the Equity Shares of the Company are held in electronic and physical mode. The status of Equity Shares of the Company as of March 31, 2017 is as follows: Particulars Number of Shares % of total Equity Share

CONTROL REPORT AS ON 31/03/2017

Sr. No Description No of Holders Shares % To Equity
1 PHYSICAL 194 9213720 2.29
2 NSDL 130 295290824 73.46
3 CDSL 99 97495456 24.25
Total 423 402000000 100.00

Registered Address:

Diamond Infosystems Limited
"ESSEN INFO PARK"
5/9-10 BIDC Gorwa
Vadodara -390016
Phone : 91-265-2284328, 2283969
Fax : 91-265-2280528
E-mail : investor.relationship@diinsy.com

Other Shareholder Information

Corporate Identity Number (CIN)

The CIN allotted to the Company by the Ministry of Corporate Affairs, Government of India is L24110GJ1993PLC019094.

Shares held in electronic form

Members holding shares in electronic form may please note that:-

i) Instructions regarding bank details which they wish to have incorporated in future dividend warrants must be submitted to their Depository Participants (DP). As per the regulations of NSDL and CDSL, the Company is obliged to print bank details on the dividend warrants, as furnished by these Depositories to the Company.

ii) Instructions already given by them for shares held in physical form will not be automatically applicable to the dividend paid on shares held in electronic form.

iii) Instructions regarding change of address, nomination and power of attorney should be given directly to the DP.

iv) The Company provides NECS facilities for shares held in electronic form and Members are urged to avail of this facility.

Bank Details

Members holding shares in physical form are requested to notify/send the following to Share transfer Agent to facilitate better servicing:-

i) Any change in their address/mandate/bank details, and

ii) Particulars of the bank in which they wish their dividend to be credited, in case they have not been furnished earlier. Members are advised that respective bank details and address as furnished by them or by NSDL/CDSL to the Company, for shares held in physical form and in electronic form respectively, will be printed on their dividend warrants as a measure of protection against fraudulent encashment.

DEPOSITORY SERVICES

Members may write to the respective Depository or to Share Transfer Agent for guidance on depository services. Address for correspondence with the Depositories is as follows:

National Securities Depository Limited Central Depository Services (India) Limited
Trade World, 4th Floor PhirozeJeejeebhoy Towers
Kamala Mills Compound 17th Floor, Dalal Street
Senapati Bapat Marg, Lower Parel Mumbai 400 023
Mumbai 400 013 Tel: 022-2272 3333
Tel: 022-2499 4200 Fax: 022-2272 3199
Fax: 022-2497 6351 E-mail: investor@cdslindia.com
E-mail: info@nsdl.co.in Website: www.cdslindia.com
Website: www.nsdl.co.in

Nomination Facility

Pursuant to the provisions of Section 72 of Act, Members are entitled to make nominations in respect of shares held by them. Members holding shares in physical form and intending to make/change the nomination in respect of their shares in the Company may submit their requests in Form No. SH- 13 to Share Transfer Agent. Members holding shares in electronic form are requested to give the nomination request to their respective DPs directly.

Reconciliation of Share Capital Audit

As stipulated by SEBI, M/s. K H & Associates., Practicing Company Secretary carries out Secretarial Audit to reconcile the total admitted capital with NSDL and CDSL and the total issued and listed capital. This audit is carried out every quarter and the report thereon is submitted to the Stock Exchange as well as placed before the Board of Directors. The audit confirms that the total listed and paid-up capital is in agreement with the aggregate of the total number of shares in physical form and the total number of shares in dematerialised form (held with NSDL and CDSL).

By Order of the Board of Director,
SD/-
S N Bhatnagar
Date: 4th September, 2017 Chairman
Place: Vadodara (DIN: 01661444)