To
The Members,
Your Directors are pleased to present to the valued stakeholders, the 34th
Annual Report of Divinus Fabrics Ltd along with the Audited Financial Statements of the
Company for the Year ended March 31st, 2019.
FINANCIAL HIGHLIGHTS- AT A GLANCE
• Overall Performance of your Company
• Your Company has earned Net Profit of Rs. 3,50,200 /- (Rupees Three Lakh Fifty
Thousand, Two Hundred) only in 2018-19 as against Net Profit of Rs. 2,12,153 (Rupees Two
Lakh, Twelve Thousand and One Hundred Fifty Three only) in FY-2017-18.
• The financial summary, performance highlights operations/state of affair of your
Company for the year are summarized below:
(Amount in Rupees)
| PARTICULARS |
Standalone |
|
2018-19 |
2017-18 |
| Sales |
- |
1,03,58,220 |
| Other Income |
19,26,173 |
15,57,152 |
| Total Income |
19,26,173 |
15,57,152 |
| Total Expenditure |
14,52,930 |
1,16,29,639 |
| Profit/(Loss) before tax |
4,73,243 |
2,85,733 |
| Tax |
1,23,043 |
73,580 |
| Net Profit/(Loss) |
3,50,200 |
2,12,153 |
| Paid Up Share Capital |
4,45,70,040 |
4,45,70,040 |
DIVIDEND
No Dividend was declared for the current financial year due to loss incurred by the
Company.
RESERVES
The net movement in major reserves of the Company for Financial Year 2018-19 and the
previous year as follows:
| Particulars |
31/03/2019 |
31/03/2018 |
| Surplus in Statement of Profit and Loss |
|
|
| Opening balance |
34,60,017 |
32,47,864 |
| Net Profit / (Loss) for the year |
3,50,199 |
2,12,153 |
| Excess / (Short) of Previous Years |
- |
- |
| Sub Total |
38,10,215 |
34,60,017 |
| (-) Utilized for issue of Bonus Shares |
- |
- |
| (-) Tax on Dividend |
- |
- |
| Total |
38,10,215 |
34,60,017 |
TRANSFER OF UNCLAIMED DIVIDEND TO INVESTOR EDUCATION AND PROTECTION FUND
Since there was no unpaid/unclaimed Dividend declared or paid by the Company, the
provisions of Section 125 of the Companies Act, 2013 do not apply.
DEPOSITS
During the year under review, the Company has not accepted any deposits in terms of section
73 of the Companies Act, 2013 to be read with the Companies (Acceptance of Deposits)
Rule, 2014 as amended from time to time, and also no amount was outstanding on
account of principal or interest thereon, as on the date of the Balance Sheet.
SUBSIDIARY / ASSOCIATE/ JOINT VENTURES COMPANIES OF THE COMPANY
The Company is not having any Subsidiary Company/ Joint Venture/ Associate Company
during the financial year 2018-2019. (Refer Annexure B)
MANAGEMENT DISCUSSION & ANALYSIS REPORT
Management Discussion and Analysis Report for the year under review, as stipulated
under Regulation 34 of SEBI (Listing Obligations and Disclosure Requirements) Regulations,
2015, is presented in a separate section of this Annual Report.
CHANGE IN NATURE OF BUSINESS
During the year under review, there was no change in nature of business of the Company.
CHANGE IN DIRECTORS /KEY MANAGERIAL PERSONNEL DURING THE YEAR
The details about the changes in Directors or Key Managerial Personnel by way of
Appointment, Re - designation, Resignation, Death, Dis-qualification, variation made or
withdrawn etc. are as follows:
• During the financial year 2018-19, there was no change in the Directorship of
the Company.
• Mr. Arvind Agarwal has been resigned from the Directorship of the Company w.e.f.
13.08.2019
• Ms. Aayesha Imran Imran Shaikh has been appointed as Non-Executive Independent
Director of the Company w.e.f. 29.05.2019
• Ms. Sima Devi has been appointed as Non-Executive Independent Director of the
Company w.e.f. 16.08.2019.
STATEMENT ON DECLARATION GIVEN BY INDEPENDENT DIRECTORS UNDER SECTION 149(6) OF
COMPANIES ACT, 2013
All Independent Directors have given declarations under section 149(7) that they meet
the criteria of Independence as laid down under section 149(6) of the Companies Act, 2013
and rules made there under to be read with SEBI (Listing Obligation & Disclosure
Requirement) Regulation, 2015.
DISCLOSURE OF CHANGE IN ACCOUNTING TREATMENT IN FINANCIAL STATEMENTS
During the period under review, there were no changes in the Accounting treatment in
the Financial Statements for the financial year 2018-19, different from that as prescribed
in Accounting Standards, prescribed by the Institute of Chartered Accountants of India
(ICAI).
EXTRACT OF ANNUAL RETURN
The details forming part of extract of Annual Return under sub section 3 of Section 92
of the Companies Act, 2013 in Form MGT-9 is annexed herewith as "Annexure
A,"
NUMBER OF MEETINGS OF THE BOARD
During the year under review, Six Board Meetings, 5 Audit Committee Meetings, Six
Nomination & Remuneration Committee Meetings, one Stakeholders’ Relationship
Committee Meetings, were convened and held. All the Meetings including Committee Meetings
were duly held and convened and the intervening gap between two consecutive meetings was
within the period prescribed under the Companies Act, 2013 to be read with the SEBI
(Listing Obligations & Disclosure Requirements), Regulations 2015.
No. of Board Meeting held during the year:
| S. No. |
Date |
S. No. |
Date |
| 1. |
30.05.2018 |
4. |
13.11.2018 |
| 2. |
10.08.2018 |
5. |
01.01.2019 |
| 3. |
31.08.2018 |
6. |
13.02.2019 |
AUDIT COMMITTEE
The Audit Committee of the Company is constituted in line with the provisions of
section 177 of the Companies Act, 2013 to be read with Regulation 18 of the SEBI (Listing
Obligation & Disclosure Requirement) Regulation, 2015. The Composition of Audit
Committee as off 31.03.2019 is given below:
| S. No. |
Name |
Category |
Category (Whether Executive/Non- Executive/Independent Director) |
| 1. |
Mr. Arvind Agrawal, |
Chairman |
Non- Executive Independent Director |
| 2. |
Ms. Seema |
Member |
Non- Executive Independent Director |
| 3. |
Mr. Kuldip Singh |
Member |
Non-Executive Director |
No. of Audit Committee Meeting held during the year
| 1. 30/05/2018 |
2. 10/08/2018 |
| 3. 31/08/2018 |
4. 13/11/2018 |
| 5. 13/02/2019 |
|
NOMINATION & REMUNERATION COMMITTEE
The Nomination & Remuneration Committee of the Company is constituted in line with
the provisions of section 178 of the Companies Act, 2013 to be read with Regulation 19 of
the SEBI (Listing Obligation & Disclosure Requirement) Regulation, 2015. The
Composition of the Committee is given below:
| S. No. |
Name |
Category |
Category (Whether Executive/Non- Executive/Independent Director) |
| 1. |
Mr. Arvind Agrawal, |
Chairman |
Non- Executive Independent Director |
| 2. |
Ms. Seema |
Member |
Non- Executive Independent Director |
| 3. |
Mr. Kuldip Singh |
Member |
Non-Executive Director |
No. of Nomination & Remuneration Committee Meeting held during the year
| S. No. |
Date |
S. No. |
Date |
| 1 |
30.05.2018 |
4 |
13.11.2018 |
| 2 |
10.08.2018 |
5 |
01.01.2019 |
| 3 |
31.08.2018 |
6 |
13.02.2019 |
STAKEHOLDERS’ RELATIONSHIP COMMITTEE
The Stakeholders’ Relationship Committee of the Company is constituted in line
with the provisions of section 178 of the Companies Act, 2013 to be read with Regulation
20 of the SEBI (Listing Obligation & Disclosure Requirement) Regulation, 2015.The
Composition of the Committee is given below:
| S. No. |
Name |
Category |
Category (Whether Executive/Non- Executive/Independent Director) |
| 1. |
Mr. Arvind Agrawal, |
Chairman |
Non- Executive Independent Director |
| 2. |
Ms. Seema |
Member |
Non- Executive Independent Director |
| 3. |
Mr. Kuldip Singh |
Member |
Non-Executive Director |
No. of Stakeholders Relationship committee meeting: 1. 31/08/2018
VIGIL MECHANISM COMMITTEE
The Company has established a Vigil Mechanism for its Directors and employees to report
their genuine concerns or grievances. The policy provides a framework for directors and
employees to report genuine concerns about unethical behavior, actual or suspected fraud
or violation of the Company's code of conduct or ethics policy. Protected disclosures can
be made by a whistle blower through an email or to the Chairman of the Audit Committee.
The vigil mechanism/whistle blower policy can be accessed on the Company's website at the
link: www.divinusfabrics.com.
BOARD ANNUAL EVALUATION
The provisions of section 134(3)(p) of the Companies Act, 2013 read with SEBI (Listing
Obligations & Disclosure Requirements) Regulations, 2015 mandate that a Formal Annual
Evaluation is to be made by Board of its own performance and that of its Committee and
individual Directors. Schedule IV of the Companies Act, 2013 states that performance
evaluation of the Independent Director shall be done by Directors excluding the Director
being evaluated. The Board carried out a formal annual performance evaluation as per the
criteria/framework laid down by the Nomination & Remuneration Committee of the company
and adopted by the Board. The evaluation was carried out through a structured evaluation
process to judge the performance of individual Directors including the Chairman of the
Board. They were evaluated on parameters such as their education, knowledge, experience,
expertise, skills, behavior, leadership qualities, level of engagement & contribution,
independence of judgment, decision making ability for safeguarding the interest of the
Company, stakeholders and its shareholders.
The performance evaluation of the Independent Directors was carried out by the entire
Board except the participation of concerned Independent Director whose evaluation was to
be done. The performance evaluation of the Chairman and the Non Independent Directors was
carried out by the Independent
Directors. The Board was satisfied with the evaluation process and approved the
evaluation results thereof.
REMUNERATION POLICY FOR THE BOARD OF DIRECTORS, KEY MANAGERIAL PERSONNEL AND OTHER
EMPLOYEES
In terms of the provisions of Section 178(3) of the Act and as per the Listing
Agreement, the Nomination and Remuneration Committee is responsible for formulating the
criteria for determining qualification, positive attributes and independence of a
Director. The Nomination and Remuneration Committee is also responsible for recommending
to the Board a policy relating to the remuneration of the Directors, Key Managerial
Personnel and other employees. In line with this requirement, the Board has adopted the
Policy on Board Diversity and Director Attributes and Remuneration Policy for Directors,
Key Managerial Personnel and other employees of the Company. The Remuneration Policy is
annexed as Annexure to this report.
POLICY REGARDING THE APPOINTMENT OF BOARD OF DIRECTORS
The Board of Directors adopted uniform policy for the appointment of Director in
pursuance of various provisions of Companies Act and Listing Agreement.
CRITERIA FOR DETERMINING QUALIFICATIONS. POSITIVE ATTRIBUTES AND INDEPENDENCE OF A
DIRECTOR
The Nomination and Remuneration Committee has formulated the criteria for determining
qualifications, positive attributes and independence of Directors in terms of provisions
of Section 178 (3) of the Act is annexed as Annexure to this Report.
CORPORATE GOVERNANCE REPORT
In pursuance of SEBI Circular CIR/CFD/POLICY CELL/7/2014 dated September 15, 2014,
Regulation 27(2) of SEBI (Listing Obligations and Disclosure Requirements) Regulations
2015 shall be applicable on those companies having paid up equity share capital exceeding
Rs.10 crore and Net Worth exceeding Rs.25 crore, as on the last day of the previous
financial year. The paid up share capital of your company not qualify the applicability of
Regulations of SEBI disclosure requirement. Therefore separate Report of Corporate
Governance is not attached herewith.
In spite of above said SEBI circular, Your Company adopts best practices for corporate
governance, disclosure standard and enhanced shareholder value while protecting the
interest of all other stakeholders including clients, its employee. This has enabled your
Company to earn the trust and goodwill of its investors, business partners, employees and
the communities in which it operates. Your directors believe that Company profitability
must go hand in hand with a sense of responsibility towards all stakeholders, employee and
communities.
STATUTORY AUDITOR, SECRETARIAL AUDITOR & COST AUDITOR WITH THEIR QUALIFICATION,
RESERVATION OR ADVERSE REMARKS ALONG WITH THE EXPLANATION OR COMMENTS BY THE DIRECTORS
A. STATUTORY AUDITOR
A written consent/certificate regarding eligibility for the appointment of M/s S.
Agarwal & Co., Chartered Accountants as the Statutory Auditors in accordance with
the Rule 4 of the Companies (Audit and Auditors) Rule, 2014 read with the provisions of
section 139(2) of the Companies Act, 2013 has been received by the company.
The Board on recommendation of the Audit Committee has proposed appointment of M/s
S. Agarwal & Co., Chartered Accountants, as the Statutory Auditors of the Company
to hold the office from the conclusion of ensuing Annual General Meeting till the
conclusion of Annual General Meeting to be held in the financial Year 2024.
Qualification(s) and Directors' comments on the report of Statutory Auditor:
The Notes on Accounts and observations of the Auditors in their Report on the Accounts
of the Company are self-explanatory and in the opinion of the Directors, do not call for
any further clarification(s). Also, the report submitted by the Auditor is unqualified.
B. SECRETARIAL AUDITOR
Pursuant to provision of section 204 of the Companies act, 2013, read with the
Companies (Appointment and Remuneration of Managerial Personnel) Rule, 2014, the Company
has appointed M/s. Ojha & Associates, Practicing Company Secretaries to
undertake Secretarial Audit of the Company.
The Secretarial Audit was conducted by M/s. Ojha & Associates, Practicing Company
Secretary, and the report thereon is annexed herewith as "Annexure G".
Qualification(s) and Directors' comments on the report of Secretarial
Auditor:
No adverse observation(s) have been recorded by the Secretarial Auditor for the year
under review in its report
DETAILS IN RESPECT OF FRAUDS REPORTED BY AUDITOR
There were no instances of fraud that have been observed by the Statutory Auditor
during audit of the financial statements for the financial year 2018-19, which are
required to be disclosed by the company in its Board Report under Section 143 (12) of the
Companies Act, 2013.
PARTICULAR OF LOANS, GUARANTEES OR INVESTMENTS UNDER SECTION 186 OF THE COMPANIES ACT,
2013
The details of loans, guarantees or investments made by the company, if any, pursuant
to the provisions of section 186 of the Companies Act, 2013 can be found in the balance
sheet.
PARTICULAR OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES UNDER SECTION 188 OF THE
COMPAIES ACT, 2013
All contracts/arrangements/transactions entered into during the financial year with the
related parties were on arm’s length basis and were in the ordinary course of
business.
FINANCIAL POSITION
A) Issue of equity shares with differential voting rights
No equity shares with differential voting rights has been issued by the company during
the financial year 2018-19
B) Issue of sweat equity shares
The Company has not issued sweat equity shares pursuant to provisions of Section 54
read with Rule 8 of the Companies (Share Capital and Debenture) Rules, 2014 during the
Financial Year.
C) Issue of employee stock options
The Company has not issued shares under employee’s stock options scheme pursuant
to provisions of Section Rule 12(9) of the Companies (Share Capital and Debenture) Rules,
2014, so question does not arise about voting rights not exercised by employee during the
year under review.
D) Buy Back of Securities
The Company has not bought back any of its securities pursuant to the provisions of
Section 67 and Section 68 of the Companies Act 2013 during the year under review.
E) Voting Rights of Employees
During the year under review the company has not given loan to any employee for
purchase of its own shares as per section 67 (3) (c) of the Companies Act, 2013. Therefore
the company is not required to make disclosure as per rule 6 (4) of the Companies (Share
Capital and Debentures) Rules, 2014.
MATERIAL CHANGES AND COMMITMENTS, IF ANY
There are no material changes or commitments noticed by the Board between the end of
financial year of the company as on 31st March, 2019 and the date of this
Report.
DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY REGULATORS OR COURTS OR TRIBUNALS
IMPACTING THE GOING CONCERN STATUS AND COMPANY’S OPERATIONS IN FUTURE
To the best of the Management’s knowledge, no significant and material order(s)
were passed by any regulator(s) or courts or tribunals which could impact the going
concern status and company’s operation in future.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION & FOREIGN EXCHANGE EARNINGS AND
OUT-GO
Information required to be given pursuant to section 134(3) (m) of the Companies Act,
2013 read with Rule 8(3) of the Companies (Accounts) Rules, 2014 are given below:
• STEPS TAKEN FOR CONSERVATION OF ENERGY
The Company has been taking energy saving measures viz., Use of energy saver electrical
equipments, CFL fittings are provided inside the building for common area lighting in the
projects of the Company, Efficient ventilation system in offices and the projects of the
Company.
Moreover, your company emphasis towards a safe and clean environment and continue to
adhere to all regulatory requirements and guidelines.
• TECHNOLOGY ABSORPTION
Your Company is engaged in to the business of trading of Fabrics. The business of the
Company does not require intense use of technology. Therefore no technology has been
absorbed during the period under review. Further during the year Company has not imported
any technology.
Our Company has not undertaken any research and development work during the year
2018-19. However, in order to minimize its cost and increase the quality of its products,
your Company is trying to maintain highest standard of quality.
• FOREIGN EXCHANGE EARNINGS AND OUTGO.
There was no foreign exchange inflow or Outflow during the year under review.
RISK MANAGEMENT POLICY
The Board of Directors of the Company has formulated a Risk Management Policy which
aims at enhancing shareholders’ value and providing an optimum risk reward tradeoff.
The risk management approach is based on a clear understanding of the variety of risks
that the organization faces, disciplined risk monitoring and measurement and continuous
risk assessment and mitigation measures.
CORPORATE SOCIAL RESPONSIBILITY INITIATIVES
The company does not fall under the criteria of net worth, turnover or profit for
applicability of Corporate Social Responsibility (CSR) provisions as per Section 135 of
the Companies Act, 2013, hence the same are not applicable to the company for the period
under review.
VIGIL MECHANISM / WHISTLE BLOWER POLICY
As per Regulation 22 of the SEBI Regulations, 2015, in order to ensure that the
activities of the Company & its employees are conducted in a fair & transparent
manner by adoption of highest standards of professionalism, honesty, integrity and ethical
behavior, the company has adopted a vigil mechanism policy. This policy is explained in
"Corporate Governance Report" and is also posted on website of the company.
PREVENTION OF SEXUAL HARASSMENT AT WORKPLACE
As per the requirement of "The Sexual Harassment of Women at Workplace
(Prevention, Prohibition & Redressal) Act, 2013" and Rules made there under, your
Company has constituted Internal Complaints Committee (ICC) at its workplaces. During the
year, no complaints were filed with the Company.
CORPORATE GOVERNANCE REPORT
As per Reg. 34 of SEBI Regulation, 2015 to be read with Part A of Schedule V of the
said regulations, a separate section on corporate governance practices followed by the
company, together with the certificate from the company’s Statutory Auditors/
Practicing Company Secretary confirming compliance forms an integral part of this Report.
HUMAN RESOURCE
The relationship with employees continues to be harmonious. The company always
considers its human resource as its most valuable asset. Imparting adequate and
specialized training to its employees is ongoing exercise in the company.
INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY
The company has in place, a sound Internal Control System, commensurate with the size,
scale and complexity of its operations. To maintain its objectivity and independence, the
Internal Audit function reports to the Chairman of the Audit Committee of the Board. The
Management monitors and evaluates the efficacy & adequacy of internal control system
in the Company, in compliance with operating systems, accounting procedure and policies.
Bases on the report of internal audit function, process owners undertake corrective action
in their respective areas and thereby strengthen the controls.
LISTING AGREEMENT
The shares of the Company are presently listed at BSE Ltd. (Bombay Stock Exchange).
All statutory dues including Annual Listing Fees for the Financial Year 2018-19 has
been paid (with interest, if any payable) by the Company.
PERSONNEL RELATIONS
Your Directors hereby place on record their appreciation for the services rendered by
executives, staff and other workers of the Company for their hard work, dedication and
commitment. During the year under review, relations between the Employees and the
Management continued to remain cordial.
CODE OF CONDUCT
The Board of Directors has laid down the code of conduct for all Board Members and
members of the Senior Management of the Company. Additionally, all Independent Directors
of the company shall be bound by duties of Independent Directors as set out in Companies
Act, 2013 to be read with SEBI Listing Regulations, 2015.
All Board Members, Key Managerial Personnel and Senior Management Personnel have
affirmed compliance with the Code of Conduct.
PARTICULARS OF EMPLOYEES/DIRECTORS
The information required pursuant to Section 197 read with Rule, 5 of The Companies
(Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of employees
of the Company is as follows:
The company has for Executive Directors and remuneration paid to them is disclosed in
MGT-9. Further, no sitting fee has been paid to any director during the year.
The remuneration paid to all Key Managerial Personnel was in accordance with the
remuneration policy as adopted by the company.
DIRECTOR’S RESPONSIBILITY STATEMENT
In terms of Section 134(3) of the Companies Act 2013, the Directors, would like to
state as follows:
(a) In the preparation of the annual accounts for the year ended March 31, 2019, the
applicable accounting standards have been followed along with proper explanation relating
to material departures and the annual accounts have been prepared in compliance with the
provisions of the Companies Act, 2013;
(b) the directors had 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 the company at the end of the financial year and of
the profit and loss of the company for that period;
(c) the directors had taken proper and sufficient care 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 directors had prepared the annual accounts on a going concern basis;
(e) the directors, in the case of a listed company, had laid down internal financial
controls to be followed by the company and that such internal financial controls are
adequate and were operating effectively and
(f) they have devised proper systems to ensure compliance with the provisions of all
applicable laws and these are adequate and are operating effectively.
ACKNOWLEDGEMENT
Your Directors would like to express their sincere appreciation for assistance and
co-operation received from the various stake holders including Financial Institutions,
Banks, Governmental authorities and other business associates who have extended their
valuable support and encouragement during the year under review.
Your Directors take the opportunity to place on record their deep appreciation of the
committed services rendered by the employees at all levels of the Company, who have
contributed significantly towards Company’s performance and for enhancing its
inherent strength. Your Directors also acknowledge with gratitude the encouragement and
support extended by our valued stakeholders.
|
By Order of the Board of Directors |
|
|
For Divinus Fabrics Limited (Formerly known as Avishkar Finance Company Limited). |
|
|
Sd/- |
Sd/- |
|
Gagan Anand |
Aayesha Imran Shaikh |
|
(DIN: 06957651) |
(DIN: 06668559) |
| Date: 13/08/2019 |
Managing Director |
Director |
| Place: Delhi |
|
|
|