BOARD OF DIRECTORS REPORT

Dear Stakeholders,

Your Directors present herewith the 30th Annual Report of the company for the year ended 31st March, 2015.

REVIEW OF OPERATION

During the year under review your Company’s performance satisfactory under the challenging market circumstances. Though the turnover of the Company has increased in comparison to the turnover of the last year by 10.01% still the net profit for the current year has decreased by approximately 50% as compared to previous year. The Company has earned the total revenue of Rs. 503.44 Lakh and other income of Rs. 6.94 Lakhs as compared to Rs. 457.13 Lakh of Sale and Rs. 3.10 Lakh of other incomes in previous Financial Year. The profit margin of the company has contracted.

SHARE CAPITAL

The issued, subscribed and paid up capital of the Company is Rs 44,570,040 (Rupees Four Crore Forty Five Lacs seventy Thousands Forty) divided into 44, 570, 04 (Forty four lacs fifty seven thousands four) equity shares of Rs 10 each. There has been no change in the share capital of the Company during the year.

DIVIDEND

The Board of Directors of your Company is of the opinion that keeping in view the future fund requirements of the Company and average financial performance, your Directors have not recommended any dividend on equity shares for the year under review. The Board assures you to present a much strong financial statements in coming years.

DETAIL OF BOARD MEETING

The Board met Six times during the financial year. The gap between any two meetings was within the period prescribed by the Companies Act, 2013

STATEMENT OF DECLARATION GIVEN BY INDEPENDENT DIRECTOR

The Board of Directors of the Company has received declaration of Independence from each Independent Director in pursuance of section 149(7) of the Companies Act, 2013.

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 1 to this Report.

ANNUAL EVALUATION OF PERFORMANCE OF BOARD OF DIRECTORS AND ITS COMMITTEES

Pursuant to the provisions of the Act, the Board has carried out an annual evaluation of its own performance, performance of the Directors individually as well as the evaluation of the working of its Committees. The following process was adopted for Board Evaluation:

Feedback was sought from each Director about their views on the performance of the Board covering various criteria such as degree of fulfillment of key responsibilities, Board structure and composition, establishment and delineation of responsibilities to various Committees, effectiveness of Board processes, information and functioning, Board culture and dynamics, quality of relationship between the Board and the Management and efficacy of communication with external stakeholders. Feedback was also taken from every director on his assessment of the performance of each of the other Directors.

Every statutorily mandated committee of the Board conducted a self-assessment of its performance and these assessments were presented to the Board for consideration. Areas on which the Committees of the Board were assessed included degree of fulfillment of key responsibilities, adequacy of Committee composition and effectiveness of meetings.

Feedback was provided to the Directors, as appropriate. Significant highlights, learning and action points arising out of the evaluation were presented to the Board.

DIRECTORATE

During the financial year 2014-15, Mrs. Preeti Srivastava was appointed as additional non- executive Independent director of your Company at the meeting of the Board of Directors held on 31st March, 2015and her tenure was upto the ensuing AGM and to be subsequently to be appointed as a Non Executive Independent Director by the shareholders at the AGM to be held on 29th September, 2015 In accordance with the requirements of the Companies Act, 2013 and the Company’s Articles of Association, Mr. Gagan Anand, Director of the Company, retires by rotation.

The Company has received declarations from all the Independent Directors of the Company confirming that they meet the criteria of independence as prescribed under Section 149(6) of the Companies Act, 2013

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 2 to this report.

COMMITTEES OF THE BOARD

The Committees of the Board focus on certain specific areas and make informed decisions in line with the delegated authority. The following substantive Committees constituted by the Board function according to their respective roles and defined scope:

• Audit Committee of Directors

• Nomination and Remuneration Committee

• Stakeholder Relationship Committee

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION

The information on conservation of energy and technology absorption stipulated under Section 134 (3) (m) of the Act read with Rule 8 of The Companies (Accounts) Rules, 2014:

The Company did not use any energy during the year under review. Your Company is conscious about its responsibility to conserve energy, power and other energy sources wherever possible.

Further your company has not imported any technology. However we believe and use information technology in all spheres of our activities to improve efficiency levels.

LISTING ON THE STOCK EXCHANGE

The Company's shares are listed with BSE Limited and the Company has paid the necessary listing fees for the Financial Year 2015-16, Also the Company is also listed on Delhi Stock Exchange but the same has been de-recognised.

CORPORATE GOVERNANCE REPORT

In pursuance of SEBI Circular CIR/CFD/POLICY CELL/7/2014 dated September 15, 2014, Clause 49 of the Listing Agreement shall be applicable 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 and net worth of your company do not qualify for applicability of clause 49 of Listing Agreement. 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.

RELATED PARTY TRANSACTION

There were no contracts or arrangements entered into by the Company in accordance with the Section 188 of the Companies Act, 2013.

DEPOSITS

The Company has not accepted any deposits during the under review.

DIRECTOR’S RESPONSIBILITY STATEMENT IN PURSUANCE OF SECTION 134(3)(C) OF THE COMPANIES ACT, 2013

The financial statements are prepared in accordance with the Accounting standard as prescribed under Section 133 of the Companies Act, 2013 (‘the Act’), read with Rule 7 of the Companies (Accounts) Rules, 2014, the provisions of the Act (to the extent notified) and guidelines issued by the Securities and Exchange Board of India (SEBI). There are no material departures from prescribed accounting standards in the adoption of these standards.

The directors confirm that:

• In preparation of the annual accounts for the financial year ended March 31, 2015, the applicable accounting standards have been followed.

• 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 the Company at the end of the financial year and of the profit and loss of the Company for that period.

• The directors have taken proper and sufficient care towards the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

• The directors have prepared the annual accounts on a going concern basis.

• The directors have laid down internal financial controls, which are adequate and are operating effectively.

• The directors have devised proper systems to ensure compliance with the provisions of all applicable laws and such systems are adequate and operating effectively.

EXTRACT OF ANNUAL RETURN

In accordance with Section 134(3)(a) of the Companies Act, 2013, an extract of the annual return in the prescribed format is appended as Annexure 3 to the Board's report.

AUDITORS

• STATUTORY AUDITORS

At the Annual General Meeting held on 29th September, 2014, Sudhir Agarwal & Associates, Chartered Accountants, were appointed as statutory auditors of the Company to hold office till the conclusion of the Annual General Meeting to be held in the calendar year 2019. In terms of the first proviso to Section 139 of the Companies Act, 2013, the appointment of the auditors shall be placed for ratification at every Annual General Meeting. Accordingly, the appointment of Sudhir Agarwal & Associates, Chartered Accountants, as statutory auditors of the Company, is placed for ratification by the shareholders. In this regard, the Company has received a certificate from the auditors to the effect that if they are reappointed, it would be in accordance with the provisions of Section 141 of the Companies Act, 2013. The Auditor Report for the FY 2014-15 forms part of the Annual Report as Annexure 4 to the Board’s Report. Auditors Report in respect of the Financial Statement for the current Financial Year given by M/s. Sudhir Agarwal & Associates, Chartered Accountant is self Explanatory and the Statutory Audit Report does not contain any qualification, reservation or adverse remark.

• SECRETARIAL AUDITOR

Ranjeet Verma, Practicing Company Secretaries, was appointed to conduct the secretarial audit of the Company for the financial year 2014-15, as required under Section 204 of the Companies Act, 2013 and Rules thereunder. The secretarial audit report for FY 2014-15 forms part of the Annual Report as Annexure 5 to the Board's report.

EXPLANATION ON SECRETARIAL AUDITOR’S REPORT

1. Non Filing of annual return:

During the period under review we have examined that company has not filed the annual return i.e. Form 20B. As per the provisions of section 159 of the companies act, 1956 every company having a share capital is require to file the annual return with the registrar within 60 days from the date on which annual general meeting is held or where no annual general meeting is held in any year within 60 days from the date on which annual general meeting should have been held together with the statement specifying the reason for not holding the same, with such fees or additional fees as may be prescribed, within the time as specified.

Management Reply

Appropriate steps are taken to comply and file given form as highlighted by the Auditors.

LOANS, GUARANTEES, SECURITIES AND INVESTMENTS

The Company has given short term loan of Rs. 30605042 in current financial year, the details of which is mentioned in the balance sheet attached to this report.

SIGNIFICANT AND MATERIAL ORDERS

No significant and material orders were passed by the regulators or the courts or tribunals impacting the going concern status and Company’s operations in future

INTERNAL FINANCIAL CONTROL

Internal financial control systems of the Company are commensurate with its size and the nature of its operations. These have been designed to provide reasonable assurance with regard to recording and providing reliable financial and operational information, complying with applicable accounting standards and relevant statutes, safeguarding assets from unauthorized use, executing transactions with proper authorization and ensuring compliance of corporate policies. The Company has a well defined delegation of authority limits for approving revenue as well as expenditures. Processes for formulating and reviewing annual and long term business plans have been laid down.

The Audit Committee deliberated with the members of the management, considered the systems as laid down and met the statutory auditors to ascertain, inter alia, their views on the internal financial control systems. The Audit Committee satisfied itself on the adequacy and effectiveness of the internal financial control system as laid down and kept the Board of Directors informed.

MATERIAL CHANGES AND COMMITMENT

In the year your Company not entered as such contract, agreement or arrangement which affects the material position and financial position of the Company.

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.

PREVENTION OF SEXUAL HARASSMENT

The Company has zero tolerance for sexual harassment at workplace and has adopted a policy on prevention, prohibition and redressal of sexual harassment at workplace in line with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 (POSH Act) and the Rules framed thereunder.

SHIFTING OF REGISTERED OFFICE

During the year, Your Company has shifted the registered office of the Company from 304, EMCA House, 23/23B, Ansari Road, Darya Ganj, Delhi 110002 to Plot No. 15, B-2, D-Block Market, Vivek Vihar, Delhi 110095 within the same city with effect from 15th December, 2014.

SUBSIDIARIES AND ASSOCIATES

Company does not have any subsidiary or associates Company.

PARTICULARS OF EMPLOYEES

During the year under review no employee is covered as per rules 5(2) & (3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, therefore no statement is required be given showing the names and other particulars of the employees drawing remuneration in excess of the limits set out in the said rules are not applicable.

VIGIL MECHANISM

The Company believes in the conduct of the affairs of its constituents in a fair and transparent manner by adopting highest standards of professionalism, honesty, integrity and ethical behavior. In line with the Code of Conduct, any actual or potential violation, howsoever insignificant or perceived as such, would be a matter of serious concern for the Company. The role of the employees in pointing out such violations of the Code of Conduct cannot be undermined.

Pursuant to Section 177(9) of the Act, a vigil mechanism was established for directors and employees to report to the management instances of unethical behavior, actual or suspected, fraud or violation of the Company’s code of conduct or ethics policy. The Vigil Mechanism provides a mechanism for employees of the Company to approach the Chairman of the Audit Committee of the Company.

APPRECIATION

Directors wish to place on record their deep thanks and gratitude to;

a) The Central and the State Government as well as their respective Departments and Development Authorities connected with the business of the Company, the Bankers of the Company as well as other Institutions for their co-operation and continued support.

b) The Shareholders, Suppliers and the Contractors for the trust and confidence reposed and to the Customers for their valued patronage.

c) The Board also takes this opportunity to express its sincere appreciation for the efforts put in by the officers and employees at all levels in achieving the results and hopes that they would continue their sincere and dedicated endeavour towards attainment of better working results during the current year.

By the order of Board of Director of Divinus Fabrics Limited

(Formerly known as Avishkar

Finance Company Limited)

Sd/- Rajesh Agrawal Managing Director DIN: 01234711

Sd/- Arvind Agrawal Director DIN: 03035484

Date: 28.08.2015

Place: New Delhi

Regd. Office:

Plot No. 15, B-2, D Block Market, Vivek Vihar, Delhi - 110095