FOR THE FINANCIAL YEAR ENDED 2016-17
Your Directors are pleased to present the 25th Annual Report on the businessand operations of the Company together with the Audited Financial Statement for the yearended 31st March 2017.
Bits Limited (Your Company) is engaged in the business to impart education in fieldof Art Commerce Science Computer Software Computer Hardware Business ManagementHotel Management Engineering & Technical Education and in all innovative fields thatmay be useful to segments of society by setting up centers institutes collegesuniversities including Distance Learning Programmes etc. in India & abroad.
|SUMMARISED || || |
|FINANCIALHIGHLIGHTS || || |
| || ||(Amount in Rs.) |
|Particulars ||Current Year Year Ended 31st March 2017 ||Previous Year Year Ended 31st March 2016 |
|Income from Operations ||36042150 ||2418990 |
|Other Income ||10838162 ||8599242 |
|Total Income ||46880312 ||11018232 |
|Total Expenditure ||106011046 ||125318105 |
|Profit/ (Loss) before tax ||(59130734) ||(114299873) |
|Less: Provision for Deferred || || |
| ||Nil ||Nil |
|Tax || || |
|Less: Prior period Adjustment || || |
| ||341111 ||403628 |
|of Tax || || |
|Net Profit/(Loss) after Tax ||(59806787) ||(114703501) |
STATE OF COMPANY AFFAIRS
During the year the sales of the company jumped to Rs. 36042150 as compared to Rs.2418990 in the previous year registering a growth in the business of the company. Thecompany has made changes in its business strategy and results thereof are visible as seenin business growth in the year.
Your directors' expect that there will be further improvement in overall performance inthe coming years.
MATERIAL CHANGES AND COMMITMENTS AFTER THE DATE OF CLOSE OF FINANCIAL YEAR 2016-17
There is no material changes and commitment affecting the financial position of companyafter the close of financial year 2016-17 till the date of report.
DETAILS OF SUBSIDIARY COMPANIES JOINT VENTURES AND ASSOCIATE COMPANIES AND HIGHLIGHTSOF THEIR PERFORMANCE AND THEIR CONTRIBUTION TO THE OVERALL PERFORMANCE OF THE COMPANY
There is no subsidiary associate and joint venture of the company and further thereare no companies which have become or ceased to be the subsidiary associate and jointventure of the company during the year.
DIVIDEND AND RESERVES
During the year under review your Company does not recommend any dividend in theabsence of profits. And also your company has not made any transfer to Reserves duringthe financial year 2016-17.
PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS BY COMPANY
Details of Loans Guarantees and Investments if any which are covered under theprovisions of Section 186 of Companies Act 2013 are given in the notes to the FinancialStatements as on 31.03.2017 and forms a part of annual report.
INTERNAL CONTROL SYSTEM AND THEIR ADEQUACY
Your Company has an effective internal control and risk mitigation system which areconstantly assessed and strengthened with new/revised standard operating procedures.
The internal audit is entrusted to M/s R. Mahajan & Associates a firm of CharteredAccountants. The main thrust of internal audit is to test and review controls appraisalof risks and business practices.
The Audit Committee of the Board of Directors actively reviews the adequacy andeffectiveness of internal control systems and suggests improvements to strengthen thesame. The Board of Directors has framed a policy which ensures the orderly and efficientconduct of its business safeguarding of its assets to provide greater assuranceregarding prevention and detection of frauds and accuracy and completeness of theaccounting records of the company.
During the year no reportable weakness in the operations and accounting were observedand your company has adequate internal financial control with reference to its financialstatements.
RELATED PARTY TRANSACTIONS
All the contracts/arrangements/transactions entered by the company with related partyfor the year under review were in the ordinary course of business and on Arm's Lengthbasis. Detail of related party transactions have been disclosed in notes to the financialstatements.
Further your company has not entered into any material contracts or arrangementswith related parties at arm's length basis. Accordingly the disclosure of related partytransactions as required under Section 134(3) (h) of the Companies Act 2013 read withrules made there under in Form AOC-2 is not applicable.
The policy on Related Party Transactions as approved by the Board of Directors has beenuploaded on the website of the Company (http://www.bits.net.in/Bits%20Limited_RPT%20Policy.pdf).
Risk management approach of the Company Theriskmanagementframeworkdefines and includesperiodic review of such risks and also documentation mitigating controls and reportingmechanism of all risks.
In this regard the Company has formulated a Risk Management Committee (which forms anintegral part of Corporate Governance Report) which lays down the procedures to informBoard members about the risk assessment and minimization procedures. Risk ManagementCommittee is responsible for framing implementing and monitoring risk management plan forthe Company.
Further a Risk Management Policy has been adopted by the board of directors for thecompany which defines therisk assessment and minimization procedures. As per view ofboard there is no risk in operation of company which may impact the existence ofcompany.
AUDITOR AND AUDITOR'S REPORT
Pursuant to the provisions of Section 139 of the Companies Act 2013 read with theCompanies (Audit and Auditors) Rules 2014 M/s Soni Gulati & Co. CharteredAccountants the Auditors of the Company shall hold office till the conclusion of theensuing Annual General Meeting and they shall not be eligible for re-appointment due toexpiry of the maximum permissible tenure as the Auditors of the Company. Your Board placeson record its deep appreciation for the valuable contributions of the Auditors duringtheir association and wishes them success in the future.
Based on the recommendation of the Audit Committee the Board has appointed M/s. Sadana& Co. Chartered Accountants (Firm Registration No. 011616N) as the Auditors of theCompany in place of the retiring auditors to hold office for a term of five consecutiveyears from the conclusion of the ensuing 25th Annual General Meeting till theconclusion of 30th Annual General Meeting of the Company to be held in theCalendar year 2022 subject to an yearly ratification by the members of the Company atevery Annual General Meeting on such remuneration including out of pocket expenses andother expenses as may be mutually agreed by and between the Board of Directors and theAuditors and recommended the same to the shareholders of the Company for their approval.
Pursuant to Section 139 and 141 of the Companies Act 2013 and Rules framed thereunder the Company has received a certificate from the auditors confirming theireligibility to be appointed as Auditors of the Company. They have also confirmed that theyhave hold a valid certificate issued by the Peer Review Board of the Institute ofChartered Accountants of India (ICAI) as required under the provisions of Regulation 33 ofthe Listing Regulation.
The auditor's report and notes on accounts referred to in the Auditor's Report are selfexplanatory and there are no adverse remarks or qualification in the Report and thereforedo not need any further comment.
Pursuant to provisions of Section 204 of Companies Act 2013 and rules made thereunder the board has appointed M/s Pritika Nagi & Associates Company Secretary in
Practice to conduct the Secretarial Audit of the Company for the financial year2016-17. The Secretarial Audit Report for the financial year ended 31st March2017 is attached herewith as part of the Annual Report as Annexure A which forms anintegral part of this report.
The Secretarial Audit report does not contain any qualification adverse remarks or res-ervation for the year under review except as stated below:-
Secretarial Auditor remarks for financial statement ending 31.03.2017:
Appointment of Company Secretary which is mandatory for the company is not done by thecompany during the year 2016-2017.
Our reply to Secretarial Auditor remarks:
Your Board has acknowledged that the Whole Time Company Secretary is not appointed inthe company in the financial year 2016-2017. However your company had recently appointedthe Whole Time Company Secretary w.e.f. 11th July 2017 to comply with theprovisions of the Companies Act 2013.
FRAUDS REPORTED BY AUDITORS OTHER THAN THOSE WHICH ARE REPORTABLE TO THE CENTRALGOVERNMENT
There are no such frauds reported by auditors which are committed against the companyby officers or employees of the company.
DIRECTORS AND KEY MANAGERIAL PERSONNEL (KMP)
Retirement by Rotation
In accordance with the provisions of Section 152 of Companies Act 2013 Mr. AnkitRathi Director of the Company is liable to retire by rotation at the ensuing AnnualGeneral Meeting and being eligible has offered himself for re-appointment.
Appointment/Re-appointment and Cessation of Directors & Key Managerial Personnel
During the year under review shareholders have approved the re-appointment of Mr. O.PPathak as Whole Time Director of the company for a period of 3 years.
The Board of Directors after recommendation of Nomination and Remuneration Committee ofyour Company recommends the change in designation and subsequent appointment of Mr.Omprakash Ramashankar Pathak as Managing Director of the company for a Period of 3 yearsw.e.f. 07th May 2017 till 06th May 2020 at remuneration of Rs.44000/- per month.
Further Ms. Deepa Kumari Chief Financial Officer resigned from the company w.e.f. 1stJuly 2016 and Mr. Sachin Sharma has been appointed as Chief Financial Officer of theCompany w.e.f. 30th November 2016 and Ms. Sonam Gupta has been appointed asCompany Secretary and Compliance Officer of the Company w.e.f. 11 th July2017.
Further there is no change in the composition of the Board of Directors of the Companyand no directors and Key Managerial Personnel have been appointed/re-appointed or resignfrom the company during the year under review i.e. 2016 - 2017 except as specified above.
All Independent Directors have given declarations to the company confirming that theymeet the criteria of independence as laid down under Section 149(6) of the Companies Act2013 and Regulation 16(1) (b) of SEBI (Listing Obligation and Disclosure Requirements)Regulations 2015.
EXTRACT OF ANNUAL RETURN
The details forming part of the extract of the Annual Return in Form MGT- 9 asrequired under Section 92 of Companies Act 2013 is included in this report as AnnexureB and forms an integral part of this report.
NUMBER OF MEETINGS OF THE BOARD
The Board duly met at regular intervals to discuss and decide on business strategies/policies and review the financial performance of the Company. The notice along with
Agenda and notes on agenda of each Board Meeting was given in writing to each Director.
In the Financial Year 2016-17 the Board met Eight times. The meetings were held on30/05/2016 01/07/2016 13/08/2016 29/08/2016 14/11/2016 30/11/2016 17/12/2016 and13/02/2017. The interval between two meetings was well within the maximum period mentionedunder Section 173 of Companies Act 2013 and Regulation 17(2) of SEBI (Listing Obligationsand Disclosure Requirements) Regulations 2015. For further details please refer reporton Corporate Governance which is an integral part of this Annual Report.
The present Audit Committee of the board comprises of three members with independentdirectors forming a majority namely Mr. Harish Kumar Chauhan Non-Executive IndependentDirector is the Chairman of the Committee Ms. Preeti Sharma Non- Executive IndependentDirector and Mr. Omprakash Ramashankar Pathak Executive Director are members of theCommittee.
All the recommendations made by the Audit Committee were accepted by the Board.
Further the roles & responsibility and other related matters of Audit Committeeforms an integral part of Corporate Governance Report a part of Annual Report.
POLICIES AND DISCLOSURES
The Vigil Mechanism/Whistle Blower Policy of the company provides that protecteddisclosures can be made by a whistle blower through an email to the Chairman of AuditCommittee. There has been no change to the Whistle blower Policy adopted by the
Company during fiscal year 2016-2017. The Whistle Blower Policy can be accessed on theCompany's website i.e. http://www.bits.net.in/Bits%20Limited_whistle%20blower%20policy.pdf.
REMUNERATION AND NOMINATION POLICY
The nomination and remuneration committee has recommended to the Board: a) A policywhich lays down a framework in relation to remuneration of Directors Key ManagerialPersonnel and Senior Management of the Company. The details of this policy are attachedherewith as Annexure C in this report.
b) Further Policy for selection criteria of Directors and Senior management andcriteria for determining qualifications positive attributes and director independence isalso attached as Annexure D to this report.
CORPORATE SOCIAL RESPONSIBILITY
Pursuant to Section 135 of Companies Act 2013 and rules made there under everycompany having net worth of Rupees five hundred crore or more or turnover of rupees onethousand crore or more or a net profit of rupees five crore or more during Committee ofthe Board.financial
However it is not applicable in case of your Company. Hence there is no need to formCorporate Social Responsibility Committee and Corporate Social Responsibility Policy forthe company as per the requirement of the Companies Act 2013.
SEBI (Listing Obligation and Disclosure Requirements) Regulations 2015 mandates thatthe Board shall monitor and review the Board evaluation framework. The Companies Act 2013states that a formal annual evaluation needs to be made by the Board of its ownperformance and that of its committees and individual directors. Schedule IV of theCompanies Act 2013 states that the performance evaluation of independent directors shallbe done by the entire Board of Directors excluding the director being evaluated.
The evaluation of all the directors and the Board as a whole and that of its committeewas conducted based on the criteria and framework adopted by the Board. Board has engagedNomination and Remuneration Committee for carrying out the evaluation and their findingwere shared with the board that had discussed and analyze its performance during the year.The Board approved the evaluation results as collated by the nomination and remunerationcommittee.
The exclusive meeting of Independent Directors was held to evaluate the performance ofthe Board non-Independent Directors & the Chairman.
The performance evaluation of committee's and board as a whole was done on the basis ofquestionnaire which was circulated among the board members and committee members and onreceiving the inputs from them their performance was assessed.
Lastly performance evaluation of individual directors was done on the basis ofself-evaluation forms which were circulated among the directors and on receiving the dulyfilled forms their performance was assessed.
FAMILIARIZATION PROGRAMME AND TRAINING OF INDEPENDENT DIRECTORS
The details of programmes for familiarization of Independent Directors with theCompany their roles and responsibilities in the company business model of the Companyand other related matters are put on the website of the Company at the following link:i.e. http:// www.bits.net.in/familirisation_policy.pdf. To familiarize the new inducteesas independent director with the strategy operations and functions of our company theexecutive directors make presentations to the inductees about the Company's organizationstructure finance human resources facilities and risk management.
Further at the time of appointment of an independent director the Company issues aformal letter of appointment outlining his/her role function duties and responsibilitiesas a director. The format of the letter of appointment is available on ourwebsitehttp://www. bits.net.in/docs.html.
Your Company has implemented all the stipulations of the Corporate Governance
Practices set out by the Securities and Exchange Board of India and as provided in
SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015. A separatesection on Report of Corporate Governance as stipulated under SEBI (Listing Obligationsand Disclosure Requirements) Regulations 2015 forms an integral part of the AnnualReport.
The requisite certificate from the Auditor's regarding compliance of conditions of
Corporate Governance as stipulated under SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 is attached as Annexure E to the Director's Report.
MANAGEMENTS' DISCUSSION AND ANALYSIS REPORT
Managements' Discussion and Analysis Report for the year under review as stipulatedunder SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 ispresented in a separate section forming Annexure F of the Director's Report.
PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES
Any In terms of the provisions of Section 197(12) of the Companies Act 2013 read withRules 5(2) and 5(3) of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 there is no employee in the company which draws the remunerationin excess of the limits set out in the said rules.
Further the details of top employees in terms of Remuneration Drawn as per provisionsof Section 197(12) of the Act read with Rules 5(2) and 5(3) of the Companies (Appointmentand Remuneration of Managerial Personnel) Rules 2014 and Disclosures pertaining toremuneration and other details of directors & KMP as required under Section 197(12) ofthe Act read with Rule 5(1) of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 are enclosed as Annexure G.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND RESEARCH & DEVELOPMENT ANDFOREIGN EXCHANGE EARNINGS AND OUTGO
Particulars relating to energy conservation technology absorption foreign exchangeearnings and outgo as required to be disclosed under Section 134 (3) (m) of the CompaniesAct 2013 read with the Rule 8(3) of the Companies (Accounts) Rules 2014 are givenhereunder:
Conservation of Energy-
i) Steps taken or impact on conservation of energy: Energy conservation efforts areongoing activities. During the year under review further efforts were made to ensureoptimum utilization of electricity.
ii) Steps taken by the company for utilizing alternate sources of energy: Nil as yourcompany does not carry any manufacturing activities
iii) The Capital investment on energy conservation equipments: Nil
Technology Absorption Adaption & Innovation and Research & Development
No research & development or technical absorption or adaption & innovationtaken place in the company during the Financial Year 2016-17 the details as per rule 8(3)of The companies (Accounts) Rules 2014 are as follows: i) Efforts made towards technologyabsorption: - Nil
ii) Benefits derived like product improvement cost reduction product development orimport substitution: Nil
iii) In case of imported technology (imported during the last 3 years reckoned from thebeginning of the financial year)-
a) Details of technology imported: Nil b) Year of Import: Nil c) Whether the technologybeen fully absorbed: Nil
d) Areas where absorption has not taken place and the reasons there of: Nil
iv) Expenditure incurred on Research and Development: Nil
Foreign Exchange Earnings and Outgo
As your Company does not deal in Foreign Exchange therefore the particulars relatingto Foreign Exchange Earnings and Outgo are not applicable to your Company.
Foreign Exchange Earnings: Nil Foreign Exchange Outgo: Nil
DIRECTORS' RESPONSIBILITY STATEMENT
To the best of our knowledge and belief and according to the information andexplanations obtained by them your Directors confirmed the following statement in termsof Section
134(3) (c) of the Companies Act 2013:
1) That in preparation of Annual Accounts for the year ended March 31st2017 the applicable accounting standards have been followed and there are no materialdepartures from the same;
2) The directors had selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true& fair view of the state of affairs of the Company as at March 31st 2017and of the profit and loss of the Company for the year ended on that date;
3) That the Directors have taken proper & sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of the Companies Act 2013for safeguarding the assets of the Company and for preventing and detecting fraud andother irregularities;
4) The directors have prepared the annual accounts on a going concern basis;
5) That the directors had laid down internal financial controls to be followed by theCompany and that such internal financial controls are adequate and were operatingeffectively;
6) That the directors had devised proper systems to ensure compliance with theprovisions of all applicable laws and that such systems were adequate and operatingeffectively.
LISTING OF SECURITIES
The Company's Equity Shares are listed on BSE Limited.
Your Company has been suspected as Shell Company' by SEBI due to which equityshares of the company has been placed in Stage VI of the Graded Surveillance Measure("GSM") on the stock exchange and has been permitted for restricted trading oncea month and transfer of the scrip in restrictive trading category or settlement on tradeto trade basis.
Your management has filed a representation before SEBI and BSE for removing the name ofthe company from the "Shell Company" database and place the company under normaltrading scenarios as earlier.
Your Director states that no disclosure or reporting is required in respect of thefollowing items as there were no transactions on these items during the year underreview:-
a) Details relating to deposits covered under Chapter V of the Act.
b) Issue of the equity shares with differential rights as to dividend voting orotherwise.
c) Issue of shares (including sweat equity shares) to directors or employees of theCompany.
d) Issue of Employee Stock Option Scheme to employees of the company.
e) As there is no subsidiary or holding company of your company so Managing Directorof the company does not receive any remuneration or commission from any of such companies.
f) No significant or material orders were passed by the regulators or courts ortribunals which impact the going concern status and Company's operations in future.
g) Purchase of or subscription for shares in the company by the employees of thecompany.
h) There is no subsidiary of company so no policy on material subsidiary is requiredto be adopted.
Your Directors further state that:-
a) The Company has zero tolerance for sexual harassment and during the year underreview there were no complaint received and no cases filed pursuant to the SexualHarassment of Women at Workplace (Prevention Prohibition and Redressal) Act 2013.
b) And there is no change in the nature of business of company during the year.
INDUSTRIAL AND HUMAN RELATIONS
Since the Company is not into any kind of manufacturing activity there is no matter todiscuss about industrial relations and the Company is maintaining cordial relations withits staff members.
Your Directors take this opportunity to place on record their appreciation for theshareholders bankers and other business associates for their forbearance understandingand support to the Company. They also wish to place on record their great appreciation ofthe commitment sense of involvement and dedication exhibited by each staff member in theoverall development growth and prosperity of the company.
| || ||By Order of the Board |
| || ||of Directors |
| || ||For Bits Limited |
| ||Sd/- ||Sd/- |
| ||Omprakash Ramashankar Pathak ||Ankit Rathi |
|Place: New Delhi ||(Managing Director) ||(Director) |
|Date: 26.08.2017 ||DIN 01428320 ||DIN - 01379134 |