FOR THE FINANCIAL YEAR ENDED 2014 - 2015
Your Directors are pleased to present the 23rd Annual Report on the businessand operations of the Company together with the Audited Financial Statement for the yearended 31st March 2015.
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.
|SUMMARISED FINANCIAL HIGHLIGHTS || ||(Amount in Rs.) |
|Particulars ||Current Year ||Previous Year |
| ||31.03.2015 ||31.03.2014 |
|Income from Operations ||2251445 ||1551000 |
|Other Income ||8113769 ||4179453.94 |
|Total Income ||10365214 ||5730453.94 |
|Total Expenditure ||11703066.59 ||37666564.36 |
|Profit/ (Loss) before tax ||(1337852.59) ||(31936110.42) |
|Less: Provision for Deferred Tax ||3035862 ||107540 |
|Net Profit/(Loss) after Tax ||1698009.41 ||(32043650.42) |
STATE OF COMPANY AFFAIRS
During the year the sales of the company jumped to Rs. 2251445 as compared to Rs.1551000 in the previous year registering a growth in the business of the company.
Nonetheless your directors expect that the initiatives undertaken will result inimprovement in financial results in the coming years.
Material Changes and Commitments after the date of close of Financial Year 2014 15
There is no material changes and commitment affecting the financial position of companyafter the close of financial year 2014-2015 till the date of report.
DETAILS OF SUBSIDIARY COMPANIES JOINT VENTURES AND ASSOCIATE COMPANIES AND THEIRFINANCIAL POSITION
There is no subsidiary and joint venture of the company and further there are nocompanies which have become or ceased to be the subsidiary and joint venture ofthe company during the year.
However M/s Prurient I.T Solutions Private Limited is our Associate Company as perSection 2(6) of the Companies Act 2013. The summary of the performance and financialposition of associate company is as follows:
|SN Name and address ||CIN/GLN of the Company ||Holding/Subsidiary/ Associate ||%age of Shareholding |
|1 Prurient I.T. Solutions Private Limited Add:- 1111 11th Floor New Delhi House 27 Barakhamba Road New Delhi - 110001 ||U72200DL2008PTC178613 ||Associate Company ||50.00% |
DIVIDEND AND RESERVES
During the year under review your Company does not recommend any dividend. And alsoyour company has not made any transfer to Reserves during the financial year 2014 2015.
PARTICULARS OF LOANS GAURANTEES OR INVESTMENTS BY COMPANY
Details of Loans Guarantees and Investments covered under the provisions of Section186 of Companies Act 2013 are given in the notes to the Financial Statements as on31.03.2015 and 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 with related party in Form AOC-2 isattached as Annexure A. Further there are no material related party transactionsduring the year under review
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)
The risk management framework defines the risk management approach of the Company andincludes periodic review of such risks and also documentation mitigating controls andreporting mechanism 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 the risk assessment and minimization procedures. . As per view ofboard there is no risk in operation of company which may impact the existence ofcompany.
AUDITOR AND AUDITORS REPORT STATUTORY AUDITORS
M/s Soni Gulati & Co. Chartered Accountants who are Statutory Auditors of theCompany and who hold office up to the forthcoming Annual General Meeting are recommendedby the audit committee and Board of Director for re-appointment to audit the Accounts ofthe Company for the Financial Year 2015-16 at remuneration as may be decided by the Boardof Directors on the recommendation of the audit committee.
The Company has received a certificate from the auditors to the effect that theirappointment if made would be within the limits prescribed under the of the CompaniesAct 2013 and they are not disqualified for re-appointment as per the provisions ofSection 141 of the Companies Act 2013.
The auditors report and notes on accounts referred to in the AuditorsReport are self explanatory and there are no adverse remarks or qualification in theReport.
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 inPractice to conduct the Secretarial Audit of the Company for the financial year 2014-2015.The Secretarial Audit Report for the financial year ended 31st March 2015 isattached herewith as part of the Annual Report as Annexure B which forms anintegral part of this report.
There is no secretarial audit qualification/adverse remarks reservation for the yearunder review except as stated below:-
Secretarial Auditor remarks for financial statement ending 31.03.2015:
As per Section 203 of the Companies Act 2013 read with rules made there under EveryListed Company Shall have Whole Time Key Managerial personnel. Nonetheless your companyhas not appointed Whole Time Company Secretary in the company.
Our reply to auditor remarks:
Your Board has acknowledged that the Whole Time Company Secretary is not appointed inthe company it is to be informed to the board that financial position of company is notvery so appointment of whole time company secretary will be an addition burden on thefinancial position of company however the board is doing continuous effortto increase therevenue of company and will also ensure to appoint a whole time company secretary in nearfuture.
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 of Directors & Key ManagerialPersonnel
During the year under review the members approved the appointments of Mr. Harish KumarChauhan and Ms. Preeti Sharma as Non-Executive Independent Directors of the Company whoare not liable to retire by rotation.
The members also appointed Mr. Omprakash Ramashankar Pathak as Whole Time Director ofthe Company for a period of 3 years with effect from 1st March 2014 to 28th February2017 and fixed the terms and condition of such appointment including remuneration.
During the year under review the board has appointed Ms. Deepa Kumari as ChiefFinancial Officer of the Company in their duly convened Board Meeting held on 12thAugust 2014.
All Independent Directors has given declarations to the company confirming that theymeet the criteria of independence as laid down under Section 149 (6) of the Companies Act2013 and Clause 49 of the Listing Agreement.
Cessation of Directors
During the year Mr. Akhilesh Chandra Khare ceased from the Directorship of the Companyw.e.f. 5th May 2015.
EXTRACT OF ANNUAL RETURN
The details forming part of the extract of the Annual Return in Form MGT-9 as requiredunder Section 92 of Companies Act 2013 is included in this report as Annexure C andforms an integral part of this report.
NUMBER OF MEETINGS OF THE BOARD
The Board duly met at regular intervals to discuss and decide on businessstrategies/policies and review the financial performance of the Company. The notice alongwith Agenda of each Board Meeting was given in writing to each Director.
In the Financial Year 2014-15 the Board met seven (7) times. The meetings were held on27/05/2014 12/08/2014 06/09/2014 30/09/ 2014 14/11/2014 14/02/2015 and 25/03/2015.The interval between two meetings was well within the maximum period mentioned underSection 173 of Companies Act 2013 and Clause 49 of the Listing Agreement
The present Audit Committee of the board comprises of three Directors with independentdirectors forming a majority namely Mr. Harish Kumar Chauhan Non-Executive IndependentDirector is the Chairman of the Committee and Ms. Preeti Sharma Non-Executive IndependentDirectors and Mr. Omprakash Ramashankar Pathak Executive Promoter Directors are membersof the Committee.
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.
NOMINATION AND REMUNERATION COMMITTEE
The present Nomination and Remuneration Committee of the Board comprises of three NonExecutive Directors namely Mr. Harish Kumar Chauhan Non-Executive Independent Directoris the Chairman of the Committee and Ms. Preeti Sharma Non-Executive IndependentDirectors and Mr. Ankit Rathi Non-Executive Directors are members of the Committee.
All the recommendations made by the Nomination and Remuneration Committee were acceptedby the Board.
Further the terms of reference and other related matters of Nomination andRemuneration Committee forms an integral part of Corporate Governance Report as part ofAnnual Report.
STAKEHOLDERS RELATIONSHIP COMMITTEE
The Stakeholders Relationship Committee of the Board comprises of two members namelyMr. Ankit Rathi Non-Executive Director Chairman of the Committee. The other member ofStakeholders Relationship Committee includes Mr. Harish Kumar Chauhan Non-ExecutiveIndependent Director.
Further the roles & responsibility and other related matters of StakeholdersRelationship Committee forms an integral part of Corporate Governance Report a part ofAnnual Report.
RISK MANAGEMENT COMMITTEE
The Risk Management Committee of the Board comprises of two members namely Mr.Omprakash Ramashankar Pathak Whole Time Director is the Chairman of the committee. Theother member of Risk Management Committee includes Mr. Ankit Rathi Non-ExecutiveDirector.
Further the roles and responsibility and other related matters of Risk ManagementCommittee forms 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. The Whistle Blower Policy can be accessed on the Companys 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 policy which lays down a framework in relation to remuneration of Director KeyManagerial Personnel and Senior Management of the Company. The details of this policy areattached herewith as Annexure D 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 E 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 any financialyear shall constitute a Corporate Social Responsibility Committee of the Board. Howeverit is not applicable in case of your Company. Hence there is no need to form CorporateSocial Responsibility Committee and Corporate Social Responsibility Policy for the companyas per the requirement of the Companies Act 2013.
Clause 49 of the Listing Agreement mandates that the Board shall monitor and review theBoard evaluation framework. The Companies Act 2013 states that a formal annual evaluationneeds to be made by the Board of its own performance and that of its committees andindividual directors. ScheduleIV of the Companies Act 2013 states that the performanceevaluation of independent directors shall be done by the entire Board of Directorsexcluding the director being evaluated. The evaluation of all the directors and the Boardas a whole and that of its committee was conducted based on the criteria and frameworkadopted by the Board. Board has engaged Nomination and Remuneration Committee for carryingout the evaluation and their finding were shared with the board thathad discussed andanalyze its performance during the year. The Board approved the evaluation results ascollated by the nomination and remuneration committee.
FAMILIARIZATION PROGRAMME AND TRAINING OF INDEPENDENT DIRECTORS
The details of programmes for familiarization of Independent Directors with theCompany their roles and responsibilities of 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 inductees as independent director with the strategy operationsand functions of our company the executive directors make presentations to the inducteesabout the Companys organization structure finance human resources facilities andrisk 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 our websitehttp://www.bits.net.in/
Your Company has implemented all the stipulations of the Corporate Governance Practicesset out by the Securities and Exchange Board of India and as provided in Clause 49 of theListing Agreement entered into with the Stock Exchanges. A separate section on Report ofCorporate Governance as stipulated under Clause 49 of the Listing Agreement form part ofthe Annual Report.
The requisite certificate from the Auditors regarding compliance of conditions ofCorporate Governance as stipulated under Clause 49 of the Listing Agreement with the StockExchanges is attached as Annexure F of the Directors Report.
MANAGEMENTS DISCUSSION AND ANALYSIS REPORT
Managements Discussion and Analysis Report for the year under review asstipulated under clause 49 of the Listing Agreement with the Stock Exchanges in India ispresented in a separate section forming Annexure G of the Directors Report.
PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES
In terms of the provisions of Section 197(12) of the Act read with Rules 5(2) and 5(3)of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 thereis no employee in the company which draws the remuneration in excess of the limits setout in the said rules.
Disclosures pertaining to remuneration and other details of directors & KMP asrequired under Section 197(12) of the Act read with Rule 5(1) of the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 are enclosed as AnnexureH .
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 2014 2015 the details as perrule 8(3) of The companies (Accounts) Rules 2014 are as follows:
i) Efforts made towards technology absorption: - 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 thebeginningof the financial year)-
a) Details of technology imported: Nil
b) Year of Import: Nil
c) Whether the technology been fully absorbed: Nil
d) Areas where absorption has not taken place and the reasons thereof: 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 31st 2015; theapplicable accounting standards have been followed and there are no material departuresfrom 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 2015and 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 Companys Equity Shares are listed on Bombay Stock
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 Whole Time 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 Companys 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/- |
|Date:27.08.2015 ||O.P.Pathak ||Ankit Rathi |
|Place: New Delhi ||(WholeTimeDirector) ||(Director) |
| ||DINNo.01428320 ||DINNo.-01379134 |