AFFLUENCE

DIRECTORS' REPORT FOR THE FINANCIAL YEAR ENDED 2014 - 2015

Dear Members,

Your Directors are pleased to present the 23rd Annual Report on the business and operations of the Company together with the Audited Financial Statement for the year ended 31st March, 2015.

CORPORATE OVERVIEW:

Bits Limited (Your Company) is engaged in the business to impart education in field of Art, Commerce, Science, Computer Software, Computer Hardware, Business Management, Hotel Management, Engineering & Technical Education and in all innovative fields that may be useful to segments of society by setting up centers, institutes, colleges, universities including Distance Learning Programmes etc.

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 director's expect that the initiatives undertaken will result in improvement 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 company after the close of financial year 2014-2015 till the date of report.

DETAILS OF SUBSIDIARY COMPANIES, JOINT VENTURES AND ASSOCIATE COMPANIES AND THEIR FINANCIAL POSITION

There is no subsidiary and joint venture of the company and further there are no companies, which have become or ceased to be the subsidiary and joint venture of the company during the year.

DIVIDEND AND RESERVES

During the year under review, your Company does not recommend any dividend. And also, your 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 Section 186 of Companies Act, 2013 are given in the notes to the Financial Statements as on 31.03.2015 and part of annual report.

INTERNAL CONTROL SYSTEM AND THEIR ADEQUACY

Your Company has an effective internal control and risk mitigation system, which are constantly assessed and strengthened with new/revised standard operating procedures.

The internal audit is entrusted to M/s R. Mahajan & Associates, a firm of Chartered Accountants. The main thrust of internal audit is to test and review controls, appraisal of risks and business practices.

The Audit Committee of the Board of Directors actively reviews the adequacy and effectiveness of internal control systems and suggests improvements to strengthen the same. The Board of Directors has framed a policy which ensures the orderly and efficient conduct of its business, safeguarding of its assets, to provide greater assurance regarding prevention and detection of frauds and accuracy and completeness of the accounting records of the company.

During the year, no reportable weakness in the operations and accounting were observed and your company has adequate internal financial control with reference to its financial statements.

RELATED PARTY TRANSACTIONS

All the contracts/arrangements/transactions with related party in Form AOC-2 is attached as Annexure A. Further, there are no material related party transactions during the year under review The policy on Related Party Transactions as approved by the Board of Directors has been uploaded on the website of the Company (http:/ /www.bits.net.in/Bits%20Limited_RPT%20Policy.pdf <http://www.bits.net.in/Bits%20Limited_RPT%20Policy.pdf>)

RISK MANAGEMENT

The risk management framework defines the risk management approach of the Company and includes periodic review of such risks and also documentation, mitigating controls and reporting mechanism of all risks.

In this regard the Company has formulated a Risk Management Committee (which forms an integral part of Corporate Governance Report) which lays down the procedures to inform Board members about the risk assessment and minimization procedures. Risk Management Committee is responsible for framing, implementing and monitoring risk management plan for the Company. Further, a Risk Management Policy has been adopted by the board of directors for the company, which defines the risk assessment and minimization procedures. . As per view of board, there is no risk in operation of company, which may impact the existence of company.

AUDITOR AND AUDITORS REPORT STATUTORY AUDITORS

M/s Soni Gulati & Co., Chartered Accountants who are Statutory Auditors of the Company and who hold office up to the forthcoming Annual General Meeting are recommended by the audit committee and Board of Director for re-appointment to audit the Accounts of the Company for the Financial Year 2015-16 at remuneration as may be decided by the Board of Directors on the recommendation of the audit committee.

The Company has received a certificate from the auditors to the effect that their appointment, if made, would be within the limits prescribed under the of the Companies Act, 2013, and they are not disqualified for re-appointment, as per the provisions of Section 141 of the Companies Act, 2013.

The auditor's report and notes on accounts referred to in the Auditor's Report are self explanatory and there are no adverse remarks or qualification in the Report.

SECRETARIAL AUDIT

Pursuant to provisions of Section 204 of Companies Act, 2013 and rules made there under, the board has appointed M/s Pritika Nagi & Associates, Company Secretary in Practice 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 is attached herewith as part of the Annual Report as Annexure B which forms an integral part of this report.

There is no secretarial audit qualification/adverse remarks, reservation for the year under 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, Every Listed Company Shall have Whole Time Key Managerial personnel. Nonetheless, your company has 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 in the company, it is to be informed to the board that financial position of company is not very so appointment of whole time company secretary will be an addition burden on the financial position of company, however the board is doing continuous effortto increase the revenue of company and will also ensure to appoint a whole time company secretary in near future.

FRAUDS REPORTED BY AUDITORS OTHER THAN THOSE WHICH ARE REPORTABLE TO THE CENTRAL GOVERNMENT

There are no such frauds reported by auditors, which are committed against the company by 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. Ankit Rathi, Director of the Company is liable to retire by rotation at the ensuing Annual General Meeting and being eligible, has offered himself for re-appointment.

• Appointment & Re-appointment of Directors & Key Managerial Personnel

During the year under review, the members approved the appointments of Mr. Harish Kumar Chauhan and Ms. Preeti Sharma as Non-Executive Independent Directors of the Company who are not liable to retire by rotation.

The members also appointed Mr. Omprakash Ramashankar Pathak as Whole Time Director of the Company for a period of 3 years with effect from 1st March, 2014 to 28th February, 2017 and fixed the terms and condition of such appointment including remuneration.

During the year under review, the board has appointed Ms. Deepa Kumari as Chief Financial Officer of the Company in their duly convened Board Meeting held on 12th August, 2014. All Independent Directors has given declarations to the company confirming that they meet the criteria of independence as laid down under Section 149 (6) of the Companies Act, 2013 and Clause 49 of the Listing Agreement.

• Cessation of Directors

During the year Mr. Akhilesh Chandra Khare ceased from the Directorship of the Company w.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 required under Section 92 of Companies Act, 2013, is included in this report as Annexure C 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 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 on 27/05/2014, 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 under Section 173 of Companies Act, 2013 and Clause 49 of the Listing Agreement

AUDIT COMMITTEE

The present Audit Committee of the board comprises of three Directors with independent directors forming a majority, namely, Mr. Harish Kumar Chauhan, Non-Executive Independent Director is the Chairman of the Committee and Ms. Preeti Sharma, Non-Executive Independent Directors and Mr. Omprakash Ramashankar Pathak, Executive Promoter Directors are members of 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 Committee forms 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 Non Executive Directors, namely, Mr. Harish Kumar Chauhan, Non-Executive Independent Director is the Chairman of the Committee and Ms. Preeti Sharma, Non-Executive Independent Directors and Mr. Ankit Rathi, Non-Executive Directors are members of the Committee.

All the recommendations made by the Nomination and Remuneration Committee were accepted by the Board.

Further, the terms of reference and other related matters of Nomination and Remuneration Committee forms an integral part of Corporate Governance Report as part of Annual Report.

STAKEHOLDERS RELATIONSHIP COMMITTEE

The Stakeholders Relationship Committee of the Board comprises of two members, namely, Mr. Ankit Rathi, Non-Executive Director, Chairman of the Committee. The other member of Stakeholders Relationship Committee includes Mr. Harish Kumar Chauhan, Non­Executive Independent Director.

Further, the roles & responsibility and other related matters of Stakeholders Relationship Committee forms an integral part of Corporate Governance Report a part of Annual 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. The other member of Risk Management Committee includes Mr. Ankit Rathi, Non-Executive, Director.

Further, the roles and responsibility and other related matters of Risk Management Committee forms an integral part of Corporate Governance Report a part of Annual Report.

POLICIES AND DISCLOSURES VIGIL MECHANISM

The Vigil Mechanism/Whistle Blower Policy of the company provides that protected disclosures can be made by a whistle blower through an email to the Chairman of Audit Committee. The Whistle Blower Policy can be accessed on the Company's website i.e. <http://> www.bits.net.in/Bits%20Limited_whistle%20blower%20policy.pdf <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, Key Managerial Personnel and Senior Management of the Company. The details of this policy are attached herewith as Annexure D in this report.

b) Further, Policy for selection criteria of Directors and Senior management and criteria for determining qualifications, positive attributes and director independence is also attached as Annexure E to this report.

CORPORATE SOCIAL RESPONSIBILITY

Pursuant to Section 135 of Companies Act, 2013 and rules made there under, every company having net worth of Rupees five hundred crore or more, or turnover of rupees one thousand crore or more or a net profit of rupees five crore or more during any financial year shall constitute a Corporate Social Responsibility Committee of the Board. However, it is not applicable in case of your Company. Hence there is no need to form Corporate Social Responsibility Committee and Corporate Social Responsibility Policy for the company as per the requirement of the Companies Act, 2013.

BOARD EVALUATION

Clause 49 of the Listing Agreement mandates that the Board shall monitor and review the Board evaluation framework. The Companies Act, 2013 states that a formal annual evaluation needs to be made by the Board of its own performance and that of its committees and individual directors. ScheduleIV of the Companies Act, 2013, states that the performance evaluation of independent directors shall be 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 committee was conducted based on the criteria and framework adopted by the Board. Board has engaged Nomination and Remuneration Committee for carrying out the evaluation and their finding were shared with the board thathad discussed and analyze its performance during the year. The Board approved the evaluation results as collated by the nomination and remuneration committee.

FAMILIARIZATION PROGRAMME AND TRAINING OF INDEPENDENT DIRECTORS

The details of programmes for familiarization of Independent Directors with the Company, their roles and responsibilities of the company, business model of the Company and 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 <http://www.bits.net.in/familirisation_policy.pdf>

To familiarize the new inductees as independent director with the strategy, operations and functions of our company, the executive directors make presentations to the inductees about the Company's organization structure, finance, human resources, facilities and risk management.

Further, at the time of appointment of an independent director, the Company issues a formal letter of appointment outlining his/her role, function, duties and responsibilities as a director. The format of the letter of appointment is available on our website <http://www.bits.net.in/>

CORPORATE GOVERNANCE

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 Clause 49 of the Listing Agreement entered into with the Stock Exchanges. A separate section on Report of Corporate Governance as stipulated under Clause 49 of the Listing Agreement, form part of the Annual Report. The requisite certificate from the Auditor's regarding compliance of conditions of Corporate Governance as stipulated under Clause 49 of the Listing Agreement with the Stock Exchanges is attached as Annexure F of the Director's Report.

MANAGEMENTS' DISCUSSION AND ANALYSIS REPORT

Managements' Discussion and Analysis Report for the year under review, as stipulated under clause 49 of the Listing Agreement with the Stock Exchanges in India, is presented in a separate section forming Annexure G of the Director's 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, there is no employee in the company, which draws the remuneration in excess of the limits set out in the said rules.

Disclosures pertaining to remuneration and other details of directors & KMP as required 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 Annexure H .

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION ANDRESEARCH & DEVELOPMENT AND FOREIGN EXCHANGE EARNINGS AND OUTGO

Particulars relating to energy conservation, technology absorption, foreign exchange earnings and outgo, as required to be disclosed under Section 134 (3) (m) of the Companies Act, 2013 read with the Rule 8(3) of the Companies (Accounts) Rules, 2014 are given hereunder:

Conservation of Energy-

i) Steps taken or impact on conservation of energy: Energy conservation efforts are ongoing activities. During the year under review further efforts were made to ensure optimum utilization of electricity.

ii) Steps taken by the company for utilizing alternate sources of energy: Nil, as your company 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 & innovation taken place in the company during the Financial Year 2014 - 2015, the details as per rule 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 or import substitution: Nil

iii) in case of imported technology (imported during the last 3 years reckoned from the beginningof 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 relating to 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 and explanations obtained by them, your Directors confirmed the following statement in terms of Section 134(3) (c) of the Companies Act, 2013:

1) That in preparation of Annual Accounts for the year ended March, 31st, 2015; the applicable accounting standards have been followed and there are no material departures from the same;

2) 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 & fair view of the state of affairs of the Company as at March, 31st, 2015 and 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 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;

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 the Company and that such internal financial controls are adequate and were operating effectively; 6) That the directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

LISTING OF SECURITIES

The Company's Equity Shares are listed on Bombay Stock Exchange.

GENERAL

Your Director states that no disclosure or reporting is required in respect of the following items as there were no transactions on these items during the year under review:-

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 or otherwise.

c) Issue of shares (including sweat equity shares) to directors or employees of the Company.

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 Director of 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 or tribunals, 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 the company.

h) There is no subsidiary of company, so no policy on material subsidiary is required to be adopted.

Your Directors further state that:-

a) The Company has zero tolerance for sexual harassment and during the year under review, there were no complaint received and no cases filed pursuant to the Sexual Harassment 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 to discuss about industrial relations and the Company is maintaining cordial relations with its staff members.

ACKNOWLEDGEMENT

Your Directors take this opportunity to place on record their appreciation for the shareholders, bankers and other business associates for their forbearance, understanding and support to the Company. They also wish to place on record their great appreciation of the commitment, sense of involvement and dedication exhibited by each staff member in the overall development, growth and prosperity of the company.

By Order of the Board of Directors

For Bits Limited

Sd/- O.P.Pathak  (WholeTime Director) DIN No.-01428320

Sd/- Ankit Rathi  (Directoi) DIN No. -01379134

Date: 27.0812015

Place: New Delhi