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Virinchi Technologies
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Directors Report Year End : Mar '14    « Mar 13
Dear Members,
 
 The Directors have pleasure in presenting you the 25th Directors''
 Report on the business and operations of your company, for the
 financial year ended 31st March, 2014.
 
 Financial Highlights:
 
                                                          (Rs. in Lacs)
                                Consolidated              Standalone
 
 Particulars                2013-14      2012-13     2013-14    2012-13
 
 Total Income              11445.62     8,035.36    6,533.14   4,395.77
 
 Profit before interest, 
 Depreciation and Tax       1637.68     1,571.98    1,105.19   1,196.86
 
 Interest                    192.66       274.16      152.43     232.34
 
 Depreciation                850.29       735.54      731.82     641.87
 
 Provision for Taxation      228.01       137.69       76.26      64.38
 
 Profit after interest, 
 Tax and depreciation        401.25       424.59      144.68     258.27
 
 Deferred Tax provision       13.62        61.37        4.54      52.22
 
 Balance brought forward   4,758.63     4,585.05    4,317.80   4,111.75
 
 Balance Carried to 
 Balance Sheet              4705.44     4,758.63    4,457.95   4,317.80
 
 RESULTS OF OPERATIONS:
 
 Following are the results of operations for the financial year 2013-14
 
 BUSINESS PERFORMANCE
 
 Consolidated Revenues: The total Consolidated income of the Company for
 the FY 2013-14 comprises operating revenues of Rs. 11297.35 Lacs as
 against Rs. 7868.32 Lacs in FY 2012-13 and other income of Rs. 148.27
 Lacs for the current year as against Rs. 167.03 lacs in FY 2012-13.
 
 Standalone Revenues: The total income of the Company for the FY 2013-14
 comprises operating revenues of Rs. 6400.69 Lacs as against Rs. 4253.85
 Lacs in FY 2012-13 and other income of Rs. 132.44 Lacs for the current
 year as against Rs. 141.92 lacs in FY 2012-13.
 
 Consolidated Profits: Profit before Tax (PBT) stood at Rs. 629.25 Lacs
 as against Rs. 562.28 Lacs for the previous year. Profit after Tax
 (PAT) stood at Rs. 387.63 lacs as against Rs. 363.22 Lacs for the
 previous year.
 
 Standalone Profits: Profit before Tax (PBT) stood at Rs. 220.94 Lacs as
 against Rs. 322.65 Lacs for the previous year. Profit after Tax (PAT)
 stood at Rs. 140.14 Lacs as against Rs. 206.05 Lacs for the previous
 year.
 
 Reserves and Surplus
 
 During the year the Company has not transferred any amount to Reserves
 and Surplus.
 
 Dividend
 
 Your directors did not recommend any dividend on shares for this year.
 
 Material changes and commitments;
 
 There are no material changes and commitments occurred between the end
 of the financial year of the company and the date of the report
 affecting the financial position of the company
 
 Acquisition of majority stake in Asclepius Consulting & Technologies
 Private Ltd.
 
 The company has acquired 51% stake in Asclepius Consulting &
 Technologies Private Ltd a Bangalore based Health IT Products Company.
 Asclepius consulting was founded in 2007 by three IIT/IIM Graduates
 with a focus on building value IT products for Indian Hospitals.
 
 Directors
 
 None of the directors of the company is disqualified under the
 provisions of the act or under the Listing agreement with the stock
 exchanges.
 
 Appointments
 
 In accordance with the provisions of the Companies Act, 1956 Datuk
 Kunasingam V. Sittampalam, Ramam Madu retire by rotation at the Annual
 General Meeting and being eligible offer themselves for reappointment
 at the ensuing Annual General Meeting.
 
 In terms of Section 149 and Schedule IV Companies Act, 2013 and in
 compliance with Clause 49 of Listing Agreement following Directors are
 proposed to be appointed as Independent Directors of the company for
 five consecutive years for a term upto 31st March, 2019.
 
 1. K. Krishna
 
 2. Kunasingam V Sittampalam
 
 3. Samad A Momin
 
 4. Ramam Madu
 
 Brief resume of the Directors proposed to be reappointed, nature of
 their expertise in specific functional areas, directorships in other
 companies as stipulated under clause 49 of the listing agreement with
 the stock exchanges in India are provided in the report on corporate
 governance.
 
 Cessations
 
 Mr. Srinath Kompella ceased to Director of the company during period
 under review.
 
 Allotment of Shares:
 
 The Company has not allotted any shares during the period under review.
 
 Directors'' Responsibility Statement:
 
 Pursuant to the requirement under Section 217 (2AA) of the Companies
 Act, 1956 with respect to the Directors'' Responsibility Statement, it
 is hereby confirmed that:
 
 I) In the preparation of the annual accounts for the year ended 31st
 March, 2014, the applicable accounting standards had been followed and
 there are no material departures.
 
 ii) We have selected appropriate accounting policies and applied them
 consistently and have 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 as on 31st March 2014 and of the profit of the company
 for the financial year ended 31st March, 2014.
 
 iii) We have taken proper and sufficient care for the maintenance of
 adequate accounting records in accordance with the provisions of
 Companies Act, 1956 for safeguarding the assets of the Company and for
 preventing and detecting fraud and other irregularities; and
 
 iv) We have prepared the annual accounts for the financial year ended
 31st March, 2014 on a going concern basis.
 
 Auditors and Audit Report
 
 M/s. P. Murali & Co., Chartered Accountants, Statutory Auditors of the
 Company retire at the conclusion of the ensuing Annual General Meeting
 and being eligible, offer themselves for reappointment.
 
 The company has received consent letter from the Statutory auditors and
 certificate indicating satisfaction of criteria sated in Section 141 of
 Companies Act, 2013 .
 
 PARTICULARS PURSUANT TO SECTION 212 OF THE COMPANIES ACT,1956
 
 Pursuant to the provisions of Section 212 of the Companies Act, 1956
 (Act), documents in respect of the various subsidiaries Viz.,
 Director''s Report, Auditor''s Report, Balance Sheet and Profit and Loss
 Account, are required to be attached to the Balance Sheet of the
 holding company. However, in terms of the provisions of Section 212(8)
 of the Act, the Government of India, Ministry of Corporate Affairs, has
 vide Circular No. 2/2011 dated 8th February, 2011 granted exemption
 from the provisions of Section 212(1) of the Act. Accordingly, the
 Annual Report does not contain the financial statements of the
 subsidiaries of the Company. However, the Company will make available
 the audited annual accounts and related detailed information of the
 subsidiaries to the shareholders upon request in accordance with the
 applicable law. These documents are also available for inspection at
 the Registered Office of the Company during business hours.
 
 A statement pursuant to the provisions of Section 212(1)(e) of the Act
 appears elsewhere in the Annual Report.
 
 Fixed Deposits
 
 The Company has not accepted any fixed deposits as on 31st March, 2014
 so as to attract the provisions of Section 58A and 58AA of the
 Companies Act, 1956 read with Companies (Acceptance of the Deposits)
 Rules, 1975 as amended from time to time.
 
 Subsidiaries
 
 Virinchi Learning Private Ltd
 
 Virinchi learning incorporated in the year 2010 as wholly owned
 subsidiary of Virinchi Technologies Ltd. The primary objective of
 incorporating Virinchi Learning is to promote technology based, for
 profit, quality education services to the different student categories
 in India, both by creation of new content & infrastructure and also by
 partnering with existing content providers by leveraging the strength
 of Information technology.
 
 The company has made an application to National Skill Development
 Corporation (NSDC) for training of youth in the specified skills as
 notified by the NSDC and the company got approval from NSDC and a loan
 of Rs.5.5 crores has been granted to the company towards healthcare and
 bio tech training objectives.
 
 KSoft Systems Inc
 
 M/s. KSoft Systems Inc is in the business of software development and
 consulting. M/s. KSoft Systems Inc provides consulting services to
 various clients in the US in the domains of SAP, Oracle and other
 technologies.
 
 M/s. K Soft Systems Inc., has taken 5000 Sft office premises on lease
 in Edison, NJ and had set up state of art infrastructure facility for
 serving the existing and new customers.
 
 M/s. K Soft Systems inc filed for 278 H-1B visa applications and 147
 applications are picked up in the Random selection process of the
 USCIS. Depending on the visa approval, the employees will travel to
 client sites starting early 2015.
 
 Consolidated Financial Statements
 
 In accordance with the Accounting Standards AS-21 and AS-27 on
 Consolidated financial Statements read with the Accounting Standard
 AS-23 on Accounting for investments in Associates, the Audited
 consolidated financial statements are provided in the annual report.
 
 Particulars of Employees
 
 In pursuance of the provisions of section 217(2A) of the Companies Act,
 1956 read with the Companies (Particulars of Employees) Rules 1975, the
 Directors are to report that there are no employees who are in receipt
 of remuneration of Rs.60,00,000/- or more per annum or Rs.5,00,000/- or
 more per month where employed for a part of the year.
 
 Details about Virinchi Employees Stock Option Scheme, 2004 (VESOS,
 2004) 
 
 Pursuant to the provisions of Guideline 12 of the Securities and
 Exchange Board of India (Employee Stock Option Scheme and Employee
 stock purchase Scheme), Guidelines, 1999, the details of stock options
 as on 31st March, 2014 under the Virinchi Employee Stock Options
 Scheme, 2004 are as under:
 
 Sl.No  Description                            Details
 
 1.     Options Granted during 2013-14         NIL
 
 2.     Pricing formula                        N.A.
 
 3.     Options Vested                         N.A.
 
 4.     Options exercised                      N.A.
 
 5.     The total number of shares arising
        as a result of exercise of option      N.A.
 
 6.     Options lapsed                         N.A.
 
 7.     Variation of terms of options          N.A.
 
 8.     Money realized by exercise of options  N.A.
 
 9.     Total number of options in force       Total options reserved
                                               under the scheme11,67,000
                                               and Total options
                                               granted: 9,00,000
 
 10.    Employee wise details of options       N.A.
        granted to i) Senior Management
        personnel ii) Any other employee who
        receives a grant in any one year of
        option amounting to 5% of or more of
        option granted during that year iii)
        Identified employees who were granted
        option, during any one year, equal to
        or exceeding 1% of the issued capital
        (excluding outstanding warrants and
        conversions) of the company at the
        time of grant.
 
 11.    Diluted Earning Per share (EPS)        N.A.
        pursuant to issue of shares on
        exercise of option calculated in
        accordance with Accounting Standard
        (AS)20 Earning Per share
 
 12.    The difference between the employee    N.A.
        compensation costs computed under
        intrinsic value method and the
        employee compensation cost that shall
        have been recognized if the Company
        had used the Fair Value methods and
        its impact on profits and EPS of the
        Company.
 
 13.    Weighted Average exercise prices and   NIL
        weighted average fair values of
        options for options whose exercise
        price either equals or exceeds or is
        less than the market price of the
        stock
 
 14.    Description of the method and          The Company has opted
        signigicant assumptions used during    intrinsic Value method 
        used during the year to estimate the   for accounting of Compen-
        fair value of options.                 sation Cost arising out
                                               of ESOP. The Company has
                                               not made any assumptions.
                                                
 
        i.   Risk-free interest rate
 
        ii.  Expected life
 
        iii. Expected Volatility
 
        iv.  Expected dividends
 
        v.   The price of the underlying
             share in market at the time
             of option grant.
 
 Information required under Section 217(1) (e) of the Companies Act 1956
 read with the Companies (Disclosure of Particulars in the report of
 Board of Directors) Rules, 1988.
 
 a) Conservation of Energy:
 
 Company''s operations require electrical energy for its use in air
 conditioning the premises, for power supply to computer systems and
 lighting which are not energy intensive. However, adequate measures
 have been taken to reduce energy consumption, wherever possible.
 
 To decrease the carbon footprint, company transportation is extended to
 associates from different parts of the city; the occupation is 100% in
 all the buses on all the working days. Also, to conserve the natural
 resources, STP plan is installed and the waste water and solid material
 emitted out, after processing is being used for landscaping. The
 company has adopted laudable practices like reducing the carbon foot
 prints, maximizing the utilization of natural light and reducing the
 electric light fitments, reduction of size of work station partitions.
 use of recycled material for the work stations'' wood boards, provision
 of task lights for every work station to minimize the power
 consumption, central control switch for entire work station and
 automated water control taps in the rest rooms. As part of energy
 conservation, LED lighting is being use for the new areas, which are
 undergoing interior renovation works.
 
 b) Research and Development
 
 Your company will continue to focus and invest in its R & D activities
 in software engineering, technologies and products. Your company
 leverages its excellence in technology for producing World Class
 Products and solutions. The continual exposure to new technologies has
 helped maintain high motivation levels in employees and to generate
 higher levels of productivity, efficiency and quality. Your company
 continues to give due importance to research and development to
 maintain its leadership in the field of leading edge technologies.
 
 d) Technology Absorption, Adaptation and Innovation
 
 Your company continues to use state-of-the-art technology for improving
 the productivity and quality of its products and services. To create
 adequate infrastructure, your Company continues to invest in the latest
 hardware and software.
 
 To support its growth plans, the company continues to invest in global
 solutions that are configured consistently for its core business
 processes.
 
 Report on Corporate Governace
 
 Corporate Governance Report is set out as separate Annexure to this
 Report.
 
 Management Discussion and Analysis
 
 Management''s Discussion and Analysis report for the year under review
 as stipulated under Clause 49 of the Listing Agreement with the stock
 exchanges is presented in a separate section forming part of the Annual
 report.
 
 Acknowledgments
 
 Your directors would like to place on record their appreciation of
 support, co-operation and assistance received from the company''s
 clients, Government authorities, bankers, shareholders and suppliers.
 The board wishes to convey its appreciation for hard work, solidarity,
 cooperation and support put in by the company''s employees at all levels
 in enabling such growth.
 
 
 
                                                   BY ORDER OF THE BOARD
                                       For VIRINCHI TECHNOLOGIES LIMITED
 
 PLACE : HYDERABAD                                        G. Santi Priya
 
 DATE : 30-08-2014                     Chairperson & Whole Time Director
Source : Dion Global Solutions Limited
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