The Directors have pleasure in presenting you the 26th Directors''
Report on the business and operations of your company, for the
financial year ended 31st March, 2015.
(Rs. in Lakhs)
Particulars 2014-15 2013-14
Total Income 14120.26 11445.62
Profit before interest, Depreciation and Tax 2456.80 1637.68
Interest 214.44 192.66
Depreciation 1138.00 850.29
Provision for Taxation 331.23 228.01
Profit after interest, Tax and depreciation 775.37 401.25
Deferred Tax provision (53.44) 13.62
Balance brought forward 4705.44 4,317.80
Balance Carried to Balance Sheet 5132.97 4705.44
(Rs. in Lakhs)
Particulars 2014-15 2013-14
Total Income 8070.59 6533.14
Profit before interest, Depreciation and Tax 1493.33 1105.19
Interest 127.41 152.43
Depreciation 964.51 731.82
Provision for Taxation 89.11 76.26
Profit after interest, Tax and depreciation 312.30 144.68
Deferred Tax provision (49.05) 4.54
Balance brought forward 4457.95 4317.80
Balance Carried to Balance Sheet 4427.43 4457.95
RESULTS OF OPERATIONS:
Following are the results of operations for the financial year 2014-15
Consolidated Revenues: The total Consolidated income of the Company for
the FY 2014-15 Rs. 14120.26Lacs as against Rs. 11445.62 Lacs in FY
Standalone Revenues: The total income of the Company for the FY 2014-15
Rs. 8070.59 Lacs as against Rs. 6533.14 Lacs in FY 2013-14
Consolidated Profits: Profit before Tax (PBT) stood at Rs. 1106.60 Lacs
as against Rs. 629.26 Lacs for the previous year. Profit after Tax
(PAT) stood at Rs.828.81 lacs as against Rs. 387.63 Lacs for the
Standalone Profits: Profit before Tax (PBT) stood at Rs. 401.41 Lacs as
against Rs. 220.94 Lacs for the previous year. Profit after Tax (PAT)
stood at Rs. 361.35 Lacs as against Rs. 140.14 Lacs for the previous
Your Company is primarily engaged in the business of providing IT
Products & Services to its customers in US. The financial results of
the Company on consolidated basis have been encouraging despite the
challenges faced in terms of unfavorable business conditions in our
primary market of US.
RESERVES AND SURPLUS
During the year the Company has transferred an amount of Rs.361.35
Lakhs to Reserves and Surplus.
Your directors did not recommend any dividend on shares for this year.
PARTICULARS OF CONTRACTS OR ARRANGEMENTS MADE WITH RELATED PARTIES
Particulars of contracts or arrangements with related parties referred
to in Section 188(1) of the Companies Act, 2013, in the prescribed Form
AOC-2, is appended as Annexure 2 to the Board''s report
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
None of the directors of the company is disqualified under the
provisions of the act or under the Listing agreement with the stock
In accordance with the provisions of the Companies Act, 2013 K Sri
Kalyan retire by rotation at the Annual General Meeting and being
eligible offer themselves for reappointment at the ensuing Annual
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
None of the Directors ceased to Director of the company during period
Allotment of Shares:
The Company has not allotted any shares during the period under review.
Internal control systems and their adequacy:
The Company has an Internal Control System, commensurate with the size,
scale and complexity of its operations. The scope and authority of the
Internal Audit function is defined in the Internal Audit Manual. To
maintain its objectivity and independence, the Internal Audit function
reports to the Chairman of the Audit Committee of the Board & to the
The Internal Audit Department monitors and evaluates the efficacy and
adequacy of internal control system in the Company, its compliance with
operating systems, accounting procedures and policies at all locations
of the Company. Based on the report of internal audit function, process
owners undertake corrective action in their respective areas and
thereby strengthen the controls. Significant audit observations and
recommendations along with corrective actions thereon are presented to
the Audit Committee of the Board.
CODE OF CONDUCT:
The Board of Directors has approved a Code of Conduct which is
applicable to the Members of the Board and all employees in the course
of day to day business operations of the company. The Company believes
in Zero Tolerance against bribery, corruption and unethical dealings
/ behaviours of any form and the Board has laid down the directives to
counter such acts. The code laid down by the Board is known as code of
business conduct which forms an Appendix to the Code. The Code has
been posted on the Company''s website www.virinchi.com.
The Code lays down the standard procedure of business conduct which is
expected to be followed by the Directors and the designated employees
in their business dealings and in particular on matters relating to
integrity in the work place, in business practices and in dealing with
stakeholders. The Code gives guidance through examples on the expected
behaviour from an employee in a given situation and the reporting
All the Board Members and the Senior Management personnel have
confirmed compliance with the Code. All Management Staff were given
appropriate training in this regard.
VIGIL MECHANISM / WHISTLE BLOWER POLICY:
The Company has a vigil mechanism named Fraud and Risk Management
Policy to deal with instance of fraud and mismanagement, if any.
In staying true to our values of Strength, Performance and Passion and
in line with our vision of being one of the most respected companies in
India, the Company is committed to the high standards of Corporate
Governance and stakeholder responsibility.
The Company has a Fraud Risk and Management Policy to deal with
instances of fraud and mismanagement, if any. The FRM Policy ensures
that strict confidentiality is maintained whilst dealing with concerns
and also that no discrimination will be meted out to any person for a
genuinely raised concern.
A high level Committee has been constituted which looks into the
complaints raised. The Committee reports to the Audit Committee and the
PREVENTION OF INSIDER TRADING:
The Company has adopted a Code of Conduct for Prevention of Insider
Trading with a view to regulate trading in securities by the Directors
and designated employees of the Company. The Code requires
pre-clearance for dealing in the Company''s shares and prohibits the
purchase or sale of Company shares by the Directors and the designated
employees while in possession of unpublished price sensitive
information in relation to the Company and during the period when the
Trading Window is closed. The Board is responsible for implementation
of the Code.
All Board Directors and the designated employees have confirmed
compliance with the Code.
The financial statements are prepared in accordance with the Generally
Accepted Accounting Principles (GAAP) under the historical cost
convention on accrual basis except for certain financial instruments,
which are measured at fair values. GAAP comprises mandatory accounting
standards as prescribed under Section 133 of theCompanies 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:
i) In the preparation of the annual accounts for the year ended 31st
March, 2015, the applicable accounting standards had been followed and
there are no material departures.
ii) The directors 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 at the end of financial year and of the
profit of the company for that period.
iii) The directors have taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provisions of Companies Act, 2013 for safeguarding the assets of the
Company and for preventing and detecting fraud and other irregularities
iv) We have prepared the annual accounts for the financial year ended
31st March, 2015 on a going concern basis.
v) The Directors have laid down internal financial controls, which are
adequate and are operating effectively.
vi) The directors have devised proper systems to ensure compliance with
the provisions of the applicable laws and such other systems are
adequate and are operating effectively.
AUDITOR''S CERTIFICATE ON CORPORATE GOVERNANCE
As required by clause 49of Listing Agreement, Auditor''s certificate on
corporate governance is enclosed as Annexure to Board''s Report.
AUDITOR''S REPORT/ SECRETARIAL AUDIT REPORT:
The observation made in the Auditors'' Report read together with
relevant notes thereon are self explanatory and hence, do not call for
any further comments under Section 134 of the Companies Act, 2013.
As required under section 204 (1) of the Companies Act, 2013 the
Company has obtained a secretarial audit report. Certain observations
made in the report with regard to non filing of some forms were mainly
due to ambiguity and uncertainty of the applicability of the same for
the relevant period. However, the company would ensure in future that
all the provisions are complied to the fullest extent.
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 .
N V S S Suryanarayana Rao, Practicing Company Secretary was appointed
to conduct Secretarial Audit of the company for the financial year
2014-15, as required under section 204 of the Companies Act, 2013 and
rules framed there under.The Secretarial Audit report for Financial
year 2014-15 forms part of board''s report as Annexure
The Board has appointed Mr. N V S S Suryanarayana Rao, Practicing
Company Secretary as Sectretarial Auditor of the Company for financial
SIGNIFICANT AND MATERIAL ORDERS
There are no significant and material orders passed by the regulators
or courts or tribunals impacting the going concern status and Company''s
operation in future.
EXTRACT OF ANNUAL RETURN:
The details forming part of the extract of the Annual Return in form
MGT-9 is annexed herewith as Annexure
CONSERVATION OF ENERGY, RESEARCH AND DEVELOPMENT, TECHNOLOGY
ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO.
The Particulars as required under Sub- section (3)(m)of Section 134 of
the Companies Act,2013, read with the Companies(Accounts) Rules 2014
are enclosed in Annexure
BUSINESS RISK MANAGEMENT:
Pursuant to section 134 (3) (n) of the Companies Act, 2013 & Clause 49
of the listing agreement , the company has constituted a business risk
management committee. The details of the committee and its terms of
reference are set out in the corporate governance report forming part
of the Boards report.
Your Company has not accepted any deposits within the meaning of
Section 73 of the Companies Act, 2013 and the Companies (Acceptance of
Deposits) Rules, 2014
Virinchi Learning Private Ltd
Virinchi Learning Private Ltd 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 been granted a loan of Rs.5.5 crores by NSDC towards
training of youth in the specified skills as notified by the NSDC in
healthcare and bio tech sectors. The company has tied up with some
training institutes and has developed the training content and the
Company has trained 370 students in various courses viz., healthcare,
Bio Technology, IT as per the NSDC Programme.
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
M/s. KSoft 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.
During the year around 100 people travelled and joined in various
projects of the company and total head count is around 120 employees in
KSoft as on 31st March, 2015
Virinchi Health Care Private Ltd
Virinchi Helath Care private Ltd is incorporated in the year 2013 with
the main objective of delivering quality health care to end users on an
asset-heavy model connecting the whole eco-system including Hospitals,
Doctors, Para-medics , Medical & Imaging Equipment, pharmacists and
patients on a robust IT back bone. To achieve this objective, The
company has leased a building at Banjara hills, in the city of
Hyderabad, by way of long term lease agreement.
Tyohar Foods Pvt. Ltd.
The company had planned to take up a project under Tyohar Foods Pvt Ltd
and had purchased a 50,000 square feet of building in 4047 Square
meters of land by participating in an open auction conducted by Canara
Bank on 16thAugust 2012 and registered the said property located at
Survey No 15, Suraram Village. However, post purchase, a petition was
filed against the company and the bank, in Debts Recovery Tribunal vide
S.A.No.370/2012 and I.A.No.1437/2012 and the DRT directed to maintain
Status Quo orders pending detailed hearing. As the Sale was done
through Auction which was conducted under the SARFESI act, the company
and the Bank are hopeful of clearing the litigation favourably. However
due to the delay in settlement, the proposed project at the scheduled
property has been suspended by the company.
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
The information required pursuant to Section 197 read with rule 5 of
the Companies (Appointment and Remuneration of Managerial Personnel)
Rules, 2014 in respect of employees of the Company, will be provided
upon request. In terms of Section 136 of the Act, the reports and
accounts are being sent to the members and others entitled thereto,
excluding the information on employees'' particulars which is available
for inspection by the members at the Registered office of the company
during business hours on working days of the company up to the date of
ensuing Annual General Meeting. If any member is interested in
inspecting the same, such member may write to the company secretary in
Details about Virinchi Employees Stock Option Scheme, 2004 (VESOS,
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, 2015 under the Virinchi Employee Stock Options
Scheme, 2004 are as under:
Sl. No Description Details
1. Options Granted during 2014-15 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 scheme:
11,67,000 and Total
10. Employee wise details of options
granted to i) Senior n.A.
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)
pursuant to issue of N.A.
shares on exercise of option calculated
in accordance with Accounting Standard
(AS)20 Earning Per share
12. The difference between the employee
compensation costs computed under intrinsic N.A.
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
13. Weighted Average exercise prices
and weighted average NIL
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
signigicant assumptions has opted intrinsic Value
used during the year to estimate the method for
fair value of options. accounting of Compensation
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
PARTICULARS OF ENERGY CONSERVATION, TECHNOLOGY ABSORPTION, FOREIGN
EXCHANGE EARNINGS & OUTFLOW REQUIRED UNDER COMPANIES (ACCOUNTS) RULES,
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.
c) Foreign Exchange Earnings and Outgo:
Most of your Company''s earnings are from the export of Computer
Software and Services. In order to promote product sales and services,
your Company participated in various exhibitions and carried product
promotion activities. Details of foreign exchange earnings and outgo
during the year as follows :
(Rs. in Lacs)
Particulars FY 2014-15 FY 2013-14
Foreign Exchange Earnings 7838 6187.64
Foreign Exchange Outgo 7743 1547.78
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
Report on Corporate Governance
Corporate Governance Report is set out as separate Annexure to this
Management Discussion and Analysis Report
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
Your directors would like to place on record their appreciation of
support, co-operation and assistance received from the company''s
clients, Central 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 M. Santi Priya
DATE : 31-08-2015 Chairperson & Whole Time Director