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Virinchi Ltd.

BSE: 532372 | NSE: | Series: | ISIN: INE539B01017 | SECTOR: Computers - Software Medium & Small

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Annual Report

For Year :
2018 2016 2015 2014 2013 2012 2011 2010 2009

Director’s Report

Directors Report

The Directors have great pleasure in presenting the report of the Business and Operations of your Company (''the Company'' or ''Virinchi''), along with the audited financial statements, for the financial year ended March 31, 2018. The Consolidated Performance of your Company and its subsidiaries has been referred to wherever required


(Rs. in Lakhs)








Total Income





Profit before finance Cost, Depreciation & Amortization, Taxation & Exceptional Item





Less: Finance Cost





Depreciation and Amortization Expenses





Profit before Tax & Exceptional items





Less: Exceptional items





Profit Before Tax





Less: Tax Expenses





Profit before minority interest






Consolidated Revenues: The total consolidated income of the Company for the FY 2017-18 is Rs. 34249.51Lakhs as against Rs 28,860.11 Lakhs in FY 2016-17 Standalone Revenues: The total income of the Company for the FY 2017-18 is Rs. 17,288.44 Lakhs as against Rs. 13990.58 Lakhs in FY 2016-17

Consolidated profits:

Profit before Tax (PBT) stood at Rs. 4553.94 Lakhs as against Rs. 2,950.91 Lakhs for the previous year.

Profit after Tax (PAT) stood at Rs. 3302.39 Lakhs as against Rs. 2,359.54 Lakhs for the previous year.

Standalone profits:

Profit before Tax (PBT) stood at Rs. 2364.02 Lakhs as against Rs.1402.52 Lakhs for the previous year. Profit after Tax (PAT) stood at Rs. 1737.46Lakhs as against Rs. 1141.60 Lakhs for the previous year.


During the year the Company has transferred an amount of Rs.1877.19 Lakhs to Reserves and Surplus.


Your directors did not recommend any dividend on shares for this year


The Company had planned to take up a project under Tyohar Foods Pvt Ltd and had purchased a 50,000 Sq. feet of building in 4047 Square meters of Land located at Survey No 15, Suraram Village, Qutbullapur Mandal, R.R.Dist by participating in an open auction conducted by Canara Bank on 16th August 2012 and the said property was registered vide Certificate of Sale Doc. No.11361/2012 dt.25th Sep, 2009 and were put in possession of the said premises. However, post purchase, a petition was filed against the Bank, before Debts Recovery Tribunal, Hyderabad vide S.A.No.370/2012 wherein the company imp leaded itself and subsequently the said DRT was pleased to pass the Order dt. 22.01.2016 in favour of the Bank and dismissed the case filed by the Applicants.

The Applicants preferred an Appeal before DRAT Kolkata vide Appeal No. 88/2016 dt.13.02.2016, the said Appeal has been dismissed by DRAT, Kolkata vide its Order dt.12th July, 2016.

The Applicants/Petitioners approached the Hon''ble High Court and filed a Writ Petition No. 25067/2017 and the case is pending before the said Hon''ble Court.

Virinchi Health Care Private Ltd

During the year under review, the flagship hospital at the prime location of Banjara Hills in Hyderabad, spread over a total area of 350,000 sft with 350 operating beds had full twelve months of operations. Phase II of expansion of the Banjara Hills facility consisting of 150 economy and 100 Oncology beds has commenced and is expected to be completed in 15-18 months.

During the year, some of the doctors who are permanent employees of the hospital have received The Times Healthcare 2018 Award in the Legendcategory.

The hospital super-specialty hospital delivers over 35 specialties with emphasis on CONNECT specialties, an acronym for Cardiology, Orthopedics, Nephrology, Neurology, Emergency, Cancer and Transplant Medicine. Virinchi has a dedicated clinical team pursuing MoUs and medical partnerships with over 300 globally reputed institutions in the US, UK, China, Israel etc. - to deliver a unique ''Right to Science'' program to make global medical innovations available to Indian patients to treat previously incurable conditions.

The flagship 350 bed hospital at City Centre is led by approximately 200 leading doctors in the country. Virinchi has set up some of the Industry Leading Medical Infrastructure including 3T fMRI, Ceiling Mounted Cath Lab, Dual Energy 128 Slice CT, 11 Fully Equipped Operation Theatre & widest range of in-house diagnostic capabilities.

During the year under review FY 2017-18, VHPL made a total turnover of Rs 67.35 crores and EBITDA of Rs. 9.96 Crores vis-a-vis Rs. 25.09 Cr Revenue and Rs. 2.75 Crores of EBITDA in FY 2016-17.

Virinchi Learning Private Ltd

We have successfully completed training and placement of 1600 students in the last financial year at our three training centers. This year, we are aiming to train 2500 students of which 350 students training programme is ongoing.

We are proud to declare that, Virinchi Learning is one among the few Training Partners to overachieve the training target set by NSDC (National Skill Development Corporation). We have achieved 124% Target vs. Achievement rate in the last financial year.

We are in the process of reaching more students and creating awareness through the Digital Media Platform. As a part of the initiative, we are posting needful content (blogs, participating in discussions, and other such) in various social media platforms that help job seekers gain knowledge on industry requirements and future job trends

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.

The employees have joined in various projects of the company and total head count is around 70 employees in KSoft as on 31st March, 2018.

During the year under review the total income is Rs. 96.60 Crores as against 116.25 Crores in 2016-17 and the PAT is Rs.24.98 Crores as against Rs.14.79 Crores in 2016-17.



We have appointed Ms. K.Kalpana as Independent Non-Executive Director on the board of the company during the financial year.


We have appointed Mr. M.V.Srinivasa Rao as Executive Director on the Board. However due to the disqualification he has attained as per section 167(3) of the companies Act, 2013 in other company, he withdrew his directorship and the board has approved the same.

Change in Capital Structure and Listing at Stock Exchanges

The equity shares of your Company continue to be listed and traded on the BSE Ltd. (BSE) During the financial year under review, 1,33,500 equity shares were allotted on exercise of the options vested under the Employee Stock Option Scheme and 14,00,000 equity shares were allotted to the strategic investors and 26,00,000 convertible Warrants to the promoters and promoter group under the Chapter VII of the SEBI (ICDR) Regulations, 2009 and admitted for trading on BSE . Consequently, the Equity Share Capital of your Company increased from 26,684,550 equity shares of Rs.10/- each to 28,218,050equity shares of Rs.10/- each as on March 31, 2018

As at 31st March, 2018

As at March 31, 2017


Number of Shares


Number of Shares


Share capital

(a) Authorised Equity Shares of Rs.10/-each





b) issued Subscribed and fully paid up: Equity Shares of Rs. 10/-each









As at 31st March, 2018

As at March 31, 2017


Number of Shares


Number of Shares


Shares outstanding at the beginning of the year





Add: issued and allotted during the year





i) Allotment of shares pursuant to scheme of amalgamation between M/s. Virinchi Limited (Transferee Company) and M/s. Bristlecone Hospitals Private Limited (Transferor Company)



ii. Allotment of shares pursuant to VESOS,2004





iii. Allotment of shares under preferential issue guidelines





Less; Shares bought Back during the year





Shares outstanding at the end of the year






As at 31st March, 2018

As at March 31, 2017


Number of Shares


Number of Shares


Viswanath Kompella





ii) Terms/Rights and restrictions attached to the Equity Shares:

The Company has only one class of Equity Shares having a face value of Rs.10/-. Each Shareholder is eligible for one vote per every share held.

iii) The Details of Shareholder holding more than 5% shares in the company:


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 / behaviors 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 is available on company''s website under following link:

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 behavior from an employee in a given situation and the reporting structure.

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.


The Company has a vigil mechanism 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, the Company is committed to the high standards of Corporate Governance and stakeholder responsibility. 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 Board. Whistle Blower Policy is posted on company''s website under following link: whistleBlowersPolicy.pdf


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 company has received declarations from all the independent

Reconciliation of Shares outstanding at the beginning and at the end of the reporting period:

directors of the company confirming that they continue to meet the criteria of independence as prescribed under sub-section (6) of section 149 of the companies act, 2013 and under Regulation 25 of SEBI ( Listing obligations and Disclosure Requirements) Regulations, 2015

Ms. M. Santhi Priya, Whole Time Director & CFO,K Sri Kalyan, Whole Time Director and Mr K. Ravindranath Tagore, Company Secretary are the Key Managerial Personnel ( KMP) of the company in terms of the provisions of the Act.

Familiarization Programme for Independent Directors

On their appointment, Independent directors are familiarized about the Company''s operations and business. Interaction with the Business Heads and key executives of the company is also facilitated. Detailed Presentations on the business of each of the Processes are made to the directors. Direct Meetings with the Chairperson are further facilitated for the new appointee to familiarize about the company/its businesses and the group practices.

Pursuant to Securities and Exchange Board of India (Listing Obligations and Disclosure Requirement) Regulations, 2015, the Company shall familiarize the Independent Directors with the Company, their roles, rights, responsibilities in the Company, nature of the industry in which the Company operates, business model of the Company, etc., through various programmes.

Accordingly, your Company arranged technical sessions to familiarize the Independent Directors, the details of which are disclosed on the website of the company at http:// familiaratisation-programme-to-independent-directors.pdf

Transfer of unclaimed dividend

Pursuant to the provisions of Companies Act, 1956/2013, the unclaimed dividend amount pertaining to the financial year 2010-11 is due for transfer to Investor Education and Protection Fund (IEPF).

Board Evaluation

Pursuant to the provisions of the Companies Act, 2013 and SEBI ( Listing obligations and Disclosure( Requirements) Regulations, 2015 the board has carried out evaluation of its own performance, the performance of committees of the Board, namely Audit Committee, Stakeholders Relationship committee and Nomination and Remuneration Committee and also the Directors individually. The manner in which the evaluation was carried out and the process adopted has been mentioned out in the report on corporate Governance

Material Subsidiary Policy

The company has adopted a policy for determining a material subsidiary, in line with the requirements of the Act and SEBI (LODR) Regulations, 2015. The policy on Material Subsidiary is available on the website of the company under following link:

Governance Policies

At Virinchi, we strive to conduct our business and strengthen our relationships in a manner that is dignified, distinctive and responsible. We adhere to ethical standards to ensure integrity, transparency, independence and accountability in dealing with all stakeholders. Therefore, we have adopted various codes and policies to carry out our duties in an ethical manner. Some of these codes and policies are:

Code of Conduct

Code of Conduct for Prohibition of Insider Trading Whistle Blower Policy

Code of Conduct for Board of Directors and Officers of Senior Management Policy for determining materiality for disclosure Document Retention and Archival Policy Sexual Harassment Policy The link for accessing the above policies is / corporateoverview.php

Sexual Harassment Policy

The company as required under the provisions of The Sexual Harassment of women at Workplace (Prohibition, prevention and Redressal) Act, 2013 has framed a policy on Prohibition, Prevention and Redressal of Sexual Harassment of women at workplace and matters connected therewith or incidental thereto. Internal complaints Committee (ICC) has been set up to redress complaints received regarding sexual harassment. All employees (Permanent, Contractual, temporary, trainees) are covered under this policy

In the year under review the company has not received any complaint under this policy.

Meetings of Independent Directors

The Company''s Independent Directors meet at least once in every financial year without the presence of Executive Directors or management personnel. Such meetings are conducted formally to enable Independent Directors to discuss matters pertaining to the Company''s affairs and put forth their views. The Independent Directors takes appropriate steps to present their views to the Chairperson

One such meeting of Independent Directors was held during the year on 17th February, 2018 without the presence of Executive Directors and management personnel. The details of the attendance of the Independent Directors in the meeting are as below.

Name of the Director

No. of meetings held during the year 2017-18



Ramam Madu



Krishna Kanaparthy



K V Sittampallam



Samad A Momin



Board Disclosures

i. Risk Management

Currently, the Company''s risk management approach comprises of the following:

Governance of Risk Identification of Risk Assessment and control of Risk

The risks are being identified by a detailed study. Senior Management are analyzing and working in mitigating them through co-ordination among the various departments. Insurance coverage and personal accident coverage for lives of all employees are also being taken.

Your company puts in place the risk management framework, which helps to identify various risks cutting across its business lines. The risks are identified and are discussed by the representatives from various functions.

Presentation to the Board of Directors and the Audit Committee is made on risk management. The Board and the Audit Committee provides oversight and review the risk management policy periodically.

ii. Internal Control System

Your company has in place adequate systems of internal control commensurate with its size and the nature of its operations. These have been designed to provide reasonable assurance with regard to recording and providing reliable financial and operational information, complying with applicable statutes, safeguarding assets from unauthorized use or losses, executing transactions with proper authorization and ensuring compliance of internal policies. The Company has a well-defined delegation of power and defined limits for approving revenue as well as capital expenditure. Processes for formulating and reviewing annual and long term business plans have been laid down to ensure adequacy of the control system, adherence to the management instructions and legal compliances

Directors'' Responsibility Statement

Pursuant to section 134(5) of the Companies Act, 2013, your Directors, based on the representations received from the Operating Management, and after due enquiry, confirm that:

a) In the preparation of the annual accounts for the year ended 31st March, 2018, the applicable accounting standards had been followed and there are no material departures.

b) 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.

c) 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

d) We have prepared the annual accounts for the financial year ended 31st March, 2018 on a going concern basis.

e) The Directors have laid down internal financial controls, which are adequate and are operating effectively.

f) they had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively throughout the Financial Year ended 31st March, 2018.


As required under Regulation 34 (3) read with schedule V (E) of the SEBI (LODR) Regulations, 2015, Auditor''s certificate on corporate governance is enclosed as Annexure to Board''s 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.


The firm name of Statutory Auditors M/s. Chandra Babu Naidu & Co has been changed to M/s. PCN & Associates during the financial year.

M/s. PCN& Associates., Chartered Accountants, (ICAI firm Registration Number : 016016S) were appointed as Statutory Auditors of the Company to hold office for a term of 5 years from the conclusion of the 28th Annual General Meeting (AGM) held on 28th September, 2017 until the conclusion of 33rd AGM of the company to be held in the year 2022.

Pursuant to the Notification issued by the Ministry of Corporate Affairs on 7th May, 2018, amending section 139 of the Companies Act, 2013, the mandatory requirement for ratification of appointment of Auditors by the Members at every AGM has been omitted and hence your Company has not proposed ratification of appointment of M/s PCN & Co. Chartered Accountants, at the forthcoming AGM. The Auditors'' Report is unmodified i.e. it does not contain any qualification, reservation or adverse remark or disclaimer

The company has received consent letter from the statutory auditors and certificate indicating satisfaction of criteria sated in Section 141 of Companies Act, 2013.


Pursuant to the provisions of Section 204 of the Companies Act, 2013 and The Companies (Appointment and Remuneration of Managerial

Personnel) Rules, 2014, your Company has appointed Mr. V Chandra Sekhar Patnaik, Practising Company Secretary, to undertake the Secretarial Audit of your Company. The Report of the Secretarial Audit is annexed as Annexure - D.

The Secretarial Audit Report does not contain any qualification, reservation or adverse remark or disclaimer.


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.


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

Meetings of the Board and Committees

Eleven Meetings of the Board of Directors were held during the year. For further details on the meetings and the attendance of directors/ members, please refer report on Corporate Governance of this Annual Report.

Consolidated Financial Statements

Pursuant to Regulation 33 of SEBI (LODR) Regulations, 2015 and the Companies Act, 2013, the consolidated financial statements prepared as per companies Act, 2013 and applicable Accounting Standards, duly audited forms part of the Annual Report.

Consolidated financial statements incorporating the operations of the company, its subsidiaries are appended. As required under the provisions of the Act, a statement showing the salient features of the financial Statements of the subsidiaries is enclosed to this report.

The financial statements of the subsidiary companies will be made available to the members of the company and its subsidiary companies on request and will also be kept for inspection in the registered office of the company.


The remuneration paid to your Directors is in accordance with the Nomination and Remuneration Policy formulated in accordance with Section 178 of the Companies Act, 2013 and Regulation 19 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirement) Regulations, 2015 (including any statutory modification(s) or re-enactment(s) for the time being in force). The salient aspects covered in the Nomination and Remuneration Policy have been outlined in the Corporate Governance Report which forms part of this report.

The information required under Section 197 (12) of the Act read with Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is annexed as Annexure - A.

Corporate Social Responsibility (CSR)

In terms of section 135 and Schedule VII of the Companies Act, 2013 read with Companies (Corporate Social Responsibility Policy) Rules, 2014 made thereunder, the Board of Directors of your Company have constituted a CSR Committee.

The CSR Committee has framed a CSR Policy which forms part of the Annual Report on CSR, annexed as Annexure - B to this report.

Virinchi Ltd had earmarked a budget of Rs.24.45 Lacs (i.e. 2% of average net profits of the previous 3 years) for FY 2017-18 and spent Rs. 24.45 Lacs during the year towards CSR activities across India.


The details forming part of the extract of the Annual Return in form MGT-9 is annexed herewith as Annexure-C.

Annual Return

The Annual Return referred to in sub-section (3) of section 92 has been placed at the website of the company and the same can be accessed at

Reporting of Frauds by Auditors

During the year under review, the Statutory Auditors and Secretarial Auditor have not reported any instances of frauds committed in the Company by its Officers or Employees to the Audit Committee under section 143(12) of the Companies Act, 2013, details of which needs to be mentioned in this Report.


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-E.

Details about Employees Stock Option Scheme,

Disclosures pursuant to Regulation 14 of the Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014 is annexed as Annexure-F.

Related Party Transactions

Related party transactions that were entered during the financial year were on an arm''s length basis and were in the ordinary course of business. There were no materially significant related party transactions with the Company''s Promoters, Promoter Group, Directors, Senior Management Personnel or their relatives, which could have had a potential conflict with the interests of your Company. Please see the details of the same in form AOC-2 which is annexed as Annexure-H.

Further all Related Party Transactions are placed before the Audit Committee for approval. Prior omnibus approval for normal company

transactions is also obtained from the Audit Committee for the related party transactions which are of repetitive nature as well as for the normal company transactions which cannot be foreseen and accordingly the required disclosures are made to the Committee on quarterly basis in terms of the approval of the Committee.

Your Directors have on the recommendations of the Audit Committee, adopted a policy to regulate transactions between your Company and its Related Parties, in compliance with the applicable provisions of the Companies Act 2013, the Rules made there under and the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirement) Regulations, 2015.

Report on Corporate Governance

Corporate Governance Report is set out as separate Annexure to this Report.

Management Discussion and Analysis Report

Management''s Discussion and Analysis report for the year under review as stipulated under Regulation 34(2) (e) SEBI (LODR) Regulation, 2015 of the Listing Agreement with the stock exchanges is presented in a separate section forming part of the Annual report


Your Directors state 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:

1. Issue of equity shares with differential rights as to dividend, voting or otherwise.

2. Issue of shares (including sweat equity shares) to employees of your Company under any scheme save and except ESOS referred to in this Report.

3. 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.

4. During the year under review, there were no cases filed pursuant to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

5. During the period under review, there were no frauds reported by the auditors under provisions of the Companies Act, 2013.

6. There were no material changes commitments affecting the financial position of your Company between the end of financial year (March 31, 2018) and the date of the report (August 29th , 2018).


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.

For Virinchi Ltd

M. Santhi Priya

Place: Hyderabad Chairperson& Whole Time Director

Date: 29th August, 2018 DIN: 03114319

Director’s Report