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Directors Report of Virinchi Ltd.

Mar 31, 2016

Dear Members,

The Directors have pleasure in presenting you the 27th Directors’ Report on the business and operations of your company, for the financial year ended 31st March, 2016.

Financial Highlights: (Rs in Lakhs)

Consolidated

Standalone

Particulars

2015-16

2014-15

2015-16

2014-15

Total Income

22046.66

14120.26

10565.94

8070.59

Profit before interest, Depreciation and Tax

3325.04

2456.80

1844.99

1493.33

Interest

302.90

214.44

217.76

127.41

Depreciation

1207.03

1138.00

1021.67

964.51

Provision for Taxation

137.92

331.23

134.99

89.11

Profit after interest, Tax and depreciation

1620.55

828.81

470.57

312.30

Deferred Tax provision

56.64

(53.44)

(52.96)

(49.05)

Balance brought forward

5132.97

4705.44

4427.43

4457.95

Balance Carried to Balance Sheet

6753.52

5132.97

4845.5

4427.43

RESULTS OF OPERATIONS:

Following are the results of operations for the financial year 2015-16 BUSINESS PERFORMANCE

Consolidated Revenues: The total Consolidated income of the Company for the FY 2015-16 is Rs.22046.66 Lacs as against Rs. 14120.26Lacs in FY 2014-15

Standalone Revenues: The total income of the Company for the FY 2015-16 is Rs. 10565.94 lacs as against Rs. 8070.59 Lacsin FY 2014-15

Consolidated Profits: Profit before Tax (PBT) stood at Rs. 1815.11 lacs as against Rs. 1106.60 Lacs for the previous year. Profit after Tax (PAT) stood at Rs. 1620.55 lacs as against Rs.828.81 Lacs for the previous year.

Standalone Profits: Profit before Tax (PBT) stood at Rs. 605.56 lacs as against Rs. 401.41 Lacs for the previous year. Profit after Tax (PAT) stood at Rs. 417.62 lacs as against Rs. 361.35 Lacs for the previous year.

RESERVES AND SURPLUS

During the year the Company has transferred an amount of Rs. 417.62 Lakhs to Reserves and Surplus. DIVIDEND

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 to the 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

Directors :

Appointments :

In accordance with the provisions of the Companies Act, 2013 the board has re-appointed Mr. K. Sri Kalyan and Ms. Santhi Priya M as Whole Time Directors, subject to approval of shareholders in the Annual General Meeting of the Company.

Brief resume of the Directors proposed to be reappointed, nature of their expertise in specific functional areas, directorships in other companies as stipulated under SEBI (LODR) Regulations, 2015 are provided in the report on corporate governance.

Cessations:

None of the Directors ceased to Director of the company during period under review.

Share Capital :

The paid up Equity Share capital of the company as on 31st March, 2016 was 1798.60 lacs. During the year the company had issued shares as detailed below.

Particulars

As at 31st March, 2016

As at March 31, 2015

Equity Shares

Number of Shares

Rs.

Number of Shares

Rs

Share capital

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

2,50,00,000

25,00,00,000

2,50,00,000

25,00,00,000

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

1,79,86,050

17,98,60,500

1,79,86,050

17,98,60,500

1,79,86,050

17,98,60,500

1,79,86,050

17,98,60,500

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

Particulars

As at 31st March, 2016

As at March 31, 2015

Equity Shares

Number of Shares

Rs.

Number of Shares

Rs

Shares outstanding at the beginning of the year

17986050

179860500

17986050

179860500

Add: issued and allotted during the year

Less: Shares bought back during the year

Shares outstanding at the end of the year

17986050

179860500

17986050

179860500

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:

Particulars

As at 31st March, 2016

As at March 31, 2015

Equity Shares

Number of Shares

Rs.

Number of Shares

Rs

Viswanath Kompella

23,24,900

12.93

23,24,900

12.93

SalokhyaInfrastructure Private Ltd

11,50,000

6.39

11,50,000

6.39

Agrade Exim Private Ltd

10,00,000

5.56

10,00,000

5.56

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 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.

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 Board.

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 of 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 the Companies 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

DECLARATION BY INDEPENDENT DIRECTORS :

The company has received declarations from all the independent 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, Chief Financial Officer, Mr 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.

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 manager 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 ( www.virinchi.com)

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 1st January, 2016 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

No. of meetings held during the year 2015-16

Held

Attended

Ramam Madu

1

1

Krishna Kanaparthy

1

1

Samad A. Momin

1

1

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 www.virinchi.com / corporateoverview.php 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 the requirement under Section 134(3) (c) of the Companies Act, 2013, with respect

to Director’s Responsibility Statement, Your Directors hereby confirmed that :

i) In the preparation of the annual accounts for the year ended 31st March, 2016, 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, 2016 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 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.

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.

AUDITORS

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.

SECRETARIAL AUDIT:

Mr. N V S SSuryanarayanaRao , Practicing Company Secretary was appointed to conduct Secretarial Audit of the company for the financial year 2015-16, as required under section 204 of the Companies Act, 2013 and rules framed there under. The Secretarial Audit report for financial year 2015-16 forms part of board’s report as Annexure

The Board has appointed Mr. V Chandra Sekhar Patnaik, Practicing Company Secretary as Secretarial Auditor of the Company for financial year 2016-17.

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 & SEBI (LODR) Regulations 2015, 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.

FIXED DEPOSITS

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

PERFORMANCE SUBSIDIARIES INFORMATION :

Tyohar foods Private 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 .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 at DRAT Kolkata vide TA 17/2016 dt.13.02.2016 and approached the Hon’ble High Court and the said court while disposing the case on 29.02.2016 granted Status Quo only for 3 months from the date of Order i.e. 29.02.2016 which expired on 29.05.2016.

The appeal at DRAT, Kolkata is posted for hearing on 07-09-2016 in which both the Bank and Virinchi have filed their counters. At present we are in possession of the property and there is no Stay or Status quo orders from any Court against the said property.

Virinchi Health Care Private Ltd

During the year under review, the process of setting up a 600 bed Greenfield Super Specialty hospital spread over a total area of 350,000 Sft across four inter-connected buildings in the prime location of Banjara Hills in Hyderabad started and is in progress . The main building with 350 beds will be operational before end of Fy 2016-17. The phase II will be completed by Fy 2018-19

The hospital has been established with a focus on CONNECT specialties, an acronym for Cardiology, Orthopedics, Nephrology, Neurology, Emergency, Cancer and Transplantation. Your company believes in the concept of “Right to Science” and endeavors to make available evidence based latest advancements in medicine and therapy to all deserving patients.

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

“We have successfully trained and placed 670 students under NSDC program this year. We are planning to establish 1 training center in each district of Telangana, Andhra Pradesh, Karnataka through a franchise model so that rural youth can utilize the most out of this program. We have developed training material for 10 courses, of which 7 courses are approved by NSDC and 3 are awaiting approval. There is a dedicated learning portal for the students who enroll in our training programs (. We have partnered with reputed hospitals to provide placements to the candidates trained under our NSDC program. Our next year plan is to soon expand the program across Pan India, attain more number of placement partners, and train as many aspirants as possible.”

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 120 employees in KSoft as on 31st March, 2016

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 is 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.

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 is as follows:

The percentage of increase in remuneration of each Director, Chief Financial Officer and Company Secretary during the financial year 2015-16, ratio of the remuneration of each Director to the median remuneration of the employees of the Company for the financial year 2015-16 and the comparison of remuneration of each Key Managerial Personnel (KMP) against the performance of the Company are as under:

Sl. No.

Name of Director/ KMP and Designation

Remuneration of Director/KMP for financial year 2015-16 (Rs. in lakhs)

% increase in Remuneration in the Financial Year 2015-16

Ratio of remuneration of each Director / to median remuneration of employees

Comparison of the Remuneration of the KMP against the performance of the company

1.

K. Sri Kalyan Whole Time Director

9.45 Lacs

40.12%

3.37

Profit before Tax increased by 50.86% and Profit After Tax increased by 15.57%in financial Year 2015-16

2.

M. Santi Priya Whole Time Director and CFO

18.00 Lacs

NIL

6.41

3.

K.Ravindranath Tagore Company Secretary

18.00 Lacs

30.25%

6.41

vii) a) Variations in the market capitalisation of the Company: The market capitalization as on March 31, 2016 at BSE was Rs. 5863.45 lakhs (Rs. 3426.34 lakhs as on March 31, 2015)

b) Price Earnings ratio of the Company at BSE was 9.48 as at March 31, 2016 and was 13.99 as at March 31, 2015;

viii) Average percentage increase made in the salaries of employees other than the managerial personnel in the last financial year i.e. 2014-15 was 15% whereas the increase in the managerial remuneration for the current financial year was 40.12%.

ix) The key parameters for any variable component of remuneration availed by the directors: Not applicable

x) The ratio of the remuneration of the highest paid director to that of the employees who are not directors but received remuneration in excess of the highest paid director during the year - Not Applicable; and

xi) It is hereby affirmed that the remuneration paid is as per the Remuneration Policy for Directors, Key Managerial Personnel and other Employees.

Change of Name, Alteration of Object Clause and Adoption of new Articles of Association.

During the year under review, the name of the company changed from Virinchi Technologies Ltd to Virinchi Ltd. The Company has received the Certificate of Incorporation on 12th January, 2016 Pursuant to change of Name of the Company from “Virinchi Technologies Ltd to Virinchi Ltd “Pursuant to Rule 29 of the Companies (Incorporation) Rules, 2014.

The company has carried out alteration to the Object clause of the memorandum of association by adding following objects after main objects III(A)4:

5. To establish, maintain, conduct, provide, procure or make available services of every kind including Commercial, Statistical, Medical, Financial, Legal, Healthcare, Accountancy, Management, Educational, Engineering, Data Processing, Communication, Entertainment, Media, Infrastructure, Hospitality and other technological social or other services

6. To carry on the business as importer, exporter, buyer, lesser, and sellers of and dealers in all types of electronic components and equipment necessary for attaining the above objects.

The company has adopted new Articles of Association inconformity with the companies Act, 2013

Details about Virinchi Employees Stock Option Scheme, 2004 (VESOS, 2004)

Pursuant to the provisions Section 62 of Companies Act, 2013 read with rules made there under and SEBI (Share Based Employee Benefits) Regulations, 2014 and erstwhile SEBI (Employee Stock Option Scheme and Employee stock purchase Scheme), Guidelines, 1999, the details of stock options as on 31st March, 2016 under the Virinchi Employee Stock Options Scheme, 2004 are as under:

Sl. No

Description

Details

1.

Options Granted during 2015-16

2,67,000

2.

Pricing formula

At Face Value

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 options granted: 11,67,000

10.

Employee wise details of options 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.

N.A.

11.

Diluted Earnings Per share (EPS) pursuant to issue of shares on exercise of option calculated in accordance with Accounting Standard (AS)20 Earnings Per share

N.A.

12.

The difference between the employee 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.

N.A.

13.

Weighted Average exercise prices and 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

NIL

14.

Description of the method and significant assumptions used during the year to estimate the fair value of options.

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

The Company has opted intrinsic Value method for accounting of Compensation Cost arising out of ESOP. The Company has not made any assumptions.

PARTICULARS OF ENERGY CONSERVATION, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS & OUTFLOW REQUIRED UNDER COMPANIES (ACCOUNTS) RULES, 2014

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 Crores)

Particulars

FY 2015-16

FY 2014-15

Foreign Exchange Earnings

104.17

78.38

Foreign Exchange Outgo

46.46

77.43

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 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.

GENERAL

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. Details relating to deposits covered under Chapter V of the Companies Act.

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

3. Issue of shares (including sweat equity shares) to employees of the Company under any scheme save and except ESOP referred to in this Report.

4. Neither of the Whole-time Directors of the Company receive any remuneration or commission from any of its subsidiaries.

5. 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.

Acknowledgments

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 LIMITED

(formerly known as Virinchi Technologies Limited)

PLACE : SECUNDERABAD M. Santhi Priya

DATE : 31.08.2016 Chairperson & Whole Time Director

DIN :03114319


Mar 31, 2014

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


Mar 31, 2013

Dear Members,

The Directors have pleasure in presenting you the 24th Directors'' Report on the business and operations of your company, for the fnancial year ended 31st March, 2013.

Financial Highlights: (Rs. in Lacs)

Consolidated Standalone Particulars 2012-13 2011-12 2012-13 2011-12

Total Income 8,035.36 6,987.91 4,395.77 3,708.21

Proft before interest, Depreciation and Tax 1,571.98 1,866.77 1,196.86 1,292.04

Interest 274.16 281.01 232.34 245.74

Depreciation 735.54 854.13 641.87 810.56

Provision for Taxation 137.69 159.74 64.38 56.98

Proft after interest, Tax and depreciation 424.59 571.88 258.27 178.76

Deferred Tax provision 61.37 32.88 52.22 19.48

Balance brought forward 4,585.05 4,153.49 4,111.75 4,039.55

Balance Carried to Balance Sheet 4,758.63 4,585.05 4,317.80 4,111.75

RESULTS OF OPERATIONS:

Following are the results of operations for the fnancial year 2012-13

BUSINESS PERFORMANCE

Consolidated Revenues: The total Consolidated income of the Company for the FY 2012-13 comprises operating revenues of Rs. 7868 Lacs as against Rs. 6804 Lacs in FY 2011-12 and other income of Rs. 167 Lacs for the current year as against Rs. 183 lacs in FY 2011-12.

Standalone Revenues: The total income of the Company for the FY 2012-13 comprises operating revenues of Rs. 4554 Lacs as against Rs. 3525 Lacs in FY 2011-12 and other income of Rs. 142 Lacs for the current year as against Rs. 183 lacs in FY 2011-12.

Consolidated Profts: Proft before Tax (PBT) stood at Rs. 562.28 Lacs as against Rs. 731.63 Lacs for the previous year. Proft after Tax (PAT) stood at Rs. 363.22 lacs as against Rs. 538.99 Lacs for the previous year.

Standalone Profts: Proft before Tax (PBT) stood at Rs. 322.65 Lacs as against Rs. 235.74 Lacs for the previous year. Proft after Tax (PAT) stood at Rs. 206.05 Lacs as against Rs. 159.28 Lacs for the previous year.

Your Company is primarily engaged in the business of providing IT Products & Services to its customers in US, Europe, and Middle East. The fnancial results of the Company on consolidated basis have been encouraging despite the challenges faced in terms of unfavorable business conditions in our primary markets of US and Europe.

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 fnancial year of the company and the date of the report affecting the fnancial position of the company

Directors

None of the directors of the company is disqualifed 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 G.Santi Priya and K. Krishna retire by rotation at the Annual General Meeting and being eligible offer themselves for reappointment at the ensuing Annual General Meeting.

Ms. G. Santi Priya reappointed as Chairperson& Whole Time Director w.e.f 22nd July, 2013 and Sri Kalyan Kompella appointed as Additional Director and Whole Time Director on 12th August, 2013

Brief resume of the Directors proposed to be reappointed, nature of their expertise in specifc 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:

Srinath Kompella resigned to be a director of the company w.e.f 12th August, 2013. Your directors place on record the appreciation and gratitude to him for his valuable contributions during his tenure as director.

Allotment of Shares:

The company has alloted 30,00,000 Equity shares on preferential basis to promoter and strategic investors during the year.

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 confrmed that:

I) In the preparation of the annual accounts for the year ended 31st March, 2013, 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 2013 and of the proft of the company for the fnancial year ended 31st March, 2013

iii) We have taken proper and suffcient 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 fnancial year ended 31st March, 2013 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 letter from the Statutory auditors to this effect that their reappointment, if made would be within the prescribed limits under section 224 (1B) of the Companies Act, 1956 and they are not disqualifed for such reappointment within the meaning of section 226 of the said act.

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 Proft 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 fnancial 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 Offce 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 fxed deposits as on 31st March, 2013 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.

Subsidiary Companies

The company has incorporated two subsidiaries namely M/s. Tyohar Foods Private Ltd and M/s. Virinchi Infra and Realty Private Ltd during the year.

The details pertaining to fnancials of Subsidiary Companies have been given elsewhere in this report.

Consolidated Financial Statements

In accordance with the Accounting Standards AS-21 and AS-27 on Consolidated fnancial Statements read with the Accounting Standard AS-23 on Accounting for investments in Associates, the Audited consolidated fnancial 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, 2013 under the Virinchi Employee Stock Options Scheme, 2004 are as under:

Sl.

Description Details

No

1. Options Granted during 2012-13 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 N.A. exercise of option

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 options granted: 9,00,000

10. Employee wise details of options granted to i) N.A. 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) Identifed 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 N.A. 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 profts and EPS of the Company.

13. Weighted Average exercise prices and weighted NIL 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 signigicant The Company has opted intrinsic Value method assumptions used during the year to estimate for accounting of Compensation Cost arising the fair value of options. 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 ftments, 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, effciency and quality. Your company continues to give due importance to research and development to maintain its leadership in the feld 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 confgured consistently for its core business processes.

Report on Corporate Governance

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, 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 G. Santi Priya

DATE : 12-08-2013 Chairperson & Whole Time Director


Mar 31, 2012

The Directors have pleasure in presenting you the 23rd Directors' Report on the business and operations of your company on standalone basis, for the financial year ended 31st March, 2012.

Financial Highlights on standalone basis (Rs. in Lacs)

Consolidated Standalone

Particulars 2011-12 2010-11 2011-12 2010-11

Total Income 6,988 6,478 3,708.21 3,816.88

Profit before interest, Depreciation and Tax 1,867 1,644 1,292.04 1,309

Interest 281 230.87 245.74 187.30

Depreciation 854 839.31 810.56 819.04

Provision for Taxation 159.74 171.61 56.98 82.32

Profit after interest, Tax and depreciation 572 402.33 178.76 220.10

Deferred Tax provision 33 (43.64) 19.48 (50.19)

Balance brought forward 4,153 3,923.64 4,039.55 3,856.64

Balance Carried to Balance Sheet 4,549 4282 4,112 4,040

RESULTS OF OPERATIONS:

Following are the results of operations for the financial year 2011-12

BUSINESS PERFORMANCE

Consolidated Revenues: The total Consolidated income of the Company for the FY 2011-12 comprises operating revenues of Rs. 6804 Lacs as against Rs. 6377 Lacs in FY 2010-11 and other income of Rs. 183 Lacs for the current year as against Rs. 101 lacs in the previous year.

Standalone Revenues: The total income of the Company for the FY 2011-12 comprises operating revenues of Rs. 3525 Lacs as against Rs. 3715 Lacs in FY 2010-11 and other income of Rs.183 Lacs for the current year as against Rs. 101 lacs in the previous year.

Consolidated Profits: Profit before Tax (PBT) stood at Rs. 731.63 Lacs as against Rs. 573.94 Lacs for the previous year. Profit after Tax (PAT) stood at Rs. 538.99 lacs as against Rs. 445.97 Lacs for the previous year.

Standalone Profits: Profit before Tax (PBT) stood at Rs. 235.74 Lacs as against Rs. 302.42 Lacs for the previous year. Profit after Tax (PAT) stood at Rs. 159.28 Lacs as against Rs. 270.29 Lacs for the previous year.

Your Company is primarily engaged in the business of providing IT Products & Services to its customers in US, Europe, and Middle East. 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 markets of US and Europe.

Reserves and Surplus

During the year the Company has not transferred any amount to Reserves and Surplus.

Dividend

Your directors are pleased to recommend payment of a dividend of Rs. 0.50/-per equity share (at the rate of 5% on the par value of Rs. 10/-each) subject to the approval of share holders.

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

Directors

In accordance with the provisions of the Companies Act, 1956 Datuk Kunasingam V. Sittampalam and Samad A. Momin retire by rotation at the Annual General Meeting and being eligible offer themselves for reappointment at the ensuing Annual General Meeting.

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.

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, 2012, 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 2012 and of the profit of the company for the financial year ended 31st March 2012

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, 2012 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 letter from the Statutory auditors to this effect that their reappointment, if made would be within the prescribed limits under section 224 (1B) of the Companies Act, 1956 and they are not disqualified for such reappointment within the meaning of section 226 of the said act.

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 letter No. 47/15/2011-CL-III dated 27 January 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, 2012 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.

Subsidiary Companies

The details pertaining to financials of Subsidiary Companies have been given elsewhere in this report.

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, 2012 under the Virinchi Employee Stock Options Scheme, 2004 are as under:

SI. Description Details No

1. Options Granted during 2011-12 NIL

2. Pricing formula The Company is issuing the shares at Face Value of Rs. 10/- each as per the resolution passed in the 17th Annual General Meeting of the Company.

3. Options Vested NIL

4. Options exercised NIL

5. The total number of shares arising NIL as a result of exercise of option

6. Options lapsed NIL

7. Variation of terms of options There is no variation of terms in this financial year

8. Money realized by exercise of NIL options 9. Total number of options in force Total options reserved under the scheme: 11,67,000 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) Rs. 3.00 per share 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 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 NIL prices and 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 significant assumptions used intrinsic Value method for during the year to estimate accounting of Compensation the fair value of options. Cost arising out of ESOP. i. Risk-free interest rate The Company has not made any assumptions. 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.

b) Research and Development and Technology Absorption:

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.

Earnings: Rs. 3393.45 Lacs Outgo: Rs. 58.98 Lacs

d) The company has not made any technology absorption during the year. Report on Corporate Governance

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, 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 AND ON BEHALF OF THE BOARD OF DIRECTORS For VIRINCHI TECHNOLOGIES LIMITED

G. Santi Priya Chairperson & Whole Time Director

PLACE : HYDERABAD DATE : 29-08-2012


Mar 31, 2010

The Directors have pleasure in presenting you the 21st Annual Report of your company together with the Audited Accounts for the year ended 31st March, 2010.

Financial Results Rs. In lacs

Particulars 2009-10 2008-09

Total Income 4,333.17 4,003.43

Profit before interest, depreciation and tax 1,374.40 1,349.12

Interest 131.05 94.30

Depreciation 825.78 852.05

Provision for Taxation 68.18 63.97

Profit after interest, Tax and depreciation 349.38 338.80

Deferred Tax Provision (51.61) (37.81)

Balance brought forward 3,226.96 2,850.35

Balance Carried to Balance Sheet 3,541.04 3,226.96

Financial Highlights & State of Company’s Affairs

During the year under review, Virinchi recorded Rs. 43.33 Crores revenues for the year 2009-10 as against Rs.40.03 Crores in the previous financial year 2008-09. We have achieved good growth of 8.18% in annual revenues beating the recession in the US Market.

Your Company is primarily engaged in the business of providing IT Services and solutions to its customers in US, Europe, and Middle East. The financial results of the Company both on standalone and consolidated basis have been very encouraging despite the challenges faced in terms of unfavorable currency movements and depressed business conditions in our primary markets of US and Europe. On a standalone basis, vastly improving margins despite revenues remaining flat bear testimony to improvements in our delivery practices and the strategy of focusing on existing customers to deliver higher value.

Reserves and Surplus

During the year the Company has not transferred any amount to Reserves and Surplus.

Dividend

Your directors are pleased to recommend payment of a dividend of Rs.0.50/-per equity share (at the rate of 5% on the par value of Rs.10/-each) subject to the approval of share holders.

Recognition:

In the year 2009-10,. CRISIL has awarded Virinchi Technologies Ltd with SME 1 Rating. The SME 1 rating indicates “Highest level of creditworthiness, adjudged in relation to other SMEs Your Company has justified the industry appreciation, through efficient management of resources resulting in a significant improvement of its profit margins.

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

Directors

In accordance with the provisions of the Companies Act, 1956 Datuk Kunasingam Sittampalam, Samad A. Momin retires by rotation at the Annual General Meeting and being eligible offer themselves for reappointment at the ensuing Annual General Meeting.

During the year Dr. Venugopal Resigned to the office of Director w.e.f 26th November, 2009.Mr. Jagan Mohan Rao has resigned to the position of the directorship w.e.f 30th January, 2010. Dr.Ravi chand resigned w.e.f 11th May, 2010. Mr. Anil Pinapala resigned on 21st July, 2010

Shri Ramam Madu appointed as additional director on the Board w.e.f. 30th January, 2010 .Shri Krishna Kanaparthy is appointed as additional director on board w.e.f 21st July, 2010 and Ms. Santi Priya is appointed as additional director and also as chairperson & Whole Time Director w.e.f 21st July, 2010

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.

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, 2010, 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 2010 and of the profit of the company for the financial year ended 31st March 2010.

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, 2010 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 letter from the Statutory auditors to this effect that their reappointment, if made would be within the prescribed limits under section 224(1B) of the Companies Act, 1956 and they are not disqualified for such reappointment within the meaning of section 226 of the said act.

Fixed Deposits

The Company has not accepted any fixed deposits as on 31st March, 2010 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.

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 the following employee was in receipt of remuneration of Rs.24,00,000/- or more per annum or Rs.2,00,000/- or more per month where employed for a part of the year.

Sl.No Name of Designation Gross Qualification Date of Commencement Particulars of

the Salary of employment Last

employee employment

01 Viswanath Executive 24,00,000 B.Tech(Mech) 13.03.1990 TISCO

Kompella Director IIT Chennai

02 Srinivas Managing 24,00,000 B.Tech. PGDM 28.01.2008 Sujana Group

Mahankali Director

03 Srinath Whole Time 24,00,000 B,com. PGDBM 14.05.2004 -

Kompella Director

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, 2010 under the Virinchi Employee Stock Options Scheme, 2004 are as under:

Sl.No Description Details

1 Options Granted during 2009-10 NIL 2 Pricing formula The Company is issuing the shares at Face Value

of Rs.10/- each as per the resolution passed in the 17th Annual General Meeting of the Company.

3 Options Vested 3,19,700

4 Options exercised NIL

5 The total number of shares arising as Nil a result of exercise of option

6 Options lapsed Nil

7 Variation of terms of options There is no variation of terms in this financial year

8 Money realized by exercise of options Rs. Nil

9 Total number of options in force Total options reserved under the scheme:11,67,000

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) pursuant NA

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 NA( There were no allotments during the compensation costs computed under financial year)

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 intrinsic Value significant assumptions used method for accounting of Compensation Cost during the year to estimate the fair arising out of ESOP. The Company has not made value of options. 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.

b) Research and Development and Technology Absorption:

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:

Earnings: Rs 3362 Lacs towards Export of Software.

Outgo : Rs.491 Lacs towards Foreign Travel and Rs. 204 Lakhs towards expenses.

d) The company has not made any technology absorption during the year.

Report on Corporate Governance

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.

Acknowledgements

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 of hard work, solidarity, cooperation and support put in by the company’s employees at all levels in enabling such growth.

FOR AND ON BEHALF OF THE BOARD OF DIRECTORS

For VIRINCHI TECHNOLOGIES LIMITED

PLACE : HYDERABAD SRINIVAS MAHANKALI G. SANTI PRIYA

DATE : 31.08.2010 MANAGING DIRECTOR CHAIRPERSON &

WHOLE TIME DIRECTOR

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