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Virinchi Ltd.

BSE: 532372 Sector: IT
NSE: N.A. ISIN Code: INE539B01017
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OPEN 109.80
PREVIOUS CLOSE 109.80
VOLUME 80463
52-Week high 131.50
52-Week low 59.10
P/E 27.61
Mkt Cap.(Rs cr) 301
Buy Price 112.10
Buy Qty 700.00
Sell Price 0.00
Sell Qty 0.00
OPEN 109.80
CLOSE 109.80
VOLUME 80463
52-Week high 131.50
52-Week low 59.10
P/E 27.61
Mkt Cap.(Rs cr) 301
Buy Price 112.10
Buy Qty 700.00
Sell Price 0.00
Sell Qty 0.00

Virinchi Ltd. (VIRINCHI) - Director Report

Company director report

Dear Members

Your Directors have pleasure in presenting you the 27th Directors’ Report on thebusiness 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 2015-16is 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. 10565.94lacs 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 asagainst 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 asagainst 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 Reservesand 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 Section188(1) of the Companies Act 2013 in the prescribed Form AOC-2 is appended as Annexureto the report.

Material changes and commitments

There are no material changes and commitments occurred between the end of the financialyear of the company and the date of the report affecting the financial position of thecompany

Directors :

Appointments :

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

Brief resume of the Directors proposed to be reappointed nature of their expertise inspecific 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 1798.60lacs. 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) Authorised Equity Shares of Rs.10/-each 25000000 250000000 25000000 250000000
b) issued Subscribed and fully paid up: Equity Shares of Rs. 10/-each 17986050 179860500 17986050 179860500
17986050 179860500 17986050 179860500

Reconciliation of Shares outstanding at the beginning and at the end of the reportingperiod:

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/-. EachShareholder 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 2324900 12.93 2324900 12.93
SalokhyaInfrastructure Private Ltd 1150000 6.39 1150000 6.39
Agrade Exim Private Ltd 1000000 5.56 1000000 5.56

CODE OF CONDUCT:

The Board of Directors has approved a Code of Conduct which is applicable to theMembers of the Board and all employees in the course of day to day business operations ofthe company. The Company believes in "Zero Tolerance" against briberycorruption and unethical dealings / behaviours of any form and the Board has laid down thedirectives to counter such acts. The code laid down by the Board is known as "code ofbusiness conduct" which forms an Appendix to the Code. The Code has been posted onthe Company’s website www.virinchi.com.

The Code lays down the standard procedure of business conduct which is expected to befollowed by the Directors and the designated employees in their business dealings and inparticular on matters relating to integrity in the work place in business practices andin dealing with stakeholders. The Code gives guidance through examples on the expectedbehaviour from an employee in a given situation and the reporting structure.

All the Board Members and the Senior Management personnel have confirmed compliancewith 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 withinstance of fraud and mismanagement if any.

In staying true to our values of Strength Performance and Passion and in line with ourvision of being one of the most respected companies in India the Company is committed tothe high standards of Corporate Governance and stakeholder responsibility.

The Company has a Fraud Risk and Management Policy to deal with instances of fraud andmismanagement if any. The FRM Policy ensures that strict confidentiality is maintainedwhilst dealing with concerns and also that no discrimination will be meted out to anyperson for a genuinely raised concern.

A high level Committee has been constituted which looks into the complaints raised. TheCommittee 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 viewto regulate trading in securities by the Directors and designated employees of theCompany. The Code requires pre-clearance for dealing in the Company’s shares andprohibits the purchase or sale of Company shares by the Directors and the designatedemployees while in possession of unpublished price sensitive information in relation tothe Company and during the period when the Trading Window is closed. The Board isresponsible for implementation of the Code.

All Board of Directors and the designated employees have confirmed compliance with theCode. The financial statements are prepared in accordance with the Generally AcceptedAccounting Principles (GAAP) under the historical cost convention on accrual basis exceptfor certain financial instruments which are measured at fair values. GAAP comprisesmandatory accounting standards as prescribed under Section 133 of theCompanies Act 2013(‘the Act’) read with Rule 7 of the Companies (Accounts) Rules 2014 theprovisions of the Act (to the extent notified) and guidelines issued by the Securities andExchange Board of India (SEBI). There are no material departures from prescribedaccounting standards in the adoption of these standards

DECLARATION BY INDEPENDENT DIRECTORS :

The company has received declarations from all the independent directors of the companyconfirming that they continue to meet the criteria of independence as prescribed undersub-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 andMr. K. Ravindranath Tagore Company Secretary are the Key Managerial Personnel (KMP) ofthe company in terms of the provisions of the Act.

Familiarisation Programme for Independent Directors

On their appointment Independent directors are familiarized about the Company’soperations and business. Interaction with the Business Heads and key executives of thecompany is also facilitated. Detailed Presentations on the business of each of theProcesses are made to the directors. Direct Meetings with the Chairperson are furtherfacilitated for the new appointee to familiarize about the company/its businesses and thegroup practices.

Board Evaluation

Pursuant to the provisions of the Companies Act 2013 and SEBI (Listing obligations andDisclosure Requirements) Regulations 2015 the board has carried out evaluation of its ownperformance the performance of committees of the Board namely Audit CommitteeStakeholders Relationship committee and Nomination and Remuneration Committee and also theDirectors individually. The manager in which the evaluation was carried out and theprocess 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 withthe requriements of the Act and SEBI(LODR) Regulations 2015. The policy on MaterialSubsidiary 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 atWorkplace (Prohibition prevention and Redressal)Act 2013 has framed a policy onProhibition Prevention and Redressal of Sexual Harassment of women at workplace andmatters connected therewith or incidental thereto. Internal complaints Committee (ICC) hasbeen 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 yearwithout the presence of Executive Directors or management personnel. Such meetings areconducted formally to enable Independent Directors to discuss matters pertaining to theCompany’s affairs and put forth their views. The Independent Directors takesappropriate steps to present their views to the Chairperson

One such meeting of Independent Directors was held during the year on 1st January 2016without the presence of Executive Directors and management personnel. The details of theattendance 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 amanner that is dignified distinctive and responsible. We adhere to ethical standards toensure integrity transparency independence and accountability in dealing with allstakeholders. Therefore we have adopted various codes and policies to carry out ourduties 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 analysing andworking in mitigating them through co-ordination among the various departments. Insurancecoverage 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 identifyvarious risks cutting across its business lines. The risks are identified and arediscussed by the representatives from various functions.

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

ii. Internal Control System

Your company has in place adequate systems of internal control commensurate with itssize and the nature of its operations. These have been designed to provide reasonableassurance with regard to recording and providing reliable financial and operationalinformation complying with applicable statutes safeguarding assets from unauthorized useor losses executing transactions with proper authorization and ensuring compliance ofinternal policies. The Company has a well-defined delegation of power and defined limitsfor approving revenue as well as capital expenditure. Processes for formulating andreviewing annual and long term business plans have been laid down to ensure adequacy ofthe 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 withrespect 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 theapplicable accounting standards had been followed and there are no material departures.

ii) The directors have selected appropriate accounting policies and applied themconsistently and have made judgments and estimates that are reasonable and prudent so asto give a true and fair view of the state of affairs of the Company at the end offinancial year and of the profit of the company for that period.

iii) The directors have taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of Companies Act 2013 forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities

iv) We have prepared the annual accounts for the financial year ended 31st March 2016on a going concern basis.

v) The Directors have laid down internal financial controls which are adequate and areoperating effectively.

vi) The directors have devised proper systems to ensure compliance with the provisionsof 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 asAnnexure to Board’s Report.

AUDITOR’S REPORT/ SECRETARIAL AUDIT REPORT:

The observation made in the Auditors’ Report read together with relevant notesthereon are self-explanatory and hence do not call for any further comments under Section134 of the Companies Act 2013.

As required under section 204 (1) of the Companies Act 2013 the Company has obtained asecretarial audit report.

AUDITORS

M/s. P. Murali & Co. Chartered Accountants Statutory Auditors of the Companyretire at the conclusion of the ensuing Annual General Meeting and being eligible offerthemselves for reappointment.

The company has received consent letter from the Statutory auditors and certificateindicating satisfaction of criteria sated in Section 141 of Companies Act 2013.

SECRETARIAL AUDIT:

Mr. N V S S Suryanarayana Rao Practicing Company Secretary was appointed to conductSecretarial Audit of the company for the financial year 2015-16 as required under section204 of the Companies Act 2013 and rules framed there under. The Secretarial Audit reportfor financial year 2015-16 forms part of board’s report as Annexure

The Board has appointed Mr. V Chandra Sekhar Patnaik Practicing Company Secretary asSecretarial 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 ortribunals 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 annexedherewith as Annexure.

CONSERVATION OF ENERGY RESEARCH AND DEVELOPMENT TECHNOLOGY ABSORPTION FOREIGNEXCHANGE EARNINGS AND OUTGO.

The Particulars as required under Sub- section (3)(m)of Section 134 of the CompaniesAct2013 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. Thedetails of the committee and its terms of reference are set out in the corporategovernance report forming part of the Boards report.

FIXED DEPOSITS

Your Company has not accepted any deposits within the meaning of Section 73 of theCompanies 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 hadpurchased a 50000 square feet of building in 4047 Square meters of land by participatingin an open auction conducted by Canara Bank on 16thAugust 2012 and registered the saidproperty located at Survey No 15 Suraram Village. However post purchase a petition wasfiled against the company and the bank in Debts Recovery Tribunal vide S.A.No.370/2012and I.A.No.1437/2012 and the DRT directed to maintain Status Quo orders pending detailedhearing .subsequently the said DRT was pleased to pass the Order dt. 22.01.2016 in favourof 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 andapproached the Hon’ble High Court and the said court while disposing the case on29.02.2016 granted Status Quo only for 3 months from the date of Order i.e. 29.02.2016which expired on 29.05.2016.

The appeal at DRAT Kolkata is posted for hearing on 07-09-2016 in which both the Bankand Virinchi have filed their counters. At present we are in possession of the propertyand 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 SuperSpecialty hospital spread over a total area of 350000 Sft across four inter-connectedbuildings 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 IIwill be completed by Fy 2018-19

The hospital has been established with a focus on CONNECT specialties an acronym forCardiology Orthopedics Nephrology Neurology Emergency Cancer and Transplantation.Your company believes in the concept of "Right to Science" and endeavors to makeavailable evidence based latest advancements in medicine and therapy to all deservingpatients.

Virinchi Learning Private Ltd

Virinchi Learning Private Ltd incorporated in the year 2010 as wholly owned subsidiaryof Virinchi Technologies Ltd. The primary objective of incorporating Virinchi Learning isto promote technology based for profit quality education services to the differentstudent categories in India both by creation of new content & infrastructure and alsoby partnering with existing content providers by leveraging the strength of Informationtechnology

"We have successfully trained and placed 670 students under NSDC program thisyear. We are planning to establish 1 training center in each district of Telangana AndhraPradesh Karnataka through a franchise model so that rural youth can utilize the most outof this program. We have developed training material for 10 courses of which 7 coursesare approved by NSDC and 3 are awaiting approval. There is a dedicated learning portal forthe students who enroll in our training programs (. We have partnered with reputedhospitals to provide placements to the candidates trained under our NSDC program. Our nextyear plan is to soon expand the program across Pan India attain more number of placementpartners 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 domainsof SAP Oracle and other technologies.

The employees have joined in various projects of the company and total head count isaround 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 2013the consolidated financial statements prepared as per companies Act 2013 and applicableAccounting Standards duly audited forms part of the Annual Report.

Consolidated financial statements incorporating the operations of the company itssubsidiaries is appended. As required under the provisions of the Act a statement showingthe sailent features of the financial Statements of the subsidiaries is enclosed to thisreport.

The financial statements of the subsidiary companies will be made available to themembers of the company and its subsidiary companies on request and will also be kept forinspection 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 employeesof the Company is as follows:

The percentage of increase in remuneration of each Director Chief Financial Officerand Company Secretary during the financial year 2015-16 ratio of the remuneration of eachDirector to the median remuneration of the employees of the Company for the financial year2015-16 and the comparison of remuneration of each Key Managerial Personnel (KMP) againstthe 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

During the period under review no employee of the Company is employed throughout thefinancial year and in receipt of Rs.60 lakhs or more or employed for part of the year andin receipt of Rs.5 lakhs or more a month under Rule 5(2) of Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014.

ii) The median remuneration of employees of the Company during the financial year wasRs. 2.81 lakhs;

iii) In the financial year there was increase of 10.12% in the median remuneration ofemployees;

iv) There were 365 employees on the rolls of Company as on March 31 2016

v) Relationship between average increase in remuneration and company performance: -

The Profit before tax for the financial year ended March 31 2016 increased by 50.86%whereas the increase in median remuneration was 10.12%

vi) Comparison of Remuneration of the Key Managerial Personnel(s) against theperformance of the Company:

The total remuneration of Key Managerial Personnel was Rs. 45.46 lakhs whereas theProfit before tax was Rs. 605.57 lakhs in 2015-16

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

b) Price Earnings ratio of the Company at BSE was 9.48 as at March 31 2016 and was13.99 as at March 31 2015;

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

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

x) The ratio of the remuneration of the highest paid director to that of the employeeswho are not directors but received remuneration in excess of the highest paid directorduring the year – Not Applicable; and

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

Change of Name Alteration of Object Clause and Adoption of new Articles ofAssociation.

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

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

5. To establish maintain conduct provide procure or make available services ofevery kind including Commercial Statistical Medical Financial Legal HealthcareAccountancy Management Educational Engineering Data Processing CommunicationEntertainment Media Infrastructure Hospitality and other technological social or otherservices

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

The company has adopted new Articles of Association inconformity with the companiesAct 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 thereunder and SEBI (Share Based Employee Benefits) Regulations 2014 and erstwhile SEBI(Employee Stock Option Scheme and Employee stock purchase Scheme) Guidelines 1999 thedetails of stock options as on 31st March 2016 under the Virinchi Employee Stock OptionsScheme 2004 are as under:

Sl. No Description Details
1. Options Granted during 2015-16 267000
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: 1167000 and Total options granted: 1167000
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 Earning Per share (EPS) pursuant to issue of shares on exercise of option calculated in accordance with Accounting Standard (AS)20 Earning 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 signigicant 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 thepremises for power supply to computer systems and lighting which are not energyintensive. However adequate measures have been taken to reduce energy consumptionwherever possible.

To decrease the carbon footprint company transportation is extended to associates fromdifferent parts of the city; the occupation is 100% in all the buses on all the workingdays. Also to conserve the natural resources STP plan is installed and the waste waterand solid material emitted out after processing is being used for landscaping. Thecompany has adopted laudable practices like reducing the carbon foot prints maximizingthe utilization of natural light and reducing the electric light fitments reduction ofsize of work station partitions. use of recycled material for the work stations’ woodboards provision of task lights for every work station to minimize the power consumptioncentral control switch for entire work station and automated water control taps in therest rooms. As part of energy conservation LED lighting is being use for the new areaswhich are undergoing interior renovation works.

b) Research and Development

Your company will continue to focus and invest in its R & D activities in softwareengineering technologies and products. Your company leverages its excellence intechnology for producing World Class Products and solutions. The continual exposure to newtechnologies has helped maintain high motivation levels in employees and to generatehigher levels of productivity efficiency and quality. Your company continues to give dueimportance to research and development to maintain its leadership in the field of leadingedge technologies.

c) Foreign Exchange Earnings and Outgo:

Most of your Company’s earnings are from the export of Computer Software andServices. In order to promote product sales and services your Company participated invarious 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 theproductivity and quality of its products and services. To create adequate infrastructureyour Company continues to invest in the latest hardware and software.

To support its growth plans the company continues to invest in global solutions thatare 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 asstipulated under Regulation 34(2) (e) SEBI (LODR) Regulation 2015 of the ListingAgreement with the stock exchanges is presented in a separate section forming part of theAnnual report.

GENERAL

Your Directors state that no disclosure or reporting is required in respect of thefollowing 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 underany scheme save and except ESOP referred to in this Report.

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

5. No significant or material orders were passed by the Regulators or Courts orTribunals which impact the going concern status and Company’s operations in future.

Acknowledgments

Your directors would like to place on record their appreciation of supportco-operation and assistance received from the company’s clients Central Governmentauthorities bankers shareholders and suppliers. The board wishes to convey itsappreciation for hard work solidarity cooperation and support put in by thecompany’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