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Virinchi Ltd.

BSE: 532372 Sector: IT
NSE: N.A. ISIN Code: INE539B01017
BSE 00:00 | 24 Apr 2020 Virinchi Ltd
NSE 05:30 | 01 Jan 1970 Virinchi Ltd

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OPEN 29.75
VOLUME 16199
52-Week high 93.00
52-Week low 18.00
P/E 4.03
Mkt Cap.(Rs cr) 92
Buy Price 28.15
Buy Qty 30.00
Sell Price 28.15
Sell Qty 300.00
OPEN 29.75
CLOSE 29.40
VOLUME 16199
52-Week high 93.00
52-Week low 18.00
P/E 4.03
Mkt Cap.(Rs cr) 92
Buy Price 28.15
Buy Qty 30.00
Sell Price 28.15
Sell Qty 300.00

Virinchi Ltd. (VIRINCHI) - Director Report

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Company director report

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


(Rs. in Lakhs)




2017-18 2016-17 2017-18 2016-17
Total Income 34249.51 28860.11 17288.44 13990.58
Profit before finance Cost Depreciation & Amortization Taxation & Exceptional Item 9692.06 6578.24 5435.45 3746.34
Less: Finance Cost 1800.62 1151.20 696.93 566.11
Depreciation and Amortization Expenses 3337.5 2316.82 2374.49 1777.71
Profit before Tax & Exceptional items 4553.94 3110.22 2364.02 1561.83
Less: Exceptional items 0 159.31 0 159.31
Profit Before Tax 4553.94 2950.91 2364.02 1402.52
Less: Tax Expenses 1251.55 591.37 626.57 260.92
Profit before minority interest 3302.39 2359.54 1737.46 1141.60


Consolidated Revenues: The total consolidated income of the Company for the FY 2017-18is Rs. 34249.51Lakhs as against Rs 28860.11 Lakhs in FY 2016-17

Standalone Revenues: The total income of the Company for the FY 2017-18 is Rs.17288.44 Lakhs as against Rs. 13990.58 Lakhs in FY 2016-17

Consolidated profits:

Profit before Tax (PBT) stood at Rs. 4553.94 Lakhs as against Rs. 2950.91 Lakhs forthe previous year.

Profit after Tax (PAT) stood at Rs. 3302.39 Lakhs as against Rs. 2359.54 Lakhs for theprevious year.

Standalone profits:

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


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


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


The Company had planned to take up a project under Tyohar Foods Pvt Ltd and hadpurchased a 50000 Sq. feet of building in 4047 Square meters of Land located at Survey No15 Suraram Village Qutbullapur Mandal R.R.Dist by participating in an open auctionconducted by Canara Bank on 16th August 2012 and the said property was registered videCertificate of Sale Doc. No.11361/2012 dt.25th Sep 2009 and were put in possession of thesaid premises. However post purchase a petition was filed against the Bank before DebtsRecovery Tribunal Hyderabad vide S.A.No.370/2012 wherein the company impleaded itself andsubsequently the said DRT was pleased to pass the Order dt. 22.01.2016 in favour of theBank and dismissed the case filed by the Applicants.

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

The Applicants/Petitioners approached the Hon'ble High Court and filed a Writ PetitionNo. 25067/2017 and the case is pending before the said Hon'ble Court.

Virinchi Health Care Private Ltd

During the year under review the flagship hospital at the prime location of BanjaraHills in Hyderabad spread over a total area of 350000 sft with 350 operating beds hadfull twelve months of operations. Phase II of expansion of the Banjara Hills facilityconsisting of 150 economy and 100 Oncology beds has commenced and is expected to becompleted in 15-18 months.

During the year some of the doctors who are permanent employees of the hospital havereceived The Times Healthcare 2018 Award in the "Legend"category.

The hospital super-specialty hospital delivers over 35 specialties with emphasis onCONNECT specialties an acronym for Cardiology Orthopedics Nephrology NeurologyEmergency Cancer and Transplant Medicine. Virinchi has a dedicated clinical team pursuingMoUs and medical partnerships with over 300 globally reputed institutions in the US UKChina Israel etc. - to deliver a unique 'Right to Science' program to make global medicalinnovations available to Indian patients to treat previously incurable conditions.

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

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

Virinchi Learning Private Ltd

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

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

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

KSoft Systems Inc

M/s. KSoft Systems Inc is in the business of software development and consulting. M/s.KSoft Systems Inc provides consulting services to various clients in the US in the domainsof SAP Oracle and other technologies.

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

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



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


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

Change in Capital Structure and Listing at Stock Exchanges

The equity shares of your Company continue to be listed and traded on the BSE Ltd.(BSE) During the financial year under review 133500 equity shares were allotted onexercise of the options vested under the Employee Stock Option Scheme and 1400000 equityshares were allotted to the strategic investors and 2600000 convertible Warrants to thepromoters and promoter group under the Chapter VII of the SEBI (ICDR) Regulations 2009and admitted for trading on BSE . Consequently the Equity Share Capital of your Companyincreased from 26684550 equity shares of Rs.10/- each to 28218050equity shares ofRs.10/- each as on March 312018

As at 31st March 2018

As at March 312017

Particulars Number of Shares Rs. Number of Shares Rs.
Share capital 40000000 400000000 40000000 400000000
(a) Authorised Equity Shares of Rs.10/-each
b) issued Subscribed and fully paid up: 28218050 282180500 26684550 266845500
Equity Shares of Rs. 10/-each
28218050 282180500 26684550 266845500

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

As at 31st March 2018

As at March 312017

Particulars Number of Shares Rs. Number of Shares Rs.
Shares outstanding at the beginning of the year 26684550 266845500 17986050 179860500
Add: issued and allotted during the year - - - -
i) Allotment of shares pursuant to scheme of amalgamation between M/s. Virinchi Limited (Transferee Company) and M/s. Bristlecone Hospitals Private Limited (Transferor Company) 8565000 85650000
ii. Allotment of shares pursuant to VESOS2004 133500 1335000 133500 1335000
iii. Allotment of shares under preferential issue guidelines 1400000 14000000 - -
Less; Shares bought Back during the year - - - -
Shares outstanding at the end of the year 28218050 282180500 26684550 266845500

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:


As at 31st March 2018

As at March 312017

Name Number of Shares % Number of Shares %
Viswanath Kompella 6807975 24.12 6807975 25.51


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 is available on company's website under following link:

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.


The Company has a vigil mechanism to deal with instance of fraud and mismanagement ifany. In staying true to our values of Strength

Performance and Passion and in line with our vision the Company is committed to thehigh standards of Corporate Governance and stakeholder responsibility. The FRM Policyensures that strict confidentiality is maintained whilst dealing with concerns and alsothat 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. TheCommittee reports to the Audit Committee and the Board. Whistle Blower Policy is posted oncompany's website under following link:


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 and prohibitsthe purchase or sale of Company shares by the Directors and the designated employees whilein possession of unpublished price sensitive information in relation to the Company andduring the period when the Trading Window is closed. The Board is responsible forimplementation of the Code.

All Board Directors and the designated employees have confirmed compliance with theCode.


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 Whole Time Director & CFOK Sri Kalyan Whole Time Directorand 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'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.

Pursuant to Securities and Exchange Board of India (Listing Obligations and DisclosureRequirement) Regulations 2015 the Company shall familiarise the Independent Directorswith the Company their roles rights responsibilities in the Company nature of theindustry in which the Company operates business model of the Company etc. throughvarious programmes.

Accordingly your Company arranged technical sessions to familiarize the IndependentDirectors the details of which are disclosed on the website of the company at familiaratisation-programme-to-independent-directors.pdf

Transfer of unclaimed dividend

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

Board Evaluation

Pursuant to the provisions of the Companies Act 2013 and SEBI ( Listing obligationsand Disclosure( Requirements) Regulations 2015 the board has carried out evaluation ofits own performance the performance of committees of the Board namely Audit CommitteeStakeholders Relationship committee and Nomination and Remuneration Committee and also theDirectors individually. The manner in which the evaluation was carried out and the processadopted 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 requirements of the Act and SEBI (LODR) Regulations 2015. The policy on MaterialSubsidiary is available on the website of the company under following link:

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 year withoutthe presence of Executive Directors or management personnel. Such meetings are conductedformally to enable Independent Directors to discuss matters pertaining to the Company'saffairs and put forth their views. The Independent Directors takes appropriate steps topresent their views to the Chairperson

One such meeting of Independent Directors was held during the year on 17th February2018 without the presence of Executive Directors and management personnel. The details ofthe attendance of the Independent Directors in the meeting are as below.

Name of the Director

No. of meetings held during the year 2017-18

Held Attended
Ramam Madu 1 1
Krishna Kanaparthy 1 1
K V Sittampallam 1 1
Samad A Momin 1 0

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 ArchivalPolicy Sexual Harassment Policy

The link for accessing the above policies is / 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 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 section 134(5) of the Companies Act 2013 your Directors based on therepresentations received from the Operating Management and after due enquiry confirmthat:

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

b) 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.

c) The directors have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of Companies Act 2013 forsafeguarding the assetsof the Company and for preventing and detecting fraud and otherirregularities

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

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

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


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


The observation made in the Auditors' Report read together with relevant notes thereonare self-explanatory and hence do not call for any further comments under Section 134 ofthe Companies Act 2013.

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


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

M/s. PCN& Associates. Chartered Accountants (ICAI firm Registration Number :016016S) were appointed as Statutory Auditors of the Company to hold office for a term of5 years from the conclusion of the 28th Annual General Meeting (AGM) held on 28thSeptember 2017 until the conclusion of 33rd AGM of the company to be held in the year2022.

Pursuant to the Notification issued by the Ministry of Corporate Affairs on 7th May2018 amending section 139 of the Companies Act 2013 the mandatory requirement forratification of appointment of Auditors by the Members at every AGM has been omitted andhence your Company has not proposed ratification of appointment of M/s PCN & Co.Chartered Accountants at the forthcoming AGM. The Auditors' Report is unmodified i.e. itdoes not contain any qualification reservation or adverse remark or disclaimer

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


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

Personnel) Rules 2014 your Company has appointed Mr. V Chandra Sekhar PatnaikPractising Company Secretary to undertake the Secretarial Audit of your Company. TheReport of the Secretarial Audit is annexed as Annexure - D.

The Secretarial Audit Report does not contain any qualification reservation or adverseremark or disclaimer.


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.


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

Meetings of the Board and Committees

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

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 are appended. As required under the provisions of the Act a statementshowing the salient features of the financial Statements of the subsidiaries is enclosedto this report.

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.


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

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

Corporate Social Responsibility (CSR)

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

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

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


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

Annual Return

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

Reporting of Frauds by Auditors

During the year under review the Statutory Auditors and Secretarial Auditor have notreported any instances of frauds committed in the Company by its Officers or Employees tothe Audit Committee under section 143(12) of the Companies Act 2013 details of whichneeds to be mentioned in this Report.


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-E.

Details about Employees Stock Option Scheme

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

Related Party Transactions

Related party transactions that were entered during the financial year were on an arm'slength basis and were in the ordinary course of business. There were no materiallysignificant related party transactions with the Company's Promoters Promoter GroupDirectors Senior Management Personnel or their relatives which could have had apotential conflict with the interests of your Company. Please see the details of the samein form AOC-2 which is annexed as Annexure-H.

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

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

Your Directors have on the recommendations of the Audit Committee adopted a policy toregulate transactions between your Company and its Related Parties in compliance with theapplicable provisions of the Companies Act 2013 the Rules made thereunder and theSecurities and Exchange Board of India (Listing Obligations and Disclosure Requirement)Regulations 2015.

Report on Corporate Governance

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

Management Discussion and Analysis Report

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


Your Directors state that no disclosure or reporting is required in respect of thefollowing items as there were no transactions on these items during the year under review:

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

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

3. 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.

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

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

6. There were no material changes commitments affecting the financial position of yourCompany between the end of financial year (March 312018) and the date of the report(August 29th 2018).


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 the company'semployees at all levels in enabling such growth.

For Virinchi Ltd
M. Santhi Priya
Place: Hyderabad

Chairperson& Whole Time Director

Date: 29th August 2018 DIN:03114319

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