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)
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
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
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
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
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
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
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
A statement pursuant to the provisions of Section 212(1)(e) of the Act
appears elsewhere in the Annual Report.
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.
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,
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
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
8. Money realized by exercise of 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) 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
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
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
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