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Virinchi Technologies
BSE: 532372|ISIN: INE539B01017|SECTOR: Computers - Software Medium/Small
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Directors Report Year End : Mar '13    « Mar 12
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
Source : Dion Global Solutions Limited
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