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