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)
Particulars 2012-13 2011-12 2012-13 2011-12
Total Income 8,035.36 6,987.91 4,395.77 3,708.21
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
forward 4,585.05 4,153.49 4,111.75 4,039.55
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
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
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
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
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
None of the directors of the company is disqualifed under the
provisions of the act or under the Listing agreement with the stock
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
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
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.
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.
The company has incorporated two subsidiaries namely M/s. Tyohar Foods
Private Ltd and M/s. Virinchi Infra and Realty Private Ltd during the
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,
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:
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
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
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
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
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.
BY ORDER OF THE BOARD
For VIRINCHI TECHNOLOGIES LIMITED
PLACE : HYDERABAD G. Santi Priya
DATE : 12-08-2013 Chairperson & Whole Time Director