Polaris Consulting & Services Ltd. - Quarterly/Annual Result Disclosures and Notes dated 31 Mar 2017

1.The standalone and consolidated financial results for the three months and year ended March31,2017 in respect of Polaris Consulting & Services Limited (‘theCompany’)have been reviewed by the Audit Committee and approved by the Board of Directors of the Company at their respective meetings held on May15,2017. The above results have been subjected to audit by the statutory auditors of the Company. The reports of the statutory auditors are unqualified.

2.These financial results have been prepared in accordance with Indian Accounting Standards('IndAS')prescribedunder Section133 of the CompaniesAct,2013 read with the relevant rules thereunder and in terms of Regulation 33 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and SEBI Circular dated July 5, 2016.



Net Profit Reconciliation Three months ended Year Ended

March 31, 2016 March 31, 2016

Consolidated Standalone Consolidated Standalone

Net Profit of the Company as per previous GAAP 510.34 213.86 12,702.08 8,975.84

Difference on account of revenue recognition (329.97) (542.39) 2,786.42 2,232.31

Mark to market adjustments on Investments 209.56 207.66 190.18 180.62

Actuarial gain on employee defined

benefit plans recognised in OCI (31.68) (31.68) (33.13) (33.13)

Increase in compensation cost due to fair

value accounting of share based payments (149.14) (37.59) (1,379.19) (709.54)

Effect of consolidation of

employee welfare trusts (2,142.19) (2,142.19) (3,244.10) (3,244.10)

Others 20.17 - 136.01 -

Income tax impact on above adjustments 64.29 115.72 (953.38) (768.52)

Net profit for the period / year as

per Ind AS (A) (1,848.62) (2,216.61) 10,204.89 6,633.48

Other Comprehensive Income (OCI): -

Re-measurement gains on defined benefit plans 31.68 31.68 33.13 33.13

Exchange differences on

translation of foreign operations 731.63 (294.22) 1,707.59 341.10

Net movement on cash flow hedges (410.41) (410.41) (4,704.21) (4,704.21)

Mark to market adjustments on investments 233.76 233.76 (1,627.12) (1,627.12)

Income tax impact on above adjustments 130.85 130.85 1,816.41 1,816.41

Sub-total (B) 717.51 (308.34) (2,774.20) (4,140.69)

Total Comprehensive Income as reported

under Ind AS (A + B) (1,131.11) (2,524.95) 7,430.69 2,492.79


The Company has also prepared an equity reconciliation between the equity for the comparative period under previous GAAP and the equity as reported in the statement of assets and liabilities under Ind AS. The equity reconciliation as at March 31, 2016 for the standalone and consolidated statement of assets and liabilities is as below:


Equity Reconciliation As at March 31, 2016

Consolidated Standalone

Equity under previous GAAP

attributable to the shareholders of the Company 96,247.61 65,395.89

Difference on account of revenue recognition (2,795.30) (2,231.86)

Fair valuation of investments (357.49) 251.86

Effect of consolidation of employee welfare trusts 268.72 268.72

Impact of applying expected credit

loss model on financial assets (397.42) (386.83)

Income tax adjustments 460.73 343.24

Equity under Ind AS attributable to the

shareholders of the Company 93,426.85 63,641.02



3. The figures for the three months ended March 31, 2017 and March 31, 2016 are the balancing figures between audited figures in respect of the full financial years and the published year to date figures upto the end of the nine months period of the relevant financial year. The standalone results for the nine months ended March 31, 2016 were subjected to audit. The consolidated and standalone results for the nine months ended March 31, 2017 and consolidated results for the nine months ended March 31, 2016 were subjected to review.


4. The consolidated financial results include the financial results of the parent company Polaris Consulting & Services Limited, and the financial results of the following subsidiaries:

• Optimus Global Services Limited

• Polaris Consulting & Services Pte Ltd

• Polaris Consulting and Services Japan K K

• Polaris Software Consulting & Services SDN.BHD.

• Polaris Software (Shanghai) Company Limited

• Polaris Consulting & Services Pty Ltd

• Polaris Consulting & Services Ltd, UK

• Polaris Consulting & Services Inc.

• Polaris Consulting & Services GmbH

• Polaris Consulting & Services Ireland Ltd

• Polaris Consulting & Services B.V.

• Polaris Consulting & Services Kft.

• Polaris Consulting & Services SA

• Polaris Consulting & Services FZ-LLC


In addition to the above, the consolidated financial results also include the financial results in respect of Associate Stock Option Plan (ASOP) Trust and Orbitech Employee Welfare Trust (OEWT). The Company has also accounted for its share of interest in the joint venture Intellect Polaris Design LLC under the equity method. Polaris Consulting & Services Limited, its subsidiaries and a joint venture are collectively referred to as ‘the Group’.


5.The Company has allotted 528,390 shares under its stock option plans during the three months ended March 31, 2017 and 753,880 shares during the year ended March 31, 2017.


6. On March 3, 2016, Virtusa Consulting Services Private Limited (“Virtusa India”), a subsidiary of Virtusa Corporation (“Virtusa US” ), completed the acquisition of 52.94% of the outstanding share capital of Polaris Consulting & Services Limited from certain shareholders of the Company for approximately INR 117,281 Lakhs (USD 180 million) in cash. In addition, under applicable Securities and Exchange Board of India (Substantial acquisition and take over regulations) 2015, Virtusa India made an unconditional mandatory offer to the public shareholders of the Company to purchase up to an additional 26% of the outstanding shares of the Company. Virtusa India accepted the purchase of 26,719,942 shares of Polaris common stock for INR 220.73 per share (USD 3.25 per share) for an aggregate purchase price of INR 58,979 Lakhs (USD 86.8 million). The mandatory open offer began on March 11, 2016 and closed on March 28, 2016 and was fully subscribed.


7. Exceptional items for the three months and year ended March 31, 2016 includes a sum of INR 457.55 lakhs and INR 1,517.55 lakhs respectively, incurred as transaction costs in connection with the acquisition of a majority stake in the Company by Virtusa India and a sum of INR 666.03 lakhs recognised as an impairment loss during the three months and year ended March 31, 2016, in the then proposed sale of the BPO business of the Company pursuant to the Business Transfer Agreement with M/s. Gamma Process Hub India Limited to transfer all of its legal and beneficial ownership in the BPO business as a going concern for a consideration of INR 200 lakhs. Subsequently, the transaction was consummated and the BPO business was transferred for a net consideration of INR 145 lakhs pursuant to a revised Business Transfer Agreement.


8.Segment Reporting in Consolidated financial results: Based on the "management approach" as defined in Ind AS 108-Operating Segments, the Chief Operating Decision Maker evaluates the Group's performance as a single business segment namely Software and Consultancy Services.


i. Prior period / year figures have been reclassified wherever required to conform to the classification of the current period / year.

For Polaris Consulting & Services Limited




Rama Sivaraman Vaidyanathan N.M

Director CFO

Date: Chennai.

Place : 15-05-2017
1. Financial items have been regrouped wherever necessary.