2016 ΞϮϬϭϲsŝƌƚƵƐĂŽƌƉŽƌĂƟŽŶ͘ůůƌŝŐŚƚƐƌĞƐĞƌǀĞĚ͘ sŝƌƚƵƐĂ͕ĐĐĞůĞƌĂƟŶŐƵƐŝŶĞƐƐKƵƚĐŽŵĞƐ͕WDdĞƐƚƌŝǀĞĂŶĚWƌŽĚƵĐƟnjĂƟŽŶĂƌĞƌĞŐŝƐƚĞƌĞĚ ƚƌĂĚĞŵĂƌŬƐŽĨsŝƌƚƵƐĂŽƌƉŽƌĂƟŽŶ͘ůůŽƚŚĞƌĐŽŵƉĂŶLJĂŶĚďƌĂŶĚŶĂŵĞƐŵĂLJďĞƚƌĂĚĞŵĂƌŬƐ Annual Report ŽƌƐĞƌǀŝĐĞŵĂƌŬƐŽĨƚŚĞŝƌƌĞƐƉĞĐƟǀĞŚŽůĚĞƌƐ͘ www.virtusa.com To our shareholders: Fiscal year ended March 31, 2016 was another successful year for On the other side of our clients’ core objectives, we continue to Virtusa where we continued to strengthen our client relationships leverage our core platforming approach to modernize our clients’ IT Corporate Information and grow our market share by leveraging our strong software environments, enabling them to reduce their BAU costs, accelerate engineering heritage, deep domain expertise and focus on applying time-to-market, and provide a more consistent and relevant Primary Investor Contact Germany Virtusa Consulting Services Pvt Ltd innovation to address critical business objectives for our clients. customer experience. Our ability to deliver significant William Mania Virtusa Germany GmbH 3rd Floor, AKDR Tower, 3/381, Fiscal 2016 also marked a transformational year for Virtusa as we improvements to the efficiency and overall cost our clients’ legacy IT Integrated Corporate Relations (ICR) Welfenstraße 22, Rajiv Gandhi Slai, Mettukuppam, Direct toll number: 508 389 7272 81541 Munchen,¨ Germany Chennai, Tamil Nadu–6000097. strengthened our capabilities and domain expertise, expanded our environments remains a key differentiator for Virtusa. In today’s Toll free number: 866 378 6929*7272 addressable market, and enhanced our ability to pursue larger market we are also seeing an accelerating shift in client demand for E-mail: [email protected] Netherlands Polaris Consulting & Services Limited contracts through our acquisition of a majority interest in Polaris new automation solutions, such as robotic process automation (or Virtusa International, B.V. Polaris House, 244 Anna Salai, Transfer Agent Schiphol Boulevard 231 Chennai–600006,. Consulting and Services, Ltd. (‘‘Polaris’’), a leading global provider of ‘‘RPA’’), to drive higher efficiencies and ultimately higher cost Computershare Trust Company, N.A 1118 BH Amsterdam Schiphol Phone: 91-44-39874000 IT solutions primarily to the banking and financial services industry savings. Virtusa has focused considerable effort and investment in PO Box 43070 The Netherlands Providence, RI 02940-3070 segment. We are proud of our fiscal year 2016 accomplishments, and areas such as RPA and cognitive computing, leveraging both our Polaris Consulting & Services Limited Tel: 303 262 0600 Austria ‘‘Foundation’ 34, IT Highway (OMR), we remain intensely focused on executing our growth strategy and own set of solutions and partnering with best- in-class vendors to Independent Registered Public Virtusa Austria GmbH Chennai–Tamil Nadu 603103 delivering excellence to our clients, while generating increased serve our clients Accountants Fischhof 3/6 Phone: 91-44-27435001 / 39873000 return to our shareholders in fiscal year 2017 and beyond. KPMG LLP 1010 Vienna In fiscal 2016, we made significant progress in establishing a strong Two Financial Center Austria Hyderabad, India Virtusa Consulting Services Private Limited For the full fiscal year 2016, our total revenue increased 25% to employee engagement platform that delivers a powerful and 60, South Street Boston, MA 02110 Hungary Sy No.115/Part, Plot No. 10, TSIIC IT/ITES, SEZ, $600.3 million, non-GAAP income from operations increased to differentiated workplace experience allowing us to be recognized Corporate Website: Virtusa Hungary KFT. Nanakramguda Village, Serillingampally $79.5 million from $68.3 million in our fiscal year 2015, and as best employer in all the major geographies in which we do http://www.kpmg.com 1027 Budapest, Mandal, R. R. Dist. Hyderabad–500 032, non-GAAP diluted earnings per share in our fiscal 2016 increased to business. We also implemented structured people engagement Horvat´ u. 14-24. Telangana Legal Hungary Telephone: +91 40 4452 8000 $2.06 from $1.84 in our fiscal year 2015. At March 31, 2016, our initiatives built around career enablement, rewards and Goodwin Procter LLP Telephone: +36 1 299 0800 Facsimile: +91 40 4452 8019 Extn. 61419 balance sheet remained healthy with $231.7 million in cash, cash recognition, social engagement and team member social media Exchange Place Fax: +36 1 299 0799 equivalents, short-term and long-term investments, and initiatives resulting in Virtusa’s annualized attrition for FY16 being Boston, MA 02109-2881 Polaris Consulting & Services Limited Singapore ‘‘The Capital’, 203, Financial District, approximately $200 million in debt which we incurred to acquire our lower than the largest companies in our industry, and an annualized Board of Directors Virtusa Singapore Private Limited Kris Canekeratne, Manokonda, Hyderabad–500019 Telangana majority stake in Polaris. Cash flow from operations for the full fiscal top talent attrition of less than 10%, which is comparable with 3 Changi Business Park Vista, Phone: 91-40-30953000 Chairman and Chief Executive Officer Akzonobel House, #04-02 year ended March 31, 2016 was $45.9 million. industry best-in-class. We have also invested significantly in building Robert E. Davoli leadership skills within the organization. I am proud to announce Singapore 486051 Pune, India Izhar Armony Telephone: +65 6496 6565 On March 3, 2016, Virtusa acquired approximately 51.7% of the fully Ronald T. Maheu Virtusa Consulting Services Private Limited that we are able to fill 75% of our leadership requirements with 3rd Floor, Block 4A, The Manjri Stud Farms diluted outstanding shares of Polaris for $168.3 million. On April 6, Martin Trust Malaysia internal candidates, reflecting the leadership strength that will Rowland T. Moriarty Pvt. Ltd, SEZ, SP Infocity, S. No. 209, 2016, Virtusa acquired an additional 26% of the fully diluted allow us to execute to our aggressive business growth plans. Virtusa Malaysia SDN BHD Pune-Saswad Road, Phursungi William K. O’Brien Tower 6 Avenue 5 outstanding shares of Polaris in a mandatory open offer for Al-Noor Ramji Pune–412308 The Horizon No. 8, Jalan Kerinchi Telephone: +91 20 4150 3434 $88.8 million, resulting in a total purchase consideration of Looking to fiscal year 2017, I believe Virtusa is stronger and better Barry R. Nearhos 59200 Bangsar, South Kuala Lumpur $257.1 million for a combined 77.7% share of Polaris’ fully diluted positioned in the market than at any time in our history. We have Executive Officers Polaris Consulting & Services Limited shares outstanding. The Polaris acquisition further differentiates strong and long-standing relationships with over 170 active clients, Kris Canekeratne, Australia Unit No. 502, Wing 3, Cluster D, 5th Floor, Chairman and Chief Executive Officer Polaris Consulting & Services Pty Ltd Plot No. 1, Survey No. 77, EON Free Zone, Virtusa in the marketplace by expanding the depth and breadth of and we see tremendous opportunity to grow our presence with our Level 12, 31, Market Street, Ranjan Kalia, MIDC Kharadi Knowledge Park, our capabilities primarily in the banking and financial services existing client base. In addition, our acquisition of a majority interest Sydney NSW 2000. Pune–411014. segment, while also creating significant new revenue opportunities in Polaris was an important step in our goal to drive deeper domain Executive Vice President, Finance, Chief Phone: 61-2-92671955 Financial Officer, Secretary and Treasurer Phone: 91-20-40734000 for our combined company. Polaris works with approximately 60 expertise and expand our capabilities within our target industries, Polaris Consulting & Services Pty Ltd Raj Rajgopal, Mumbai , India clients including many of the world’s largest banking and financial creating significant new revenue growth opportunities for our Level 23, HWT Tower, Virtusa Consulting Services Pvt. Ltd. President, Enterprise 40 City Road, South Gate, institutions. We have made significant progress in integrating our combined company both with new and existing clients. With our Transformation Services Alpha, 2nd floor, Unit No #201 two companies including solidifying our combined go-to-market differentiated and leading solutions that squarely address the core Victoria 3006, Melbourne. Jitin Goyal, strategy and we are on track to complete our integration by the end business objectives of our clients, I believe we have built a strong Powai, Hiranandani Business Park, President, Banking and Financial Services Mumbai–400076 of calendar 2016. The combination of Virtusa and Polaris has created foundation for sustainable, profitable growth and shareholder Thomas Holler, India Telephone: +91 22 4009 8000 a formidable player in the global IT Services industry that is uniquely return. On behalf of the Virtusa Board of Directors, we would like to Executive Vice President, Advanced Technology Centers positioned to accelerate business outcomes for organizations in an thank our clients and shareholders for their ongoing support. I Chief Strategy Officer Polaris Consulting & Services Limited Bengaluru, India 7th Floor, Level-10, G Corp Tech Park, ever-changing environment. would also like to extend my sincere thanks to our global team Keith Modder, Virtusa Consulting Services Pvt. Ltd. Kasarvadawali, Ghodbunder Road, members who consistently deliver value to our clients by providing Executive Vice President, RMZ Eco World, SEZ, Unit 301, 302, Thane (West)–400 601 Maharashtra, Throughout fiscal year 2016, we also continued