Exhibit 99.1

VIRTUSA CORPORATION

FINANCIAL STATEMENTS

INDEX

Report of Independent Auditors

The Board of Directors of Polaris Consulting and Services Limited.

We have audited the accompanying carve out combined financial statements of the Service Business of Polaris Consulting and Services Limited, which comprise the carve out combined balance sheets as of March 31, 2015 and 2014, and the related carve out combined statements of income, comprehensive income, changes in invested equity, and cash flows for the years then ended, and the related notes to the carve out combined financial statements.

Management’s Responsibility for the Financial Statements

Management is responsible for the preparation and fair presentation of these financial statements in conformity with U.S. generally accepted accounting principles; this includes the design, implementation and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free of material misstatement, whether due to fraud or error.

Auditor’s Responsibility

Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion, the financial statements referred to above present fairly, in all material respects, the carve out combined financial position of the Service Business of Polaris Consulting and Services Limited at March 31 2015 and 2014, and the carve out combined results of its operations and its cash flows for the years then ended, in conformity with U.S. generally accepted accounting principles.

S.R. Batliboi & Associates LLP

January 29, 2016

S.R. Batliboi & Associates LLP, a Limited Liability Partnership with LLP Identity No. AAB-4295

Regd. Office : 22, Camac Street, Block ‘C’, 3rd Floor, Kolkata-700 016

Service Business of Polaris Consulting & Services Limited

Carve out Combined Balance Sheets

Amounts in Indian rupees

See accompanying notes to the carve out combined financial statements

Service Business of Polaris Consulting & Services Limited

Carve out Combined Statements of Income

Amounts in Indian rupees

See accompanying notes to the carve out combined financial statements

Service Business of Polaris Consulting & Services Limited

Carve out Combined Statements of Comprehensive Income

Amounts in Indian rupees

See accompanying notes to the carve out combined financial statements

Service Business of Polaris Consulting & Services Limited

Carve out Combined Statements of Changes in Invested Equity

Amounts in Indian rupees

(a) During financial year 2014-15, the employee benefit trusts (Refer note 25) sold 1,536,000 shares held in Polaris Consulting & Services Limited (“Treasury shares”) in the secondary market to comply with Securities Exchange Board of India regulations. The gain on disposal of Rs. 101,274,294 has been adjusted in the equity.

(b) Pursuant to the agreed terms of demerger of product business in financial year 2014-15, the employee benefit trusts (Refer note 25) received one share in Intellect Design Arena Limited (“Transferee Company”) for every share then held in Polaris Consulting & Services Limited and consequently, a portion of the then carrying value of treasury shares received in the transferee company. The resultant reclassification adjustment from treasury shares to available for sale investments in the transferee company has been reflected in equity.

See accompanying notes to the carve out combined financial statements

Service Business of Polaris Consulting & Services Limited

Carve out Combined Cash Flow Statements

Amounts in Indian rupees

Service Business of Polaris Consulting & Services Limited

Notes to Carve out Combined Financial Statements

Amounts in Indian rupees

1. Corporate information

Polaris Consulting & Services Limited (formerly known as Polaris Financial Technology Limited) is a public limited company domiciled in India. It was founded in 1993 and is headquartered at Chennai, India. The Company’s shares are listed on The National share Exchange and The Bombay share Exchange in India.

The Group historically had two businesses, the “Product Business” and the “Service Business” that had been managed separately. On September 15, 2014, the Madras High Court approved the spin-off of the Product Business pursuant to a Demerger Scheme of Arrangement effective April 1, 2014.

After the spin-off, Polaris Consulting & Services Limited (“Polaris” or “the Company”) and its subsidiaries (collectively referred to as “the Polaris Group” or “the Group”) are primarily engaged in providing IT services and IT-enabled services. The Group leverages its technological expertise in delivering customized software solutions and products in the domain of contemporary services which include banking and financial services. Significant customers are from banking and financial services industries. References herein to “we,” “us,” “our” refer to the Polaris Group.

2. Basis of preparation and principles of combination

The accompanying carve out combined financial statements of the “Service Business” as of and for the years ended March 31 2015 and 2014 are derived from the Group’s accounting records. The carve out combined financial statements have been prepared to reflect the financial position, results of operations, and cash flows of the Service Business for the periods presented, in conformity with U.S. generally accepted accounting principles.

The accompanying carve out combined financial statements include the accounts of the Company and its direct and indirect subsidiaries, Polaris Consulting & Services Pte Ltd, located in Singapore; Polaris Consulting & Services Inc., located in Canada; Polaris Consulting & Services Ltd., located in the United Kingdom; Polaris Consulting & Services GmbH, located in Germany; Polaris Consulting & Services Pty Ltd., located in Australia; Polaris Consulting & Services K.K, located in Japan; Optimus Global Services Limited, located in India; Polaris Consulting & Services Ireland Ltd, located in Ireland; Polaris Consulting & Services BV, located in the Netherlands, Polaris Software Lab (Shanghai) Limited, located in China; Polaris Consulting & Services Sdn Bhd, located in Malaysia; Polaris Consulting & Services, KFT, located in Hungary; and Intellect Polaris Design LLC, located in the United States. In addition, the Group has combined the employee benefit trusts administering its employee stock option plans as it has determined that these trusts are variable interest entities where the Company is the primary beneficiary. All intercompany transactions and balances have been eliminated on combination. The Group uses the Indian Rupee (‘Rs.’ or ‘INR’) as its reporting currency.

The results of operations; assets, and liabilities have been allocated to the Service Business based on specific identification wherever possible. Where specific identification was not reasonably possible, allocation has been done based on the most relevant allocation method, primarily based on revenues or headcount. Management believes that the basis used for allocations are reasonable. However, the carve out combined financial statements may not be indicative of the Group’s future performance and may not reflect what its consolidated results of operations, financial position and cash flows would have been had the Service Business operated as an independent company during all of the periods presented.

3. Summary of significant accounting policies

(a) Use of estimates

The preparation of financial statements in accordance with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, including the recoverability of long-lived assets, disclosure of contingent assets and liabilities as of the date of the financial statements, and the reported amounts of revenue and expenses during the reported period. Management re-evaluates these estimates on an ongoing basis. The most significant estimates relate to the recognition of revenue and profits based on the proportional performance method of accounting for fixed-price contracts, allocation of common costs, income, assets and liabilities in the carved out combined financial statements, share-based compensation, income taxes, including reserves for uncertain tax positions, deferred taxes and liabilities, intangible assets, and valuation of financial instruments including derivative contracts and investments. Management bases its estimates on historical experience and on various other factors and assumptions that are believed to be reasonable under the circumstances. The actual amounts may vary from the estimates used in the preparation of the accompanying carve out combined financial statements.

(b) Foreign currency

The functional currency of the Company is the Indian rupee. Foreign currency transactions are translated into Indian rupees at exchange rates prevailing on the date of transaction. Foreign currency denominated monetary assets and liabilities are converted into Indian rupees using exchange rates prevailing on the balance sheet dates. Gains and losses arising on conversion of foreign currency denominated monetary assets and liabilities and on foreign currency transactions are included in net income.

The financial statements of foreign subsidiaries have been translated into Indian rupees for the purposes of combination as follows: income statement items have been converted at the average exchange rates during the period, and assets and liabilities have been translated at exchange rates prevailing on the balance sheet date. Any resulting unrealized gains or losses are reported in other comprehensive income, a separate component of equity.

(c) Derivative instruments and hedging activities

The Group enters into forward foreign exchange contracts to mitigate the risk of changes in foreign exchange rates on forecasted transactions denominated in foreign currencies. The Group designates derivative contracts as cash flow hedges if they satisfy the criteria for hedge accounting. Changes in fair values of derivatives designated as cash flow hedges are deferred and recorded as a component of accumulated other comprehensive income, net of taxes, until the hedged transactions occur and are then recognized in the statement of income. Ineffective portion of derivatives designated as cash flow hedges are recognized immediately in the statement of income.

With respect to derivatives designated as cash flow hedges, the Group formally documents all relationships between hedging instruments and hedged items, as well as its risk management objectives and strategy for undertaking various hedge transactions. The Group also formally assesses both at the inception of the hedge and on an ongoing basis, whether each derivative will be highly effective in offsetting changes in fair values or cash flows of the hedged item. If the Group determines that a derivative or a portion thereof is not highly effective as a hedge, or if a derivative ceases to qualify for hedge accounting, the Group prospectively discontinues hedge accounting with respect to that derivative.

The derivative instruments do not include any financing element at inception. Cash flows from a derivative instrument that is accounted for as a cash flow hedge is classified in the same category as the cash flows from the items being hedged. If for any reason hedge accounting for an instrument that hedges an identifiable transaction or event is discontinued, then any cash flows after the date of such discontinuance is classified in line with the nature of the instrument.

(d) Cash and cash equivalents and Restricted cash

Cash and cash equivalents comprise cash at bank and in hand and all highly liquid investments with an original maturity of three months or less that are readily convertible into known amounts of cash. Restricted cash represents unclaimed dividends and dividends payable.

Service Business of Polaris Consulting & Services Limited

Notes to Carve out Combined Financial Statements

Amounts in Indian rupees

3. Summary of significant accounting policies (Contd……)

(e) Investment securities

The Group has classified debt and equity securities as “available for sale” based on the Group’s intention. Available for sale investments are classified as long-term or current investments in the carve out combined balance sheet based on the management’s intention to sell and are carried at fair market value. Any unrealized gains and losses available for sale securities are reported in other comprehensive income, net of tax, as a separate component of equity unless the decline in value is deemed to be other-than-temporary, in which case, the available for sale investments are written down to fair value and the loss is charged to the statement of income. The Group determines the cost of the securities sold based on the specific identification method.

The Group conducts a periodic review and evaluation of its available for sale securities to determine if the decline in fair value of any security is deemed to be other-than-temporary. Other-than-temporary impairment losses are recognized on securities when: (i) the holder has an intention to sell the security; (ii) it is more likely than not that the security will be required to be sold prior to recovery; or (iii) the holder does not expect to recover the entire amortized cost basis of the security.

(f) Goodwill and Other intangible assets

The Group accounts for its business combinations under the acquisition method of accounting. The Group allocates the cost of an acquired entity to the assets acquired and liabilities assumed based on their estimated fair values at the date of acquisition. The excess of the purchase price for acquisitions over the fair value of the net assets acquired, including other intangible assets, is recorded as goodwill. Goodwill is not amortized but is tested for impairment at the reporting unit level, defined as the Group level, at least annually in the fourth quarter of each fiscal year or more frequently when events or circumstances occur that indicate that it is more likely than not that an impairment has occurred. In assessing goodwill for impairment, an entity has the option to assess qualitative factors to determine whether events or circumstances indicate that it is not more likely than not that fair value of a reporting unit is less than its carry amount. If this is the case, then performing the quantitative two-step goodwill impairment test is unnecessary. The two-step process begins with an estimation of the fair value of a reporting unit. Goodwill impairment exists when a reporting unit’s carrying value of goodwill exceeds its implied fair value. Significant judgment is applied when goodwill is assessed for impairment.

For the goodwill impairment analysis, the Group operates under one reporting unit. Any impairment would be measured based upon the fair value of the related assets. In performing the first step of the goodwill impairment testing and measurement process, the Group compares the entity-wide estimated fair value to net book value to identify potential impairment. Management estimates the entity-wide fair value utilizing the Company’s market capital capitalization plus an appropriate control premium reasonably allocable pertaining to the service business. The Company has split the market capitalisation prior to demerger based on the market capitalisation ratio immediately post the demerger as this is believed to be a consistent basis. The Market capitalization is determined by multiplying the shares outstanding on the assessment date by the market price of the Company’s shares. If the market capitalization is not sufficiently in excess of the Group’s book value, the Company will calculate the control premium which considers appropriate industry, market and other pertinent factors. If the fair value of the reporting unit is less than the book value, the second step is performed to determine if goodwill is impaired. If the Company determines through the impairment evaluation process that goodwill has been impaired, an impairment charge would be recorded in the statement of income. The Group continues to closely monitor its market capitalization. If the Group’s market capitalization for service business, plus an estimated control premium, is below its carrying value for a period considered to be other-than-temporary, it is possible that the Group may be required to record an impairment of goodwill either as a result of the annual assessment that the Group conducts in the fourth quarter of each fiscal year, or in a future quarter if an indication of potential impairment is evident. The estimated fair value of the reporting unit on the assessment date significantly exceeded the carrying book value.

Other intangible assets acquired in a business combination are recognized at fair value using generally accepted valuation methods appropriate for the type of intangible asset and reported separately from goodwill. Intangible assets with definite lives are amortized over the estimated useful lives and are tested for impairment when events or circumstances occur that indicate that it is more likely than not that an impairment has occurred. The Group tests other intangible assets with definite lives for impairment by comparing the carrying amount to the sum of the net undiscounted cash flows expected to be generated by the asset whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable. If the carrying amount of the asset exceeds its net undiscounted cash flows, then an impairment loss is recognized for the amount by which the carrying amount exceeds its fair value.

(g) Fair value measurement of financial instruments

At March 31, 2015 and 2014 the carrying amounts of certain of the Group’s financial instruments, including cash and cash equivalents, accounts receivable, unbilled accounts receivable, restricted cash, accounts payable, accrued employee compensation and benefits and other current liabilities, approximate their fair values due to the nature and maturity of the items. Refer note 24 for a discussion of the fair value of the group’s other financial instruments.

(h) Concentration of credit risk and significant customers

Financial instruments which potentially expose the Group to concentrations of credit risk are primarily comprised of cash and cash equivalents, investments, derivatives, accounts receivable and unbilled accounts receivable. In the management’s opinion, as of March 31, 2014 and 2015, there was no significant risk of loss in the event of non-performance of the counterparties to these financial instruments, other than the amounts already provided for in the financial statements.

The Group places its cash (uninsured), investments and derivatives in highly-rated financial institutions. The Group adheres to a formal investment policy with the primary objective of preservation of principal. Management believes its credit policies reflect normal industry terms and business risk. The Group does not anticipate non-performance by the counterparties and, accordingly, does not require collateral. The customers of the Group are primarily corporations based in the Americas (although delivery centres may be spread in other geographies), Europe and Asia and accordingly, trade receivables are concentrated in the respective countries. To reduce the risk, the Group performs periodic credit evaluation of its customers.

At March 31, 2015, one customer (Customer A) accounted for 43% of gross accounts receivable. At March 31, 2014, one customer accounted for 40% (Customer A) of gross accounts receivable. Revenue from significant clients as a percentage of the Group’s carve out combined revenue was as follows:

Also refer Note 23 for disclosures on concentration in geographic areas in which the entity conducts its operations and refer to Note 20(B) for the disclosure of transactions with the significant customer being a beneficiary of a principal shareholder.

Service Business of Polaris Consulting & Services Limited

Notes to Carve out Combined Financial Statements

Amounts in Indian rupees

3. Summary of significant accounting policies (contd….)

(i) Property and Equipment

Property and equipment are recorded at cost and depreciated over their estimated useful lives using the straight-line method. Leasehold improvements are amortized over the shorter of their lease term or the estimated useful life of the related asset. Upon retirement or sale, the cost of assets disposed of and the related accumulated depreciation and amortization are removed from the accounts and any resulting gain or loss is credited or charged to income. Repair and maintenance costs are expensed as incurred. Capital work in progress comprises cost of property and equipment not ready for intended use as at the balance sheet date. The Group depreciates the property and equipment based on its assessed useful life as noted below:

(j) Long-lived Assets

The Group reviews the carrying value of its long-lived assets or asset groups with definite useful lives to be held and used for impairment whenever events or changes in circumstances indicate that the carrying value of these assets may not be recoverable. Recoverability of these assets is measured by a comparison of the carrying value of an asset to the future net undiscounted cash flows directly associated with the asset. If assets are considered to be impaired, the impairment recognized is the amount by which the carrying value exceeds the fair value of the asset. The Group uses a discounted cash flow approach or other methods, if appropriate, to assess fair value.

Long-lived assets to be disposed of by sale are reported at the lower of carrying value or fair value less cost to sell and depreciation is ceased. Long-lived assets to be disposed of other than by sale are considered to be held and used until disposal.

(k) Income Taxes

Income taxes are accounted for using the asset and liability method whereby deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. The current tax provision and advance income tax as at balance sheet date have been arrived at after setting off advance tax and current tax provision where the Group has legally enforceable right to set off assets and liabilities and where such assets and liabilities relate to taxes on income levied by the same governing taxation laws. Deferred tax assets and liabilities are measured using enacted tax rates in effect for the year in which those temporary differences are expected to be recovered or settled. Deferred tax assets and liabilities across various countries of operation are not set off against each other as the Group does not have legal right to do so.

The calculation of the Group tax liabilities involves dealing with uncertainties in the application of complex tax regulations in multiple jurisdictions. The Group records liabilities for estimated tax obligations which includes the impact of provisions established for uncertain income tax positions, as well as the related interest, in India and other tax jurisdictions in which it has operations.

The income tax amounts reflected in the accompanying carve out combined financial statements have been allocated based on taxable income directly attributable to the Service Business.

(l) Revenue and Other income

The Group derives its revenue from a variety of software development and support services. Contracts for these services have different terms and conditions based on the scope, deliverables, and complexity of the engagement which require management to make judgments and estimates in determining the overall cost to the customer. Revenue is recognized net of discounts and allowances, value-added and service taxes, and includes reimbursement of out-of-pocket expenses amounting to Rs. 3,062,993 and Rs. 1,998,854 for the years ended March 31, 2015 and 2014 respectively.

The Group considers revenue to be earned once persuasive evidence of an arrangement has been obtained, services are delivered, fees are fixed or determinable, and collectability is reasonably assured. The revenue from software development and support services are derived predominantly from time-and-material and fixed price contracts. Revenue from time and material contracts is recognized as the services are performed and amounts are earned. Revenue related to fixed price contracts is recognized in accordance with the proportional performance method. When customer acceptance provisions exist for fixed priced contracts, revenue is recognised only if the Group is able to reliably determine that the service meets, or will meet upon completion, the customer acceptance criteria. The input (efforts expended) method is used to measure progress towards completion, as there is a direct relationship between input and productivity. Costs are recorded as incurred over the contract period.

In instances when revenue is derived from sales of third-party vendor services, material or licenses, revenue is recorded on a gross basis when the Group is a principal to the transaction and net of costs when the Group is acting as an agent between the customer and the vendor. Several factors are considered to determine whether the Group is a principal or an agent, most notably whether the Group is the primary obligor to the customer, has established its own pricing, and has inventory and credit risks.

Interest income is recognized using the time-proportion basis taking into account the amount outstanding and the applicable interest rate. Dividend income is recognized when the Group’s right to receive dividend is established.

(m) Cost of revenue and other operating expenses

Costs of revenue principally consists of expenses associated with projects and includes items such as salaries, employee benefits and share based compensation expense, travelling expenses, cost of technical subcontractors and security and other benefit plans for overseas employees.

Selling, general and administrative expenses are those expenses associated with promoting & selling the Group’s services and overall administration. Selling expenses include items such as sales and marketing personnel salaries, share based compensation expense and related fringe benefits, commissions, travel and cost of advertising and other promotional activities.

General and administrative expenses include other operating expenses such as officers’ and administrative personnel salaries, share based compensation expense and related fringe benefits, legal and audit expenses, insurance and operating lease expenses.

Service Business of Polaris Consulting & Services Limited

Notes to Carve out Combined Financial Statements

Amounts in Indian rupees

3. Summary of significant accounting policies (contd….)

(n) Share based compensation

Share-based compensation cost is determined by estimating the fair value at the grant date of the Company’s options using the Black-Scholes option pricing model, and expensing the total compensation cost on a straight line basis (net of estimated forfeitures including on account of expectation of achievement of non-market performance based vesting conditions) over the requisite employee service period.

The risk-free interest rate assumptions are based on the estimated interest rates applicable for maturity equal to the expected life of the options based on the zero-coupon yield curve for Government Securities. The Company’s volatility assumption is based on the historical volatility rates of the Company’s shares from exchange traded shares over periods commensurate with the expected term of each grant.

The expected term of employee share-based awards represents the weighted average period of time that awards are expected to remain outstanding. The determination of the expected term of share-based awards assumes that employees’ behaviour is a function of the awards vested, contractual lives, and the extent to which the award is in the money. Accordingly, for the fiscal years ended March 31, 2015 and 2014, the expected term of our options is based on historical employee exercise patterns.

(o) Allowances for doubtful accounts

The Group maintains an allowance for doubtful accounts for estimated losses resulting from the inability of clients to make required payments. The allowance for doubtful accounts is determined by evaluating the relative credit worthiness of each client, historical collections experience and other information, including the aging of the receivables. We evaluate the collectability of our accounts receivables on an on-going basis and write-off accounts when they are deemed to be uncollectible.

(p) Unbilled Accounts receivable

Unbilled accounts receivable represent revenue on contracts to be billed, in subsequent periods, as per the terms of the related contracts.

4. New Accounting Pronouncements

In April 2014, the FASB issued ASU No. 2014-8, Presentation of Financial Statements (Topic 205) and Property, Plant, and Equipment (Topic 360): Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity. This ASU is effective for disposals that occur within annual periods beginning on or after December 15, 2014, and interim periods within annual periods beginning on or after December 15, 2015. This ASU elevates the threshold for a disposal to qualify as discontinued operations and significantly expands the disclosure requirements for transactions that meet the criteria for discontinued operations. The Group expects the adoption of this guidance will have no impact on the Group’s financial position, results of operations, comprehensive income, cash flows and disclosures.

In May 2014, the FASB issued ASU No. 2014-9, Revenue from Contracts with Customers (Topic 606). This ASU is effective for annual reporting periods beginning after December 15, 2017 (after considering deferral of one year by FASB), including interim periods within that reporting period. This ASU clarifies the principles for recognizing revenue and provides a common revenue standard for U.S. GAAP and International Financial Reporting Standards (“IFRS”). The Group is currently evaluating the impact that the adoption of this guidance will have on its financial position, results of operations, comprehensive income, cash flows and disclosures.

In June 2014, the FASB issued ASU No. 2014-12, Compensation-share Compensation (Topic 718): Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period. This ASU is effective for annual periods and interim periods within those annual periods, beginning after December 15, 2015. The Group expects the adoption of this guidance will have no impact on the Group’s financial position, results of operations, comprehensive income, cash flows and disclosures.

In August 2014, the FASB issued ASU No. 2014-15, Presentation of Financial Statements - Going Concern (subtopic 205-40). This ASU is effective for annual periods ending after December 15, 2016, and for annual periods and interim periods thereafter, and defines management’s responsibility to evaluate whether there is substantial doubt about an organization’s ability to continue as a going concern and to provide related footnote disclosures. The Group expects the adoption of this guidance will have no impact on the Group’s financial position, results of operations, comprehensive income, cash flows and disclosures.

In November 2014, the FASB issued ASU No. 2014-16, Derivatives and Hedging (Topic 815): Determining Whether the Host Contract in a Hybrid Financial Instrument Issued in the Form of a Share Is More Akin to Debt or to Equity. This ASU is effective for annual reporting periods beginning after December 15, 2015, including interim periods within that reporting period. The Group expects the adoption of this guidance will have no impact on the Group’s financial position, results of operations, comprehensive income, cash flows and disclosures.

In November 2014, the FASB issued ASU No. 2014-17, Business Combinations (Topic 805): Pushdown Accounting. This ASU is effective on November 18, 2014 and provides an acquired entity with an option to apply pushdown accounting in its separate financial statements upon occurrence of an event in which an acquirer obtains control of the acquired entity. The Group is currently evaluating the impact that the adoption of this guidance will have on its financial position, results of operations, comprehensive income, cash flows and/or disclosures.

Service Business of Polaris Consulting & Services Limited

Notes to Carve out Combined Financial Statements

Amounts in Indian rupees

5      Cash and cash equivalents

The cash and cash equivalents as of March 31, 2015 and 2014 are as follows:

6      Allowances for accounts receivable

The Group maintains an allowance for uncollectible receivables on its accounts receivables at the end of the year. Accounts receivables are measured at amortized cost. Factors considered by the management in determining the adequacy of the allowance include the present and prospective financial condition of the debtor and the ageing of the trade receivables.

The movement in allowance for accounts receivable is given below:

7      Other current assets

8      Property and equipment

Depreciation expense was Rs.276,738,776 and Rs.308,279,108 for the years ended March 31, 2015 and 2014, respectively. Capital work in progress includes the cost of property and equipment which are not placed in service before the balance sheet date. In fiscal 2015 the Group has revised the estimated useful life of certain assets as it was felt that the revised life would better represent the allocation of cost of long-lived assets over the pattern in which the economic benefits are derived from the use of these assets and resulting in more appropriate presentation of the financial statements. On account of the revision of estimate, the depreciation charge for the year ending March 31, 2015 was higher by Rs.5,220,000.

9      Goodwill

In November 2002, the Company acquired substantially all of the business and assets of Orbitech Solutions Limited (OSL), a company domiciled in India. Goodwill represents the allocation of goodwill recorded on the acquisition to the Service Business based on the relative fair value of the net assets of the Service Business acquired. There has been no impairment or write down of goodwill since initial recognition.

10   Other intangible assets

Customer contracts acquired as part of transaction mentioned in note-9 above amounting to Rs. 3,821,000,000 are fully amortized as at March 31, 2015 and March 31, 2014. These remaining customer contracts are amortized on a straight-line basis over a period of three years. Amortization expense was Rs. 11,666,667 and Rs. 11,666,667 for the years ended March 31, 2015 and 2014, respectively. The estimated annual amortization expense schedule for intangible assets based on current balance is as follows:

Service Business of Polaris Consulting & Services Limited

Notes to Carve out Combined Financial Statements

Amounts in Indian rupees

11 Available for sale investments

Available for sale investment securities consist of the following:

As of March 31, 2015:

The Group’s available for sale investment securities consist, principally of listed Equity shares/Asian Depository Receipts, Mutual funds invested in debt securities and other debt securities which comprise of Investment in Corporate bonds and Preferences shares issued by Corporates.

The net unrealized gains have been recorded as part of accumulated other comprehensive income as they are available for sale.

The Group evaluates investments with unrealized losses to determine if the losses are other than temporary. The Group has determined that the gross unrealized losses on its available-for-sale securities at March 31, 2015 are temporary. The Group conducts a periodic review and evaluation of its investment securities to determine if the decline in fair value of any security is deemed to be other-than-temporary. Other than-temporary losses are reflected in earnings as a charge against gain on sale of investments to the extent the impairment is related to credit losses. The amount of the impairment related to other factors is recognized in other comprehensive income.

The maturity profile of the investments classified as available for sale (other than equity instruments) as of March 31, 2015 and 2014 is set out below:

Proceeds from the sale of available-for-sale securities and the gross gains and losses that have been included in earnings as a result of those sales are as stated below. The cost of a security sold or the amount reclassified out of accumulated ‘other comprehensive income (loss)’ into earnings was determined on specific identification method.

The table summarizes the transactions for available for sale securities:

Interest income earned from these investments during the years ended March 31, 2015 and 2014 were Rs. 63,010,777 and Rs. 27,326,397 respectively.

Service Business of Polaris Consulting & Services Limited

Notes to Carve out Combined Financial Statements

Amounts in Indian rupees

12 Derivative Financial Instruments

In the normal course of business, the Group uses derivative financial instruments to manage foreign currency exchange rate risk in highly probable forecasted transactions. Derivative transactions are governed by a uniform set of policies and procedures covering areas such as authorization, counterparty exposure and hedging practices. The Group does not enter into derivative transactions for trading or speculative purposes.

As a result of the use of derivative instruments, the Group is exposed to the risk that counterparties to derivative contracts will fail to meet their contractual obligations. To mitigate the counterparty credit risk, the Group has a policy of entering into contracts only with carefully selected, nationally recognized financial institutions, based upon their credit ratings and other factors. The Company’s hedging program involves the purchase of derivative instruments with maturities of up to 750 days, and is designed to mitigate the impact of foreign exchange on United States Dollars (US$), denominated highly probable forecasted revenue with respect to the periods for which such instruments are purchased.

The following table presents the aggregate notional principal amounts of the outstanding derivative forward covers together with the related balance sheet exposure:

The notional amount is a key element of derivative financial instrument agreements. However, notional amounts do not represent the amount exchanged by counterparties and do not measure the Group’s exposure to credit risk as these contracts are settled at their fair values at the maturity date. The balance sheet exposure denotes the fair value of these contracts at the reporting date and is presented in Indian rupees.

The Group presents its foreign exchange derivative instruments on a gross basis in the financial statements.

The fair value of those derivative instruments presented on a gross basis as of each year end is as follows:

The following tables summarize the activities in the accumulated other comprehensive income for the year ended March 31, 2015 and March 31, 2014:

The following tables summarize the activities in the carve out combined statement of income for the year ended March 31, 2015 and March 31, 2014:

As at March 31, 2015, the estimated net amount of existing gain that is expected to be reclassified into the income statement from accumulated other comprehensive income on maturity of the hedging contracts is Rs. 552,855,811. The estimated net amount of existing losses expected to be reclassified into the income statement from accumulated other comprehensive income on maturity of the hedging contracts as at March 31, 2014 amounts to Rs. 168,365,878

Service Business of Polaris Consulting & Services Limited

Notes to Carve out Combined Financial Statements

Amounts in Indian rupees

13   Other non-current assets

14   Accounts payable and accrued expenses

15   Other current liabilities

16   Other income, net