We are delighted to present the report on our business and operations
 for the year ended March 31, 2011.
 
 1.  Results of operations
 
                                   (Rs. in Lacs, except per share data)
 
 STANDALONE FINANCIALS                 March 31, 2011    March 31, 2010
 
 Revenue
 
 Income from Software 
 Services & Products                      137,596.45         114,347.69
 
 Other Income                               6,267.17           (378.36)
 
 Total Income                             143,863.62         113,969.33
 
 Expenditure
 
 Software Development & Other 
 Operating                                119,567.98          96,366.50
 
 Expenditures
 
 Finance charges & Depreciation             2,677.87           2,592.01
 
 Total Expenditure                        122,245.85          98,958.51
 
 Profit Before Tax (PBT)                   21,617.77          15,010.82
 
 Less:
 
 Income Taxes                               2,914.99           1,946.50
 
 Profit After Tax (PAT)                    18,702.78          13,064.32
 
 Surplus brought forward                   36,019.06          28,312.27
 
 Profit available for appropriation        54,721.84          41,376.59 
 
 Appropriations
 
 Total Dividend                             4,465.02           3,462.63
 
 Dividend Tax                                 717.65             588.47
 
 Transferred to General Reserve             1,900.00           1,306.43
 
 Balance carried to Balance Sheet          47,639.17          36,019.06
 
 Earnings Per Share (EPS)
 
 Basic Rs.                                     18.87              13.23
 
 Diluted Rs.                                   18.74              13.11 
 
 CONSOLIDATED FINANCIALS              March 31, 2011     March 31, 2010
 
 Total Income                             164,540.09         134,645.54
 
 Total Expenditure                        137,243.45         113,173.80
 
 Profit Before, Interest, 
 Depreciation & Tax (EBIDTA)               27,296.64          21,471.74
 
 Finance Charges & Depreciation             3,480.73           3,592.62
 
 Profit Before Tax (PBT)                   23,815.91          17,879.12
 
 Profit After Tax (PAT)                    20,245.97          15,284.24
 
 Earnings Per Share (EPS)
 
 Basic Rs.                                     20.43              15.48
 
 Diluted Rs.                                   20.28              15.34
 
 2.  Business performance
 
 The consolidated revenue of Polaris Software Lab Ltd from Software
 development services, products and Business Process Management for the
 year ended March 31, 2011 stood at Rs.158,633 Lacs, as against the
 previous years revenue of Rs.135,376 Lacs. The consolidated Net Profit
 for the fiscal year ended March 31, 2011 stood at Rs.20,246 Lacs as
 against the previous years consolidated Net Profit of Rs.15,284 Lacs.
 The reserves and surplus increased to 98,295 Lacs (2010-11) from
 Rs.82,299 Lacs (2009-10).
 
 Our software services engagements are driven with business benefits &
 long-term relationship vision. We have nurtured strong relationships
 through sustained delivery of value and it is with considerable pride
 that we would like to share that we are celebrating 26 years our
 continued relationship with Citibank, one that is based on sustained
 and growing value.
 
 3.  Subsidiaries
 
 The names of the subsidiaries of your Company along with its country(s)
 of incorporation are given below:
 
 1 Polaris Software Lab Pty Ltd            Australia
 
 2 Polaris Software Lab Canada Inc         Canada
 
 3 Polaris Software Lab Chile Limitada     Chile
 
 4 Polaris Software Lab (Shanghai) Co Ltd  China
 
 5 Polaris Software Lab GmbH               Germany
 
 6 Polaris Software Lab Ltd                Great Britain
 
 7 Polaris Software Lab Ireland Ltd        Ireland
 
 8 Polaris Software Lab Japan KK           Japan
 
 9 Polaris Software Lab Sdn Bhd.           Malaysia
 
 10 Polaris Software Lab B.V               Netherlands
 
 11 Polaris Software Lab Pte Ltd           Singapore
 
 12 Polaris Software Lab S.A               Switzerland
 
 13 Polaris Software Lab Inc 
    (Formerly Intellect SEEC Inc)          USA
 
 14 Polaris Software Lab Vietnam 
    Company Ltd.                           Vietnam
 
 15 Polaris Enterprise Solutions Ltd 
    (Formerly Polaris Retail Infotech
    Ltd)                                   India
 
 16 Optimus Global Services Ltd            India
 
 17 SEEC Technologies Asia Private Ltd     India
 
 18 Laser Soft Infosystems Ltd.            India
 
 19 Indigo Tx Software Private Ltd         India
 
 20 SFL Properties Private Ltd             India
 
 The financial statements of subsidiaries have to be published in the
 Annual Report, pursuant to the provisions of Section 212 of the
 Companies Act, 1956.
 
 The Ministry of Corporate Affairs, Government of India, issued a
 General Circular No.2/2011 dated February 8, 2011 and granted a general
 exemption for complying with the provisions of Section 212 of the
 Companies Act, 1956 subject to certain conditions.  Accordingly, the
 Board of Directors of the Company at its meeting held on April 28, 2011
 decided to comply with the conditions as stipulated in the said
 circular. A brief of the conditions are given hereunder for reference:
 
 (i) The annual accounts of the subsidiary(s) and other related
 information shall be made available to shareholders of the holding and
 subsidiary Companies and on demand the copies of the same shall also be
 furnished to the shareholders.
 
 (ii) The annual accounts of the subsidiary(s) shall be kept for
 inspection to the shareholders in the Registered office of the Company
 and or the subsidiaries concerned;
 
 (iii) The statement of financials of the subsidiaries will form part of
 the abridged Annual Report.
 
 4.  Cash & Cash equivalents
 
 Polaris liquidity remains healthy with zero-debt and a cash reserve of
 over Rs.51,406 Lacs.  The DSO is at an impressive 45 days.
 
 5.  Share Capital
 
 During the year, under ASOP 2003 Scheme the company has allotted
 2,34,450 equity shares of Rs.5/- each to 121 Associates / Directors. As
 a result of the above allotments the issued, subscribed and paid-up
 equity share capital of the company was increased from Rs.494,805,735/-
 comprising of 98,961,147 equity shares of Rs.5/- each as on March 31,
 2010 to Rs.495,977,985/- comprising of 99,195,597 number of equity
 shares of Rs.5/- each as on March 31, 2011. Further your company during
 this year, under ASOP 2004 Scheme transferred 72,900 equity shares of
 Rs.5/- each to 22 associates of Orbitech Employees Welfare Trust, on
 exercise of the options granted under the said scheme.
 
 6.  Dividend
 
 We propose a dividend of Rs.4.50 per share (90%) upon approval of the
 shareholders at the 18th Annual General Meeting; this dividend will be
 paid out of the profits of the company.
 
 The transfer books and register of members of the company will be
 closed w.e.f July 11 to July 20, 2011 (both days inclusive).
 
 7.  Corporate Governance
 
 Your company has been complying with the conditions of Corporate
 Governance as stipulated in Clause 49 of the Listing Agreement. A
 separate report on Corporate Governance along with Auditors
 certificate on compliance with of the Corporate Governance norms as
 stipulated in Clause 49 of the Listing Agreement and Management
 Discussions & Analysis forming part of this report are provided
 elsewhere in this Annual Report.
 
 8.  Conservation of energy, technology absorption, foreign exchange
 earnings and outgo.
 
 The particulars, as prescribed under clause (e) of sub-section (1) of
 Section 217 of the Companies Act, 1956 read with the Companies
 (Disclosure of Particulars in the Report of Board of Directors) Rules,
 1988 are set out in the Annexure to the Directors report section.
 
 9.  Particulars of employees
 
 As required under the provisions of Section 217(2A) of the Companies
 Act, 1956 read with Companies (Particulars of Employees) Rules, 1975 as
 amended, a statement showing the names and other particulars of
 employees are set out in the Annexure to the Directors Report, forming
 part of the complete version of the Annual Report for the year 2010-11.
 Pursuant to the exemption given under the Section 219(1)(b)(iv) of the
 Companies Act, 1956 the said annexure has not been enclosed with the
 Directors Report forming part of the abridged version of the Annual
 Report 2010-11.
 
 10.  Directors responsibility statement as required under section
 217(2AA) of the Companies Act, 1956
 
 Pursuant to the provisions of Section 217(2AA) of the Companies Act,
 1956 the Directors of your company confirm that:
 
 (i) In the preparation of the Annual Accounts, the applicable
 accounting standards had been followed along with proper explanation
 relating to material departures;
 
 (ii) The Directors had selected such accounting policies and applied
 them consistently and 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 at the end of the financial year and of the profit or
 loss of the company for that period;
 
 (iii) The Directors had taken proper and sufficient care for the
 maintenance of adequate accounting records in accordance with the
 provisions of this Act for safeguarding the assets of the company and
 for preventing and detecting fraud and other irregularities.
 
 (iv) The Directors had prepared the Annual Accounts on a Going concern
 basis.
 
 11.  Directors
 
 Messrs Dr.Ashok Jhunjhunwala and Mr.R.C.Bhargava, Directors of the
 company are retiring by rotation at the forthcoming Annual General
 Meeting of the company and being eligible offer themselves for
 re-appointment.
 
 Mr.Anil Khanna and Mr.Anil Nagu, Directors of the company resigned from
 the directorship of the Company w.e.f July 12, 2010 & August 02, 2010
 respectively.
 
 12.  Associate (Employee) Stock Option Schemes (ASOP)
 
 ASOP 2003 & 2004 (Details of options during the year 2010-11)
 
 Particulars                                ASOP 2003    ASOP 2004
 
 Options outstanding as on April 01, 2010   2,880,300      609,500
 
 The pricing formula                     Market value Market value
 
 Options granted during the year              735,000      165,000
 
 Options exercised during the year            234,450       72,900
 
 Total number of shares arising 
 as a result of exercise                      234,450       72,900 
 of Options
 
 Money realized by exercise 
 of Options (in Rs. Crores)                      2.02         0.30
 
 Total number of Options in force           2,981,850      627,700
 
 Particulars/information 
 under ASOP 2003 scheme                   March 31, 2011 March 31,2010
 
 Weighted average exercise price (Rs.)            185.57        143.51
 
 Weighted average fair value (Rs.)                 97.56         75.29
 
 (i) Details of number of options 
 granted to Senior Management
 
 Personnel:                                    ASOP 2003       162,000
 
                                               ASOP 2004        40,000
 
 (ii) Employee receiving 5% or more of 
 the total number of Options                                       Nil 
 granted during the year
 
 (iii) Employees granted Option equal 
 to or exceeding 1% of the issued                                  Nil 
 capital
 
 Diluted Earnings Per Share (EPS) pursuant to issue of shares on
 exercise of Options
 
 (i) Employee compensation cost using intrinsic method of  Rs. Nil
 accounting. 
 
 (ii) Employee compensation cost using fair value method 
 of                                                        Rs.14,058,968
 accounting.  
 
 Difference between (i) & (ii)                             Rs.14,058,968
 
 Impact for the accounting period had the fair value method been used on
 the following:
 
 Net results decreased by                                  Rs.14,058,968
 
 Basic EPS will reduce by                                  Rs.0.14
 
 Method and significant assumptions used
 to estimate the fair value of Options
 under                                 Date of  Share     Exercise price
 Black & Scholes methods, significant  grant    price(Rs.)   (Rs.)
 assumptions are:
 
 (a) Risk free rate of 
 interest – 7.99%                 22.04.2010    186.00       185.95
 
 (b) Expected life of Options 
 2.5 to 6.5                       15.07.2010    207.40       207.40
 years
 
 (c) Expected volatility 63.06%   19.10.2010    173.85       173.85
 
 (d) Expected dividend 
 yield 1.37%                      21.01.2011    178.15       183.85
 
 (e) Price of the underlying 
 share in
 market at the time of grant 
 under                            Share price on the date of grant 
 ASOP 2003
 
 Your company has granted options to the eligible associates under the
 Associate Stock Option Plans 2003 & 2004 as per SEBI Guidelines on
 ESOP.
 
 13.  Auditors
 
 M/s S.R.Batliboi & Associates, Chennai Chartered Accountants who are
 the Statutory Auditors of the company retire at the forthcoming Annual
 General Meeting and are eligible for re-appointment. The retiring
 auditors have furnished a certificate of their eligibility for
 re-appointment with the provisions of Section 224(1B) of the Companies
 Act, 1956 and have indicated their willingness to be re-appointed.
 
 14.  Fixed deposits
 
 Your company has not accepted any deposits during the financial year
 and as such, no amount of principal or interest was outstanding on the
 date of the Balance Sheet.
 
 15.  Social connect
 
 Ullas Trust
 
 A humble initiative which started in 1997 with just 32 children has
 today turned into a revolution of sorts. So far, Ullas Trust has
 awarded 25,000 scholarships to students in schools across Chennai and
 all districts of Tamil Nadu, seven districts of Andhra Pradesh
 including Hyderabad and cities of Mumbai and Delhi. Polaris associates
 plan to take this to the grassroot level so that the Trust can achieve
 its goal of One Student One Mentor.
 
 Ullas Annual Workshop - Chennai
 
 Ullas Trust celebrated its 13th Annual Workshop on August 21, 2010 in
 Chennai where over 2,000 Ullas Achievers from Tamil Nadu participated
 in the Can Do It workshop and were awarded Ullas Young Achievers
 Scholarships. Continuing its unrelenting endeavor of recognizing
 academic excellence in students from Corporation, Government and
 Government aided schools, the Ullas Trust awarded scholarships to
 students from across 176 schools in Chennai and 65 schools from all 32
 districts headquarters of Tamil Nadu. In addition to that, 200 students
 were awarded Higher Education Scholarships for pursuing professional
 courses.
 
 Ullas Annual Workshop - Mumbai
 
 Around 350 students from 9 schools were awarded scholarships in the
 Mumbai workshop held on December 11, 2010. The Diary of Dreams session
 was very interactive making the students participate by penning down
 their dreams. The teamwork of around 45 associates who volunteered to
 travel to different zones in Mumbai kick started the Summit classes
 with a new methodology of going to schools and conducting the classes
 there during the weekends. This was the first time a new procedure was
 adapted which was later followed in other chapters also.
 
 Ullas Annual Workshop - Hyderabad
 
 In Hyderabad, 487 students from 96 schools eagerly participated in the
 Hyderabad Annual workshop on February 5, 2011 which was held at the
 Hyderabad office premises. The Young Achievers entertained everyone
 with a few cultural performances. The Diary of Dreams workshop was very
 interactive and enabled students to share their dreams.  Weekend
 Program Summits were a great hit at Hyderabad which saw the
 participation of not only the Ullas children but also their friends who
 attended the classes in order to improve their communication skills.
 The Hyderabad Team took the initiative of ‘Touch the Soil Programme
 where the scholarships were given to 256 students from 35 schools
 across 6 districts. Associates travelled to the villages and
 distributed scholarship cheques.
 
 Ullas Annual Workshop - Delhi
 
 The Delhi chapter of Ullas conducted their Annual Workshop on February
 12, 2011 where 267 Young Achievers from 8 schools participated. The
 Diary of Dreams Workshop conducted went very well at Delhi with
 children interacting cheerfully with the Ullas volunteers. In Delhi
 also the volunteers travelled to schools to take the weekend classes in
 the schools. Ullas plans to expand its reach to Noida very soon.
 
 SAMPADA
 
 SAMPADA - Special Appreciation and Mentoring Program Acknowledging
 Differently Abled is the inclusion programme at Polaris where our
 SAMPADA colleagues are referred to as Distinctly abled rather than
 differently abled. Around 18% of associates at the Intellect Products
 Group business solution centre are SAMPADA colleagues. This unit
 designs and
 
 implements high performance banking solutions to over 52 banks across
 the globe and offers the best Price to Performance ratio for their
 solutions.
 
 The SAMPADA initiative was awarded the Best CSR Practise Award at the
 6th BSE Social and Corporate Governance Awards in 2010.
 
 16.  Impending litigations
 
 Details of impending litigations are furnished in Notes to accounts C2
 (iii) & (iv) of significant accounting policies and notes to accounts
 provided as an annexure to the complete and full Balance Sheet and
 Profit and Loss account of the company for the FY 2010-11.
 
 17.  Acknowledgement
 
 Your Directors take this opportunity to thank all investors, clients,
 vendors, banks, regulatory and Government authorities and Stock
 Exchanges for their continued support.  Your Directors also wish to
 place on record their appreciation for the contribution made by the
 Associates at all levels.
 
                                               By Order of the Board 
                                    For Polaris Software Lab Limited
 
 Arun Jain 
 Chairman & Managing Director
 
 Place: Chennai 
 Date: April 28, 2011