8-K/A

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K/A

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities

Exchange Act of 1934

Date of Report (Date of earliest event reported): July 1, 2011

VIRTUSA CORPORATION

(Exact Name of Registrant as Specified in Charter)

Delaware	001-33625	04-3512883
(State or Other Jurisdiction of Incorporation	(Commission File Number)	(IRS Employer Identification No.)

2000 West Park Drive Westborough, Massachusetts	01581
(Address of Principal Executive Offices)	(Zip Code)

Registrant’s telephone number, including area code: (508) 389-7300

(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K/A filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

oWritten communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

oSoliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

oPre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

oPre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.01 Completion of Acquisition or Disposition of Assets

As previously reported, on July 1, 2011, Virtusa Corporation (the “Company”) acquired certain assets comprising the business of ALaS Consulting LLC, a New York limited liability company (“ALaS”), pursuant to an Asset Purchase Agreement (the “Asset Purchase Agreement”) with ALaS and the members of ALaS (the “Members”), dated as of July 1, 2011. This Current Report on Form 8-K/A is being filed as an amendment (“Amendment No. 1”) to the Current Report on Form 8-K filed by the Company on July 5, 2011 to report the completion of the Company’s acquisition of ALaS under Items 2.01 and 9.01.  This Amendment No. 1 is being filed solely to provide the financial statements and pro forma information described in Item 9.01 below.

Item 9.01 Financial Statements and Exhibits.

(a)           Financial statements of businesses acquired

The required financial statements of ALaS as of June 30, 2011 and December 31, 2010, and for the three and six months ended June 30, 2011 and 2010 and for the year ended December 31, 2010, are attached hereto as Exhibit 99.1 and are included herein.

(b)           Pro forma financial information

Unaudited pro forma condensed, combined financial information as of, and for the three months ended June 30, 2011 and for the year ended March 31, 2011 is attached hereto as Exhibit 99.2.

2

(d) Exhibits.

Exhibit No.	Description
23.1	Consent of O’Connor Davies Munns & Dobbins, llp, Independent Auditors for ALaS Consulting LLC.
99.1	Financial Statements of ALaS Consulting LLC as of June 30, 2011 and December 31, 2010 and for the three and six months ended June 30, 2011 and 2010 and for the year ended December 31, 2010.
99.2	Unaudited Pro Forma Condensed Combined Balance Sheet as of June 30, 2011 and Unaudited Pro Forma Condensed Combined Statements of Income for the three months ended June 30, 2011 and for the year ended March 31, 2011.

3

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	Virtusa Corporation
Date: September 15, 2011	By:	/s/ RANJAN KALIA
		Ranjan Kalia, Senior Vice President, Finance and Chief Financial Officer (Principal Financial and Accounting Officer)

4

EXHIBIT INDEX

Exhibit No.	Description
23.1	Consent of O’Connor Davies Munns & Dobbins, llp, Independent Auditors for ALaS
99.1	Financial statements of ALaS as of June 30, 2011 and December 31, 2010, and for the three and six months ended June 30, 2011 and 2010 and for the year ended December 31, 2010.
99.2	Unaudited Pro Forma Condensed Combined Balance Sheet as of June 30, 2011 and Unaudited Pro Forma Condensed Combined Statements of Income for the three months ended June 30, 2011 and for the year ended March 31, 2011.

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EX-23.1

Exhibit 23.1

CONSENT OF INDEPENDENT AUDITORS

We consent to the incorporation by reference in the registration statement (Nos. 333-170792 and 333-160981) on Form S-8 of Virtusa Corporation of our report dated June 29, 2011, with respect to the balance sheet of ALaS Consulting LLC as of December 31, 2010, and the related statement of income, statement of changes in members’ equity and cash flows for the period ended December 31, 2010, which report appears in the Form 8-K/A of Virtusa Corporation dated September 15, 2011.

/s/ O’Connor, Davies, Munns & Dobbins, LLP

September 15, 2011

EX-99.1

Exhibit 99.1

ALAS CONSULTING LLC

FINANCIAL STATEMENTS

INDEX

	Page
Independent Auditors’ Report	2
Balance Sheet as of December 31, 2010	3
Statement of Income for the year ended December 31, 2010	4
Statement of Changes in Members’ Equity for the year ended December 31, 2010	5
Statement of Cash Flows for the year ended December 31, 2010	6
Notes to Financial Statements for the year ended December 31, 2010	7
Balance Sheet as of June 30, 2011 (unaudited)	11
Statements of Income for the three and six months ended June 30, 2011 (unaudited) and 2010 (unaudited)	12
Statement of Changes in Members’ Equity for the six months ended June 30, 2011 (unaudited)	13
Statements of Cash Flows for the six months ended June 30, 2011 (unaudited) and 2010 (unaudited)	14
Notes to Financial Statements for the three and six months ended June 30, 2011 (unaudited) and 2010 (unaudited)	15

Independent Auditors’ Report

To the Board of Directors and Members’

Alas Consulting LLC

We have audited the accompanying balance sheet of Alas Consulting LLC (the “Company”) as of December 31, 2010 and the related statements of income, changes in members’ equity and cash flows for the year then ended. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with auditing standards generally accepted in the United States of America. 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 includes consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Alas Consulting LLC as of December 31, 2010 and the results of its operations and its cash flows for the year then ended in conformity with accounting principles generally accepted in the United States of America.

Harrison, New York

June 29, 2011

2

ALAS CONSULTING LLC

BALANCE SHEET

(in thousands)

As of December 31, 2010

ASSETS
Current Assets:
Cash and cash equivalents	$	3,341
Accounts receivable, net of allowance for doubtful accounts of $35	3,795
Security deposit	6
Prepaid expenses	172
Total current assets	7,314
Equipment, net	22
Total assets	$	7,336
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities:
Account payable and accrued expenses	$	1,719
Unincorporated business tax payable	244
Liability for uncertain tax positions	420
Due to related parties	762
Borrowings under line of credit	1,000
Total current liabilities	4,145
MEMBERS’ EQUITY	3,191
Total liabilities and members’ equity	$	7,336

See notes to financial statements

3

ALAS CONSULTING LLC

STATEMENT OF INCOME

(in thousands)

For the Year ended December 31, 2010

Revenue	$	24,635
Cost of revenue	14,206
Gross profit	10,429
Operating expenses:
Selling, general and administrative expenses	4,705
Income from operations	5,724
Other income (expense):
Interest expense	(136		)
Other, net	31
Total other income (expense)	(105		)
Income before tax expense	5,619
Unincorporated business tax	244
Net income	$	5,375

See notes to financial statements

4

ALAS CONSULTING LLC

STATEMENT OF CHANGES IN MEMBERS’ EQUITY

(in thousands)

For the Year Ended December 31, 2010

	Total Members’ Equity			Archer Associates, Inc.			Lathrop Consulting, Inc			Wetshore Investments LLC			Angle Park, LLC			Kwok Consulting Inc.			UGV Consulting Corp			Mindustry Solutions Inc.			Kenneth M. Schwartz			Brooke Consulting Inc.			Micro Business Applications Inc			James Anderson			Ransco Financial Consulting Inc.			ECD Consulting Corp.
Balance at December 31, 2009	$	365		$	86		$	86		$	86		$	86		$	4		$	4		$	4		$	4		$	1		$	1		$	1		$	1		$	1
Net Income	5,375			1,273			1,273			1,273			1,273			54			54			54			54			13			13			13			13			13
Distributions	(2,549		)	(612		)	(612		)	(612		)	(612		)	(18		)	(18		)	(18		)	(24		)	(4		)	(4		)	(4		)	(4		)	(4		)
Balance at December 31,2010	$	3,191		$	747		$	747		$	747		$	747		$	40		$	40		$	40		$	34		$	10		$	10		$	10		$	10		$	10
Ownership percentage at December 31,2010	100.00		%	23.69		%	23.69		%	23.69		%	23.69		%	1.00		%	1.00		%	1.00		%	1.00		%	0.25		%	0.25		%	0.25		%	0.25		%	0.25		%

See notes to financial statements

5

ALAS CONSULTING LLC

STATEMENT OF CASH FLOWS

(in thousands)

	Year ended
	December 31,
	2010
CASH FLOWS FROM OPERATING ACTIVITIES
Net Income	$	5,375
Adjustments to reconcile net income to net cash from operating activities
Depreciation	4
Change in operating assets and liabilities:
Accounts receivable	(268		)
Prepaid expenses	(95		)
Security deposits	(6		)
Accounts payable and accrued expense	340
Unincorporated business tax payable	244
Due to related parties	(342		)
Net Cash from Operating Activities	$	5,252
CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of equipment and leasehold improvements	(19		)
Net Cash from Investing Activities	$	(19	)
CASH FLOWS FROM FINANCING ACTIVITIES
Repayment of member loans	(512		)
Distributions to members	(2,550		)
Net Cash from Financing Activities	$	(3,062	)
Net Change in Cash	2,171
CASH
Beginning of the period	1,170
End of the period	$	3,341
SUPPLEMENTAL CASH FLOW INFORMATION
Cash paid for interest	$	136

See notes to financial statements

6

Alas Consulting LLC

Notes to Financial Statements

(in thousands)

1.Business Activity

Alas Consulting LLC (“the Company”) is an advisory firm located in New York City servicing the financial industry, specializing in reengineering, strategic consulting, software and training across all asset classes and functions including accounting, regulatory reporting and operations. The Company was formed under the laws of the State of New York on February 15, 2007.

2.Summary of Significant Accounting Policies

Basis of Accounting

The accompanying financial statements are prepared on the accrual basis of accounting. Revenues are recorded when earned, and expenses are recorded when incurred.

Use of Estimates

The presentation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Revenue Recognition

Revenue is recognized based on monthly services and support contracts.

Cash and Cash Equivalents

For purposes of the statement of cash flows, the Company considers all highly liquid debt instruments with maturities of three months or less at the time of purchase to be cash equivalents.

Property and Equipment

Purchases of property and equipment are recorded at cost and depreciation is recognized over their estimated useful lives using the straight-line method. The estimated useful lives of property and equipment are three to five years for furniture, fixtures and equipment.

Accounts Receivable

The Company’s receivables are amounts invoiced to customers, less an allowance for doubtful account established based on the Company’s history of write-offs, collections and current credit conditions.

Accounting for Uncertainty in Income Taxes

The Company has elected to be treated as a Partnership for Federal and New York income tax purposes. Under these provisions, the partners report their respective share of the Partnership’s taxable income or loss on their individual income tax returns.

7

2.Summary of Significant Accounting Policies (continued)

The Company recognizes the effects of income tax positions only when they are more likely than not of being sustained. At December 31, 2010, management has determined that the partnership is a flow through tax entity and has no uncertain tax positions that would require financial statement recognition or effect the financial position of the company except for a liability related to the tax position for New York City Unincorporated Business tax.

Limitation of Members’ Liability

As a limited liability company, the members of the Company have no liability to the Company or others beyond their membership interest.

Advertising

The company follows the policy of charging the cost of advertising to expense as incurred. Advertising expense totaled $124 for 2010.

3.Property and Equipment

The following reflects the cost of property and equipment at December 31, 2010.

Computer Equipment	$	29
Less: accumulated depreciation	(7		)
Equipment, net	$	22

Depreciation expense for 2010 was $4.

4.Borrowing under Line of Credit

The Company has an uncommitted line of credit with J.P. Morgan Chase Bank, N.A. for $2,500. The line of credit is secured by substantially all the Company’s assets. The Company pays interest on the principal balance based on the prime rate available at that time. All outstanding principal and interest are due and payable in full on September 30, 2011. The line of credit is subject to certain setoff rights by the bank. There are no prepayment penalties. The outstanding balance on the line of credit at December 31, 2010 was $1,000.

5.Lease Obligations

The Company leases office space for its operations. The lease commenced on November 21, 2006 and is due to expire in May, 2011. The lease contains provisions for rental increase of 8% annually as well as utilities expense. Required minimum lease payment for 2011 is $92.

Rental expense under operating leases was $273 for 2010.

6.Retirement Plan

The Company sponsors a non contributory 401(k) plan covering substantially all of its employees who have met certain service requirements. There was no pension expense for 2010.

8

7.Concentration of Credit Risk

Concentration of Cash on Deposit and Uninsured Cash Balances

The Company has a concentration of credit risk for cash maintained in a bank account at a financial institution located in New York which may at times exceed amounts covered by insurance provided by the U.S. Federal Deposit Insurance Corporation (FDIC). The Company has not experienced any losses in such account and believes it is not exposed to any significant credit risk to cash.

Accounts Receivable

At December 31, 2010, 74% of the Company’s account receivables were due from 5 customers.

8.Economic Dependency

A material part of the Company’s business is dependent upon five major customers. The loss of business from one of these customers would have a materially adverse effect on the Company. At December 31, 2010, three customers accounted for 51% of service revenue.

9.Stock Based Compensation

During 2008, the Company granted membership options to certain employees. These options only vest and become exercisable upon a “Change in Control Transaction” as defined in the option agreement. As of December 31, 2010 these options would grant employees a 1.1% membership interest in the Company. Financial Accounting Standard Board Accounting Standards Codification (“ASC”) states that the obligation to fulfill these options should only be recorded as a liability if it is probable that the contingent event requiring settlement of the option is probable. Since a change in control transaction is not probable at this time, no liability has been recorded related to these options.

In 2009, a .25% membership interest was granted to an employee of the Company. This interest, which vested upon signing of the grant agreement, is not transferable, and must be sold back to the Company at net book value if employment terminates. Although the ASC requires recognition of compensation expense for this grant, management has determined that the amount is immaterial to the financial statements.

10.Related Party Transactions

During 2010, related parties rendered consulting services to the Company in the amount of $1,548 which is included in the cost of service. As of December 31, 2010 the Company owed $762 related to these services. Theses payables, which bear no interest, will be repaid in the ordinary course of business.

11Compensated Absences

Employees of the Company are entitled to paid time off. It is impracticable to estimate the amount of compensation for future absences, and accordingly, no liability has been recorded in the accompanying financial statements. The Company’s policy is to recognize the costs of compensated absences when actually paid to employees.

12.Subsequent Events

On January 1, 2011 the Company purchased the assets of a New York City based consulting firm. The purchase price was approximately $235 pursuant to the terms of the Asset Purchase Agreement. The operating results of the acquired consulting firm have not been included in the Company’s 2010 year-end financial statement.

9

13.Litigation

During 2010, the Company was named as a defendant in an action brought by a former employee with the U.S. Equal Employment Opportunity Commission. Attorneys for the Company cannot evaluate the likelihood of an unfavorable outcome as of the date of this report, or an estimate or range of potential loss. The Company does have insurance coverage for employment practices for up to $500 with a $50 deductible.

10

ALAS CONSULTING LLC

BALANCE SHEET

(in thousands)

	June 30,
	2011
	Unaudited
ASSETS
Current Assets:
Cash and cash equivalents	$	1,942
Accounts receivable, net of allowance for doubtful accounts of $35	5,298
Security deposit	28
Prepaid expenses	149
Total current assets	7,417
Equipment, net	83
Goodwill	235
Total assets	$	7,735
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities:
Account payable and accrued expenses	$	2,033
Unincorporated business tax payable	119
Liability for uncertain tax positions	420
Due to related parties	430
Borrowings under line of credit	1,500
Members’ loans	1,765
Total current liabilities	6,267
MEMBERS’ EQUITY	1,468
Total liabilities and members’ equity	$	7,735

See notes to financial statements

11

ALAS CONSULTING LLC

STATEMENTS OF INCOME

(in thousands)

	Three Months						Six Months
	Ended						Ended
	June 30,						June 30,
	2010			2011			2010			2011
	Unaudited						Unaudited
Revenue	$	6,635		$	8,042		$	12,148		$	15,603
Cost of revenue	3,866			4,985			7,140			9,992
Gross profit	2,769			3,057			5,008			5,611
Operating expenses:
Selling, general and administrative expenses	1,190			2,215			2,160			3,970
Income from operations	1,579			842			2,848			1,641
Other income (expense):
Interest expense	(44		)	(56		)	(79		)	(104		)
Other income, net	13			—			13			—
Total other income (expense)	(31		)	(56		)	(66		)	(104		)
Income before tax expense	1,548			786			2,782			1,537
Unincorporated business tax	—			28			—			64
Net income	$	1,548		$	758		$	2,782		$	1,473

See notes to financial statements

12

ALAS CONSULTING LLC

STATEMENT OF CHANGES IN MEMBERS’ EQUITY

(in thousands)

For the six months ended June 30, 2011

																															Micro						Ransco
	Total			Archer			Lathrop			Wetshore			Angle			Kwok			UGV			Mindustry			Kenneth			Brooke			Business						Financial			ECD
	Members’			Associates,			Consulting,			Investments			Park,			Consulting			Consulting			Solutions			M.			Consulting			Applications			James			Consulting			Consulting
	Equity			Inc.			Inc			LLC			LLC			Inc.			Corp			Inc.			Schwartz			Inc.			Inc			Anderson			Inc.			Corp.
Balance at December 31, 2010	$	3,191		$	747		$	747		$	747		$	747		$	40		$	40		$	40		$	34		$	10		$	10		$	10		$	10		$	10
Net Income	1,473			357			357			357			357			14			—			14			—			4			—			4			4			4
Distributions	(3,196		)	(778		)	(778		)	(778		)	(778		)	—			(40		)	—			(34		)	—			(10		)	—			—			—
Balance at June 30, 2011	$	1,468		$	326		$	326		$	326		$	326		$	54		—			$	54		—			$	14		—			$	14		$	14		$	14
Ownership percentage at June 30,2011	100.00		%	24.25		%	24.25		%	24.25		%	24.25		%	1.00		%	—			1.00		%	—			0.25		%	—			0.25		%	0.25		%	0.25		%

See notes to financial statements

13

ALAS CONSULTING LLC

STATEMENT OF CASH FLOWS

(in thousands)

	Six months ended
	June 30,
	2010			2011
	Unaudited
CASH FLOWS FROM OPERATING ACTIVITIES
Net Income	$	2,782		$	1,473
Adjustments to reconcile net income to net cash from operating activities
Depreciation	1			15
Change in operating assets and liabilities:
Accounts receivable	(1,639		)	(1,504		)
Prepaid expenses	12			23
Security deposits	—			(21		)
Accounts payable and accrued expense	(569		)	383
Unincorporated business tax payable	—			(125		)
Due to related parties	—			(332		)
Net Cash from Operating Activities	$	587		$	(88	)
CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of equipment and leasehold improvements	(16		)	(76		)
Business acquisition	—			(235		)
Net Cash from Investing Activities	$	(16	)	$	(311	)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from members’ loans	582			2,596
Repayment of member loans	—			(900		)
Proceeds from line of credit	500			1,500
Repayment of line of credit	—			(1,000		)
Distributions to members	(1,459		)	(3,196		)
Net Cash from Financing Activities	$	(377	)	$	(1,000	)
Net Change in Cash	194			(1,399		)
CASH
Beginning of the period	1,170			3,341
End of the period	$	1,364		$	1,942
SUPPLEMENTAL CASH FLOW INFORMATION
Cash paid for interest	$	22		$	30

See notes to financial statements

14

Alas Consulting LLC

Notes to Financial Statements

(in thousands)

1.Business Activity

Alas Consulting LLC (“the Company”) is an advisory firm located in New York City servicing the financial industry, specializing in reengineering, strategic consulting, software and training across all asset classes and functions including accounting, regulatory reporting and operations. The Company was formed under the laws of the State of New York on February 15, 2007.

2.Summary of Significant Accounting Policies

Basis of Accounting

The accompanying financial statements are prepared on the accrual basis of accounting. Revenues are recorded when earned, and expenses are recorded when incurred.

Use of Estimates

The presentation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Revenue Recognition

Revenue is recognized based on monthly services and support contracts.

Cash and Cash Equivalents

For purposes of the statement of cash flows, the Company considers all highly liquid debt instruments with maturities of three months or less at the time of purchase to be cash equivalents.

Property and Equipment

Purchases of property and equipment are recorded at cost and depreciation is recognized over their estimated useful lives using the straight-line method. The estimated useful lives of property and equipment are three to five years for furniture, fixtures and equipment.

Accounts Receivable

The Company’s receivables are amounts invoiced to customers, less an allowance for doubtful account established based on the Company’s history of write-offs, collections and current credit conditions.

Accounting for Uncertainty in Income Taxes

The Company has elected to be treated as a Partnership for Federal and New York income tax purposes. Under these provisions, the partners report their respective share of the Partnership’s taxable income or loss on their individual income tax returns.

15

2.Summary of Significant Accounting Policies (continued)

The Company recognizes the effects of income tax positions only when they are more likely than not of being sustained. At June 30, 2011, management has determined that the partnership is a flow through tax entity and has no uncertain tax positions that would require financial statement recognition or effect the financial position of the company except for a liability related to the tax position for New York City Unincorporated Business tax.

There are no changes in the accounting for uncertainty in income taxes at June 30, 2011.

Limitation of Members’ Liability

As a limited liability company, the members of the Company have no liability to the Company or others beyond their membership interest.

Advertising

The company follows the policy of charging the cost of advertising to expense as incurred. Advertising expense totaled $36 for the three months ended June 30, 2010, and $48 for three months ended June 30, 2011. Advertising expense totaled $65 for the six months ended June 30, 2010, and $112 for six months ended June 30, 2011.

3.Property and Equipment

The following reflects the cost of property and equipment at June 30, 2011.

Computer Equipment	$	105
Less: accumulated depreciation	(22		)
Equipment, net	$	83

Depreciation expense for the three months ended June 30, 2010 and 2011 was $1 and $7 respectively.  Depreciation expense for the six months ended June 30, 2010 and 2011 was $1 and $15, respectively.

4.Borrowing under Line of Credit

The Company has an uncommitted line of credit with J.P. Morgan Chase Bank, N.A. for $2,500. The line of credit is secured by substantially all the Company’s assets. The Company pays interest on the principal balance based on the prime rate available at that time. All outstanding principal and interest are due and payable in full on September 30, 2011. The line of credit is subject to certain setoff rights by the bank. There are no prepayment penalties.

The outstanding balance on the line of credit at June 30, 2011 was $1,500.

5.Lease Obligations

On March 14, 2011, the Company entered into a new operating lease for its operations, with a lease term of 10 years and 8 months from the commencement date and the rent payments for the first 8 months from the commencement date are abated. The lease can be extended for a further period of five years. The commencement date of the operating lease is contingent on when the office space is ready for use, which is expected to be September 2011.

16

Future minimum lease payments under non-cancellable leases for the fiscal years following June 30, 2011 are:

Fiscal year ending December 31:
2011	$	—
2012	204
2013	306
2014	306
2015	306
2016	306
2017 and thereafter	1,787
Total	$	3,215

Rental expense under operating leases was $65 and $85 for three months ended June 30, 2010 and 2011 respectively. Rental expense under operating leases was $131 and $183 for six months ended June 30, 2010 and 2011, respectively.

6.Retirement Plan

The Company sponsors a non contributory 401(k) plan covering substantially all of its employees who have met certain service requirements. There was no pension expense for the three and six months ended June 30, 2010 and 2011.

7.Concentration of Credit Risk

Concentration of Cash on Deposit and Uninsured Cash Balances

The Company has a concentration of credit risk for cash maintained in a bank account at a financial institution located in New York which may at times exceed amounts covered by insurance provided by the U.S. Federal Deposit Insurance Corporation (FDIC). The Company has not experienced any losses in such account and believes it is not exposed to any significant credit risk to cash.

Accounts Receivable

At June 30, 2011, 63% of the Company’s account receivables were due from 5 customers.

8.Economic Dependency

A material part of the Company’s business is dependent upon five major customers. The loss of business from one of these customers would have a materially adverse effect on the Company. At June 30, 2010, three customers accounted for 53% of service revenue. At June 30, 2011, four customers accounted for 50% of service revenue.

9.Stock Based Compensation

In 2011, 2.25% membership interest in the Company was purchased back from three minority members at the member’s equity interest at the time of the transaction.

10.Related Party Transactions

During 2011, related parties rendered consulting services to the Company which is included in the cost of service. As of June 30, 2011, the Company owed $430 related to these services. Theses payables, which bear no interest, were paid in the ordinary course of business.

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11Compensated Absences

Employees of the Company are entitled to paid time off. It is impracticable to estimate the amount of compensation for future absences, and accordingly, no liability has been recorded in the accompanying financial statements. The Company’s policy is to recognize the costs of compensated absences when actually paid to employees.

12.Litigation

During 2010, the Company was named as a defendant in an action brought by a former employee with the U.S. Equal Employment Opportunity Commission. Attorneys for the Company cannot evaluate the likelihood of an unfavorable outcome as of the date of this report, or an estimate or range of potential loss. The Company does have insurance coverage for employment practices for up to $500 with a $50 deductible.

13.Members’ Loan

On January 1, 2011, the members loaned the Company $2,596 at an interest rate of prime plus three percent with no stated term.  During the six months ended June 30, 2011, $900 was repaid. As of June 30, 2011, the balance of $1,765 included $69 of accrued interest.

14.Subsequent Events

On July 1, 2011 the Company’s assets were sold to Virtusa Corporation for $27,838. All employment and customer contracts were assigned to Virtusa as a result of this purchase. The operating impact of this transaction has not been included in the Company’s June 30, 2011 interim financial statements.

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EX-99.2

Exhibit 99.2

Virtusa Corporation

UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS

The following unaudited pro forma condensed combined balance sheet as of June 30, 2011, the unaudited pro forma condensed combined statement of income for the year ended March 31, 2011 and the unaudited pro forma condensed combined statement of income for the three months ended June 30, 2011, are based on the historical financial statements of Virtusa Corporation (the “Company”) and ALaS Consulting LLC (“ALaS”). The unaudited pro forma condensed combined financial statements are presented as if the acquisition of Alas had occurred as of June 30, 2011 for pro forma balance sheet purposes and as if the acquisition of ALaS had occurred as of the first day of fiscal 2011 for pro forma statement of income purposes.

The pro forma adjustments are based on preliminary information available at the time of this document. These preliminary estimates and assumptions are subject to change as the Company finalizes the valuations of the net tangible and intangible assets acquired and liabilities assumed in connection with its acquisition of ALaS.

The unaudited pro forma condensed combined financial statements are not intended to represent or be indicative of the consolidated results of operations or financial position that the Company would have reported had the ALaS acquisition been completed as of the dates presented, and should not be taken as a representation of the Company’s future consolidated results of operations or financial position. The unaudited pro forma condensed combined financial statements do not reflect any operating efficiencies and/or cost savings that may be achieved in combining the companies. The unaudited pro forma condensed combined financial statements, including the notes thereto, should be read in conjunction with the Company’s historical consolidated financial statements included in its Annual Report on Form 10-K for the year ended March 31, 2011, its Quarterly Report on Form 10-Q for the three months ended June 30, 2011 and the financial statements of ALaS for the fiscal year 2010 and the three and six months ended June 30, 2011 included herein.

VIRTUSA CORPORATION

UNAUDITED PRO FORMA CONDENSED COMBINED BALANCE SHEET

(in thousands)

	Virtusa		ALaS		Pro forma Adjustments			Pro forma
	June 30, 2011		June 30, 2011		Note 3			combined
ASSETS
Current assets:
Cash and cash equivalents	$	69,931	$	1,942	$	(29,780	)(a), (b)	$	42,093
Short-term investments	27,415		—		—			27,415
Accounts receivable, net	43,675		5,298		(5,298		)(b)	43,675
Unbilled accounts receivable	9,753		—		—			9,753
Prepaid expenses	6,127		149		(98		)(a), (b)	6,178
Deferred income taxes	1,201		—		—			1,201
Restricted cash	162		—		—			162
Other current assets	6,931		28		—			6,959
Total Current Assets	165,195		7,417		(35,176		)	137,436
Property and equipment, net	30,992		83		(50		)(a), (b)	31,025
Long-term investments	7,682		—		—			7,682
Deferred income taxes	7,722		—		—			7,722
Goodwill	19,046		235		16,191		(a), (b)	35,472
Intangible assets, net	9,288		—		11,300		(a)	20,588
Other long-term assets	6,787		—		—			6,787
Total assets	$	246,712	$	7,735	$	(7,735	)	$	246,712
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	5,273	$	756	$	(756	)(b)	$	5,273
Accrued employee compensation and benefits	11,504		1,241		(1,241		)(b)	11,504
Accrued expenses and other	11,159		467		(467		)(b)	11,159
Income taxes payable	2,911		538		(538		)(b)	2,911
Borrowings under line of credit	—		1,500		(1,500		)(b)	—
Members’ loans	—		1,765		(1,765		)(b)	—
Total current liabilities	30,847		6,267		(6,267		)	30,847
Long-term liabilities	2,265		—		—			2,265
Total liabilities	33,112		6,267		(6,267		)	33,112
Stockholders’ equity	213,600		1,468		(1,468		)(b)	213,600
Total liabilities and stockholders’ equity	$	246,712	$	7,735	$	(7,735	)	$	246,712

See notes to unaudited pro forma condensed combined financial statements.

2

Virtusa Corporation

UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF INCOME

(in thousands, except for per share amounts)

	Virtusa			ALaS
	12 months ended						Pro forma
	March 31,2011			December 31,2010			Adjustments Note 3			Pro forma combined
Revenue	$	217,979		$	24,635		$	—		$	242,614
Cost of revenue	134,496			14,206			510		(d)	149,212
Gross profit	83,483			10,429			(510		)	93,402
Operating expenses:
Selling, general and administrative expense	65,697			4,705			1,980		(c), (d)	72,382
Income from operations	17,786			5,724			(2,490		)	21,020
Other income (expense):
Interest income (expense)	1,974			(136		)	—			1,838
Foreign currency gain or (losses)	(1,436		)	—			—			(1,436		)
Other, net	(97		)	31			—			(66		)
Total other income	441			(105		)	—			336
Income before income tax expense	18,227			5,619			(2,490		)	21,356
Income tax expense (benefit)	2,027			244			1,008		(e), (f)	3,279
Net income	$	16,200		$	5,375		$	(3,498	)	$	18,077
Net income per share of common stock
Basic	$	0.68		$	—		$	—		0.76
Diluted	$	0.66		$	—		$	—		0.73

See notes to unaudited pro forma condensed combined financial statements.

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Virtusa Corporation

UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF INCOME

(in thousands, except for per share amounts)

	Virtusa			ALaS
	3 months ended						Pro forma
	June 30,2011			June 30,2011			Adjustments Note 3			Pro forma combined
Revenue	$	61,045		$	8,042		$			$	69,087
Cost of revenue	37,982			4,985			128		(d)	43,095
Gross profit	23,063			3,057			(128		)	25,992
Operating expenses:				—
Selling, general and administrative expense	18,276			2,215			395		(c), (d)	20,886
Income from operations	4,787			842			(523		)	5,106
Other income (expense):
Interest income (expense)	605			(56		)	—			549
Foreign currency gain or (losses)	(182		)	—			—			(182		)
Other, net	(23		)				—			(23		)
Total other income	400			(56		)	—			344
Income before income tax expense	5,187			786			(523		)	5,450
Income tax expense (benefit)	1,232			28			77		(e), (f)	1,337
Net income	$	3,955		$	758		$	(600	)	$	4,113
Net income per share of common stock
Basic	$	0.16		$	—		$	—		$	0.17
Diluted	$	0.16		$	—		$	—		$	0.16

See notes to unaudited pro forma condensed combined financial statements.

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NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS

(in thousands)

1. Basis of Pro Forma Presentation

On July 1, 2011, the Company acquired certain assets comprising the business of ALaS, a New York limited liability company, pursuant to an Asset Purchase Agreement with ALaS and the members of ALaS, dated as of July 1, 2011.

The Company accounts for business combinations pursuant to Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) 805, Business Combinations. In accordance with ASC 805, the Company recognizes separately from goodwill, the identifiable assets acquired, the liabilities assumed, and any non controlling interests in an acquiree, generally at the acquisition date fair value as defined by ASC 820, Fair Value Measurements and Disclosures. Goodwill as of the acquisition date is measured as the excess of consideration transferred, which is also generally measured at fair value, and the net of the acquisition date amounts of the identifiable assets acquired and the liabilities assumed. The Company has made significant assumptions and estimates in determining the preliminary estimated purchase price and the preliminary allocation of the estimated purchase price in the unaudited pro forma condensed combined financial statements. These preliminary estimates and assumptions are subject to change as we finalize the valuations of the net tangible assets, intangible assets and resultant goodwill. In particular, the final valuations of identifiable intangible and net tangible assets may change materially from the preliminary estimates. These changes could result in material variances between the Company’s future financial results and the amounts presented in these unaudited pro forma condensed combined financial statements, including variances in fair values recorded, as well as expenses and cash flows associated with these items.

The purchase price is approximately $27,838 in cash, 10% of which is subject to a hold back by the Company for a period of 12 months as security for the indemnification obligations of ALaS and the Members under the Asset Purchase Agreement. As part of the transaction, substantially all of the employees of ALaS accepted employment with the Company. The Company has agreed to issue an aggregate of up to $4,000 in shares of restricted stock from the Company’s 2007 Stock Option and Incentive, not to exceed 250,000 shares, to these new Company employees. The shares will vest annually over a four year period.

The foregoing description of the Asset Purchase Agreement is not intended to be complete and is qualified in its entirety by reference to the Asset Purchase Agreement, which was attached as Exhibit 2.1 to the Company’s Current Report on Form 8-K filed on July 5, 2011 and is incorporated herein by reference.

The unaudited pro forma condensed combined statements of income provided above give effect to the acquisition as of the beginning of fiscal 2011, for both the Company and ALaS. Due to the combining companies having different fiscal period ends, the unaudited pro forma condensed combined statements of income combine the historical results for the Company for the three months ended June 30, 2011 and year ended March 31, 2011, and the historical results of ALaS for the three months ended June 30, 2011 and year ended December 31, 2010. The unaudited pro forma condensed combined balance sheet combines the historical balance sheet of the Company as of June 30, 2011 and of ALaS as of June 30, 2011, giving effect to the acquisition as of these dates, respectively.

Shares used in the computation of basic and diluted income per share for the three months ended June 30, 2011 were 24,457,474 and 25,328,317, respectively.  Shares used in the computation of basic and diluted income per share for the twelve months ended March 31, 2011 were 23,783,457 and 24,714,808, respectively.

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2. Preliminary Purchase Price Allocation

The Company paid cash of $27,838 as consideration on July 1, 2011 for the acquisition. The cash paid reflects the purchase price of $27,838 less a 10% holdback.

(in thousands)
Cash paid on July 1, 2011	$	25,055
Holdback (10%)	2,775
Transfer tax	8
Total purchase price	$	27,838

The total preliminary purchase price for ALaS was allocated to the net tangible and intangible assets based upon their preliminary fair values as of July 1, 2011 as set forth below. The excess of the preliminary purchase price over the preliminary fair values of net tangible and intangible assets was recorded as goodwill. The allocation of the purchase price was based upon a preliminary valuation and the estimates and assumptions are subject to change.

The primary areas of the preliminary purchase price allocation that are not yet finalized relate to the fair values of certain tangible assets and liabilities acquired, the valuation of intangible assets acquired, certain legal matters, and residual goodwill. The Company expects to continue obtaining information to assist in determining the fair value of the net assets acquired at the acquisition date.

The preliminary purchase price allocation for ALaS is as follows:

(in thousands)
Customer relationships	$	10,900
Backlog	300
Trade name	100
Fixed assets	33
Prepaid expenses	79
Goodwill	16,426
Total purchase price	$	27,838

3. Pro Forma Adjustments

The pro forma adjustments are as follows:

(a) To record the cash payment of $27,838 related to the acquisition and the preliminary purchase price allocation, see Note 2.

(b) Represents the elimination of the assets and liabilities not assumed in the acquisition.

(c) To record amortization of $273 and $1,490 for the three months ended June 30, 2011 and the twelve months ended March 31, 2011, respectively, associated with preliminarily fair value of identified intangible assets acquired.

(d) To record the restricted stock awards of $250 and $1,000 for the three months ended June 30, 2011 and the twelve months ended March 31, 2011, respectively, given to ALaS employees over a four-year vesting period and to record as compensation cost based on fair value at date of grant.

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(e) To record the tax benefit of $209 and $996 for the three months ended June 30, 2011 and the twelve months ended March 31, 2011, respectively, due to stock-compensation and intangible amortization.

(f) To remove the unincorporated business tax expense and record income tax expense of $314 and $2,248 for the three months ended June 30, 2011 and the twelve months ended March 31, 2011, respectively.

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