Dear All,

This is a special time of the year for me as I get a golden opportunity to reach out to Polaris shareholders. In 2000, I wrote to you as the Chairman & CEO of a Rs. 100 Cr young organisation. Today, in all humility, I am reaching out to you from a Rs. 1000 Cr young organisation!

Encapsulating a 7-year journey in a couple of pages is a challenge. How do I do justice to the mammoth effort and experience, how do I capture the passion and energy of the teams that were behind this, the value delivered to the customers across the globe and the unflinching support of shareholders through the stumbling blocks? Yes, this was indeed an enriching journey.

Yet, this is what I attempt every year through these letters, to share with you, the excitement of the past, present and future. From my ‘Letter to the Shareholders’ over the last seven years, I have drawn out a few messages that trace our journey, the Roots of Polaris, the Pedigree and the Future.

Year 2000-2001

What we said

The Polaris team decided on leveraging theesources to serve a few clients well, rather than spreading itself thin across too many clients. At the same time, it was agreed that Polaris would continue to grow by offering newer services to existing clients. The objective of the entire exercise was not just in executing the project but building a relationship. Clients in turn reciprocated by entrusting Polaris with new projects. This is how Polaris grew with Citibank. We believe in the essence of simplicity. Our journey has been towards global leadership. And we are getting there. The growth is continuous. The methodologies are simple. And we plan to get to our goal by ‘Thinking like a Start- Up and Acting like a Giant'.

Theme

The Power of Simplicity, the Essence of Success at Polaris

Milestone

Forbes ranked Polaris among the 200 Best Small Companies in the world.

Year 2001-2002

What we said

We invested in creating a powerful service differentiator 'Precision'. We are part of an industry that benefits from the inefficiencies of our creation. While dynamic changes in technology do necessitate this to a large extent, we could, as an industry, certainly eliminate the errors of commission. We took it as a challenge to become the ‘gold standard’ in the international quality arena.

Theme

The Power of Precision, Delivering Increasing Value to the Customer

Milestone

First company in the world to achieve SEI CMMi Level 5 (Integrated – Capability Maturity Model, Software Engineering Institute, Carnegie Mellon University, USA)

Year 2002-2003

What we said

We are at the threshold of the next wave of opportunity. We are poised strategically to move up the value chain, by decisively breaking into the high-end of the market, both in products and solutions. We have consciously built up domain knowledge and technical capabilities necessary to engineer such world-class products and solutions.

Theme

The Power of Change

Milestone

Merger of Polaris with OrbiTech, an unprecedented merger in the Indian IT industry and the acquisition of 56 Intellectual Property Rights (IPRs) in the banking domain, the launch of Brand Intellect, our banking product suite, the birth of Optimus, our BPO subsidiary and Adrenalin, our subsidiary focused on HR products

Year 2003-2004

What we said

With the good brand name developed by the Indian IT industry on the global world map, it becomes imperative to move from cost-arbitrage model to a customer value-creation business model. Our strategy of 100-5-7 implies that, we will focus in the next 3 years on building not more than 100 relationships, which means we will create more value for our existing customers and win a large share of their business. We believe we are on the threshold of the next growth phase, which will be based on building higher growth margins using the principle of Economics of Expertise.

Theme

The Economics of Expertise

Milestone

Intellect wins the prestigious Banker’s Award, Polaris becomes a NASSCOM Top 10 company

Year 2004-2005

What we said

Our goal is to be among the Top 10 most respected global organisations, in our area of expertise. Customers would increasingly look for specialists rather than generalists for delivering value. We are creating an environment in Polaris to facilitate continuous learning at all levels and to cultivate the expertise mind-set. What this expertise means for our customers: Expertise permits Polaris to read between the lines, to hear the unspoken needs of the customer. This helps us to deliver a solution faster because there is less time wasted in knowledge transfer. In turn, this helps our customers reach their market ahead of the competition.

Theme

Delivering Economics of Expertise

Milestone

Polaris begins Relationship with 6 out of the Top 10 Investment Banks in the world and High Street Banks in the UK

Year 2005-2006

What we said

Industry Analysts have forecast that in the next 5 years, a significant proportion of the IT spends by Global banks will be around modernization of IT infrastructure. The growing needs of Modernization are already being felt by the large banks that have pioneered technology automation in the 70’s and 80’s. Polaris is well positioned to serve these banks, using Progressive Modernization, which is a non-disruptive ‘Platform-Refresh’ for MNC Banks. We also have a phenomenal value proposition for our customers by implementing Secure and Agile solutions with a distinct IP advantage.

Theme

Live Your Dream

Milestone

Polaris rated winner in the category ‘Specialty Application Development Leaders', by Global Services, an international integrated media brand owned by CMP-Cyber Media LLC.

A global Customer Landscape of 40 large accounts, including 4 out of Top 7 High Street Banks, 7 out of Top 10 Wall Street Banks, 4 out of the 7 large Banks in Australia, 3 out of 4 top Private Sector Banks in India.

Year 2006-2007

Theme

Connecting our pedigree to our future

Milestone

Polaris launches two Super Specialty Centers for providing technology solutions to Investment Banks and to Risk and Treasury business.

Adrenalin becomes the most chosen HCM software in India.

The results of our investment into building the largest suite of Intellectual assets are visible in the strong financial performance of the company as well as in the expanding global customer landscape. Intellect-led business grew by 147% over last year. We have also created the right infrastructure necessary for nurturing talent that is globally competitive as well as a culture of innovation and extreme execution.

Connecting our pedigree to our future

The proof of a company value is the ‘pedigree’ of its customers. We have developed a customer connect by providing a service mix of consulting, products and outsourcing to global Leaders in banking, financial services and insurance space, who trust us with their mission critical applications. Our business plan for the next year is around 70 customer relationships. This customer base has an aggregated IT budget of over $ 50 Billion. A sizeable portion of this has been allocated for modernization of the IT infrastructure and specialized solutions for sub verticals within the banking domain. As we have painstakingly built a robust business model in the last 4 years around Non-disruptive Modernization, Super Specialty and Next-Generation banking products, Polaris is well positioned to leverage the big canvas of opportunity.

Our challenge and focus is on building a powerhouse of talent akin to that of cardio specialists and cardio surgeons. We call such people Solution Architects. This talent is not easily available in the market place and our talent development programs nurture this high-end expertise from within the system, around the business levers of technology, domain, process, tools, solution development life cycle and customer market place. We will continue to make the necessary investments into Sales & Marketing to accelerate our growth in the global market place.

An inspired workplace

Our blue print for building a Holistic Institution is not only through niche or differentiated offerings but also through a differentiated work culture, around multi threaded relationships that remain strong and unblemished despite the demands or ravages of pressure and time.

The connecting threads are around:

Organisational Connect: We nurture a culture of shared vision, shared dreams and backed by our values - Passion, Humility, Integrity, Respect and Fun.

Family Connect: We are committed to creating a support system for our families, especially for unit families, staying far away from their ‘roots’. The Family Connect programs are managed by the HUM Trust.

Society Connect: We integrate our employees with a larger community, through the Ullas Trust. So far, we have reached out to over 17000 school children coming from economically challenged sections of our society, encouraging them to ‘Dream Big’ as well as nurturing a ‘Can Do It’ spirit.

To summarize, we started our growth journey around Quality and Relationships. We built our transformation strategy around ‘Customer Voice’ and occupy a niche position today as a Global Integrated Solution Provider for the Financial World. We have a treasure trove of Intellectual Assets in the form of Intellect Suite of banking products.

Our roots are strong and we have a promising and fulfilling journey ahead of us. It is invigorating and inspiring to have supportive shareholders, as we build a high-energy, high-performing and globally respected Institution.

A sincere thank you from the 9000 strong Polaris family.

Warm regards

Arun Jain
Chairman and CEO