Item 2.02. Results of Operations and Financial Condition
On May 12, 2014, Virtusa Corporation (the "Company") announced its financial
results for the fourth quarter and fiscal year 2014 ended March 31, 2014. The
full text of the press release issued in connection with the announcement is
attached as Exhibit 99.1 to this Current Report on Form 8-K.
The information in this Form 8-K (including Exhibit 99.1) shall not be deemed
"filed" for purposes of Section 18 of the Securities Exchange Act of 1934 (the
"Exchange Act") or otherwise subject to the liabilities of that section, nor
shall it be deemed incorporated by reference in any filing under the Securities
Act of 1933 or the Exchange Act, except as expressly set forth by specific
reference in such filing.
Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an
Off-Balance Sheet Arrangement of a Registrant.
On May 6, 2014, the Company purchased multiple foreign currency forward
contracts designed to hedge fluctuation in the Indian rupee against the U.S.
dollar and U.K. pound sterling. The U.S dollar contracts have an aggregate
notional amount of approximately 678,465,000 Indian rupees (approximately
$10,412,000) and have an average settlement rate of 65.24 Indian rupees. The
U.K. pound sterling contracts have an aggregate notional amount of approximately
676,800,000 Indian rupees (approximately £6,207,000) and have an average
settlement rate of 109.73 Indian rupees. These contracts will expire at various
dates during the 36 month period ending on March 31, 2017. The Company will be
obligated to settle these contracts based upon the Reserve Bank of India
published Indian rupee exchange rates. Based on the U.S. dollar to U.K. pound
sterling spot rate on May 6, 2014 of $1.69, the blended weighted average Indian
rupee rate associated with both the U.S. dollar and U.K. pound sterling
contracts would be approximately 64.90 Indian rupees per U.S. dollar. Such
blended, weighted average Indian rupee rate is subject to change, to the extent
of any appreciation or depreciation in the U.K. pound sterling against the U.S.
dollar, as compared to the spot rate listed above. Because these foreign
currency forward contracts are designed to reduce volatility in the Indian rupee
exchange rates, they not only reduce the negative impact of a stronger Indian
rupee but also reduce the positive impact of a weaker Indian rupee on the
Company's Indian rupee denominated expenses.
Item 9.01. Financial Statements and Exhibits
The following exhibit relating to Item 2.02 shall be deemed to be furnished, and
99.1 Press Release issued by Virtusa Corporation on
May 12, 2014.