Firstsource Solutions Ltd:Annual Report 2023-24 Analysis

Firstsource Solutions Ltd: A Comprehensive Overview #

About the Company #

• Year of Establishment and Founding History: Firstsource Solutions Ltd. was established in 2001 as a subsidiary of ICICI Bank. It was later spun off into an independent entity.
• Headquarters Location and Global Presence: The company’s headquarters are located in Mumbai, India. Firstsource has a global presence with operations across India, the United States, the United Kingdom, and the Philippines.
• Company Vision and Mission: (Data unavailable. Refer to Firstsource’s official website for accurate information.)
• Key Milestones in Their Growth Journey:
  • Early Years: Focused on providing contact center services to ICICI Bank and other financial institutions.
  • Expansion: Expanded service offerings to include business process management (BPM) and customer management solutions.
  • Acquisitions: Growth through strategic acquisitions to expand capabilities and geographical reach. Notable acquisitions include MedAssist (healthcare revenue cycle management) and ISGN Solutions Inc (mortgage BPO).
  • Digital Transformation: Focus on digital transformation and adoption of technologies like AI and automation.
• Stock Exchange Listing Details and Market Capitalization: Firstsource Solutions Ltd. is listed on the National Stock Exchange of India (NSE) and the Bombay Stock Exchange (BSE). (Market capitalization details should be looked up on financial websites such as Google Finance, Yahoo Finance, or BSE/NSE.)
• Recent Financial Performance Highlights: (Refer to Firstsource’s latest annual reports, quarterly results, and investor presentations for current financial performance. Look for key metrics such as revenue growth, profitability, EBITDA, and earnings per share (EPS).)
• Management Team and Leadership Structure: (Refer to Firstsource’s official website or annual reports for the most up-to-date information on the management team, including the CEO, CFO, and other key executives.)
• Notable Awards or Recognitions: (Refer to Firstsource’s official website for awards and recognition information.)

Their Products #

• Complete Product Portfolio with Categories: Firstsource offers a range of Business Process Management (BPM) services categorized as follows:
  • Customer Management: Contact center services, customer support, digital customer engagement.
  • Healthcare: Revenue cycle management, payer solutions, provider solutions.
  • Financial Services: Mortgage processing, banking operations, collections.
  • Communications, Media & Technology: Customer lifecycle management, digital transformation, technical support.
• Flagship or Signature Product Lines: Their Healthcare Revenue Cycle Management (RCM) solutions are a significant part of their portfolio.
• Key Technological Innovations or Patents: (Specific details regarding patents are unavailable. Refer to Firstsource’s official website and publications for information on technological advancements.)
• Quality Certifications and Standards: (Refer to Firstsource’s official website for their current ISO certifications, SOC compliance, and other quality standards.)
• Any Unique Selling Propositions or Technological Advantages: Focus on digital-first BPM solutions, automation, analytics, and AI-powered platforms.
• Recent Product Launches or R&D Initiatives: (Refer to Firstsource’s official press releases, investor presentations, and website for recent product announcements and R&D initiatives.)

Primary Customers #

• Target Industries and Sectors: Healthcare, Financial Services, Communications, Media & Technology.
• Geographic Markets (Domestic vs. International): Primarily serves international markets, particularly the United States and the United Kingdom, while maintaining a presence in India.
• Major Client Segments: (Detailed breakdowns are unavailable; they serve large corporations and institutions in their target sectors.)
• Any Notable Government Contracts or Institutional Clients: (Refer to Firstsource’s official press releases and contract announcements.)
• Distribution Network and Sales Channels: Direct sales and partnerships.

Major Competitors #

• Direct Competitors in India and Globally:
  • Globally: Teleperformance, Conduent, Genpact, WNS Global Services, Infosys BPM, Wipro BPS, TCS BPS, HCLTech BPS, EXL Service.
• Comparative Market Share Analysis: (Specific market share data is unavailable and requires access to industry reports from sources like Gartner, Forrester, or Everest Group.)
• Competitive Advantages and Disadvantages:
  • Advantages: Domain expertise in healthcare and financial services, strong focus on digital transformation, established global delivery network, strategic acquisitions to expand capabilities.
  • Disadvantages: Intense competition in the BPM industry, potential impact from economic downturns, dependence on specific client industries.
• How They Differentiate from Competitors: Focus on delivering digital-first solutions, leveraging automation and analytics to improve efficiency and customer experience.
• Industry Challenges and Opportunities:
  • Challenges: Increasing competition, pricing pressures, evolving technology landscape, data privacy and security concerns.
  • Opportunities: Growing demand for digital transformation, increasing adoption of automation and AI, expanding into new geographic markets.
• Market Positioning Strategy: Positioned as a provider of digitally-enabled BPM solutions with deep domain expertise in key industries.

Future Outlook #

• Expansion Plans or Growth Strategy: Focus on expanding its digital BPM offerings, strengthening its presence in key industries (healthcare and financial services), and exploring opportunities in new geographic markets.
• Upcoming Products or Innovations: (Refer to Firstsource’s official website and press releases for details.)
• Sustainability Initiatives or ESG Commitments: (Refer to Firstsource’s official website and sustainability reports for details on ESG initiatives.)
• Industry Trends Affecting Their Business: Digital transformation, automation, AI, cloud computing, increasing demand for personalized customer experiences, regulatory changes.
• Long-Term Vision and Strategic Goals: (Data unavailable. Refer to Firstsource’s official website for accurate information.)

Financial Performance Analysis of Firstsource Solutions Limited (FY 2023-24) #

Financial Performance Trend Analysis (FY22-FY24) #

• Revenue: FY24 revenue reached ₹63,362 million ($765 million), a 5.2% YoY increase (1.1% in constant currency). FY24 performance showed acceleration in H2 (Q3: +3.4% CC, Q4: +4.2% CC) after a flat H1, suggesting improving momentum.
• Profitability:
  • EBIT surged 23.6% YoY to ₹6,962 million in FY24, with EBIT margin expanding significantly by 160 bps to 11.0%.
  • PAT remained relatively flat at ₹5,147 million (0.2% YoY growth), with PAT margin slightly contracting to 8.1% (from 8.5% in FY23).
  • Diluted EPS saw marginal growth to ₹7.34 from ₹7.32 in FY23.
• Capital & Cash Flow: FY24 saw healthy cash flows and the highest-ever deal wins. The company maintained its dividend policy, distributing 35% (₹3.50/share).
• Overall Trend: FY24 topline growth moderated significantly, the company demonstrated strong operational leverage leading to substantial EBIT growth and margin expansion. Accelerating growth in H2 FY24 and record deal wins signal a positive trajectory.

Business Segment Performance (FY24) #

• Banking & Financial Services (BFS):
  • Revenue Contribution: 39.2%
  • Growth: -3.1% YoY.
  • Performance: Faced headwinds from interest rates and market volatility. However, debt collection grew steadily, and tech-led mortgage propositions gained traction. Added 20 new logos.
• Healthcare:
  • Revenue Contribution: 33.0%
  • Growth: +4.0% YoY.
  • Performance: Structural industry changes driving demand for offshore/tech solutions. Payer segment saw transformative initiatives leading to a 60% jump in ACV wins for Firstsource. QBSS acquisition significantly strengthens RCM capabilities.
• Communications, Media & Technology (CMT):
  • Revenue Contribution: 22.3%
  • Growth: +11.6% YoY.
  • Performance: Strong growth despite top client transition headwinds, offset by new business wins. Consumer Tech footprint grew, particularly with AI localization support for major tech firms. Added 4 new logos.
• Diverse Industries (Primarily Utilities):
  • Revenue Contribution: 5.5%
  • Growth: +132.3% YoY.
  • Performance: Robust demand driven by digitalization trends in the energy and utilities sector. Strong performance within the large existing client in this vertical.

Major Strategic Initiatives and Progress #

• Core Strategy: Maintaining “inch wide, mile deep” focus on domain specialization.
• ‘One Firstsource’ Framework: Launched as a strategic blueprint for growth and efficiency, focusing on Simplifying Organization and Cross-sell/Up-sell.

Detailed Analysis #

Financial Analysis: Firstsource Solutions Limited (FY24) #

Balance Sheet Analysis (FY24 vs FY23) #

This analysis is based on excerpts from the Firstsource Solutions Limited Annual Report for FY 2023-24.

Comparative Analysis of Consolidated Balance Sheet #

Firstsource Solutions Limited - Financial Analysis FY 2023-24 #

Revenue Analysis #

• Consolidated revenue reached ₹63,362.45 million ($765 million) in FY24, a 5.2% YoY growth in INR terms (1.1% in constant currency).
• H1 revenue was flat, followed by accelerated growth in H2 (Q3: 3.4% CC, Q4: 4.2% CC).

Segmental Breakdown (FY24) #

• Banking and Financial Services (BFS): 39.2% of total revenue. Revenue degrew 3.1% YoY.
• Healthcare: 33.0% of total revenue. Revenue grew 4.0% YoY.
• Communications, Media, and Technology (CMT): 22.3% of total revenue. Revenue grew 11.6% YoY.
• Diverse Industries (primarily Utilities): 5.5% of total revenue. Revenue grew 132.3% YoY.

Geographical Breakdown (FY24) #

• USA: 64.8% of total revenue
• UK: 35.1% of total revenue
• Asia and Rest of World: 0.1% of total revenue

Cost Structure Analysis #

• Personnel Costs: Increased 1.1% YoY to ₹39,093.25 million. 61.7% of revenue in FY24 (64.2% in FY23).
• Other Expenses: Increased 10.7% YoY to ₹14,704.80 million. 23.2% of revenue in FY24 (22.1% in FY23).

Margin Analysis #

• Operating EBITDA: Increased 15.7% YoY to ₹9,564.40 million. Margin expanded 140 bps to 15.1% in FY24 (13.7% in FY23).
• Operating EBIT: Increased 23.6% YoY to ₹6,962.16 million. Margin expanded 160 bps to 11.0% in FY24 (9.4% in FY23).
• Profit After Tax (PAT): Increased marginally by 0.2% YoY to ₹5,147.29 million. Margin contracted slightly by 40 bps to 8.1% in FY24 (8.5% in FY23).

Operating Leverage #

Operating EBIT grew by 23.6% YoY, outpacing revenue growth of 5.2%, indicating positive operating leverage.

Non-recurring / Exceptional Items #

No exceptional items reported. YoY PAT comparison impacted by ‘Other Income’ volatility.

GAAP vs Non-GAAP Reconciliation #

Financial statements prepared under Indian Accounting Standards (Ind AS). Key performance indicators include Operating EBITDA and Operating EBIT.

Earnings Per Share (EPS) Analysis #

• Basic EPS: ₹7.52 in FY24 (₹7.55 in FY23).
• Diluted EPS: ₹7.34 in FY24 (₹7.32 in FY23).

Quarterly Trends #

H1 saw largely flat revenues, while H2 demonstrated visible growth acceleration (Q3: 3.4% CC, Q4: 4.2% CC).

Cash Management Analysis #

Cash Flow and Liquidity Analysis #

Operating Cash Flow (OCF) #

• Net cash generated from operating activities decreased to ₹6,447.91 in FY24 from ₹7,950.23 in FY23.
• Key Components (FY24): Net profit before tax (₹6,296.75) adjusted primarily for depreciation & amortization (₹2,602.24), finance costs (₹1,033.85), and employee stock compensation (₹31.34). Changes in working capital contributed a net inflow (₹2,404.02 reported as decrease in WC), contrasting with a smaller net inflow from WC changes in FY23 (₹764.96). Income taxes paid were higher at ₹717.75 vs ₹655.92 in FY23.
• Analysis: Despite higher PBT in absolute terms, the OCF decreased primarily due to less favourable working capital movements compared to FY23. The core operations continue to generate healthy cash flow.

Investing Cash Flow (ICF) #

• Net cash used in investing activities was ₹579.93 in FY24, compared to net cash generated of ₹163.53 in FY23.
• Key Components (FY24): Primarily driven by capital expenditure on property, plant & equipment (₹850.43) and net purchase of investments (₹324.34). In FY23, net proceeds from investments (₹637.42) offset lower capex (₹536.22).
• Analysis: Higher capex in FY24 and a shift from net selling to net buying of current investments led to a net cash outflow from investing activities, indicating increased investment in fixed assets and financial instruments.

Financing Cash Flow (FCF) #

• Net cash used in financing activities decreased slightly to ₹5,641.87 in FY24 from ₹7,433.83 in FY23.
• Key Components (FY24): Primarily comprised repayment of long-term borrowings (₹1,609.77), repayment of short-term borrowings (₹1,277.99), interest payments (₹1,010.70), dividend payments (₹2,405.94), lease liability repayments (₹1,410.14), and purchase of non-controlling interest (₹583.32). FY23 saw higher net repayment of short-term borrowings and higher lease liability repayments. Purchase of treasury shares was lower in FY24 (₹58.85 vs ₹139.58).
• Analysis: Financing activities consistently show cash outflow due to debt servicing, lease payments, and shareholder returns (dividends, treasury share purchases). The reduction in outflow in FY24 was mainly due to lower net repayment of short-term debt and lower treasury share purchases.

Working Capital Management Efficiency #

• Debtors’ days increased to 50 days in FY24 from 41 days in FY23, indicating slower collections.
• Trade receivables increased by 11.8% YoY to ₹11,608.18 million, growing faster than the reported constant currency revenue growth (1.1%).
• Trade payables increased by 32.0% YoY to ₹3,055.81 million. The significant increase suggests potentially extended payment terms or higher procurement activity towards year-end.
• Overall Change in Working Capital: Net changes resulted in a cash inflow of ₹2,404.02 million in FY24, compared to an inflow of ₹764.96 million in FY23.

Capex Analysis by Segment #

• Total capital expenditure increased significantly to ₹850.43 million in FY24 from ₹536.22 million in FY23.
• Capex was mainly towards refurbishment and maintenance of operation centers, technology upgrades, and setting up new operations centers.

Dividend and Share Buyback Trends #

Dividends #

• The Company declared and paid an interim dividend of ₹3.50 per share for FY24, same as FY23.
• Total dividend payout amounted to ₹2,405.94 million in FY24, compared to ₹2,384.45 million in FY23.
• The dividend payout ratio remained consistent at approximately 47.7% in FY24 compared to 47.8% in FY23.

Share Buybacks (Treasury Shares) #

• The Company purchased treasury shares amounting to ₹58.85 million in FY24, significantly lower than the ₹139.58 million purchased in FY23.
• As of March 31, 2024, the ESOP Trust held 9,376,900 equity shares (1.35% of total shares), down from 15,589,182 shares (2.24%) as of March 31, 2023.

Debt Service Coverage #

• The Interest Coverage Ratio was 6.73 times in FY24, a slight decrease from 7.13 times in FY23.
• While Operating EBIT increased significantly (23.6% YoY), finance costs also rose (31% YoY), leading to the slight moderation in the coverage ratio.
• The ratio remains comfortably above typical covenant levels.

Liquidity Position #

• Cash and cash equivalents stood at ₹1,747.74 million as of March 31, 2024, compared to ₹1,515.40 million as of March 31, 2023.
• The Current Ratio was approximately 0.93 as of March 31, 2024, compared to approximately 0.92 as of March 31, 2023.
• The increase in Debtors’ Days to 50 suggests cash conversion is slowing slightly from receivables. However, the company generated positive OCF and maintained adequate cash balances.

Firstsource Solutions Limited: Financial Analysis FY 2023-24 #

Revenue and Profitability #

• Revenue: ₹63,362 million ($765 million), a 5.2% YoY increase (1.1% in constant currency). Growth accelerated in H2 FY24 (Q3 CCY: 3.4%, Q4 CCY: 4.2%).
• Operating Profit (EBIT): ₹6,962 million, a 23.6% YoY increase. EBIT margin improved to 11.0% from 9.4% in FY23.
• Profit After Tax (PAT): ₹5,147 million, largely flat YoY with 0.2% growth. PAT margin was 8.1%.
• Earnings Per Share (EPS): Diluted EPS increased slightly to ₹7.34 from ₹7.32 in FY23.
• Deal Wins: Highest-ever net new Annual Contract Value (ACV) in FY24. Average deal size increased by over 60% compared to FY23.

Market Share and Competitive Position #

• Market Context: Global BPS market grew by an estimated 3.4% in FY24. Indian BPS exports grew an estimated 2.6%. Macro uncertainty and AI are driving industry changes.
• Client Base: Serves over 150 global brands, including 18 Fortune 500 and 3 FTSE100 companies. Client retention averages 18+ years for the top five clients.
• Segment Leadership:
  • 5 of the top 15 US Mortgage Servicers & Lenders.
  • 6 of the top 10 US Credit Card Issuers.
  • 7 of the top 10 US Health Insurance Companies.
  • 3 of the top 6 UK Retail Banks.
  • Supports 1,000+ US Hospitals.
• Competitive Differentiation: Deep domain expertise, technology integration (AI/ML, analytics, FirstSense.AI), and outcome-led approach.
• Growth Strategy: Aims to gain market share by leveraging differentiators and the ‘One Firstsource’ framework, targeting top-quartile revenue growth and margin expansion.

Key Products/Services Performance #

• Banking & Financial Services (BFS - 39.2% of Revenue): Revenue degrew 3.1% YoY. Added 20 new logos.
• Healthcare (33.0% of Revenue): Revenue grew 4.0% YoY. Strong ACV growth (60% jump) in the payer segment.
• Communications, Media & Technology (CMT - 22.3% of Revenue): Revenue grew 11.6% YoY. Added 4 new logos.
• Diverse Industries (5.5% of Revenue): Revenue grew 132.3% YoY.

Geographic Distribution and Market Penetration #

• Revenue Mix: Dominated by the US (64.8%) and UK (35.1%).
• Operational Footprint: Operates 40 centers across the US (16), UK (8), India (12), Philippines (3), and Mexico (1). Recent expansion includes South Africa and Australia. Exploring further expansion in LATAM.
• Market Penetration Opportunity: Significant under-penetration and cross-sell/up-sell opportunities within existing large accounts.

Segment-wise Capex and ROIC #

• Overall Capex: ₹851.04 million incurred in FY24.
• Return on Capital Employed (ROCE): 15.6% for FY24 (vs. 13.5% in FY23).

Operational Efficiency Metrics #

• Attrition: Reduced by ~17% YoY. Trailing 12-month attrition for Q4 FY24 was 30.8% offshore and 42.5% onshore.
• Headcount: Net addition of 4,922 employees in FY24, reaching a total of 27,940. Offshore employee percentage increased to 68.7%.
• Efficiency Initiatives (‘One Firstsource’): Focus on cost optimization and productivity gains.
• Employee Satisfaction: Reported score of 80% (Feb 2024 Pulse Survey).
• Profitability Focus: Aiming for stable margins during investment phase, followed by 50-75 bps annual margin improvement.

Growth Initiatives and Challenges #

• Key Initiatives:
  • ‘One Firstsource’ Framework
  • AI Leadership
  • Strategic M&A (QBSS acquisition)
  • Geographic Expansion
  • Sales Reinvigoration
• Stated Goals: Objective of becoming a USD 1 billion revenue run-rate company by FY26.
• Challenges:
  • Macroeconomic Uncertainty
  • Technological Disruption (AI)
  • Competition
  • Talent Management
  • Integration Risk (QBSS)

Firstsource Solutions Limited - Risk Analysis Report (FY 2023-24) #

Overview #

Firstsource Solutions Limited (FSL) operated in a dynamic FY 2023-24 environment. The company faces several strategic, operational, financial, compliance, and emerging risks. This report analyzes these key risks based on information presented in the FY 2023-24 Annual Report.

Risk Category Analysis #

Strategic Risks #

• Risk Description:
  • Client Concentration: Significant revenue derived from a limited number of large clients in the US and UK. Top client contributed 14.0% (FY23: 15.3%), Top 5 contributed 36.2% (FY23: 37.2%).
  • Technology Disruption: Rapid advancements in AI/automation potentially impacting traditional BPS models and requiring continuous adaptation and investment.
  • Competitive Pressure: Highly competitive BPS market with established players and niche providers vying for market share.
  • Vertical-Specific Headwinds: Challenges in specific sectors like BFS (interest rates, regulatory pressure) and US Mortgages (volumes impacted by rates).
  • Strategy Execution: Successful implementation of the ‘One Firstsource’ framework and integration of acquisitions (e.g., QBSS) are critical for achieving growth and margin targets (USD 1bn run-rate goal by FY26).
• Severity: High (Client Concentration, Tech Disruption, Strategy Execution); Medium (Competitive Pressure, Vertical Headwinds).
• Likelihood: High (Competitive Pressure, Tech Disruption); Medium (Client Concentration, Vertical Headwinds, Strategy Execution).
• Trend: Tech Disruption (Increasing); Client Concentration (Slightly Decreasing); Competitive Pressure (Stable/Increasing); Vertical Headwinds (Stable/Variable); Strategy Execution (N/A - New Framework).
• Mitigation Strategies:
  • ‘One Firstsource’ framework focusing on cross-selling/up-selling, capability expansion (Consulting, AI, new geos), brand amplification, and organizational simplification.
  • Investment in AI (FirstSense.AI, FirstCoLab), strategic partnerships, and CDAO appointment.
  • Focus on deep domain expertise and technology-led solutions (‘inch wide, mile deep’).
  • QBSS acquisition to enhance RCM capabilities and tech-led offerings.
  • Expansion of sales and go-to-market teams; focus on new logo acquisition with higher average deal size.
  • Diversification within verticals (e.g., mortgage servicing, EdTech, Consumer Tech).
• Control Effectiveness: Improving (based on highest-ever deal wins, positive pipeline commentary, slight decrease in concentration metrics).
• Potential Financial Impact: Revenue volatility/loss, margin erosion if tech adaptation lags or competition intensifies, failure to meet growth targets, M&A integration costs/synergy realization delays.

Operational Risks #

• Risk Description:
  • Talent Management (Attrition): Attracting and retaining skilled workforce, particularly in a competitive market. High attrition impacts cost, service quality, and continuity.
  • Cybersecurity & Data Privacy: Threat of cyber-attacks, data breaches impacting sensitive client/customer information, leading to reputational damage and financial loss.
  • Service Delivery & Contract Renewals: Failure to meet SLAs or deliver value leading to non-renewal of key contracts. Dependence on long-term contracts necessitates consistent performance.
  • Operational Errors/Fraud: Potential for errors or internal non-compliance leading to financial loss or reputational damage.
  • Business Continuity: Disruptions due to unforeseen events (geopolitical, natural disasters, pandemics).
• Severity: High (Cybersecurity, Talent Management, Contract Renewals); Medium (Operational Errors, Business Continuity).
• Likelihood: Medium (Talent Management, Cybersecurity); Low (Contract Renewals - given long tenures/recent renewals, Operational Errors, Business Continuity).
• Trend: Talent Management (Decreasing - significant improvement in attrition); Cybersecurity (Increasing - evolving threat landscape); Contract Renewals (Stable); Operational Errors (Stable); Business Continuity (Stable/Variable).
• Mitigation Strategies:
  • HR initiatives: Revised appraisal cycle, REACCH values, enhanced onboarding, training investment (₹288.72 mn), internal mobility (‘Wings Within’), focus on employee experience, wellness programs.
  • Cybersecurity: ISO 27001, HIPAA, HITRUST, SOC2 certifications; technical controls (Zero Trust, EDR, DLP, etc.); threat & vulnerability management; 24/7 SOC; employee training.
  • Strong client relationship management (CRM), focus on value enhancement, proactive engagement, long-term contract renewals secured (e.g., top client - 10 years).
  • Internal controls framework, internal audit function, Whistle Blower Policy, Code of Conduct.
  • Business Continuity Management (BCM) framework (aligned with ISO 22301), crisis management plans, diversified delivery locations.
• Control Effectiveness: Improving (Attrition reduction); Medium/High (Cybersecurity - ongoing effort); High (Contract Renewals - based on reported success); Medium/High (Internal Controls - Auditors noted exception on audit trail database logging); High (BCM - Standard practice).
• Potential Financial Impact: Increased operating costs (recruitment, training), revenue loss from contract non-renewal or service disruption, regulatory fines/penalties from data breaches, reputational damage impacting future business, fraud losses.

Financial Risks #

• Risk Description:
  • Currency Volatility: Exposure due to significant operations/revenue in USD and GBP, impacting reported financials upon translation to INR.
  • Liquidity Risk: Ensuring sufficient cash flow to meet operational needs, working capital requirements, debt servicing, and investment plans.
  • Customer Credit Risk: Potential inability to collect receivables from clients, particularly under challenging economic conditions.
  • Interest Rate Risk: Impact of rising interest rates on borrowing costs (Finance costs increased YoY).
  • Taxation Risk: Changes in tax laws or interpretations across multiple jurisdictions; recoverability of deferred tax assets (esp. MAT credit - ₹2,332.09 mn).
• Severity: High (Currency Volatility); Medium (Liquidity, Credit Risk, Taxation, Interest Rate).
• Likelihood: High (Currency Volatility, Interest Rate); Medium (Taxation, Credit Risk); Low (Liquidity - based on current cash flows/position).
• Trend: Currency Volatility (Stable/Increasing); Interest Rate (Increasing); Credit Risk (Stable/Potentially Increasing with macro uncertainty); Taxation (Stable/Increasing); Liquidity (Stable).
• Mitigation Strategies:
  • Treasury function with internal foreign exchange risk management policy; use of forward/option contracts for hedging.
  • Monitoring cash flows, maintaining adequate cash balances (₹1,747.74 mn), available credit lines, managing working capital (Debtor days: 50 vs 41 YoY).
  • Credit monitoring of customers, assessing collectability, provisions for doubtful debts (Net receivables increased but so did provision).
  • Optimizing borrowing mix, managing debt levels (Debt-Equity ratio stable at 0.2).
  • Tax planning, utilizing tax incentives (SEZs), ongoing assessment of DTA recoverability based on future profit forecasts.
• Control Effectiveness: Medium/High (Hedging appears standard practice); High (Liquidity management seems adequate); Medium (Credit risk management - debtor days increased); Medium (Interest Rate - impact seen in finance costs); Medium (Taxation - standard practice, MAT recoverability relies on forecasts).
• Potential Financial Impact: Fluctuations in reported revenue and profit (currency), increased finance costs impacting PAT, write-offs from bad debts, cash flow constraints, higher tax outflows or DTA write-downs.

Compliance/Regulatory Risks #

• Risk Description:
  • Multi-jurisdictional Compliance: Adhering to diverse and changing laws (employment, tax, environmental, data privacy like GDPR/HIPAA) across the US, UK, India, Philippines, Mexico, etc.
  • Industry-Specific Regulations: Compliance with sector-specific rules, particularly in highly regulated areas like BFS (financial crime, consumer protection) and Healthcare (patient data privacy - HIPAA, RCM rules).
  • ESG Regulations: Evolving requirements for ESG reporting and performance (e.g., BRSR, potential climate disclosure mandates).
• Severity: High (Data Privacy, Industry-Specific); Medium (Multi-jurisdictional, ESG).
• Likelihood: High (Data Privacy, Industry-Specific, Multi-jurisdictional); Medium (ESG - currently evolving).
• Trend: Increasing (across all categories due to heightened global scrutiny).
• Mitigation Strategies:
  • Dedicated legal and compliance functions, local management teams understanding country specifics.
  • Robust internal policies (Code of Conduct, Anti-Bribery, Data Privacy, Information Security).
  • Certifications (ISO, PCI DSS, HITRUST etc.) demonstrating adherence to standards.
  • Regular training for employees on compliance matters.

Strategic Analysis of Firstsource Solutions Limited (FY23-24) #

Long-Term Strategic Goals and Progress #

• Goal: Achieve a USD 1 billion revenue run-rate by FY26.
• Strategy: Focused approach (“inch wide and a mile deep”) on specialized Business Process Services (BPS) leveraging domain expertise, technology, data, and analytics.
• Framework: ‘One Firstsource’ internal strategy:
  • Simplifying organizational structure for agility.
  • Driving cross-sell/up-sell into existing accounts.
  • Expanding capabilities (adjacencies, consulting, geographic footprint – Australia, South Africa, LatAm).
  • Amplifying the brand (‘We Make It Happen’ positioning).
  • Integrating technology (“Technology in everything we do”).
  • Elevating employee experience.
  • Improving profitability (50-75 bps margin expansion annually post-investment).
• Progress: Strong H2 FY24 growth (Q3: 3.4% CC, Q4: 4.2% CC), record deal wins, highest-ever net new ACV, and strong deal pipeline.

Competitive Advantages and Market Positioning #

• Parentage: Benefit from RP-Sanjiv Goenka Group company.
• Domain Specialization: Expertise in Healthcare, Banking & Financial Services (BFS), Communications, Media & Technology (CMT), and select diverse industries (Utilities).
• Client Relationships: Strong partnerships with major global brands (Fortune 500, FTSE 100), average tenure of 18+ years for top five clients. High penetration in key sectors.
• Tech Integration: Combines domain knowledge with AI, data, and analytics.
• Market Recognition: Recognized as a ‘Leader’ by industry analysts (Everest Group, ISG, HFS, NelsonHall). Client awards reinforce positioning.
• Scale & Presence: Global footprint (US, UK, India, Philippines, Mexico, South Africa, Australia) with 27,940+ employees.

Innovation Initiatives and R&D Effectiveness #

• AI Focus: Becoming an “AI-first enterprise.”
  • FirstSense.AI: Proprietary framework to accelerate client AI deployment.
  • FirstSense.AI Studio: Sandbox for AI experimentation and integration.
  • FirstCoLLab: Internal initiative engaging employees in AI engineering.
  • Progress: Over 55 AI Proof-of-Concepts (POCs) completed, 8 co-pilots in production in FY24. AI demos influenced customer wins.
• Technology Infusion: Infusing AI, automation, and analytics into platforms and service delivery. Developing technology-led propositions.
• Capability Building: Scaling data services, data engineering (unstructured data), Annotation/Moderation services, and Intelligent Document Processing (IDP).
• Partner Ecosystem: Leveraging partners across robotics, process mining, and conversational AI.
• Case Studies: Application of AI, analytics, and technology to deliver client outcomes (e.g., reduced email response times).

M&A Strategy and Execution #

• Strategic Alignment: Acquisitions aligned with “inch wide, mile deep” strategy, focusing on strengthening domain capabilities.
• QBSS Acquisition: Enhances Revenue Cycle Management (RCM) capabilities.
• Capability Expansion: M&A as a route for expanding capabilities and identifying adjacent opportunities.
• Geographic Expansion: Office in Melbourne (FY24) targets ANZ markets. Strengthening footprints in South Africa and Central/Latin America for nearshore delivery.

Management’s Track Record in Execution #

• Financial Performance: 5.2% YoY revenue growth (INR) / 1.1% (CC) to ₹63.4B in FY24. EBIT margin expansion of 160 bps to 11.0%.
• Sales Momentum: Secured highest-ever deal wins and net new ACV in FY24, with average deal sizes >60% higher YoY. Key long-term contract renewals.
• Strategic Implementation: Executing the ‘One Firstsource’ framework.
• Operational Efficiency: Managing costs and improving efficiency, contributing to margin improvement. Reduced attrition (~17% YoY drop).

Capital Allocation Strategy #

• Strategic Investments: Prioritizes investments (people, technology, M&A like QBSS) on deepening domain expertise.
• Growth Funding: Reinvesting savings from cost optimization into expanding sales footprint, account management, and capabilities.
• Shareholder Returns: Consistent dividend policy. FY24 dividend of ₹3.50/share represents a 35% payout ratio.
• Capex: Incurred ₹851M in capital expenditure in FY24.

Organizational Changes and Their Impact #

• ‘One Firstsource’ Structure: Realigned North America along verticals, maintained Europe as a geo BU, and consolidated services into five capability areas.
• Leadership: Strengthened leadership team with key external hires.
• Sales & Account Management: Expanded Go-To-Market team and established dedicated client partner teams for strategic accounts.
• Operational Efficiency Measures: Centralized global payroll and employee shared services offshore; doubled span of control.
• HR Processes: Revised appraisal/promotion cycle to twice yearly. Enhanced onboarding and focus on internal mobility.
• Impact: Accelerated growth in H2 FY24, improved margins, record deal wins, reduced attrition, and enhanced employee experience.

Firstsource Solutions Limited (FY 2023-24) ESG Analysis #

Environmental Metrics and Targets #

Energy Consumption #

Total energy consumption reported at 81,744 GJ for FY24. Renewable energy constituted 14% of the mix. All UK offices utilize 100% green energy. Energy efficiency initiatives include sensor-based LED lighting, energy-efficient data centers, refurbished IT systems, and Smartracks. Use of Renewable Energy Certificates (RECs) is also noted.

GHG Emissions #

• Scope 1: 109.91 tCO2e, showing a 68.68% reduction YoY (FY23 reported as 2,014.25 tCO2e after restatement/recalculation).
• Scope 2 (Location-based): 14,388.28 tCO2e.
• Scope 2 (Market-based): 12,504.69 tCO2e.
• Scope 3: 19,933 tCO2e (FY23: 13,844.18 tCO2e).
• Emission reduction from renewable energy conversion at UK sites (396 tCO2e) and Mumbai (638 tCO2e) highlighted for FY24.

Water Management #

Total water withdrawn was 168,007 KL (FY23: 106,528 KL). Total water consumption was 10,080 KL (FY23: 6,391 KL). Initiatives include sensor-based taps, waterless urinals, rainwater harvesting, and 100% STP water recycling. Partnered with AirOWater for drinking water solutions.

Waste Management #

Generated 249.77 tonnes of non-hazardous waste and zero hazardous waste in FY24. All waste is segregated and disposed of via handlers, targeting a zero-waste-to-landfill policy. Circular economy principles (5R) are prioritized. Partnerships with Rescript (sustainable stationery) and Padcare Labs (sanitary pad recycling) noted.

Climate Risk #

A climate risk assessment (Physical and Transition risks based on IPCC AR5) was conducted. Results are pending disclosure in a separate ESG/TCFD report.

Targets #

The company mentions adopting a climate strategy with specific achievable targets and timelines as part of its future commitments.

Social Responsibility Programs #

Employee Metrics #

Total headcount reached 27,940, a net addition of 4,922 in FY24. Women constitute 46% of the workforce. Attrition decreased significantly (~17% YoY). Employee satisfaction score (Pulse Survey Feb 2024) stood at 80% (73% participation).

Training & Development #

Investment in training and development totalled ₹288.72 million, encompassing 1,011,597 training hours. Specific investment for managers/leadership was ₹9.9 million and 31,500 hours. Over 750 internal moves facilitated career mobility.

Diversity & Inclusion (D&I) #

D&I agenda includes three affinity groups (WIN, Source of Pride, Culture Collective). Received Bronze at India Workplace Equality Index 2023 and recognized as Level 3 Disability Confident Leader in the UK. Aim to hire 10,000 employees via impact sourcing by 2025.

Community Engagement (CSR) #

Total CSR expenditure reported as ₹11 million (excluding ₹64.30 million transferred to RPSG Trust). Initiatives impacted 48,370 lives through 690 events and 15,507 volunteering hours. +5 tons of plastic collected. Partnered with 16 non-profits.

Impact Sourcing #

Aim to hire 10,000 employees by 2025 through impact sourcing.

Supply Chain #

75% of top 20 critical vendors assessed on ESG criteria. 42% of input material sourced directly from MSMEs/small producers. Procurement from marginalized/vulnerable groups constitutes 68% of total procurement.

Customer Relations #

Achieved 94% overall customer satisfaction score (FirstVoice survey).

Governance Structure and Effectiveness #

Board Structure #

As of March 31, 2024, the Board comprised 12 Directors (1 Executive, 11 Non-Executive). 7 out of 12 (58%) were Independent Directors. Clear separation between Chairman (Non-Executive) and MD & CEO roles.

Committees #

Key committees include Audit, Nomination & Remuneration (NRC), Stakeholders Relationship (SRC), Corporate Social Responsibility (CSR), Risk Management, Investment, and Strategy.

Risk Management #

Implemented COSO-based Enterprise Risk Management (ERM) framework. Risk Management Committee oversees identification, evaluation, and mitigation of risks (operational, strategic, external, ESG, cyber). Integration of ESG risks into ERM and alignment with double materiality principles noted.

Internal Controls #

Stated adequacy of internal financial controls, with effective operation confirmed by Statutory Auditors. Internal Audit function reports quarterly to the Audit Committee.

Policies & Compliance #

Key policies include Whistle Blower, Prevention of Sexual Harassment (POSH), Anti-Bribery, Global Ethics, Related Party Transactions, Code of Conduct, and Insider Trading Prohibition. Compliance affirmed with relevant acts and regulations.

Stakeholder Engagement #

Materiality assessment conducted involving internal/external stakeholders identifies key ESG topics. Engagement channels include AGM, financial releases, investor calls, surveys, and grievance mechanisms.

Sustainability Investments and ROI #

Direct Investments #

• CSR Expenditure: ₹11 million spent directly on projects + ₹64.30 million transferred to RPSG Trust.
• Training & Development: ₹288.72 million invested in employee upskilling.

Reported ROI #

Social Return on Investment (SROI) analysis for the Green IT skills project in West Bengal reported a return of ₹5.91 for every ₹1 invested.

Implied ROI/Value Creation #

Investments in energy efficiency, renewable energy, and waste reduction partnerships likely yield operational cost savings and environmental benefits. Investments in employee well-being, D&I, and talent development contribute to reduced attrition, potentially lowering recruitment/training costs and enhancing productivity.

ESG Ratings and Peer Comparison #

Ratings & Recognitions #

• Dow Jones Sustainability Index (DJSI): Inducted with 96th percentile rank, ESG & CSA score of 62.
• S&P Global Sustainability Yearbook 2024: Included as ‘Sustainability Yearbook Member’.
• CDP: Climate Change score ‘C’; Supplier Engagement Rating ‘B-’.
• EcoVadis: Bronze rating.
• UNGC: Signatory.
• HYSEA ESG Conclave: Received ‘Special Mention’ award.

Peer Comparison #

The DJSI percentile rank (96th) provides a quantitative benchmark against global peers in the assessed industry.

Regulatory Compliance and Future Preparations #

Compliance Status #

Annual Report sections confirm compliance with key regulations.

Future Preparations #

The company explicitly stated it has initiated alignment with double materiality principles and integrated its materiality framework into the Enterprise Risk Management (ERM) process. Commitment to setting specific, long-term ESG targets suggests ongoing adaptation to future expectations.

Firstsource Solutions Limited: Financial Analysis & Future Outlook #

Management Guidance and Assumptions #

• Revenue Target: USD 1 billion revenue run-rate by FY26.
• Growth Strategy: Focus on domain expertise, technological disruptions (AI), cross-selling/up-selling, expanding capabilities, and new geographies.
• Profitability: Aim to improve margins by 50-75 bps annually through cost optimization and operational efficiencies.
• Technological Assumption: AI (Generative AI) as a key driver of disruption and competitive differentiation.
• Macroeconomic Assumption: Focus on growth and efficiency amidst macro uncertainties.
• M&A Assumption: Synergistic acquisition of QBSS for RCM capability enhancement.

Market Growth Forecasts #

• Global BPS Market: Growth slowed to 3.4% in FY24.
• Indian BPS Exports: Growth slowed to 2.6% YoY in FY24.
• BFS: Headwinds from interest rates and regulatory pressures, opportunities in specialized services and next-gen banks/fintech.
• Healthcare: Focus on efficiency, cost optimization, and value-based care; RCM solutions market growing 8-10% annually.
• CMT: Transformative changes driven by technology and consumer behavior; focus on GenAI, cost reduction, and digital learning.
• Diverse (Utilities): Robust demand driven by digitalization trends.

Planned Strategic Initiatives (One Firstsource Framework) #

• Simplify Organization: Streamlined structure for faster decision-making.
• Cross-sell/Up-sell: Dedicated teams for strategic accounts and expanded go-to-market team.
• Expand Capabilities: Building adjacencies, M&A, and geographic expansion.
• Amplify Brand: Increased engagement with analysts/advisors and new brand positioning.
• Technology Infusion: Embedding AI into frameworks/platforms and expanding partner ecosystem.
• Elevate Employee Experience: Focus on engagement, talent development, and reduced attrition.
• Improve Profitability: Driving cost optimization and productivity gains for margin expansion.

Capital Expenditure Plans #

• FY24 Capex: ₹851.04 million towards refurbishment, technology upgrades, and new centers.
• ESG/Green IT: Implemented SmartRow solution and replacement of desktops with energy-efficient alternatives.
• Investments: Cloud infrastructure (Azure, AWS, Google), SaaS solutions (Salesforce, SAP SuccessFactors, Office365), cloud security (Zscaler).
• Global Capability Center: Setting up a center for EdTech in Hyderabad.
• AI Capabilities: Ongoing investment in FirstSense.AI, FirstCoLLab, and partner ecosystem.

Efficiency Improvement Targets #

• Margin Expansion: Target of 50-75 bps annual EBIT margin improvement.
• Cost Optimization: Doubled span of control and centralized global payroll and employee shared services.
• Operational Efficiency: Leveraging technology to improve productivity and streamline processes.
• Attrition Reduction: Achieved ~17% YoY reduction in attrition rates.

Potential Challenges and Opportunities #

• Challenges (Risks):
  • Macroeconomic Uncertainty
  • Technology Disruption
  • Competitive Intensity
  • Client Concentration
  • Talent Management
  • Cybersecurity/Data Privacy
  • Geopolitical/Regulatory Risks
  • Currency Volatility
• Opportunities:
  • Market Share Gain
  • AI Leadership
  • Cross-selling/Up-selling
  • New Markets/Adjacencies
  • M&A Synergies
  • Client Transformation Needs
  • Disrupting Traditional Models

Scenario Analysis and Sensitivity (Goodwill Impairment Testing) #

• Methodology: Value-in-use calculation based on discounted cash flow model for CGUs.
• Key Assumptions: Long-term average growth rates (2%-10%), weighted average cost of capital (13.5%-19%), estimated operating margins.
• Sensitivity Analysis: No probable scenario was identified where the recoverable amount of any CGU would decrease below its carrying amount.
• MAT Credit Recoverability: Assessment involves forecasts of future taxable income, sensitivity analysis did not indicate non-recoverability.

Financial Analysis Report: Firstsource Solutions Limited (FY 2023-24) #

Auditor’s Opinion and Qualifications #

• Consolidated Financial Statements: The Independent Auditor, Deloitte Haskins & Sells LLP, issued an unmodified opinion, stating that the consolidated financial statements give a true and fair view in conformity with Ind AS and the Companies Act, 2013. No qualifications were mentioned in the main opinion. Key Audit Matters highlighted were: Revenue recognition and measurement for un-invoiced amounts, Impairment assessment of goodwill, and Assessment of recoverability of Minimum Alternate Tax (MAT) Credit for SEZ units. The report notes reliance on unaudited financial information for an associate, deemed immaterial.
• Standalone Financial Statements: The Independent Auditor issued an unmodified opinion, stating that the standalone financial statements give a true and fair view in conformity with Ind AS and the Companies Act, 2013. No qualifications were mentioned. Key Audit Matters highlighted were: Revenue recognition and measurement for un-invoiced amounts, and Assessment of recoverability of Minimum Alternate Tax (MAT) Credit for SEZ units.

Key Accounting Policies and Changes #

• Basis of Preparation: Financial statements are prepared under the historical cost convention on an accrual basis, complying with Indian Accounting Standards (Ind AS), the Companies Act, 2013, and SEBI guidelines.
• Revenue Recognition: Revenue is recognized based on the pattern of benefits from performance obligations transferred to the customer. Unit price contracts are measured by units delivered multiplied by agreed price; time and material contracts by effort expended multiplied by agreed price. Variable considerations (discounts, rebates, incentives) are estimated and reassessed each reporting period.
• Goodwill: Goodwill represents the excess cost of acquisition over the net fair value of identifiable assets/liabilities. It is measured at cost less accumulated impairment losses and tested for impairment annually or when indicators exist.
• Impairment: Expected Credit Loss (ECL) model used for financial assets. Lifetime ECL is used for trade receivables. Goodwill impairment is tested at the CGU level based on value-in-use or fair value less cost to sell, involving significant estimates (growth rates, discount rates, margins). Other non-financial assets are evaluated when impairment indicators arise.
• Leases (Ind AS 116): Right-of-use assets and lease liabilities are recognized, measured at the present value of lease payments. Significant judgment is applied in determining the lease term, including extension/termination options.
• Income Taxes: Current and deferred taxes are recognized. Deferred tax assets (including MAT credit) are recognized when it is probable that future taxable profit will be available. Significant judgment is involved in determining provisions and recoverability, especially concerning SEZ benefits.
• Changes/Recent Pronouncements: No new standards or amendments notified by MCA were applicable for FY 2023-24. The impact of the amendment to Ind AS 37 (Onerous Contracts) effective from April 1, 2022, was accounted for in the previous period’s opening retained earnings.

Internal Control Effectiveness #

• Consolidated: The auditor issued an unmodified opinion, stating that the Company, its subsidiary company, and its associate company (incorporated in India) have, in all material respects, adequate internal financial controls with reference to consolidated financial statements, and such controls were operating effectively as at March 31, 2024. This is based on the auditor’s work and reliance on the unaudited information for the associate.
• Standalone: The auditor issued an unmodified opinion, stating that the Company has, in all material respects, adequate internal financial controls with reference to standalone financial statements, and such controls were operating effectively as at March 31, 2024.
• Audit Trail Exception: Both Consolidated and Standalone Auditor’s Reports noted that while the accounting software used had an audit trail feature which operated during the year, the audit trail was not enabled at the database level to log any direct data changes. No instances of tampering were noted during the audit.

Regulatory Compliance Status #

• Companies Act & SEBI Regulations: The Auditors’ reports and the Secretarial Audit Report confirm compliance with relevant provisions of the Companies Act, 2013, SEBI regulations (including Listing Regulations), SCRA, Depositories Act, FEMA (for FDI/ODI), and applicable Secretarial Standards.
• Specific Laws: The Secretarial Audit Report confirms general compliance with The Special Economic Zones Act, 2005, and the Information Technology Act, 2000, on a test-check basis.
• Penalties/Strictures: The Corporate Governance report states no penalties/strictures were imposed by Stock Exchanges, SEBI, or other capital market regulatory authorities during the last three years.
• Disclosures: The Directors’ Report confirms compliance with disclosures related to loans, investments, guarantees, deposits, etc. The Corporate Governance report confirms compliance with listing regulations. The Secretarial Audit Report noted a disclosure regarding a delayed announcement of the record date for interim dividend but confirmed overall compliance.
• Director Disqualification: Auditors confirmed, based on representations, that no director is disqualified under Section 164(2) of the Companies Act. A separate certificate confirmed no director was debarred by SEBI, MCA, or other authorities as of March 31, 2024.

Legal Proceedings and Potential Impact #

• Tax Matters: Pending litigations primarily relate to Income Tax and Service Tax demands.
  • Income Tax demands (Consolidated & Standalone) amount to ₹1,917.41 million across various assessment years. The Company has disputed these, citing favorable decisions or grounds, and considers the provision for taxation adequate. Payments under protest have been made for specific assessment years (totaling ~₹110.38 million).
  • Service Tax demands (Consolidated & Standalone) amount to ₹192.52 million, related to input credit and FCCB expenses, which are disputed in appeal. The Company expects favorable outcomes.
• Overall Assessment: Management has reviewed pending litigations, made provisions where required, and disclosed contingent liabilities. They do not expect the outcomes to have a materially adverse effect on the financial statements. The Auditors’ reports acknowledge the disclosure of pending litigations’ impact.

Related Party Transactions #

• All contracts/arrangements/transactions entered into with related parties during FY 2023-24 were reported to be on an arm’s length basis and in the ordinary course of business.
• No materially significant related party transactions requiring Board or Shareholder approval under the Act or LODR, or that might have potential conflicts of interest, were reported.
• Prior omnibus approval was obtained for repetitive transactions, and all related party transactions were placed before the Audit Committee.
• Disclosures are provided in Note 25 (Consolidated) and Note 27 (Standalone) and Form AOC-2 (Annexure IV to Directors’ Report).

Subsequent Events #

• The Board of Directors approved the financial statements on May 3, 2024. No other subsequent events requiring disclosure or adjustment were reported in the notes (Note 35 Consolidated, Note 36 Standalone).

Accounting Quality Analysis #

• The accounting quality appears reasonable, adhering to Ind AS principles.
• Key Audit Matters highlight areas requiring significant management judgment and estimation, particularly in revenue recognition for un-invoiced amounts (reliant on quantifying service units and applying correct pricing/variable considerations), goodwill impairment (dependent on future cash flow forecasts, growth rates, and discount rates), and the recoverability of MAT credit (reliant on forecasts of future taxable profits, especially from SEZ units).
• The consistent application of accounting policies is noted. The auditors have issued unmodified opinions, indicating the financial statements present a true and fair view despite these inherent estimation uncertainties.
• The noted exception regarding the audit trail not being enabled at the database level, while not resulting in observed tampering, represents a weakness in the control environment around the accounting software.

Regulatory Risk Assessment #

• Regulatory risk appears moderate.
• Compliance with major regulations (Companies Act, SEBI LODR) is confirmed by auditors and secretarial auditors. Internal controls over financial reporting are deemed adequate and effective.
• However, substantial pending tax litigations (Income Tax and Service Tax) represent a specific area of regulatory risk. While management is confident of favorable outcomes and provisions are deemed adequate, adverse rulings could have a financial impact.
• The noted exception regarding the audit trail at the database level, while compliant with rules effective from April 1, 2023, could attract scrutiny regarding the robustness of IT controls around financial records if not fully addressed prospectively.
• The need for shareholder approval for the continuation of directors aged over 75 (Mr. Pradip Kumar Khaitan) and those serving long terms without recent shareholder approval (Dr. Sanjiv Goenka) reflects adherence to recent SEBI amendments, mitigating governance risks in this area.