Firstsource Solutions Ltd
Directors Reports
Dear Members,
Directors of your Company take great pleasure in presenting the 22nd
Annual Report on the business and operations of your Company and the Audited Financial
Statements for the financial year ended March 31, 2023.
FINANCIAL RESULTS:
Pursuant to the notificationdated February 16, 2015 issued by the
Ministry of Corporate Affairs, the Company has adopted the Indian Accounting Standards
("Ind AS") notified under the Companies (Indian Accounting Standards) Rules,
2015 w.e.f. April 01, 2016. The performance of the Company for the FY 2022-23 is
summarized herein below: (` in million)
| Particulars |
Consolidated |
Standalone |
|
FY 2022-23 |
FY 2021-22 |
FY 2022-23 |
FY 2021-22 |
| Total Income |
61,531.68 |
59,217.08 |
14,094.44 |
16,227.56 |
| Profit Before Interest and Depreciation |
9,573.55 |
9,604.13 |
4,148.34 |
5,616.24 |
| Interest and Finance Charges |
789.70 |
639.39 |
149.41 |
200.68 |
| Depreciation/Amortization |
2,631.70 |
2,493.73 |
888.38 |
881.98 |
| Profit Before Tax and share in net profit of associate |
6,152.15 |
6,471.01 |
3,110.55 |
4,533.58 |
| Share in net profit of associate |
- |
- |
- |
- |
| before tax and after share in net profit activities
Profitfromordinary ofassociate |
6,152.15 |
6,471.01 |
3,110.55 |
4,533.58 |
| Provision for Taxation (including Deferred Tax Charge/Credit) |
1,015.03 |
1,105.71 |
627.13 |
657.69 |
| Net Profit After Tax |
5,137.12 |
5,365.30 |
2,483.42 |
3,875.89 |
| Owners of the Company |
5,137.20 |
5,373.74 |
2,483.42 |
3,875.89 |
| Non-controlling Interest |
(0.08) |
(8.44) |
- |
- |
| Total |
5,137.12 |
5,365.30 |
2,483.42 |
3,875.89 |
| Opening Balance in Profit & Loss Account |
15,524.68 |
13,810.25 |
15,210.92 |
13,669.95 |
| Closing Balance in Profit & Loss Account |
17,425.98 |
15,524.68 |
15,241.85 |
15,210.92 |
| Earning Per Share ( ) - Basic |
7.55 |
7.90 |
3.65 |
5.70 |
| Earning Per Share ( ) - Diluted |
7.32 |
7.62 |
3.54 |
5.49 |
RESULT OF OPERATIONS:
The consolidated total income increased from 59,217.08 million to
61,531.68 million, an increase of 3.91% over the previous financial year. The consolidated
Net Profit After Tax decreased from 5,365.30 million to 5,137.12 million, an decrease of
4.25% over the previous financial year. The detailed analysis of the consolidated results
forming part of the Management Discussion and Analysis Report is provided separately in
the Annual Report.
The standalone total income decreased from 16,227.56 million to
14,094.44 million, a decrease of 13.15% over the previous financial year. The standalone
Profit After Tax decreased from 3,875.89 million to 2,483.42 million, a decrease of 35.93%
over the previous financial year.
GLOBAL OPERATION CENTERS:
The Company, on a consolidated basis has 48 global operation centers as
on March 31, 2023. The centers are located across the US, the UK, India, the Philippines
and the Mexico. 11 of the Company's operation centers are located in India which
includes Chennai (2), Mumbai (2), Bangalore (2), and 1 each in Trichy, US, Pondicherry,
Hyderabad, Indore & Vijayawada cities.
10 in the UK, 2 in the Philippines and 1 in Mexico.
During the year, the Company incurred capital expenditure of 536.22
million mainly towards refurbishment and maintenance of operation centers, technology
upgrade and setting up of new operations centers.
QUALITY INITIATIVES:
The Company follows global best practices and the quality framework is
based on COPC principles. The Company uses innovative techniques like Speech & Text
Analytics, Robotic Process Automation and Intelligent Action improvements across. Also, as
part of the Quality Management System, the Company has embraced ISO 9001:2008. The Company
continuesto follow process improvement methodologies like Six Sigma, Lean and Kaizen.
AWARDS AND ACCOLADES:
The Company received the following awards and accolades during the year
under review.
Awards:
Named as ‘Disruptor' in Avasant Banking Process
Transformation 2022 RadarView and Avasant Contact Center Business Process Transformation
2022 RadarView.
Named as ‘Innovator' in Avasant Claims Processing Business
Process Transformation 2022 RadarView.
Named as Disruptors in Avasant's Contact Center Business Process
Transformation 2022 RadarView.
Named as ‘Disruptor' in HFS Horizons for The Best Service
Providers for Retail Banks, 2023.
Listed in select categories as HFS' Top 10: Healthcare Provider
(HCP) Service Providers, 2022.
Listed as ‘Disruptor' in HFS Horizons' Healthcare Payer
Service Providers, 2022.
Named as ‘Leader' in UK & Europe Quadrant in ISG Provider
Lens Contact Center - Customer Experience Services 2022.
Named ‘Leaders' in ISG Provider Lens Healthcare Digital
Services Study 2022 U.S.
Named ‘Leaders' in ISG Provider Lens Healthcare Payer Digital
Services Study.
Named as ‘Major Contender' by Everest Group for Everest
Healthcare Customer Experience Management (CXM) Services in North America PEAK Matrix.
Mentioned in Everest Group BPS Top 50 2022.
Named as ‘Leader' in Mortgage and Loan Services 2022 NEAT
results by NelsonHall.
Recognized in Bloomberg Gender-Equality Index 2022.
Gold winner for Customers at the Heart of Everything , Customer Driven
Business Change and Transformation and Best Customer Service by European CXA'22
Customer Experience Awards.
Awarded for our ‘Strong Leverage of Tier 2 & Tier 3
Cities'at the NASSCOM Business Process Innovation Awards 2022.
Awarded Silver at the Brandon Hall HCM excellence awards 2022 for Best
Hybrid Learning.
Rated ‘A-100' by SecurityScorecard - for our robust security
posture across technology platforms, cloud solutions and applications, and our best
practices-based security protocols.
Recognized as a Level 3 Disability Confident Leader in the UK.
Recognized as Top Mortgage Employer by Mortgage Professional America,
2022.
Silver winner for the ‘Most Effective Learning and Development
Initiative' by European Contact Centre & Customer Service Awards (ECCCSA).
Achieved SILVER in the Most Effective Distributed Workforce category by
UK National Contact Center Awards, 2022.
Awarded with Business Services Project of the Year by Global Sourcing
Association, UK.
Received CSR Leadership Award at the 4th Edition Social Responsibility
Summit & Awards 2022.
Ranked second in the COVID-19 Warrior category by India CSR Leadership
Summit 2022.
CONSOLIDATED FINANCIAL STATEMENTS:
In accordance with Section 129(3) of the Companies Act, 2013 and in
viewofnotification issued by the Ministry of Corporate Affairs on Ind-AS, the Company has
prepared consolidated financial statements of the Company and all its subsidiaries as per
Ind-AS, which forms part of this Annual Report.
DIVIDEND:
The Board approved and declared an interim dividend on February 02,
2023 at the rate of 35% i.e. 3.5 per share of 10/- each.
The interim dividend for FY 2022-23 aggregated to 2,219.06 million (net
of applicable TDS).
The Dividend Distribution Policy of the Company was approved by the
Board at its meeting held on August 08, 2017 and is available on the Company's
website at
https://www.firstsource.com/wp-content/uploads/2023/03/
Dividend-Distribution-Policy.pdf
TRANSFER TO RESERVE:
The Board of Directors of the Company (hereinafter referred to as the
"Board") have not recommended transfer of any amount of profit to reserves
during the year under review. Hence, the remaining amount of profit for the financial year
under review has been carried forward to the Statement of Profit & Loss
HUMAN RESOURCES:
On a consolidated basis, the Company has 23,018 employees as of March
31, 2023.
PARTICULARS OF THE EMPLOYEES AND RELATED DISCLOSURES:
Disclosures pertaining to remuneration and other details as required
under Section197(12) of the Companies Act, 2013 ("Act") read with Rule 5(1) of
the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 form part
of this Report and are annexed as Annexure I.
The statement containing particulars of employees as required under
Section 197(12) of the Act read with Rules 5(2) and 5(3) of the Companies (Appointment and
Remuneration of Managerial Personnel) Rules, 2014, is provided in a separate annexure
forming part of this Report. Further, the Report and the accounts are being sent to the
members excluding the aforesaid annexure. In terms of Section 136 of the Act, the said
annexure is open for inspection at the Registered Office of the Company. Any shareholder
interested in obtaining a copy of the same may write to the Company Secretary.
PUBLIC DEPOSITS:
During the year under review, your Company has not accepted any
deposits under Section 73 of the Act, and as such, no amount on account of principal or
interest on public deposits was outstanding as of March 31, 2023.
PARTICULARS OF LOANS, INVESTMENTS, GUARANTEES AND SECURITIES:
Particulars of loans given, investments made, guarantees given and
securities provided along with the purpose for which the loan or guarantee or security is
proposed to be utilized by the recipient are provided in the notes to the standalone
financial statements. (Please refer to Note No. 6 and 31 to the standalone financial
statements).
CREDIT RATINGS:
During the year under review, the rating given by CARE and CRISIL are
mentioned herein below:
(i) CARE Rating:
| Long/Short term |
CARE A+:Stable/CARE A1+ |
| Bank Facilities |
(Single A plus; Outlook:Stable/A |
|
One plus) |
| Commercial Paper |
CARE A1+ |
|
(A One plus) |
(ii) CRISIL Rating: |
|
| Long/Short term |
CRISIL A+/Stable |
| Bank Facilities |
|
| Commercial Paper |
CRISIL A1 |
CORPORATE SOCIAL RESPONSIBILITY INITIATIVES:
The Company seeks to be a good corporate its operations and
activities.The Company commits to operating in an economically, socially and
environmentally responsible manner whilst balancing the interests of diverse stakeholders.
Our CSR Policy is governed and guided by our Group's corporate vision to enable
inclusive growth and our aspiration to be India's leading business group serving
multiplemarket segments, for our customers, shareholders, employees and community. The
Company seeks to undertake programmes in the areas of Healthcare, Education, Environment,
Arts & Culture, Promotion Sports as well as support initiatives towards Gender
Equality and Empowerment of Women.
The Board constituted a Corporate Social Responsibility (CSR)
Committee, pursuant to Section 135 of the Act, consisting of Mr Shashwat Goenka
(Chairman), Mr Vipul Khanna, Mr Subrata Talukdar and Mr Anjani K. Agrawal as its members.
The CSR Committee meets at least once in a year. During the year under review, the
Committee met once. The details of CSR Committee and its meetings are given in Report on
Corporate Governance forming part of the Annual Report. The CSR Committee has framed and
formulatedactivities to CSRPolicyindicating the be undertaken by the Company, in
accordance with Schedule VII of the Act and the Companies (Corporate Social Responsibility
Policy) Rules, 2014 issued under the Act. The same has also been approved by the Board.
The CSR policy is available on the website of the Company at the link
https://www.firstsource.com/wp-content/uploads/2023/04/
Firstsource-CSR-Policy.pdf
The Annual Report on CSR Activities, and the SEBI (LODR) Regulations,
2015 forms an integral part Report and is appended as Annexure II. The details of focus
areas of engagement as mentioned in the CSR Policy of the are mentioned in the said Annual
Report on CSR Activities.
The CSR activities, as per the be undertaken by the Company through a
registered trust. Accordingly, "RP - Sanjiv Goenka Group CSR Trust" ("Group
CSR Trust") was formed along with other Group Companiestopursue to the CSR activities
as mentioned in the CSR Policy of the Company.
During the year, the Company has spent an amount of 17.68 million. The
Company has been contributing of amount of its CSR obligation up an International
Baccalaureate School in Kolkata taken up by the Group CSR Trust which is identified as an
‘ongoing project' as defined in the Policy) Rules, 2014. Accordingly, the
Company had transferred 50.68 million. to Group CSR Trust for the above mentioned cause
towards CSR expenditure for FY 2022-23 before March 31, 2023.
The CSR at the Company is a platform for giving back to the communities
in which we live and work. The Company looks to engage employees in focus areas where
possible through programmes such as employee volunteering, payroll giving, participating
response to disasters.
India:
Launched "Every Leader a Volunteer" campaign in Firstsource
to promote volunteering at the top level. In the first year launch of this campaign, the
Company saw 17% across globe participating in various programs contributing 600+ hours; in
all aspects of
Leaders have empowered young minds through Mentorship session, Virtual
classroom teaching, Career guidance, Women Empowerment session, livelihood support
projects along with sharing their deep expertise providing Probono support in the area of
Tech and Consultingand also supporting launch and milestones of our CSR Projects;
Structured high impact projects in partnership with nonprofits was
started. FFE Mentorship Program are some examples where our employee volunteers of
committed to support on a long months teaching or mentoring students;
Volunteers supported Govt. school students by enabling various skill
developmentsessionsby giving their time and knowledge. Experts from HR team conducted mock
interview & resume building sessions to graduates from Youth Empowerment Programs;
Volunteers took part in varied virtual awareness sessions on aerobic
way of home composting, recycling & reusability, waste management, ocean and its
importance, growing microgreens, sign language, Cyber safety, Tangram making, Women rights
and safety;
As part of observing International day for People with Disability, the
Company had organized Industrial visit for differently abled students who are supported by
Samarthanam Trust in Bangalore and Hyderabad. 250 Tactile greeting cards for blind schools
were made in Bangalore, Chennai, Hyderabad and Vijayawada offices;
As part of International Women's Day, volunteers participated as
stipulated under the Act in various initiatives to empower women beneficiaries like - of
this Virtual Menstrual hygiene session for the girl students from underrepresented
communities, to women beneficiaries, financial literacy and motivational sessions by women
leaders. Further, felicitation function planned across our centres for women supporting
staffs to of the Act, may also recognize their efforts;
Volunteers continued their support by enabling various upskilling from
varied groups of Community such as women elderly, People with Disability and women
beneficiary Baale Mane and Cheshire home.
Philippines:
Employee volunteers from Manila, Philippines visited Father Luis Amigo
home and engaged the children by organizing ‘Poster making activity' on see
tomorrow';
Firstsource volunteers supported the REAVO volunteers with F&B
requirements during Sinulog Grand Festival;
Volunteers from Cebu took part in beach clean-up activity organized in
partnership with REAVO NGO which works towards Disaster and Rescue operations in the
Philippines;
Volunteers supported in donationof food and essentials to Ready Relief
which aims tolendhelptofamiliesheadedby aisers. Solo Parents.
USA:
Volunteers took part in donation drive and collected Blankets, Towel
sets, bath mats, shower caps, curtains, hygiene products, pots and pans, cleaning
supplies, laundry detergent, Gift cards, new board, card games, books, Mindfulness
journal, Backpacks, Markers, coloured pencils and pencils through in-kind donation for
Longview charity;
On the occasion of Halloween, US opened up an employee st payroll
donation and open donation of candies at the Companies US Lousiville office contributed
through their payroll deduction program while a requested that few of the employees
dropped in candies at Children's hospital;
As part of Black History Month campaign, US volunteers reviewed the
LinkedIn profiles of Black youth. The goal was to celebrate their achievements and provide
valuable feedback team in to help improve their professional profiles.
UK:
As part of international women's day celebration, in collaboration
with Goodera NGO UK volunteers participated in Trivia night on women's history in pop
culture and gained awareness about the inspiring achievements of famous women in pop
culture;
UK volunteers took part in fundraising activity for Breast Cancer Now
NGO with their Wear it Pink day to raise money ate, monitor and for those going through
breast cancer and to raise awareness on how to check for early signs of breast cancer
throughout the site. They also had set up a bun sale to sell buns as a ‘Pay what you
can' initiative and had 2 bakers who provided home made goods to be included in the
stall;
UK Firstsourcers supported a local football team Don Bosco's under
8 & Newell FC in the Foyle cup tournament as part of promoting sport;
As part of Pride Month celebrations, volunteers from UK participated in
virtual volunteering opportunity to supporttheLGBTQIA+communitybycreatingimpactful digital
posters.
Global Employee Giving:
Our employees across globe continuedto show their love and affectionfor
communities by contributing regularly for charity through various fund raising and payroll
program.
Purpose led Employee Giving projects in India: In India through
Give India Payroll program 12K+ Lives impacted through various projects such as Gift a
Smile, Book A Smile, Art truck project, Groceries support and Donation of Sports Equipment
for the topic ‘The world that I want to Children Home.
US Fund Raising: US employees supported fund raising for various
causes such as Norton Candy Drive, Susan G Koman Cancer patient support fund drive.
UK Payroll Giving and Fund Raising: Employees donate to regular
payroll program along with supporting fund raising for UK charity organizations
buns&cakes,takingpartin5Krun/walkandraffle
Special Projects:
Right To Education Act:5 full time employees (LGBQT+) helped in
reaching 5,052 parents and identified 1,294 eligible children and enabled 774 of them to
get admission in reputed private schools though RTE act. colouring BHUMI's
Scholarship support: 3 full time employees (LGBQT+) Gateway made 266 calls
through which 50 students were identified for BHUMI scholarship which amounted to 1.06
million.
fir its kind, during the month SupportingWomenScholars:Ina of
July, the Company have on-boarded 12 female scholars pursuing their graduation. A few days
ago, a non-profit organization named the Company provide HopeWorksFoundation, part-time
employment opportunities for their girl scholars who are from economically
underrepresented communities.
Badminton tournament for people with disability: Supported
organizing the Badminton Deaf enabled foundation tournament for students with speech and
hearing impairment through a one-time donation of 0.05 million.
Job Fair support: One of our full time employees (LGBTQ+) supported
the "We are your Voice" team by making calls to 70 PWD candidates to help them
in registering for Job fair.
RISK MANAGEMENT:
The Company has implemented a comprehensive and fully integrated
‘Enterprise Risk Management' framework in order
toanticipate,identify,measure,manage, report the principal risks and uncertainties that
can impact its ability to achieve its strategic business objectives.
The Enterprise Risk Management drives a common integrated view of risks
and optimal riskmitigationresponses. This integration is enabled by alignment of Risk
Management and Internal Audit methodologies and processes in order to maximize enterprise
value of the Company and ensure high value creation for our stakeholdersoveratime.
The details of the ‘Enterprise Risk Management' framework
with details of the principal risks and the plans to mitigate the same are given in the
‘Risk Management Report' section of the ‘Management Discussion and Analysis
Report' which forms part of this Annual Report.
Further in view of SEBI (Listing Obligations and Disclosure
Requirements) Regulations, April 01, 2019, the Board constituted a Risk Management
Committee
INTERNAL FINANCIAL CONTROLS:
The Company has in place adequate internal financial controls with
reference to financial statements. Such internal financial controls over financial
reporting are operating effectively and the Statutory Auditor has also expressed their
opinion on the same in the Annexures to the Auditors Report.
WHISTLE BLOWER POLICY:
The Company has a Whistle Blower Policy (the "WB Policy")
with a view to provide vigil mechanism to Directors, Employees and other Stakeholders to
disclose instances of wrongdoing in the workplace and report instances of unethical
behavior, actual or suspected fraud or violation of the Company's code of conduct or
ethics policy. The WB Policy also states that this mechanism provides for adequate
safeguards against victimization of Director(s)/Employees who avail of the mechanism and
also provides for direct access to the Chairperson of the Audit Committee in exceptional
on the website of the Company and the details of the same are provided in the ‘Report
on Corporate Governance' forming part of this Annual Report.
The WB Policy is available on the website of the Company at
https://www.firstsource.com/wp-content/uploads/2023/03/
WHISTLE-BLOWER-POLICY-6.0.pdf
PREVENTION OF SEXUAL HARRASSMENT POLICY:
The Company has a ‘Prevention of Sexual Harassment Policy' in
force in compliance with the requirements of Sexual Harassment of Women at Workplace
(Prevention, Prohibition and Redressal) Act, 2013. The objective of this Policy is to
ensure a safe, secure and congenial work environment where employees deliver their best
without any inhibition, threat Tolerance to any form of harassment especially if it is
sexual in nature. The complaints filed under the Policy are reported to the Audit
Committee at its quarterly meetings with details of action taken thereon.
It is confirmed that during the year under review, the Company has
complied with applicable provisions in relation to sexual harassment of Women at Workplace
(Prevention, Prohibition and Redressal) Act, 2013, including the provisions relating to
the constitution of Internal Complaints Committee under the said
BOARD OF DIRECTORS:
During the year under review, the following are the changes in the
Board of Directors:
Mr Pradip Kumar Khaitan (DIN 00004821) retires by rotation and being
eligible, has offered himself for re-appointment at (" theensuingAnnualGeneralMeeting
The Board appointed Mr Utsav Parekh (DIN 00027642) as an Additional
Director (Non-Executive, Independent) on the Board of the Company w.e.f. November 02,
2022. His appointment was approved by members through Postal Ballot on
December15,2022foratermofthree(3)consecutive years, effective from November 02, 2022. The
Company has received the declaration from Mr Utsav Parekh confirming that he meets the
criteria of independence as prescribed under Section 149(6) of the Act.
Ms Grace Koshie ceased to be an Independent Director on account of
completion of her term with effect from the closing of business hours on February 08, 2023
by afflux of time. The Board places on record its appreciation towards valuable
contribution made by her during her tenure as a Director of the Company.
All the Independent Directors of the Company have given declarations
that they meet the criteria of independence as laid down under Section 149(6) of the Act.
BOARD AND AUDIT COMMITTEE MEETINGS:
| During the FY 2022-23, the following four (4) Board Meetings were held
on: |
| 1. May 05, 2022 |
| 2. August 03, 2022 |
| 3. November 02, 2022 |
| 4. February 02, 2023 |
| During the FY 2022-23, the following four (4) Audit Committee Meetings
were held on: |
| 1. May 05, 2022 |
| 2. August 02, 2022 |
| 3. November 02, 2022 |
| 4. February 02, 2023 |
Time gap between any two meetings was not more than one hundred twenty
(120) days.
The full details of the said meetings are given in the ‘Report on
Corporate Governance' forming part of this Annual Report.
THE FAMILIARISATION PROGRAMMES FOR INDEPENDENT DIRECTORS:
The Company has put in place a system to familiarise its Independent
Directors with the Company, their roles, rights & responsibilities in the Company,
nature of the industry in which the Company operates, business model of the Company, etc.
The details of such familiarisation programmes are put up on the website of the Company at
the below link:
https://www.firstsource.com/wp-content/uploads/2023/03/ .
Policy-on-familiarisation-of-Independent-Directors.pdf
BOARD EVALUATION:
(i) Performance Evaluationof the Independent Directors and Other
Individual Directors:
The Company has framed a policy for Appointment of Directors and Senior
Management and Evaluation of Directors' Performance ("Board Evaluation
Policy"). The said policy sets out criteria for performance evaluation of Independent
Directors, other Non-Executive Directors and the Executive Directors.
Pursuant to the provisions of the Act and the Securities and Exchange
Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015
("Listing Regulations"), the Board carries out the performance evaluation of all
the Directors (including Independent Directors) on the basis of recommendation of the
Nomination and Remuneration Committee and the criteria mentioned in the Board Evaluation
Policy. The Board decided that the performance evaluation of Directors should be done by
the entire Board of Directors excluding the Director being evaluated and unanimously
agreed on the following assessment criteria for evaluation of Directors' performance:
Attendance and active participation in the Meetings;
Bringing one's own experience to bear on the items for discussion;
Governance covering Awareness and Observance; and
Value addition to the business aspects of the Company.
(ii) Performance Evaluation of Executive Director:
The performance of the MD & CEO is evaluated on the basis of
achievement of performance targets/criteria given to him bytheBoardfromtime
(iii) Performance Evaluation by the Board of its own ees: Committ
performanceandits
The performance of the Board is evaluated by the Board in the overall
context of understanding by the Board of the Company's principle and values,
philosophy and mission statement, strategic and business plans and demonstrating e
Directors; this through its action on important matters, the effectiveness of the Board
and the respective Committees in providing guidance to the Management of the Company and
keeping them informed, open communication, the constructive participation of members and
prompt decision making, emeetings,constructiv level of attendance the Board
participation in the discussion on the Agenda items, monitoring cash flow, profitability,
income & expenses, productivity & other financial indicators, so as to ensure that
the Company achieves its planned results, effective discharge of the functions and roles
of the Board, etc.
The performance of the Committees is evaluated by the members of the
respective Committees on the basis of the Committee as outlined meetingsheld at its
Charter, Committee appropriate meetingsbeing frequency, length of the appropriate, open
communication & constructive participation of members and prompt decision-making, etc.
POLICY ON DIRECTORS' APPOINTMENT AND REMUNERATION: ee/(s) is
as The criteria for Directors' appointment and for determining qualification,
positive attributes and independence of a Director as mentioned in the ‘Policy for
Appointment of Senior Management and Evaluation of Directors' Performance' in
terms of Section 178(3) of the Act is mentioned below:
Appointment criteria and quali cations:
Committee shall identify TheNomination and Remuneration and ascertain
the integrity, qualifications, expertise experience of the person for appointment as
Director, Key Managerial Personnel ("KMP") or at Senior Management level and
recommend the same to the Board for appointment, if found suitable;
A person should possess adequate qualifications, expertise he/she is
considered andexperienceforthe position for appointment. The Committee has discretion to
decide whether by a person are sufficient/satisfactory for the concerned position; and
The Company shall not appoint or continue the employment of any person
as Managing Director/Whole-Time Director who has attained the age of seventy years,
provided that the term of the person holding this position may be extended beyond the age
of seventy years with the approval of shareholders by passing resolutionbased on
the statement special pursuant totheprovisionsofSection102 of the Act annexed to the
notice or such motion indicating the justification extension of appointment beyond seventy
years.
Meeting of Independent Directors:
There should be atleast one meeting of Independent Directors in a year,
without the attendance of non-independent Directors and members of the Management. One (1)
meeting of the Independent Directors of the Company was held on February 01, 2023.
The Independent Directors meeting:
Review the performance of non-independent Directors including MD &
CEO and the Board as a whole;
Review the performance of the Chairperson of the Company, taking into
accounttheviewsofExecutive Directors and Non-
Assess the quality, quantity and timeliness of the flow of information
between the Company's Management and the Board that is necessary for the Board to
effectively and reasonably perform its duties.
REMUNERATION POLICY:
The Board, on the recommendation of the Nomination and Remuneration
Committee framed a Remuneration Policy for Non-Executive Directors (including Independent
Directors) and a Remuneration Policy for Key Managerial Personnel and other Employees of
the Company. The details of Remuneration Policy for Non-Executive Directors and
Independent Directors are provided as Annexure IIIA and details of Remuneration Policy for
effectively performing the responsibility Key Managerial Personnel and Other employees of
the Company are provided as Annexure IIIB to this Report.
COMMITTEES OF THE BOARD:
A detailed note on the Board and its Committees is provided in the
‘Report on Corporate Governance' forming part of this Annual Committfollows:
Report.Thecomposition ofthemajor
Audit Committee:
As on March 31, 2023, the Audit Committee comprised of three and (3)
Independent Directors viz. Ms Grace Koshie (Chairperson), (ceased to be a Chairperson and
Member on the closing of business hours on February 08, 2023 by efflux of time), Parekh
(appointed as a Member and Chairman w.e.f. February 09, 2023), Mr Anjani K. Agrawal, Mr
Sunil Mitra and one (1) Non-Independent Director, Mr Subrata Talukdar.
Nomination and R emuneration Committee:
As on March 31, 2023,Nominationand Remuneration the Committee comprised
of two (2) Independent Directors viz. Mr Anjani K. Agrawal (Chairman), Mr Pratip Chaudhuri
and one (1) Non-Independent Director, Mr Subrata Talukdar.
Corporate Social Responsibility Committee:
As on March 31, 2023, Corporate Social Responsibility Committee
comprised of four (4) members viz Mr Shashwat Goenka (Chairman), Mr Vipul Khanna, MD &
CEO, Mr Subrata Talukdar, Non-Executive, Non-Independent Director and one (1) Independent
Director, Mr Anjani K. Agrawal.
Stakeholders RelationshipCommittee:
As on March 31, 2023, Stakeholders RelationshipCommittee comprised of
three (3) members viz. Mr Subrata Talukdar (Chairman), Mr Vipul Khanna, MD & CEO, and
one (1) Independent Director, Mr Anjani K. Agrawal.
Investment Committee:
As on March 31, 2023, Investment Committee comprised of three (3)
members viz. Mr Shashwat Goenka (Chairman), Mr Vipul Khanna, MD & CEO and one (1)
Non-Independent Director, Mr Subrata Talukdar. o time.
Strategy Committee:
As on March 31, 2023, Strategy Committee comprised of three (3) members
viz. Mr Shashwat Goenka (Chairman), Mr Vipul Khanna, MD & CEO and one (1)
Non-Independent Director, Mr Subrata Talukdar.
Risk Management
As on March 31, 2023, Risk Management Committee comprised of five (5)
members viz. Mr Shashwat Goenka (Chairman), Mr Vipul Khanna, MD & CEO, one (1)
Independent Director, Ms Grace Koshie, (upto the the closing of business hours on February
08, 2023 by efflux of time), Ms Vanita Uppal (appointed as a Member w.e.f. February 09,
2023), Mr Dinesh Jain and Mr Arun Tyagi, Officials of the Company.
RELATED PARTY TRANSACTIONS:
All the contracts/arrangements/transactions that were entered into by
the Company during the financial parties were on an arm's length basis and in the
ordinary course of business and none of such related party transactions required the
approval of the Board of Directors or the Shareholders as per the Act or LODR Regulations.
Further, there were no materially significant related party transactions that may have
potential conflict of interests of the Company at large. Prior omnibus approval is
obtained for related party transactions which are of repetitive nature and entered in the
ordinary course of business and at arm's length. All Related Party Transactions are
before the Audit Committee for approval.
The policy on Related Party Transactionsas approved by the Board is
available on the website of the Company at the link:
https://www.firstsource.com/wp-content/uploads/2023/03/
Related-Party-Transactions-Policy. et practice; k The details of the related party
transactions as required under the Act and the Rules are attached in Form AOC-2 as
Annexure IV.
EMPLOYEES STOCK OPTION SCHEME:
The Company grants share-based benefits est unto with a view to
attracting and retaining the best talent, employees to align individual performances with
the Company objectives, and promoting With a view to provide an opportunity to the
employees of the Company, to share the growth of the Company and to create long term
wealth, the Company has an Employee Stock Option Scheme (ESOS), viz., the Firstsource
Scheme, 2003 (ESOS 2003). The Scheme is applicable to all eligible
employees and Directors of the Company and its Subsidiary Companies. The Scheme is in
compliance with Securities and Exchange Board of India (Share Based Employee Benefits and
Sweat Equity) Regulations, 2021 (SBEB&SE), as amended from time to time.
FIRSTSOURCE SOLUTIONS LIMITED EMPLOYEE STOCK OPTION PLAN 2019
("ESOP 2019 PLAN"):
The Company has established the ESOP 2019 Plan, pursuant to approval of
shareholders at the Annual General Meeting on August 02, 2019, to allow our employees to
acquire greater proprietary stake in our success and growth, and to encourage our
employees to continue their association with us. The ESOP 2019 Plan is in compliance with
SEBI (SBEB&SE) Regulations 2021, as amendedfromtime
As per the ESOP 2019 Plan, the Nomination and Remuneration Committee
will issue stock options to the identified eligible employees/Director(s) of the Company
and its Subsidiaries at an exercise price which will be the face value of the Shares or
any higher price which may be decided by the Nomination and Remuneration Committee
considering the prevailing market conditions and the norms as prescribed by SEBI and other
regulatory authorities.Further, the stock options under the said plan would vest & be
exercisable in tranches as determined by the Nomination and Remuneration Committee basis
the power given to the Nomination and Remuneration Committee in line with the ESOP 2019
Plan.
LONG TERM INCENTIVE STRUCTURE GRANTS UNDER ESOP 2019 PLAN: of the
Company's philosophy of aligning employee Incontinuation interests with shareholder
valuecreationand in line with global with related practices, the Nomination and
Remuneration Committee the Board of Directors has approved the Long Term Incentive
Structure ("LTI") in the form of ESOP grants which will be granted to identified
eligible employees as per ESOP 2019 Plan. This unique plan is a combination of tenure and
performance based ESOPs aligned to shareholder value creation which will deepen employee
ownership in the Company.
A) Tenure based Structure (ESOP Structure): placed
Optionsinthisstructurewillbegrantedto employees, basis the below criteria:
1. Drives ownership of employees in Company's fortunes for better
engagement and retention; package, in line with 2. Seenaspartof the total compensation
3. Quantum of grants is based on the performance and potential of the
individual employee.
| Vesting Schedule in the given structure is: |
|
| Periodwithinwhichoptions will encouraging the
participant to eligible employees |
% of options that will vest |
| End of 12 months from the date of grant of options |
25% increased participation |
| At the end of every quarter after year 1, till end of year 4
from date of grant |
6.25% |
|
Employee Stock Option |
B) Performance based Structure (PSU Structure):
Option in this structure is granted to identified eligible employees -
Functional and Business heads, basis the below criteria:
1. Attainment of options can range between 0% and 150% of tranche
eligible for vesting for the respective performance measurement period. Each tranche is
separate. Performance and vesting in one performance period has no bearing on performance
and vesting in another performance period;
2. Subject to terms and conditions of the performance-based component
of the grant is measured basis the Performance targets as agreed annually by the
Management.
Vesting Schedule in the given structure is:
| Periodwithinwhichoptions will the participant |
% of options that will vest |
| End of 12 months from the date of grant of options |
25% |
| At the end of every year after year 1, till end of year 4
from date of grant |
25% |
Under both the above structures, grants will be issued at face value of
the shares or any higher price which may be decided by the Nomination
andRemunerationCommittee and will have an exercise period up to three (3) years as per the
ESOP 2019 Plan and as determined by the Nomination and Remuneration
Under the ESOP 2019 Plan, as on March 31, 2023, the Nomination and
Remuneration Committee has approved grant of 3,326,500 options which are a mix of tenure
based and performance-based structure optionsto its senior leadership team and employees.
FIRSTSOURCE EMPLOYEE BENEFIT TRUST UNDER ESOP 2019 PLAN:
The ESOP 2019 Plan shall be implemented through the Trust which will be
administered under the guidance, advice and and Remuneration direction of the Nomination
accordance with the provisions of the Companies Act, 2013 and SEBI (SBEB&SE)
Regulations.
The Board of Directors has facilitated setting up of Employee welfare
trust, viz "Firstsource Employee Benefit Trust" ("ESOP Trust") to
implement the ESOP 2019 Plan which has been formed by the Company. The Company shall
provide financial assistance to the ESOP Trust for secondary acquisition Company for the
purpose of implementation of ESOP 2019 Plan. The terms and conditionsfor the financial
assistance shall be in compliance with the Companies Act, 2013 read with Companies (Share
Capital and Debenture) Rules, 2014 and SEBI (SBEB&SE) Regulations 2021.
As on March 31, 2023, the ESOP Trust holds 15,589,182 equity shares
purchased through secondary market.
SUBSIDIARY COMPANIES:
As on March 31, 2023, your Company has 21 subsidiaries and 1 Associate
Company:Jamaica Limited became a step down
| Domestic Subsidiary: (1) |
| 1. Firstsource Process Management Services Limited [Wholly |
| Owned Subsidiary ("WOS") of the Company]; |
| International Subsidiaries: (20) |
| 2. Firstsource Solutions UK Limited, UK (WOS of the Company); |
| 3. Firstsource Solutions S.A., Argentina (Subsidiary of Firstsource
Solutions UK Limited) scheme, |
| 4. Firstsource BPO Ireland Limited (WOS of Firstsource Solutions the UK
Limited) |
| 5. Firstsource Group USA, Inc., USA (Subsidiary of the Company) |
| 6. Firstsource Business Process Services, LLC, USA (WOS of Firstsource
Group USA, Inc) |
| 7. Firstsource Advantage, LLC, USA (WOS of Firstsource Business Process
Services, LLC) |
| 8. One Advantage, LLC, USA (WOS of Firstsource Business Process Services,
LLC) |
| 9. MedAssist Holding, LLC, USA (WOS of Firstsource Group USA, Inc) |
| 10. Firstsource Solutions USA, LLC, USA (WOS of MedAssist Holding, LLC)
Plans |
| 11. Firstsource Health Plans and Healthcare Services, LLC, USA Services,
LLC) (Formerlyknown as Firstsource Transaction (WOS of Firstsource Solutions USA, LLC) . |
| 12. Sourcepoint, Inc. (WOS of Firstsource Group USA, Inc) |
| 13. Sourcepoint Sourcepoint, Inc.) |
| 14. Firstsource Dialog Solutions the Company) |
| 15. PatientMatters LLC (WOS of Firstsource Solutions USA, LLC) |
| 16. Kramer Technologies, LLC (WOS of PatientMatters LLC) |
| 17. Medical Advocacy Services For Healthcare, Inc. (WOS of PatientMatters
LLC) |
| 18. The StoneHill Group, Inc. (WOS of Sourcepoint, Inc.) |
| 19. American Recovery Service Incorporated (WOS of Firstsource Business
Process Services, LLC, USA) |
| 20. Firstsource Solutions Mexico, S. de R.L. de C.V (Subsidiary Company
of Firstsource Group USA, Inc.) of equity shares of the |
| 21. Firstource Solutions Jamaica Limited (WOS of Firstsource Group USA,
Inc.) |
| Associate Company: (1) |
| 1. Nanobi Data and Analytics |
| Note: |
| Firstsource Solutions Jamaica Limited was incorporated as a Wholly Owned
Subsidiary Company of Firstsource Group USA, Inc., (Subsidiary of the Company), on April
13, 2022. On account of this, Firstsource Solutions subsidiary of the Company. |
The Company has no other joint venture company. No company has ceased
to be a joint venture or associate during the FY 2022-23.
gy: Report on the Performance and Financial Position of Subsidiaries:
A report on the performance and financial position of each of the
subsidiaries as per the Act, in the prescribed format AOC - 1 is statement and hence not
annexedtotheconsolidated financial repeated here for the sake of brevity. The Company has
a policy on material subsidiaries pursuant to Regulation 16(1)(c) of the Listing
Regulations. The same is available on the website of the Company viz:
https://www.firstsource.com/wp-content/uploads/2023/04/ Material-Subsidiary-Policy-IN.pdf
MANAGEMENT DISCUSSION AND ANALYSIS REPORT:
Management Discussion and Analysis Report for the year as stipulated
under Regulation34(3) of the Listing Regulations is separately given and forms part of
this Annual Report.
BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORT: ant part of its
Operations With effect fromtheFY2022-23,therequirementofsubmitting Business Responsibility
Report is discontinued and replaced with Business Responsibility and Sustainability Report
(BRSR) for the top one thousand listed entitiesbased on market capitalization. Since your
company is falling under this category, the CompanySaaS has adopted the BRSR as stipulated
under Regulation 34(2(f) of the Listing Regulations and forms part of this Annual Report.
REPORT ON CORPORATE GOVERNANCE:
The adherence to the corporategovernancepracticesby the
Company not only justifies the legal obedience of the laws but dwells
deeper conforming to the ethical leadership and stability. It is the sense of good
governance that our leaders portray, which trickles down to the wider Management and is
further maintained across the entire functioning of the Company.
The Company is committed to maintain the highest standards of corporate
governance and adheres to the corporate governance requirements set out by SEBI.
The report on Corporate Governance as stipulated under provisions of
Chapter IV & Schedule V of the Listing Regulations is separately given and forms part
of this Annual Report.The requisite certificate from a Practicing Company Secretary
confirming compliance of the conditions of corporate governance is attached to the Report
on Corporate Governance.
Pursuant to amendment of Rule 12 of Companies (Management and
Administration) Rules, 2014 by MCA, wherein, instead of attaching an extract of annual
return (to be prepared in Form MGT - 9) to the Directors' Report, the Company can
host a copy of annual return on the website of the Company and a web link of the same to
be given in the Directors' Report.
Accordingly, a copy of Annual Return is available on the website of the
Company at the below link: https://www.firstsource.com/wp-content/uploads/2023/07/
Annual-Return-FY-2022-23.pdf
STATUTORY DISCLOURES OF PARTICULARS:
A)Conservation of
The Company continues to make progress towards energy conservation
across all its operation centres by adopting efficient Air-conditioning management system,
usage of Energy efficient LED and efficient power back-up system. The Company is
continuously monitoring earlier initiatives of reducing energy consumption within data
centre/(s) and across its' operation centres. The Company, similar to its previous
year's initiatives of GREEN IT, continued to replace the normal Desktops and old Thin
clients with Mini Desktops/Zero thin-clients in US Geography as the power consumption of
mini desktop & Zero thin-clients was 2.5 times less than the power consumed by normal
desktops and nearly 5 times less during standby mode. Scripts have been deployed where
possible to shut down the Desktops/Thin clients which are not being used for more than 1
hour which helps conserve energy.
B) Absorption of Technology:
Cloud-First Initiatives: As part of Company's Cloud-First and
Digital-First-Digital-Now (DFDN) journey, the Company continues and Deliveries, tomigratea
across the geographies and business units, to cloud. Over the past few years, the Company
has adopted multiple the-art technologies by partnering with Global Cloud Services
Platforms. Be it for Infrastructure As A Service (IaaS) where the Company partner
withleadingglobalCSPssuchasMicrosoft Azure,AWSandGoogle or adopting solutionssuch as Sales
Force, SAP Success Factors or Office365 or companies like Zscaler which provide cloud
based Zero Trust Security solutions. Most of Company's client facing applications are
deployed on Multi-Cloud environment to make them more Scalable, Resilient and Fault-tolerant.
Digital Enabled Contact center (DECC): As part of our DECC
implementation,the Company has implemented multipleNext Generation Contact dc (NGCC)
across the global and business units. The DECC and Omni Channel Platform is further
enhanced with Digital Capabilities, such as AI, Social Integration, Chat-Bot, Analytics
etc. These state-of-art technologies are implemented to enhance and automate call handling
capabilities by Digital/AI interference, thus enhancing the Customer Experience (CX);
NextGen Cybersecurity: Firstsource has also deployed various
technical controls at the perimeter, Endpoints, Data center and enduser
Threat and Vulnerability Management: Early Detection of vulner
ability on Core Infra structure and proactivemitigation-
| Comprehensive Technical Compliance check through 3rd party
covering the following: |
| o Vulnerability Assessment and Penetration Test |
| o Web Application Security Assessment |
| o ASV Scans for PCI DSS |
| o Desktop Scans for PCI DSS |
| o Source Code Review |
| o Cloud Infrastructure review |
| o Network Config review |
Security Operations Center & Digital Footprint Monitoring -
Continuous Monitoring.
24/7 continuous monitoring and helps increase Firstsource organization
security posture while preventing, detecting, analyzing, and responding to cybersecurity
incidents.
Digital Footprint monitoring is done through Security Scorecard that
rates cybersecurity postures of corporate entities throughcompletingscored analysis of
cyber threat intelligence.
The end users are required to go through Cisco AnyConnect - VPN, High
Secure Network Access, Cisco Duo - Two Factor Authenticationand the end user
computingare protected with Cisco AMP - EDR for Endpoints and Servers and the end
user *internet and DNS are Cisco Umbrella - DNS Layer Security, Internet gateways
using Cisco WSA - Blocking risky sites and al emails are protected by Cisco Mail
Security - protects emails from Malware, Spam, Phishing, Ransomware, Spoofing, and
more.
C) Foreign Exchange Earnings and Outgo Activities relating to exports,
initiatives taken to increase exports, development of new export markets for services and
export plans:
The Company's income is diversified across a range of geographies
and industries. During the year, 92.11 % of the Company's standalone total revenues
were derived from exports. The Company provides BPO services mostly to clients in North
America, UK and Asia Pacific region. The Company has established exports. direct marketing
FOREIGN EXCHANGE EARNED AND USED:
The Company's Foreign Exchange Earnings and Outgo during the year
were as under: (` in million)
| Particulars |
FY2023 |
FY2022 |
| Foreign Exchange Earnings |
12,671.78 |
13,618.21 |
| Foreign Exchange Outgo (including capital goods and imports) |
61.52 |
163.11 |
SECRETARIAL AUDIT:
Act read with Pursuant to the provisions of Section the Companies
(Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company obtained
Secretarial Audit Report from MMJB & Associates LLP (CP No. 8968), Company Secretaries
for the FY 2022-23. The Secretarial Audit Report is annexed to this Report as Annexure V.
ANNUAL SECRETARIAL COMPLIANCE REPORT:
SEBI vide its Circular No. CIR/CFD/CMD1/27/2019 dated February 08, 2019
read with Regulation 24(A) of the Listing Regulations, directed listed entities to conduct
Annual Secretarial Compliance Audit from a Practicing Company Secretary of all applicable
SEBI Regulations and circulars/guidelines issued thereunder. The said Secretarial
Compliance report is in addition to the Secretarial Audit Report issued by Practicing
Company Secretaries under Form MR - 3 and is required submitted to be Stock
Exchanges within 60 days of the end of the financial year. The Company has engaged the
services of MMJB & Associates LLP (CP No. 8968), Company Secretaries for providing
this certification.
STATUTORY AUDITORS AND AUDITORS' REPORT:
M/s. Deloitte Haskins & Sells LLP, Chartered Accountants, bearing
Registration Number: 117366W/W-100018, were re-appointed as the Statutory Auditors of the
Company by the members at their 21st Annual General Meeting (AGM) for a second term of
consecutive five (5) years i.e. till the conclusion of 26 th AGM.
The Notes on financial statements referred to in the Auditors'
Report are self-explanatory and do not call for any further comments. The Auditors'
Report does not contain any eservation qualification, or adverse remark.
During the year under review, there were no material or serious
instances of fraud falling within the purview of Section 143 (12) the Companies Act, 2013
and rules made thereunder, by officers or employees reported by the Statutory Auditors of
the Company during the course of the audit conducted and therefore no details are required
to be disclosed under Section 134 (3)(ca) of the Act.
GENERAL:
Your Directors state that no disclosure or reporting is required in
respect of the following matters as there were no transactions on these matters during the
FY 2022-23:
Issue of equity shares with differential rights as to dividend, voting
or otherwise;
Issue of shares to employees of the Company under any scheme save and
except Employees Stock Option Schemes as referred to in this Report;
No significant or material orders were passed by the Regulators or
Courts or Tribunals which impact the going concern status and the Company's
operations in future.
There were no material changes and commitments affecting of the Company
between the end of the thefinancialposition financial year and the date of this Report.
Further, your Directors would like to mentionthat the MD & CEO
received 158.95 million as remunerationduring the year from Firstsource Group USA Inc.
subsidiary of the Company.
The disclosure pursuant to Securitiesand Exchange Board of India (Share
Based Employee Benefits)Regulations, 2014 read with Circular No. CIB/CFD/Policy/CELL/2,
2015 dated June 16, 2015, will be placed on the website of the Company.
DIRECTORS' RESPONSIBILITY STATEMENT:
Pursuant to the requirement under Section 134(3) (c) and 134(5) of the
Companies Act, 2013, Directors of your Company state and confirm that:
1. In the preparation of the annual accounts for the FY 2022-23, the
applicable Ind-AS accounting standards have been followed and there are no material
departures from the same;
2. The Directors had selected such accounting policies and applied them
consistently and made judgments and estimates that are reasonable and prudent so as to
give a true and fair view of the state of affairs of the Company as at March 31, 2023 and
of the profit of the Company for year ended on that date;
3. The Directors had taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the provisions of the Act
for safe-guarding the assets of the Company and for preventing and detecting fraud and
other irregularities;
4. The Directors had prepared the annual accounts on a going concern
basis;
5. The Directors had laid down internal financial controls to be
followed by the Company and that such internal financial controls are adequate and were
operating effectively; and
6. The Directors had devised proper systems to ensure compliance with
the provisions of all applicable laws and that such systems were adequate and operating
effectively.
APPLICATION/PROCEEDING PENDING UNDER IBC:
proceeding is pending under the Insolvency and Bankruptcy Code, 2016
(31 of 2016) Noneoftheapplication during the year.
ACKNOWLEDGEMENTS:
The Board wishes to place on record its sincere appreciation for the
support and co-operation extended by all the customers, vendors, bankers and business
associates. The Board also expresses its gratitude to the Department of
Telecommunications, Collector of Customs and Excise, Director of Special Economic Zone,
Ministry Software Technology Parks of India, and Labour,Ministry CorporateAffairs,
various Governmental departments and organisations for their help and cooperation.
Further, the Board places on record its appreciation to all the
employees for their dedicated service. The Board appreciates and values the
contributionsmade by every member across the world and is confident that with their
continued support, the Company will achieve its objectives and emerge stronger in the
coming years.
|
For and on behalf of the Board of Directors |
| Mumbai |
Dr Sanjiv Goenka |
| May 04, 2023 |
Chairman |
|
(DIN 00074796) |