Firstsource Solutions Ltd Directors Report.

Dear Members,

Directors of your Company take great pleasure in presenting the 17th Annual Report on the business and operations of your Company and the Audited Financial Statements for the financial year ended March 31, 2018.


Pursuant to the notification dated 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 with effect from April 1, 2016. The performance of the Company for the FY2017-18 is summarized below:

( in Million)








Total Income





Profit Before Interest and Depreciation





Interest and Finance Charges (net)





Depreciation/ amortization





Profit Before Tax





Share in net (loss) of associate





Profit from ordinary activities before tax and after share in net loss





Provision for Taxation (including Deferred Tax





Charge/ Credit)
Net Profit After Tax





Profit attributable to:
Owners of the Company





Non-controlling Interest










Balance in Profit & Loss Account





Closing Balance in Profit & Loss Account





Earning Per Share (Rs.) - Basic





Earning Per Share (Rs.) - Diluted






The consolidated total income decreased from INR 35,588.15 Million to INR 35,406.78 Million, a decrease of 0.51% over the previous financial year. The consolidated Net Profit after Tax increased from INR 2,792.38 Million to INR 3,265.78 Million, a growth of 16.95% over the previous financial year. The detailed analysis of the consolidated results forms part of the Management Discussion & Analysis Report provided separately as part of the Annual Report.

The standalone total income decreased from INR 9,548.51 Million to INR 8,739.79 Million, a decrease of 8.47% over the previous financial year. The standalone Profit after Tax increased from INR 1,884.59 Million to INR 1,919.16 Million, an increase of 1.83% over the previous financial year.


During the year, your Company issued/ allotted 5,214,482 equity shares of the face value of INR 10/- each on the exercise of stock options under Firstsource Solutions Employee Stock Option Scheme 2003 (ESOS 2003). Consequently, the outstanding, issued, subscribed and paid up capital of the Company has increased from 681,308,337 shares to 686,522,819 shares of INR 10/- each aggregating to INR 6,865.22 Million as on March 31, 2018.


During the year under review, a Business Transfer Agreement was signed on July 7, 2017 with Vertex Customer Management India Private Limited to sell a portion of Companys India domestic business and the said transaction/(s) has been closed successfully during the period under review.


The Company, on a consolidated basis have 37 global operation centers as on March 31, 2018. The centers are located across India, US, UK and Philippines. 10 of the Companys operation centers are located in 7 cities in India, 18 in US, 7 in UK and 2 in Philippines.

During the year, the Company incurred capital expenditure of INR 625.05 Million mainly towards refurbishment and maintenance of operation centers, technology upgrade and setting up of new operations centers.


The Company follows the global best practices for process excellence and the quality framework is based on COPC principles. The Company uses innovative techniques like Speech & Text Analytics, Robotic Process Automation and Intelligent action board to drive improvements across. Also, as part of the Quality Management System, the Company has embraced ISO 9001:2008. The Company continues to follow process improvement methodologies like Six Sigma, Lean and Kaizen.


The Company received the following awards and accolades during the year.


• Triple awards at the Welsh Contact Centre (WCC) Awards 2018 in the UK: Gold in Outsourced Contact Centre of the Year; Gold in People Engagement for the Caridff HR teams and Individual award in the Trainer of the Year categories. The awards recognise the teams commitment to delivering great customer experiences and making Firstsource an employer of choice.

• Won the award for Best Personal Entertainment and Telecoms at the prestigious UK Complaint Handling (UKCH) Awards 2018. The award recognises the companys partnership with giffgaff, the community-run network which delivered record breaking results for the telecoms company in a highly competitive marketplace.

• Won multiple awards at the North East Contact Centre Awards 2017: Gold in the Contact Centre of the Year (under 250 seats) category. This award recognises the Firstsource Middlesbrough teams commitment to understanding and responding to customer needs and delivering great customer experiences. Silver for the Middlesbrough HR team in the Recruitment Champion category, for its commitment to making Firstsource an Employer of choice, while delivering value to clients and contributing to Firstsources overall business performance. Individual awards in the categories of Inspirational Leader 2017 and the Customer Experience Champion of the Year.

• Won 3 awards at the European Contact Centre and Customer Service Awards (ECCCSAs) 2017: Gold in Medium Contact Centre of the Year, Silver in Outsourcing Partnership of the Year for work done with Sky and Silver in Outsourced Contact Centre of the Year for work done out of the Middlesbrough office in the UK. The awards recognise the teams commitment to understanding and responding to customer needs and delivering great customer experiences.

• Awarded the BPO Contract of the Year at the Global Sourcing Association (GSA) Awards 2017, in recognition of the on-going

work with Sky. This win recognises Firstsources long-term partnership with Sky and the success achieved by creating a joint operational management structure, transparent culture and the innovative use of technology and approach to customer experience.

• Won two awards at the UK Customer Experience Awards 2017: Gold in the Large Contact Centre category in partnership with Sky and CX Professional of the Year for Kathryn Chivers, VP - Sales Operations, UK. The wins celebrate Firstsources work in Cardiff office in the UK to deliver top quality customer experiences.

• Won the prestigious Customer Service Excellence Award at the NASSCOM BPM Strategy Summit 2017. This award in the Return on Investment (ROI) category recognises Firstsources focus on providing agile solutions across channels and creating immense RoI for its client.

Analyst Recognition:

• Recognised as a Major Contender in Everest Groups Mortgage BPS Service Provider Landscape with Services PEAK Matrix™ Assessment 2017. The positioning recognises Firstsources focus on excellence and delivery, and highlights the companys commitment to providing a smart and collaborative partnership for clients.

• Healthcare Provider and Payer businesses were also recognised as Major Contender in Everest Groups Service Provider Landscape PEAK Matrix™ Assessment 2017. The positioning recognises the investments and strides made in the digital arena, especially with RPA deployment for Payer and automation solutions for Provider services.

• Recognised as a Major Contender in Everest Groups Contact Centre Outsourcing (CCO) PEAK Matrix™ Assessment 2017. This positioning recognises Firstsources focus on excellence and delivery while highlighting the organisations commitment to building smart and collaborative partnership with clients.

• Recognised as a Major Contender in Banking BPO-Service Provider Landscape by Everest Groups PEAK Matrix™ Assessment 2017. This recognition acknowledges the organisations focus on excellence and celebrates its capabilities to consistently enhance customer experience.

• Ranked as a Leader in the Telecoms market by NelsonHall in one of their industry reports. The ranking as Leader significantly improves the organisations performance from a High Achiever in the past.

Industry Recognition:

• Firstsource is the first BPM Company in the U.K to achieve the Gold standard by Investors in People (IIP). The standard defines what it takes to lead, support and manage people for sustained success. The organisation is now in the top 7% of businesses in the UK, which falls under this Gold accreditation.

• Firstsource recognised as a Leader in the International

Association of Outsourcing Professionals (IAOP) Global Outsourcing 100 List for 2017. In addition, it has also been named a Superstar of the Global Outsourcing 100, because of its exceptional performance and high scores achieved during the IAOP evaluation.


In accordance with Section 129(3) of the Companies Act, 2013 and in view of notification 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.


Your Company takes immense pleasure to inform that the Board of Directors at its meeting held on May 7, 2018 recommended final maiden dividend at the rate of 15% i.e. INR 1.50 per share of INR 10/- each fully paid up equity shares of the Company for the FY2017- 18.


Pursuant to SEBI (Listing Obligations and Disclosure Requirements) (Second Amendment) Regulations, 2016 dated July 8, 2016, the top five hundred listed entities based on market capitalization (calculated as on March 31 of every financial year) shall formulate a Dividend Distribution Policy which shall be disclosed in their annual reports and on their websites.

The Board of Directors of the Company has approved the draft of Dividend Distribution Policy at its meeting held on August 8, 2017. The applicability of the said policy will be effective from FY 2016-17 to the Company and the same is available on the website of the Company at the link uploads/2017/10/Dividend-Distribution-Policv.pdf.


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 other than as mentioned above. Hence, the remaining amount of profit for the financial year under review has been carried forward to the Statement of Profit and Loss.


On a consolidated basis, the Company has 18,703 employees as of March 31, 2018.


Disclosures pertaining to remuneration and other details as required under Section 197(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 Section197(12) of the Act read with Rules 5(2) and 5(3) of the Companies (Appointmentand 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.


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, 2018.


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 5 & 28 to the standalone financial statements).


The Company seeks to be a good corporate citizen in all aspects of its operations and activities. We commit 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 Groups corporate vision to enable inclusive growth and our aspiration to be Indias leading business group serving multiple market segments, for our customers, shareholders, employees and community. The Company seeks to undertake programmes in the areas of Healthcare, Education, Environment, Arts & Culture, Promotion of 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 Shashwat Goenka (Chairman), Rajesh Subramaniam, Subrata Talukdar and Pradip Roy (Independent Director) as its members. The CSR Committee meets once in a year. 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 formulated a CSR Policy indicating the activities to 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 fsl-corporate-social-responsibility-policy.pdf. The Annual Report on CSR Activities, as stipulated under the Act and the Listing Agreement forms an integral part of this Report and is appended as Annexure II. The details of focus areas of engagement as mentioned in the CSR Policy of the Company are mentioned in the said Annual Report on CSR Activities.

The CSR activities, as per the provisions of the Act, may also be undertaken by the Company through a registered trust. Accordingly, "RP - Sanjiv Goenka Group CSR Trust" ("CSR Trust") was formed along

with other group companies to pursue CSR activities as mentioned in the CSR Policy of the Company. During the year, the Company has spent an amount of INR 34.51 Million, being 2% of the average net profits of the Company for the last 3 years on CSR activities as mentioned in the CSR Policy. Out of the said amount, majority of the amount has been contributed by the Company towards the corpus of the CSR Trust, which would be spent by the CSR Trust on the focus areas as mentioned in the CSR Policy of the Company.

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 our focus areas where possible through programmes such as Employee Volunteering, Payroll Giving, Participating in fundraising events, Partnering with NGOs and Response to disasters.


• As part of the Give India Payroll Giving Program, Firstsource employees contribute towards various charities on a monthly basis. The total contribution this FY year was around INR 2 Million;

• Firstsource donated INR 0.5 Million towards Wheels of

Change. They work in the disability space and have a novel cab service called Kickstart. The donation was towards modification of one of their cabs to make it accessible for people with disability;

• Firstsource donated INR 0.25 Million towards Light of Life trust for organizing a fundraiser event "Kalpataru - A Musical". This is a platform for the underprivileged children to showcase their talent and the proceedings from this event was utilized for their education;

• Firstsource donated INR 0.2 Million towards Foundation

For Excellence for providing Scholarship for underprivileged Engineering students;

• In Indore, employees participated in a plantation drive organized by the Government of Madhya Pradesh. The team went to Devguradiya to plant trees and were felicitated by the Forest department officials;

• Employees in Chennai office visited Christ Faith Home, a

shelter for more than 100 homeless children. The team

members distributed provision items to the shelter and they had a chance to interact and conduct fun activities for the children;

• In Mumbai, employees visited Shram Yash Charitable Trust, a shelter home for 32 children. The volunteers distributed snacks and collected stationery materials. They also had interacted with the children and conducted some fun activities for them;

• Employees in Pondicherry visited a service home and spent quality time with children;

• The Firstsource Dream source Committee at Trichy, visited Hope of the Hopeless orphanage which is home to 90 odd orphans. They spent quality time with the children and also donated provisions as part of the Joy of giving initiative;

• Employees from Bangalore office visited Swanthana, an NGO for underprivileged and differently abled girls. With the support and contribution of fellow Firstsourcers, the volunteers who visited the NGO donated groceries, a washing machine, blenders, cleaning solutions, blankets and bed sheets. The remaining funds were issued to the NGO through a cheque to assist them in construction of a section that was damaged due to rains;

• Firstsource joined hands with Shine Treechy- an NGO dedicated to Environmental conservation and Social development in Trichy. 2000 Palm saplings were planted in a pre-identified area.Philippines:

• Employees in Philippines visited Bahay Punlaan as part of the CSR initiative called Plant-a-Tree for Mother Earth. This initiative helped in replanting and restoring the rainforest;

• A CSR activity was held in partnership with the Department of Labour and Employment at Bahay Aruga, Manila and pooled in resources to provide for school supplies and other provisions for the children at the orphanage;

• Employees of the Companys office in Manila, for more than 3 years in a row have been sponsoring the Chosen Children Village Foundation, Inc., an internationally acclaimed facility geared towards securing the future children with special needs. Our employees supported this foundation by selling Christmas Cards painted by the children of the foundation. A total of 321 Christmas cards were sold and PHP 16,050 was raised to support the foundation.


• Supershoes fundraising were our annual charity of choice. Firstsourcers have been actively supporting Supershoes a charity which empowers children fighting cancer. Fundraising has involved activities like Waterside Half Marathon, Errigal Peak Challenge, cake sales, Funky Shoe Weeks, Ice Bucket Challenge, Onesie day, Raffle to win tickets to the Wales vs Georgia rugby match, etc. A total of GBP 3,556.33 was raised towards Supershoes in FY17-18;

• To mark World Suicide Prevention Day, Aware NI held Mood Walk in Derry with the aim of raising money for AWARE and the services they provide in the local area;

• Black Eye fundraising boxing match was organized and a total of GBP 1,460 was raised to support the Altnagelvin Neonatal Intensive Care Unit (NICU);

• During Christmas employees participated in donations of toys and gifts to support disadvantaged children in conjunction with the Business in The Community Cares @ Christmas initiative across Northern Ireland sites. In Warrington, ticket sale donations following the sites Christmas Party, were given towards Saint Roccos Hospice;

• Staff across firstsources offices took part in various activities namely Wear Pink to Work day, Dress down day and bake sale to create awareness around breast cancer care;

• During the cold spell referred to as the Beast from the East, staff in Cardiff raised well over GBP 672, which was enough to buy 100+ sleeping bags, 100+ rucksacks and 150+ pairs of socks for the homeless;

• Staff in Cardiff took part in a litter picking activity in partnership with Business in the Community. This organization works closely with businesses to tackle a wide range of issues that are essential to building a fairer society and a more sustainable future.


• Multiple events were organized for Making Strides for Breast Cancer. Over USD 14,000 was raised from bake sales, raffles, yard sales, Annual walks, lunch events, selling breast cancer prevention items, jeans day, penny wars, etc.;

• Louisville employees raised funds for Toys for Tots. Managers and supervisors all volunteered to receive a pie for every USD 15 that was placed in their jar. Total USD 230.66 was raised for the charity;

• To assist the hurricane affected in US Virgin Islands and Puerto Rico, employees decided to act quickly and raise donations. Two shipments were sent by boat and one shipment via freight company (all through donated time/efforts). School Supply drives were organised at multiple offices. For Hurricane Harvey affected, all offices in US encouraged donation;

• As part of Back to school campaign, Louisville employees donated binders and notebooks to local schools and Colorado Springs office donated over 540 school supply items;

• In association with Habitat for Humanity in Louisville, community clean up was helped by cleaning up around homes, planting and yard maintenance in specific areas;

• Blood donation drive was carried out in association with UNYTS. Employees donated a total of 36 Whole Blood Units and 8 Double Red Cell Products. Also, 13 employees signed up to be organ donors;

• Employees from multiple offices donated a variety of items for all ages to local homeless/womens shelters, and also partnered with YWCA womens shelter to provide mittens;

• As part of the "Adopt a family" initiative, employees adopted a child for the holiday season and donated clothing and toys so that children could have a nice Christmas holiday;

• Firstsource Advantage employees in association with Salvation Army organized various fundraising events. During the past year Firstsource has done multiple food drives with proceeds

going towards the Salvation Army Food Bank. Participation was done in Pack a Backpack initiative which helped support 20 young children in need of school supplies;

• The Company held multiple 50/50s throughout the year, and raised a total of USD 2,264 for American heart organization, American Red Cross, American Cancer Society etc.


The Company has implemented a comprehensive and fully integrated Enterprise Risk Management framework in order to anticipate, identify, measure, manage, mitigate, monitor and report the principal risks and uncertainties that can impact its ability to achieve its strategic business objectives.

The Company has introduced several improvements to Enterprise Risk Management and processes to drive a common integrated view of risks and optimal risk mitigation responses. 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 stakeholders over a time.

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.


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.


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 Companys 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 Chairman of the Audit Committee in exceptional cases. The WB Policy has been posted on the website of the Company and the details of the same are explained in the Report on Corporate Governance forming part of this Annual Report. The WB Policy is available at the website of the Company at the below link blog/wp-content/uploads/2016/06/Whistle-Blower-Policy.pdf


The Company has a Prevention of Sexual Harassment Policy in force in compliance to 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 or fear. The Company has Zero 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.


1. Subrata Talukdar (DIN 01794978) retires by rotation and being eligible, has offered himself for re-appointment at the ensuing Annual General Meeting("AGM");

2. Re-appointment of Mr. Pradip Roy (DIN 00026457) as an Independent Director on the Board of the Company for a term of three (3) consecutive years, subject to Members approval.

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 FY2017-18, the following 4 Board Meetings and Audit Committee Meetings were held on:

1. May 5, 2017;

2. August 8, 2017;

3. November 1, 2017; and

4. February 7, 2018.

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 familiarization programmes are put up on the website of the Company at the below link: content/uploads/2016/06/fsl-details-of-independent-directors familiarisation-programme.pdf.


(I) Performance Evaluation of 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 NonExecutive 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:

a. Attendance and active participation in the Meetings;

b. Bringing ones own experience to bear on the items for discussion;

c. Governance - i) Awareness ii) Observance; and

d. Value addition to the business aspects of the Company.

(ii) Performance Evaluation of Executive Director:

The performance of the Managing Director & CEO is evaluated on the basis of achievement of performance targets/ criteria given to him by the Board from time to time.

(iii) Performance Evaluation by the Board of its own performance and its Committees:

The performance of the Board is evaluated by the Board in the overall context of understanding by the Board of the Companys principle and values, philosophy and mission statement, strategic and business plans and demonstrating 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 decisionmaking, level of attendance in the Board meetings, constructive 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 effectively performing the responsibility as outlined in its Charter, Committee meetings held at appropriate frequency, length of the meetings being appropriate, open communication & constructive participation of members and prompt decision-making etc.


The criteria for Directors appointment and for determining qualification, positive attributes and independence of a Director as mentioned in the Policy for Appointment of Directors and Senior Management and Evaluation of Directors Performance in terms of Section 178(3) of the Act is mentioned below:

Appointment criteria and qualifications:

1. The Nomination and Remuneration Committee shall identify and ascertain the integrity, qualifications, expertise and 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;

2. A person should possess adequate qualifications, expertise and experience for the position he/ she is considered for appointment. The Committee has discretion to decide whether qualifications, expertise and experience possessed by a person

are sufficient/ satisfactory for the concerned position; and

3. 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 a special resolution based on the explanatory statement annexed to the notice or such motion indicating the justification for 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.

The Independent Directors in the meeting:

i. Review the performance of non-independent Directors including Managing Director & CEO and the Board as a whole;

ii. Review the performance of the Chairperson of the Company, taking into account the views of executive Directors and nonexecutive Directors; and

iii. Assess the quality, quantity and timeliness of the flow of information between the Companys management and the Board that is necessaryfor 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 Directorsare provided as Annexure IIIA and details of Remuneration Policy for Key Managerial Personnel and Other employees of the Company are provided as Annexure IIIB to this Report.


A detailed note on the Board and its Committees is provided in the Report on Corporate Governance forming part of this Annual Report. The composition of the major Committee/(s) is as follows:

Audit Committee:

As on March 31, 2018, the Audit Committee comprised of 3 Independent Directors namely Y. H. Malegam (Chairman), Charles Miller Smith and Ms. Grace Koshie and 1 Non - Independent Director, namely Subrata Talukdar.

Nomination and Remuneration Committee:

As on March 31, 2018, the Nomination and Remuneration Committee comprised of 3 Independent Directors viz. Y H. Malegam (Chairman), Charles Miller Smith and Pradip Roy and (1) NonIndependent Director, namely Subrata Talukdar.

Corporate Social Responsibility (CSR Committee):

As on March 31, 2018, CSR Committee comprised of Shashwat Goenka (Chairman), Rajesh Subramaniam, Subrata Talukdar and 1 Independent Director, namely Pradip Roy.

Stakeholders Relationship Committee:

As on March 31, 2018, Stakeholders Relationship Committee comprised of members viz. Subrata Talukdar (Chairman) and Rajesh Subramaniam.

Investment Committee:

As on March 31, 2018, Investment Committee comprised of members viz. Y. H.Malegam (Chairman), Rajesh Subramaniam and 1 Non-Independent Director, namely Subrata Talukdar.

Strategy Committee:

As on March 31, 2018, Strategy Committee comprised of members viz. Shashwat Goenka (Chairman), Rajesh Subramaniam, Subrata Talukdar and 1 Independent Director, namely Donald W. Layden Jr.


All the contracts/ arrangements/ transactions that were entered into by the Company during the financial year with related parties were on an arms length basis and in the ordinary course of business. During the year, the Company had not entered into any contract/ arrangement/ transaction with related parties which could be considered material, requiring approval of the Board/shareholders, in accordance with the policy of the Company on materiality of related party transactions. All Related Party Transactions are placed before the Audit Committee for approval.

The policy on Related Party Transactions as approved by the Board is available on website of the Company at the below link: http:// Transaction-Policy.pdf.

Details of Related Party Transactions are given at Note No. 24 to the Standalone Financial Statements. None of the Directors of the Company has any pecuniary relationships or transactions vis-a-vis the Company.


With a view to provide an opportunity to the employees of the Company to share the growth of the Company and to create longterm wealth, the Company has an Employee Stock Option Scheme (ESOS), namely, the Firstsource Solutions Employee Stock Option Scheme 2003 (ESOS 2003). The Scheme is applicable to the eligible employees that include Employees and Directors of the Company and its Subsidiary Companies. The Scheme is in compliance with the Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014 ("SEBI ESOP Regulations"), as amended. There has not been any material change in the Scheme during the financial year. The disclosure pursuant to SEBI ESOP Regulations read with Circular No CIB/CFD/Policy/CELL/2,2015 dated June 16, 2015, are given on the website of the Company (http://www.firstsource. com/us/investors-corporate-governance).


As on March 31, 2018, your Company has 15 subsidiaries and 1 Associate Company:

Domestic Subsidiary: (1)

1. Firstsource Process Management Services Limited (Formerly known as Anunta Tech Infrastructure Services Limited) [Wholly Owned Subsidiary ("WOS") of the Company]

International Subsidiaries: (14)

1. Firstsource Solutions UK Limited, UK (WOS of the Company)

2. Firstsource Solutions S.A., Argentina (Subsidiary of Firstsource Solutions UK Limited)

3. Firstsource Group USA, Inc., USA (WOS of the Company)

4. MedAssist Holding, LLC, USA (WOS of Firstsource Group USA, Inc)

5. Firstsource Business Process Services, LLC, USA (WOS of Firstsource Group USA, Inc)

6. Firstsource Advantage, LLC, USA (WOS of Firstsource Business Process Services, LLC)

7. One Advantage, LLC, USA (WOS of Firstsource Business Process Services, LLC)

8. Firstsource Solutions USA, LLC, USA (WOS of MedAssist Holding, LLC)

9. Firstsource Transaction Services, LLC, USA (WOS of Firstsource Solutions USA, LLC)

10. ISGN Solutions Inc. (WOS of Firstsource Group USA, Inc)

11. ISGN Fulfillment Services, Inc. (WOS of ISGN Solutions Inc.)

12. ISGN Fulfillment Agency, LLC (WOS of ISGN Fulfillment Services, Inc.)

13. Firstsource BPO Ireland Limited (WOS of the Company)

14. Firstsource Dialog Solutions (Private) Limited (Subsidiary of the Company)

Associate Company: (1)

1. Nanobi Data and Analytics Private Limited

The Company has no other joint venture Company. No company has ceased to be a joint venture or associate during the FY 2017-18.

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 annexed to the consolidated financial statement and hence not 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 website of the Company viz:



Management Discussion and Analysis Report for the year as stipulated under Regulation 34(3) of the Listing Regulations is separately given and forms part of this Annual Report.


Business Responsibility Report for the year as stipulated under Regulation 34(3) of the Listing Regulations is separately given and forms part of this Annual Report.


The adherence to the corporate governance practices by 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.


The details forming part of the extract of the Annual Return in Form MGT- 9 is annexed herewith as Annexure IV.


A) Conservation of Energy:

The Company continues to make progress towards energy conservation across all its operation centers. The Company is continuously monitoring earlier initiatives of reducing energy consumption within data center/(s) and across its operation centers. The Company, similar to its previous years 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:

The Company has been innovating consistently to absorb newer technology offerings which can benefit business to improve operational efficiency with a cost effective manner. During the year, the Company has invested on newer technology with Software defined network with Cisco on Ciscos M5 next generation blade infrastructure. The Company is also migrating its vast range of physical servers across multiple data centers in India, US & UK on to virtual servers as a result of which there will be savings of Power costs on account of reduction in power consumption and cooling costs. This is the first step towards hosting our Applications to cloud and ease of management of our Data center Infrastructure and Applications.

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 Companys income is diversified across a range of geographies and industries. During the year, 66.23% of the Companys 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 direct marketing network around the world to boost its exports.


The Companys Foreign Exchange Earnings and Outgo during the year were as under:

(Standalone figures in Million)




Foreign Exchange Earnings



Foreign Exchange Outgo



(including capital goods and imports)