Firstsource Solutions Ltd Management Discussions

Overview

Firstsource is a leading provider of technology-driven business process solutions, committed to addressing complex client challenges and delivering measurable outcomes. Trusted by some of the world?s most respected brands across industries such as healthcare, banking and financial services, communications, media and technology, retail, and energy and utilities, we combine deep domain expertise with cutting-edge technology to help clients transform operations, drive growth, and elevate customer experiences. At the heart of our success is the passion and dedication of our people, whose contributions consistently create value for our clients. Guided by our REACCH code — our core value system — we foster a culture of excellence and accountability. Our strategic framework, One Firstsource, outlines our vision to build a sustainable, future-ready organization: one that stays aligned with our clients? evolving priorities, creates meaningful opportunities for our employees, delivers profitable growth for our investors, and positively impacts the communities we serve.

Industry structure and developments

According to ISG, the global Business Process Management (BPM) market is estimated at USD 122–124 billion, marking a 4.2% growth over CY23. Indian BPM exports have shown a strong performance as well, growing at 4.4% year-on-year to USD 48.5 billion in FY25, as per Nasscom, versus 2.7% in FY24. The global BPM industry is undergoing a significant transformation, driven by digital innovation, evolving customer expectations, and the growing demand for agile and resilient operations. At the core of this evolution is the rapid adoption of AI and intelligent automation, which is enabling organizations to automate complex workflows, generate real-time insights, and optimize performance. These technologies are increasingly being used for continuous monitoring and proactive intervention, unlocking new levels of operational efficiency and business agility. In the post-pandemic landscape, there has been a marked shift towards customer-centric BPM approaches. Organizations are reimagining processes with the end user in mind — emphasizing intuitive user experiences, personalized service delivery, and higher engagement. Simultaneously, the rise of low-code and no-code platforms is democratizing process development. These tools allow business users to design, test, and deploy workflows with minimal reliance on IT teams, significantly accelerating innovation cycles and improving responsiveness to dynamic market conditions.

Our strategic response

We believe that AI and other emerging technologies are fundamentally reshaping the BPM industry. As the axis shifts from labor arbitrage to technology arbitrage, traditional strengths — such as large-scale delivery centers and optimized employee pyramids — may turn into constraints. Providers must therefore rewire their business models, not merely enhance them. In this context, Firstsource is uniquely positioned to lead. We are large enough to deliver significant impact, yet agile enough to innovate at speed. Unlike some of our larger peers, we are unencumbered by legacy systems or organizational inertia — enabling us to capitalize on the AI-driven evolution unfolding across industries. To guide our response, we launched unBPO^TM, our blueprint for the future. It reimagines the BPO business model through the lens of AI and automation, challenging traditional constructs across ten tenets — from execution models to commercial constructs and resourcing models to organizational design.

While unBPO^TM is our blueprint designed to challenge the traditional BPO model and shape the future of our industry, the One Firstsource framework has been our north star for the strategy refresh in the organization launched in FY24, focused on making us faster, sharper, and more scalable across seven key themes. We made significant progress across each of the themes during FY25:

1. Simplify the organization and realign leadership. We made targeted leadership hires across sales, solution design, technology, and delivery — strengthening execution across markets and capabilities. Our sales team expanded by 50% during the year, and we successfully attracted high-caliber talent, including from larger peers, validating our core strengths, our revamped go-to-market strategy, and our ability to build a resilient, durable business with industry-leading growth.

2. Embed technology across the value chain. We continued to build technology-led propositions to disrupt incumbents and enhance the relevance of our platforms. We launched relAI^TM, a suite of GenAI-powered offerings aimed at responsible, full-cycle transformation. We are also investing in developing a domain-specific language model for mortgage services to significantly reduce loan processing timelines. In digital collections, AI now powers our persona-based, empathy-first outreach — delivering hyper-personalized, channel-optimized experiences that have improved outcomes by 10%.

3. Institutionalize cross-sell and upsell. We focused on expanding multi-tower relationships and increasing wallet share within existing clients. This effort resulted in significant gains: the number of clients contributing over USD 1 million, USD 5 million, and USD 10 million in annual revenue rose by thirteen, five, and two, respectively.

4. Expand capabilities. We realigned our portfolio around high-growth adjacencies — both organically and through acquisitions. Our collections business expanded into fintech, BNPL, and personal finance, and we began cross-selling collections into non-BFS verticals such as healthcare and utilities. The Ascensos acquisition enhanced our nearshore delivery capabilities, multilingual support, and retail vertical strength, while our entry into Australia added strategic presence in a new market.

5. Amplify the Firstsource brand. We invested significantly in brand building — among analysts, clients, and prospects. Our newly formed Advisory Board, comprising senior industry veterans, has helped amplify our voice in the market. We hosted our first-ever client events in the US and UK, with participation from over 120 CXOs.

6. Elevate the employee experience. We launched several initiatives to enhance hiring, training, and internal mobility. Trailing 12-month attrition dropped to 29.8% in FY25 from 35.4% the previous year. Firstsource was certified as a Great Place to Work in India, the Philippines, the UK, and the US. We delivered 200,000+ hours of digital learning in GenAI, automation, and domain-specific areas. More than 2,500 internal job moves took place under our Seeding initiative. We also launched FirstALUM, a platform to engage our alumni network and unlock new opportunities for collaboration.

7. Drive margin expansion. Despite increased strategic investments, we maintained EBIT margins within a narrow band through rigorous cost management. We identified 37 margin levers — from offshoring to delivery consolidation — and have set a medium-term target of improving margins by 50–75 bps annually, aiming toward mid-teen profitability.

Our strategy revamp, coupled with our strong foundation of domain knowledge and deep client relationships, is helping us take advantage of the market opportunities being created by the ongoing macro and technology shifts. In FY25, we added 43 new logos, which included 12 strategic logos. We define a strategic logo as one where we see potential for at least USD 5+ million relationship. We won fourteen large deals in FY25, including five from new logos. We consider a deal with ACV of over USD 5 million as a large deal. The combined ACV of deal wins in FY25 was up over 60% versus last year, and our FY25 exit deal pipeline was higher by over 30% versus FY24. Our improved growth momentum has helped us gain almost half a percent of market share over the last four quarters against the basket of fifteen of our closest global publicly traded peers, based on trailing 4 quarters reported revenues.

Business segments

Banking & Financial Services (BFS)

The BFS industry continues to navigate a challenging macroeconomic environment marked by high interest rates, inflationary pressures, and regulatory shifts. In Europe, low economic activity and subdued transaction volumes have slowed the pace of digital transformation. In contrast, North America remains relatively resilient, with consumer lending, mortgage services, and fintech innovation emerging as key growth drivers. Across the industry, banks and financial institutions are accelerating their adoption of Generative AI, cloud platforms, and advanced data analytics to drive operational efficiency, manage costs, and reimagine service delivery. AI-led automation, lean operating models, and process reengineering are now central to the BFS transformation agenda. In FY25, our BFS vertical grew 7% YoY in constant currency terms and contributed 34% to the total revenues. We added 18 new logos in this vertical. We have focused our efforts on broadening our presence within existing clients and expanding our footprint into adjacent segments, to reduce the macro dependency in the portfolio. To support this, we?ve strengthened our sales and solutions teams and are now bringing a wider set of capabilities to the table. For example, while elevated interest rates remain an overhang in the mortgage market, our focus on cost optimization programs with our customers is helping us expand our market share, especially among our monoliners customers. Our own domain-centric large language model specific to the mortgage process is aimed at customers looking at non-linear execution models to prepare for a potential volume upcycle in their business. Similarly, in the debt collections segment, our AI-infused digital collection platform is seeing growing interest among clients. In FY25, we also introduced new services offerings around financial crimes and compliance and expanded into building societies market in the UK.

Healthcare

The Healthcare industry is undergoing significant transformation as payers and providers respond to rising medical costs, evolving care models, and increasing regulatory complexity. In the U.S., margin pressures across health plans — driven by increased Medicare utilization, payment rate constraints, and inflation—are accelerating the need for scalable, cost-effective operating models. This, in turn, is fueling demand for transformative programs that include intelligent automation, BPaaS (Business Process as a Service) solutions, and AI-enabled decision support across the healthcare value chain. On the provider side, continued financial stress and talent shortages are prompting a shift toward technology-led Revenue Cycle Management (RCM) platforms and integrated service delivery models. The broader push toward value-based care, interoperability, and real-time data visibility remains a key strategic priority across the ecosystem.

Our deep domain knowledge and a broad-based client portfolio position us well in both the payer and the provider segments to benefit from these demand shifts. In addition, our acquisition of QBSS strengthened our revenue cycle management (RCM) portfolio enabling us to go to the market with a significantly enhanced end-to-end value proposition. A notable development in FY25 was the launch of our BPaaS (business process as a service) offering that is aimed at mid-market healthcare payers. We bring our current capabilities across the payor value chain to play an aggregator role along with partnerships for platform and system integration capabilities to take end-to-end ownership of multiple business processes. This has enabled us to grow our revenues from the healthcare vertical by 30% in FY25. While the growth was driven by the payer segment, we had healthy growth in the provider segment as well. We added 16 new logos and had at least 5 large deal wins in the vertical, including our largest ever deal — a five-year BPaaS engagement with a mid-market U.S. health plan, in FY25.

Communications, Media, and Technology (CMT)

Over the past decade, the global CMT sector has evolved at a rapid pace, driven by convergence between traditional and digital-first players, rising customer experience expectations, and accelerated adoption of AI and automation technologies. Consumer technology companies are at the forefront of deploying Generative AI to personalize interactions, automate content creation, and reimagine product discovery. Meanwhile, traditional media and telecom players are focused on modernizing legacy systems, streamlining service operations, and improving cost efficiency through intelligent automation.

Our focused investments and non-traditional service propositions have positioned us well to address the distinct needs of both digital-native and traditional players. In FY25, we delivered 16% YoY growth in constant currency terms in this vertical and added 8 new logos. Our ability to support next-generation AI operations for leading consumer tech firms continues to be a strategic differentiator. For example, we are engaged in content validation and optimization services for some of the world?s top technology companies, helping them refine and scale their GenAI models. In the communications and media space, we have continued to win market share by positioning ourselves as a challenger to incumbent service providers. Our modular CX and back-office offerings—supported by scalable, multilingual delivery from nearshore locations— have allowed us to deliver measurable impact in both customer experience and cost efficiency.

Diverse

Our diverse business consists mainly of Utilities and the Retail sectors. In the utilities vertical, customer service transformation is a key priority as providers modernize legacy systems and adapt to increased regulatory focus on billing accuracy, service responsiveness, and vulnerable customer management. Volatility in demand patterns and cost pressures are also guiding utilities to invest in digital process redesign, AI-based automation, and omnichannel engagement platforms. We added the Retail vertical to our portfolio through the Ascensos acquisition in FY25. Across both these segments, clients are seeking partners who can blend domain expertise with automation and analytics to deliver measurable outcomes across the customer lifecycle. There is a growing demand for agile, multilingual support delivered through models that balance operational resilience with cost efficiency, with a greater reliance on nearshore and offshore service delivery for non-core functions.

Our diverse portfolio grew by 118% in FY25, including a 5% revenue contribution from Ascensos, and contributed 10% to the total revenues. In the utilities space, we secured 1 new deal in FY25, including expansions with several long-standing clients. Our ability to manage complex customer journeys at scale — supported by AI-infused workflows and blended delivery models — continues to be a core differentiator. In the Retail segment, Ascensos has added some of the most iconic UK Retail brands to our client list for services covering the full front, middle, and back-office spectrum, including customer experience management, digital transformation and customer insights and analytics. We are now working to take these capabilities to prospects in other geographies.

Human resources

Workforce growth & global expansion

As of March 31, 2025, Firstsource employed 34,651 professionals — a 24% increase from 27,940 on March 31, 2024. This growth was driven by both organic and inorganic expansion, including operations launched in four new countries: South Africa, Trinidad, Romania, and Australia. This balance supports our long-term profitability and global competitiveness.

Certification & recognition

In FY25, Firstsource earned the prestigious Great Place to Work^? certification across key geographies — India, the United Kingdom, the United States, and the Philippines. This recognition, based on rigorous employee feedback and cultural assessment, reinforces our commitment to an empowering, inclusive, and purpose-driven workplace.

Mergers & integrations

Seamless integration of two strategic acquisitions contributed significantly to our expanded capabilities, particularly within our Healthcare Provider and retail businesses in Europe. Our dedicated HR team ensured smooth alignment with Firstsource?s values, fostering innovation and operational synergy across new and legacy teams.

Talent management strategy

Talent acquisition

Our hiring teams reached a milestone by recruiting 20,737 individuals globally since April 2024, with a 104% on-time delivery rate. This success stems from an AI-first, Global Talent Acquisition Strategy that leverages advanced technologies, robust policies, and innovative practices to attract and integrate top-tier talent.

Engaging young talent

In alignment with our commitment to nurturing future leaders, we increased apprentice hiring by 78% in India under the National Apprenticeship Promotion Scheme (NAPS) and National Apprentice Training Scheme (NATS), onboarding 4,038 apprentices in FY25.

Talent retention & internal mobility

Our targeted retention initiative, ranging from leadership training and early onboarding to enhanced employee engagement, resulted in a 5.6% year-over-year reduction in attrition, bringing it to 29.8%. Additionally, 2800+ employees benefited from internal role opportunities, supported by the launch of ‘FirstLeap,? a program designed to upskill and certify employees for critical internal roles. Complementary initiatives such as the THRIVE program have further empowered frontline associates through career development and skills enhancement.

Investing in a future-ready workforce

In FY25, we strategically invested in workforce upskilling to create a future-ready, digital-first organization. Our focus was on enhancing digital fluency, adaptability, and innovation — ensuring our employees are equipped to drive business transformation and navigate an evolving technological landscape.

Key initiatives include:

• Customized learning content: Developed 270 hours of tailored learning material to enhance digital fluency, innovation, and adaptability in context of our business and the industries we serve, ensuring relevance and direct impact on performance.

• Strategic partnerships: Collaborated with leading organizations to offer specialized technology and leadership training, ensuring our supervisors and leaders have access to best-in-class resources.

• Learning Experience Platform (LXP): Launched an

AI-driven LXP that integrates internal, external, and social learning opportunities, allowing personalized career and skills development.

• Engagement & impact: Employees logged 263,500 learning hours on digital, leadership and business focused skills, with early metrics indicating a cultural shift towards continuous learning and improved digital competencies that drive operational efficiency and innovation.

Enhancing employee well-being

Our holistic employee well-being strategy integrates continuous training, development, and wellness initiatives:

• FitSource: Our comprehensive wellness program addressing physical, mental, social, and financial health through monthly webinars and an updated information hub.

• First responder program: Over 100 employees trained as First Responders/Mental Health First Aiders, with 22 new additions from Asia in FY25, ensuring timely support during crises.

• Employee Assistance Programs (EAP): Collaborations with certified EAP partners provide professional counselling across India, the US, and the UK.

• Global wellness month: Celebrated with webinars, interactive sessions, and a Photography Contest, engaging over 700 employees live and receiving 300+ contest entries.

Upgrading our policy framework for sustainable growth

In FY25, we undertook a comprehensive upgrade of our policy framework to streamline processes, align with evolving industry standards, and foster an inclusive, growth-oriented culture. By consolidating existing policies and introducing new ones, we aimed to simplify approvals, enhance employee experience, and reinforce our commitment to best-in-class governance.

Key focus areas included:

• Simplification: Merging and refining policies to reduce complexity, minimize administrative overhead, and enable faster decision-making.

• Industry trends & compliance: Adopting best practices around mobility, leave management, and remote/hybrid work, ensuring our workforce is well-supported and our operations remain compliant across geographies.

• Culture & employee experience: Strengthening policies around career advancement, DE&I, and well-being — such as lactation breaks and mental health support — to create an environment where employees can thrive.

• Monetary impact: Optimizing benefits and leave structures to manage costs effectively, while maintaining competitive offerings that attract and retain high-performing talent.

In total, we reviewed and published 98 policies, introduced 18 new ones, and retired 12 that were no longer relevant. These measures collectively strengthen our operational resilience, support our growth trajectory, and underscore our commitment to being an employer of choice. By continuously refining our policy ecosystem, we aim to sustain a high-performance culture that drives long-term value for our stakeholders.

Employee engagement surveys & recognition

Utilizing Microsoft Viva Glint, our lifecycle and pulse surveys — with average participation at 73% and favorability scores around 81.5% — offer actionable insights that have refined onboarding processes and enhanced our Rewards and Recognition frameworks.

Our transition to the Advantage Club has streamlined our reward policy, and enriched the employee experience, supporting over 24,000 monetary awards and 43,000 non-monetary appreciations distributed in FY25.

Diversity, equity, and inclusion (DE&I): advancing impact and inclusion

At Firstsource, DE&I is integral to our ESG strategy. In FY25, we advanced our DE&I framework with a focus on:

• Inclusive Workplace: Fostering environments where every employee feels valued and empowered.

• Enhanced Client Experience: Leveraging our diverse workforce to serve clients with cultural intelligence.

• Community Engagement: Driving societal impact through inclusive hiring and strategic partnerships.

Key strategic enhancements include a revamped DE&I strategy, global ERG governance, and updated policies promoting accessibility and inclusivity. Our robust ERG network — comprising groups such as WIN, Source of Pride, Culture Collective, and the newly launched Diverse Abilities Alliance — empowers employees and drives continuous DE&I learning and engagement through initiatives like DE&I Week, which engaged 3,111 employees, and participation in global diversity observances.

Risks and concerns and their mitigation

The risk management report describes the Company?s enterprise-wide risk management philosophy, structure, and practices. We caution readers that risk-related information outlined here is for information purposes only. This report contains forward-looking statements about risks and uncertainties affecting our business objectives. The business model is subject to uncertainties that could cause results to differ materially from those reflected in the forward-looking statements. Readers are requested to exercise their judgment in assessing the risks associated with the Company and review all the factors discussed elsewhere in this annual report. In today?s dynamic environment, organizations face multiple risks and thus creating and sustaining the value for our stakeholders requires robust governance and a robust risk management function.

Our risk management framework

We have designed and implemented our risk management framework based on the COSO Framework (Committee of Sponsoring Organizations). This globally accepted and recognized framework provides guidance and thought leadership on enterprise risk management and internal controls. Enterprise risk management at Firstsource seeks to minimize the adverse impact of risks on key business objectives and enables the Company to leverage market opportunities effectively. We continuously track these risks with the help of Key Risk Indicators (KRIs) as defined by the risk management team and risk owners.

Risk management process

The Company has defined an integrated enterprise risk management and internal controls framework that encompasses both a top-down and a bottom-up risk assessment process.

Top-down: This approach is strategically crucial. It focuses on the broader cross-cutting risks and macroeconomic factors that affect the entire organization and the Company?s ability to achieve our goals and strategic objectives. It should be at the forefront of the leadership?s agenda.

Bottom-up: The bottom-up approach focuses on an in-depth assessment of the Company?s business processes, our specific risks, and how we control these risks.

Aligning transactional risk data from operational risk registers, internal audits, and operational risk events with the broader enterprise-level risks identified through management discussions, workshops, and macroeconomic assessment will create a line of sight into what is causing an enterprise risk and how those risks could be mitigated or responded to. The risks are identified across the defined risk categories considering the Company?s business objectives. The stakeholders with clearly defined roles and responsibilities at various levels take up the response, remediation, monitoring, tracking, reporting and review at defined periodicities.

Remuneration and financial incentives

The company?s remuneration system is aligned with risk management principles. At the highest level of the organization, decisions on the remuneration of Firstsource?s executive director and senior management incorporate the necessary precautions to avoid assuming excessive risks and rewarding unfavorable management results. The variable remuneration paid to the heads of departments that manage company risk (e.g. the departments of compliance, prevention of occupational risk, information security, etc.) is dependent upon the proper management, disclosure and integration of risks throughout the whole company.

Key business risks and their mitigation

The Company?s critical business risks and their mitigation measures include:

A. Strategic risks

Risks	Risk description
Growth risk	We derive most of our revenues from a few big US and UK-based clients. Hence, any economic slowdown or downturn in these economies and industries may affect the Company?s business.
	Increasing technology disruptions and digitization trends have made inventing and adapting digital technologies imperative. Improper adaption could impact the Company?s ability to grow.
	The Companys healthcare industry services are less prone to economic or recessionary cycles. However, the customer management business is relatively low-margin and more prone to economic variations. Hence, any technology disruption could see volume shrinkage and can have an adverse impact on growth.
	The Company?s continued focus on creating the digital business practices has enabled us to offer differentiated, productized services across industry segments. We have based these services on digitization, robotics, artificial intelligence, and data analytics, and other technology-enabled solutions, which allow the Company to retain and grow our wallet share with our clients and win new logos.
	The Company has also ramped up efforts to establish new relationships in new-age economy businesses and won the first few logos, which will further diversify revenue and industry concentration.
Country risk	The Company has a global footprint, with operations in multiple geographies, intermediate or operating subsidiaries and branches, and branches incorporated in India, the US, the UK, the Philippines, Mexico, and South Africa.
	Consequently, the Company is exposed to various geopolitical and regulatory risks that are beyond the Company?s control.
	From a macroeconomic perspective, the most significant actions taken by the new US administration have been on tariffs and government operations. There have been numerous announcements of new tariffs — some have gone into effect, some have been "paused," and some are yet to come into force.
	The Company has local management teams in all our operating countries, and they understand the country specific economic and operating nuances.
	The Company has also invested significantly in creating a management structure in these geographies and has a well- diversified geographic spread to mitigate these risks.
ESG	The Company?s inability to demonstrate the outcome of our ESG program covering various areas such as Climate change, GHG reductions, responsible supply chains, Governance etc., can have an adverse impact on operations, reputation etc. Further, the expectations may change due to evolving regulatory and stakeholder expectations.
	We have established a robust ESG governance framework that is closely aligned with our Enterprise Risk Management (ERM) practices. ESG-related risks and opportunities are regularly reviewed and reported to the Board-level Risk Management Committee, ensuring strong oversight and accountability. Governance). Our governance structure supports strategic alignment across the organization, with clearly defined roles and responsibilities at both executive and operational levels. To stay responsive to evolving stakeholder expectations and regulatory requirements, we conduct an annual review of our materiality assessment. The outcomes of this review help ensure the continued relevance of our material topics, and any necessary changes are integrated into our risk management framework.

B. Industry and macroeconomic risks

Risks	Risk description
Long selling cycle	The Companys selling cycle for BPS ranges from months to multiple years and requires significant capital, resources, and time from both clients and the Company.
	The Company has robust marketing, sales and business development teams across geographies with an aggressive transition methodology that helps transition new wins fairly quickly into service delivery mode. Most contracts with existing clients are long-term, ensuring sustainable and scalable business from such clients.
Highly competitive Environment	The market for BPS has become highly competitive over the years. These competitors include third-party ‘pure play? BPS providers based largely in India and the Philippines, local/onshore BPS providers in the US and UK, BPS divisions of global IT companies and in-house captives of potential clients.
	The Company understands that we need to retain and grow our leadership in the industry. To maintain this competitive edge, we invest significantly in strengthening domain expertise, digital capabilities, process excellence, operational prowess, and innovation quotient and creating a robust transformation framework. These measures will help us differentiate ourselves vis-?-vis competition and aid non-linear growth in revenues and margins.

C. Financial risks

Risks	Risk description
Currency volatility	The exchange rate between INR and GBP, INR and USD, has been volatile in recent years, and these currencies may continue to fluctuate significantly in the future as well.
	The Company?s operating results will continue to be impacted by fluctuations in these exchange rates The Company has a dedicated treasury function and an internal foreign exchange risk management policy that proactively hedges exposures. Per the internal guidelines, the Company has been judiciously hedging our net exposures regularly through forward cover contracts and other suitable products
Customer credit risk	This risk is the possible inability to collect from clients or delays in collecting the Company?s dues. While this risk did not impact us in the current year the pressure will continue in FY25 due to the adverse impact on the overall liquidity situation and challenges faced by clients? businesses. This could have an impact on the Company?s cash receivables, and the Company may be required to enhance our short-term line of credit temporarily, to continue our operations.
	The Company addresses this risk through a well-defined governance mechanism to ensure adequate liquidity and solvency.
Liquidity and solvency risk	The Company operates through legal entities in multiple countries and is subject to various standards and principles for accounting and reporting. Any material change in the standards will impact the Company?s financial reporting.
	Furthermore, the Company uses financial leverage to ensure optimum solvency. Timely borrowing, repayment, and raising funds at the right cost are important aspects of financial management, which would otherwise adversely impact profitability and solvency.
	The Company has implemented a robust internal financial controls framework that helps mitigate these risks.

D. Operational risks

Risks	Risk description
Non-renewal of key client contracts	The Company continues to maintain existing accounts and acquire new clients. We constantly endeavor to grow existing client businesses and add new clients to our portfolio. The contracts with clients are of varying duration, between one and ten years. After the term expires, we put out our contracts for tender through a procurement process.
	Non-renewal may significantly affect the Company?s revenues.
	The Company recognizes that providing excellent services and constant value enhancement is critical to ensuring a high chance of contractual renewal at the expiry of the term. The Company?s sales and CRM teams constantly strive to enhance their relationships with key stakeholders to position the Company?s services favorably.
Cybersecurity/ Data privacy risk	As part of the services offered to our clients, we handle confidential data and proprietary information. Any leakage of this information harms the Company?s reputation.
	The Company faces heightened cybersecurity risk due to possible attacks on data centers and technology infrastructure. We address this risk through a robust information and data security, privacy, and cybersecurity framework and processes that applies to all our offices and employees. Various operation centers are ISO 27001-certified, which is an international standard for Information Security Management Systems (ISMS).
	Additionally, many processes are certified with HIPPA, HITRUST, and SOC2 accreditations. Audits are conducted on a periodic basis, and any non-conformance observed is fixed immediately. The Company adopts a zero-tolerance policy towards non-compliance with this framework
	We have also deployed various technical controls at the network perimeter, servers, network devices, data centers and end-user computing.
	Threat and vulnerability management: Early detection of core infrastructure vulnerabilities ensures proactive mitigation. Our comprehensive technical compliance check through a third party covers the following:
	• Vulnerability assessment and penetration testing
	• Segmentation penetration testing
	• Web application security assessment
	• Approved scanning vendor for Payment Card Industry Data Security Standard
	• Desktop scans for Payment Card Industry Data Security Standard
	• Source code review
	• Cloud infrastructure review
	• Network configuration review
	• Security operations center and digital footprint monitoring – continuous monitoring
Risks	Risk description
Cybersecurity/ Data privacy risk	24/7 monitoring helps reinforce our security posture while preventing, detecting, analyzing, and responding to real-time cybersecurity incidents. Firstsource has deployed EDR /XDR on all the endpoints, servers and cloud and these digital assets are monitored through 24/7*365 using MDR services (Managed Detection and threat response service) using X-Vigil from SentinelOne
	Digital footprint monitoring is done through a security scorecard that rates the cybersecurity postures of corporate entities by completing a scored analysis of cyber threat intelligence.
	The end users must go through a highly-secure virtual private network with two-factor authentication.
	We protect end-user computing with endpoint detection and response, data loss prevention, encryption, and domain name system layer security. Internet access is managed through a proxy, blocking risky sites and all e-mails are protected by a secure mail gateway that protects them from malware, spam, phishing, ransomware, spoofing, and more.
	• All O365 channels are protected with data loss prevention.
td>	• Servers are protected with best-in-class endpoint detection and responses/extended detection and responses.
	• LogintoserversisthroughasecurechannelusingaprivilegedaccessmanagementtoolwithtwofactorAuthentication
Risks due to operational errors, frauds and internal non- compliances of policies and procedures Reputational risks	The Company has internal policies, procedures and norms for operational activities, process compliance and controls.
	These norms are specified to achieve various control objectives and to prevent fraud and errors. Nonadherence to such internal policies, procedures, and norms, can therefore, lead to operational errors, fraud, and internal non- compliance.
	The Company has strong internal controls to check compliance with policies and procedures operated by various levels of management. Furthermore, these controls are also subject to risk-based internal audits by an independent internal audit team, which helps identify and remedy gaps promptly.
	Our clients are big and reputed corporates. A loss of reputation can adversely affect our operations and contractibility.
	As a public company, we are scrutinized by many constituents including the media.
	We have not been impacted by any event that could jeopardize our reputation in the past. Our well-managed operations do not expose our employees and clients to major risks. Moreover, our communications setup is always proactive in managing minor situations that may arise.
Legal risks	The Company has long-term contracts with our customers, and we deliver our services under these contracts from several offices across the US, the UK, India, Mexico, South Africa, and the Philippines. Additionally, to deliver on the various service level commitments, the Company also needs to ensure compliance with applicable laws and regulations in those geographies, including but not limited to employment, tax, and environmental laws.
	Additionally, the Company must safeguard our intellectual properties against infringement and ensure compliance with third-party licenses used in our day-to-day business.
	The Company has a legal team in place, which, in addition to advising and ensuring documentary safeguarding, closely works with business and support functions to enable compliance with contractual and/or regulatory requirements.

E. Human resources risks

Risks	Risk description
Risk related to Attrition	In the BPM industry, talent continuity directly impacts operational performance, client satisfaction, and cost efficiency.
	The accelerating pace of change — driven by automation, AI, and agentic technologies — is reshaping roles and skills, increasing pressure to retain agile, multi-skilled talent.
	Evolving employee expectations, especially across generations, further complicate retention and make it a persistent business risk. The consequences include service disruption, higher replacement costs, and diminished employee experience. To mitigate this, the Company has adopted a targeted retention strategy, with a focus on critical roles:
	• Strengthening onboarding and early lifecycle experiences to drive faster integration
	• Advancing digital and leadership capability building to equip talent for the future
	• Accelerating internal mobility through curated programs aligned with individual aspirations and business needs
	• Expanding internal learning academies for continuous upskilling and reskilling
	• Driving well-being, career enablement, and continuous learning to deepen engagement
	• Investing in first-line manager development to improve team stability and employee experience
Risk related to ability to recruit employees at a large-scale and manage inflationary wage costs	Our ability to attract and onboard skilled talent at scale remains core to business growth. As digital transformation reshapes the BPM industry, demand for new capabilities — particularly in AI, analytics, and customer-centric roles — is rising. Simultaneously, wage inflation and talent shortages have made hiring more competitive and costly.
Risks	Risk description
Risk related to ability to recruit employees at a large-scale and manage inflationary wage costs	To manage these pressures, the Company has evolved its talent acquisition model to build a sustainable, future-ready pipeline:
	• A robust employee referral program drives 30% of hiring, improving cultural alignment and retention
	• A structured apprentice hiring strategy brings in early-career talent for digital and emerging roles, reducing hiring costs and enabling long-term capability building
	• AI-enabled hiring platforms enhance recruitment speed, accuracy, and market reach
	• Strong employer branding through career events, digital outreach, and local partnerships increases visibility and attractiveness
	• Strategic tie-ups with educational institutions in tier-II and III cities expand access to untapped talent pools
Risk related to leadership team and succession planning	• Focused investment in internal mobility to fill lateral roles from within Effective leadership is essential to navigate market shifts, drive strategy, and sustain client trust. In a rapidly evolving market environment, leadership attrition can impact business continuity, operational stability, and cultural cohesion. To mitigate this risk, we follow a disciplined, future-oriented succession strategy:
	• We identify and prioritize "Value Creator" roles—those with the greatest impact on strategic execution, client outcomes, and business growth—and ensure succession plans are in place for each
	• Succession plans and talent fitment are reviewed regularly to ensure readiness and continuity
	• Our total rewards framework ensures leadership compensation is competitive, performance-linked, and aligned with retention objectives
	• Internal talent reviews and development programs build a future-fit leadership pipeline
Risk of unethical business practices/ misconduct	The BPS industry is people-centric with a large employee base across cultures and geographies. It also has client- driven incentive programs in many businesses, which may lead to acts of potential misconduct cases and resultant client or reputational issues.
	The Company has a well-defined code of conduct which every employee is trained on and certifies to comply with. The Company also has a robust whistle-blowing mechanism which enables employees to report any misconduct, which is independently investigated and remediated. We also have a variety of training/refresher programs throughout the year. Additionally, the Company has a systematic background check verification program (for employees) and a due diligence process (for vendors/third parties) the appointment stage.
	The Company demonstrates zero tolerance towards cases of unethical business practices or misconduct

F. Compliance risks

Risks	Risk description
Compliance and regulatory risks in various geographies	As we have grown, our geographic presence, customer base, and exposure to various regulatory and compliance risks have also increased. The Company has a relatively high proportion of regulated businesses in our overall portfolio, which enhances the regulatory risk. The Company?s operations and clients are spread across multiple geographies and are governed by various regulations and government guidelines. Breach of any of these regulatory provisions can attract regulatory inspection, notices, penalties, and revocation of permits or licenses.
	The Company has implemented a robust regulatory and contractual compliance framework to identify, assess, monitor, control, and report compliance status concerning laws and regulations specific to the country we operate in, and the client-specific work in a consistent manner for our businesses across the globe. The framework ensures we align compliance ownerships, keep responsible personnel aware, report compliance status, and take necessary actions to comply. All laws and regulations are verified for applicability, detailed at the provision level, and tracked for compliance at the function and location level.

G. Technology risks

Risks	Risk description
Advent of disruptive technologies	The overall business environment continues to witness emerging disruptive technologies. However, clients seek to cut additional back-office costs due to continued budget pressures, while suppliers try to create additional services and associated revenues. Technologies such as cloud computing, artificial intelligence, data analytics software, social media platforms, and process automation software are being used in the BPS industry to enable businesses to lower costs and be more effective.
	BPS companies are moving fast to offer additional value-added services through technology enablement, partnerships, and alliances.
	As part of our productization initiatives, the Company has developed a comprehensive suite of digital solutions for robotics process automation and digital analytics. A combination of domain and process expertise with best- in- class technology is helping the Company pursue significant opportunities.

Discussion on Financial Position relating to Operational Performance

Shareholders? funds

The authorized share capital of the Company is I 8,720.00 million with 872 million Equity shares of I 10 each. The paid up share capital as of March 31, 2025 stands at I 6,969.91 million compared to I 6,969.91 million as of March 31, 2024.

There is no increase in equity share capital.

The Other equity of the Company increased from I 30,034.12 million to I 34,006.39 million. The details of increase in Reserves and surplus by I 3,972.27 million are as below:

Particulars	Amount
Increase on account of:
Profit for the year less appropriation	5,888.51
Exchange Difference on consolidation of	636.86
non-integral subsidiaries/entities
Employee stock option reserve	556.19
Decrease on account of:
Dividend (Net)	(2,758.57)
Effective portion of cash flow hedges	(234.14)
Treasury shares, net	(116.58)
Net Increase in Reserves and surplus	3,972.27

Minority interest

Minority interest is created on account of 74% consolidation of Firstsource Dialog Solutions (Private) Limited, Sri Lanka. Minority interest as of March 31, 2025 is I 3.96 million as compared to I 3.84 million as of March 31, 2024.

Long-term borrowings

Secured long-term borrowings represent finance lease obligation. Unsecured long-term borrowings represent loan from banks and non-banking financial companies.

Unsecured long-term borrowings outstanding as of March 31, 2025 were I 3,419 million as compared to I Nil as of March 31, 2024. The net increase was majorly due to loan taken from bank.

Deferred tax liabilities

Deferred tax liabilities as of March 31, 2025 were I 1,645.11 million as compared to I 1,470.38 million as of March 31, 2024. This is majorly due to utilization of deferred tax on business losses during the year.

Lease liabilities

Lease liabilities for the Company as of March 31, 2025 were I 10,365.67 million and for March 31, 2024 were I 7,209.19 million. The increase is on account of new premises taken on lease.

Provisions

Provisions represents provision for gratuity and compensated absences liability to employees based on actuarial valuation done by an independent actuary. These provisions as of March 31, 2025 were I 884.16 million as compared to I 654.68 million in March 31, 2024.

Short-term and other borrowings

Short-term borrowings as of March 31, 2025 were I 11,907.95 million as compared to I 8,048.76 million as of March 31, 2024. The increase is on account of additional line of credit from banks netted off by decrease in current maturities of long term borrowings.

Trade payables

Trade payables as of March 31, 2025 were I 3,976.20 million as compared to I 3,055.81 million as of March 31, 2024.

Other financial liabilities

Other financial liabilities as of March 31, 2025 were I 4,208.59 million as compared to I 2,047.30 million as of March 31, 2024. The increase in other financial liabilities is majorly on account of increase in employee benefits payable and contingent consideration.

Other liabilities

Other current liabilities as of March 31, 2025 were I 1,105.52 million as compared to I 1,056.96 million as of March 31, 2024.

Goodwill

Goodwill as of March 31, 2025 was I 36,799.24 million as compared to I 29,884.90 million as of March 31, 2024. The increase in goodwill during the year was due to acquisition of Quintessence Business Solutions & Services Private Limited and Ascensos Limited.

Fixed assets

The net block of tangible assets, intangible assets and capital work-in progress amounting to I 4,501.91 million as of March 31, 2025 as compared to I 2,460.91 million as of March 31, 2024, resulted in a net increase of the assets to the extent of I 2,041 million. This is majorly due to net additions and assets acquired on acquisition of I 3,755.72 million and by upward exchange rate impact of I 27.21 million and depreciation charge for the year amounting to I 1,741.93 million.

Right of use assets

Right of use assets of the Company was I 9,125.76 million on March 31, 2025 and I 6,355.29 million on March 31, 2024. The increase is due to net additions and assets acquired on acquisition of I 4,475.43 million and upward exchange rate impact of I 107.16 million offset by depreciation charge for the year amounting to I 1,812.12 million.

Investments

The investments of the Company represent non-current investments of I 115.21 million and current investments of I 615.63 million as on March 31, 2025 as compared to I 115.05 million and I 300.27 million respectively as on March 31, 2024.

Deferred tax assets

Deferred Tax assets of the Company as of March 31, 2025 were I 2,734.63 million as compared to I 2,920.61 million as of March 31, 2024.

Income tax assets

Income Tax assets of the Company as of March 31, 2025 were I 713.93 million as compared to I 808.79 million as of March 31, 2024.

Other non-current assets

The other non-current assets of the Company as of March 31, 2025 were I 1,964.65 million as compared to I 2,086.10 million as of March 31, 2024. This decrease is due to decrease in non-current portion of deferred contract cost.

Trade receivables – billed

Billed trade receivables amount to I 11,677.13 million (net of provision for doubtful debts amounting to I 1,269.81 million) as of March 31, 2025 as compared to I 8,606.78 million (net of provision for doubtful debts amounting to I 848.23 million) as of March 31, 2024. These receivables are considered good and realizable.

The need for provisions is assessed based on various factors including collectability of specific dues, risk perceptions of the industry in which the customer operates and general economic factors which could affect the Company?s ability to settle claims. Provisions are generally made for all receivables outstanding for more than 180 days as also for others, depending on the management?s perception of the risk. Debtors? days as of March 31, 2025 (calculated based on per-day sales in the year) were 53 days, as compared to 50 days as of March 31, 2024. The Company constantly focuses on reducing its receivables period by improving its collection efforts.

Trade receivables – unbilled

Unbilled trade receivables amount to I 5,183.18 million as of March 31, 2025 as compared to I 3,001.40 million as of March 31, 2024.

Cash and bank balances

Cash balance represents balance in cash with the Company to meet its petty cash expenditures. The bank balances in India include both Rupee accounts and foreign currency accounts. The bank balances in overseas current accounts are maintained to meet the expenditure of the overseas subsidiaries and branches. The cash and bank balance as of March 31, 2025 was I 1,542.12 million as compared to I 1,747.74 million as of March 31, 2024. This decrease in cash was due to cash used in investing activities and payment of dividend offset by cash generated from operating activities.

Other financial assets

Other Financial Assets as of March 31, 2025 were I 1,232.78 million as compared to I 845.11 million as of March 31, 2024. The increase in these assets was on account of increase in deposits.

Other current assets

The other current assets of the Company as of March 31, 2025 were I 2,888.28 million as compared to I 1,486.16 million as of March 31, 2024. This increase is majorly due to increase in prepaid expenses.

Results of operations

The table below sets forth, for the periods indicated, certain income and expense items for the Company?s consolidated operations:

	FY25	FY24
Particulars	Rs million	% of income	Rs million	% of income
Income from services	79,721.00	-	63,325.28	-
Other operating income	82.14	-	37.17	-
Revenue from operations	79,803.14	100%	63,362.45	100%
EXPENDITURE
Personnel cost	49,957.80	62.6%	39,093.25	61.7%
Other expenses	17,769.14	22.3%	14,704.80	23.2%
Operating EBITDA (Earnings before Interest, Tax and Depreciation)	12,076.20	15.1%	9,564.40	15.1%
Depreciation and amortization	3,270.35	4.1%	2,602.24	4.1%
Operating EBIT (Earnings before Interest and Tax)	8,805.85	11.0%	6,962.16	11.0%
Finance charges	1,478.76	1.9%	1,033.85	1.6%
Share in net (profit) / loss of associate
Other income/(expense)	(8.67)	0.0%	368.44	0.6%
Profit before exceptional item and tax	7,318.42	9.2%	6,296.75	9.9%
Exceptional items, net (income)	88.09	0.1%	-	-
Profit before tax	7,406.51	9.3%	6,296.75	9.9%
Provision for taxation
- Current tax expense (including MAT)	1,294.64	1.6%	900.54	1.4%
- Deferred tax Charge	167.36	0.2%	248.96	0.4%
Profit after tax before minority interest	5,944.51	7.4%	5,147.25	8.1%
Minority interest	(0.04)	0.0%	(0.04)	0.0%
Profit after tax	5,944.55	7.4%	5,147.29	8.1%

Income

Income from Services

Income from services increased by 25.9% to I 79,721.00 million in FY25 from I 63,325.28 million in FY24. The Company attributes this increase in its income from services to new business from existing clients and addition of few new clients. The average exchange rate for consolidation of subsidiaries for USD and GBP in FY25 was I 84.55 per USD and I 107.87 per GBP as compared to I 82.78 per USD and I 104.05 per GBP in FY24.

Consolidated revenues by segment

The Company serves clients for Banking and Financial Services, Healthcare, Communication, Media & Technology and Diverse Industries. Clients from Banking and Financial Services accounted for 34.0% (FY24: 39.3%), clients from Healthcare accounted for 34.9% (FY24: 33.0%), clients from Communication, Media and Technology accounted for 21.2% (FY24: 22.3%), clients from Diverse Industries accounted for 9.9% (FY24: 5.4%) of the income from services in FY25.

The following table gives a segment-wise breakdown of the income from services for the corresponding periods:

	FY25	FY24
Business Segment
Banking and Financial Services	27,119.16	24,856.63
Healthcare	27,823.87	20,874.04
Communication, Media and Technology	16,897.74	14,113.39
Diverse Industries	7,880.23	3,481.22
Total	79,721.00	63,325.28

Consolidated revenues by geography

The Company reports its revenue based on geography, categorizing clients into the USA, UK and Rest of the World. Clients from USA accounted for 67.7% (FY24: 64.8%), clients from UK accounted for 32% (FY24: 35.1%), clients from Rest of the World accounted for 0.3% (FY24: 0.1%). The following table gives a segment wise breakdown of the income from services for the corresponding periods:

	FY25	FY24
Geography
UK	25,534.70	22,239.21
USA	53,923.55	41,012.03
Rest of the World	262.75	74.04
Total	79,721.00	63,325.28

Client concentration

In FY25 income from the Company?s five largest clients amounted to I 24,876.56 million versus I 22,937.78 million in FY24, accounting for 31.2% versus 36.2% of total income from services respectively. In FY25, the Company had 30 clients contributing individually over USD 5 million each in annual revenues as compared to 25 clients in FY24. Although the Company continues to increase and diversify its client base, it focuses on gradually reducing this concentration by adding more high-value clients.

Other operating income

Other operating income of I 82.14 million in FY25 (FY24: I 37.17 million) includes exchange gain of on restatement and settlement of debtor balances and related gain/(loss) on forward/option contracts as these transactions relate to the operations of the Company.

Revenue from operations

The Company?s revenue from operations increased by 25.9% to I 79,803.14 million in FY25 from I 63,362.45 million in FY24 in rupee terms and grew by 1.1% in constant currency terms.

Expenditure

Personnel costs

Personnel costs increased by 27.8% to I 49,957.80 million in FY25 from I 39,093.25 million in FY24, with the number of employees increasing to 34,651 as of March 31, 2025 from 27,940 as of March 31, 2024.

Other expenses

Other expenses for FY25 amounted to 22.3 % of the income for that period, as compared to 23.2% of income in FY24. Operating costs increased to I 17,769.14 million in FY25 from I 14,704.80 million in FY24. This increase is majorly due to increment in operating expenses with high variability.

Operating EBITDA (Earnings before Interest, Tax and Depreciation)

Operating EBITDA increased to I 12,076.20 million in FY25 from 9,564.40 million in FY24. Operating EBITDA in FY25 is 15.1% of income as compared to 15.1% in FY24.

Depreciation

Depreciation costs for FY25 amounted to 4.1% of the income for that period, as compared to 4.1% in FY24. Depreciation increased year-on-year to I 3,270.35 million in FY25 from I 2,602.24 million in FY24.

Operating EBIT (Earnings before interest and tax)

Operating Earnings before Interest and Tax (EBIT) increased by I 1,843.69 million to I 8,805.85 million in FY25 from I 6,962.16 million in FY24. Operating EBIT in FY25 is 11.0% compared to 11.0% in FY24.

Finance cost

Finance cost for FY25 amounted to 1.9% of income for that period, as compared to 1.6% of income in FY24. Finance charges increased to I 1,478.76 million in FY25 from I 1,033.85 million in FY24.

Other income

Other income/(expense), net decreased to I (8.67) million in FY25 from I 368.44 million in FY24. The components of other income in FY25 were profit from the sale/redemption of current investments of I 68.45 million, loss on sale of fixed assets of I 49.98 million, interest income of I 26.84 million, foreign exchange loss of I 62.99 million and other miscellaneous income, net of I 9.01 million which is on account of changes in the fair value of the liabilities for purchase of non-controlling interest and contingent considerations respectively.

Profit before tax

Profit before tax increased to I 7,406.51 million in FY25 from a profit before tax of I 6,296.75 million in FY24. Profit before tax in FY25 was 9.2% of the income, as compared to 9.9% of the income in FY24.

Tax expense

Tax expense increased to I 1,462.00 million in FY25, from I 1,149.50 million in FY24. Income tax expense comprises of current tax, net change in the deferred tax assets and liabilities in the applicable FY period and minimum alternate tax credit. Current tax expense comprises tax on income from operations in India and foreign tax jurisdictions. The Company had the benefit of tax-holiday under Section 10AA under the Special Economic Zone scheme, since few of the centers in India are in Special Economic Zone.

Current tax expense amounted to I 1,294.64 million in FY25 as compared to I 900.54 million in FY24, and deferred tax charge of I 167.36 million in FY25 compared to a deferred tax charge of I 248.96 million in FY24.

Profit after tax before minority interest

As a result of the foregoing, profit after tax before minority interest increased to I 5,944.51 million for FY25 from profit after tax before minority interest of I 5,147.25 million in FY24.

Minority interest

Minority interest is I (0.04) million in FY25 as compared to I (0.04) million in FY24.

Profit after tax

As a result of the foregoing, profit after tax to I 5,944.55 million in FY25 from profit after tax of I 5,147.29 million in FY24. Profit after tax in FY25 was 7.4% of the income, as compared to 8.1% of the income in FY24.

Liquidity and capital resources cash flows

The Company needs cash to fund the technology and infrastructure requirements in its operation centers, to fund its working capital needs, to pay interest and taxes, to fund acquisitions and for other general corporate purposes. The Company funds these capital requirements through variety of sources, including cash from operations, short and long-term lines of credit and issuances of share capital. As of March 31, 2025, the Company had cash and cash equivalents of I 1,542.12 million. This represents cash and balances with banks in India and abroad.

The Company?s summarized statement of consolidated cash flows is set forth below:

	FY25	FY24
Net Cash flow from Operating activities	7,010.96	6,440.54
Net Cash flow generated from /(used in) from Investing	(7,458.96)	(579.93)
Activities
Net Cash flow generated/used in	225.92	(5,634.50)
Financing Activities
Cash and cash equivalents at the beginning of the year	1,747.74	1,515.40
Foreign exchange gain on translating Cash and cash equivalents	16.46	6.23
Cash and cash equivalents at the end of the year	1,542.12	1,747.74

Operating activities

Net cash generated from the Company?s operating activities in FY25 amounted to I 7,010.96 million. This consisted of net profit before tax of I 7,406.51 million and a net upward adjustment of I 5,767.14 million relating to various non-cash items and non-operating items including depreciation of I 3,270.35 million; net decrease in working capital of I 4,943.97 million; and income taxes paid of I 1,218.72 million. The working capital change was due to increase in trade receivables of I 4,208.57 million, increase in loans and advances by I 1,233.46 million and increase in liabilities and provisions by I 498.06 million. Net cash generated from the Company?s operating activities in FY24 amounted to I 6,440.54 million. This consisted of net profit before tax of I 6,296.75 million and a net upward adjustment of I 3,272.93 million relating to various non-cash items and non-operating items including depreciation of I 2,602.24 million; net increase in working capital of I 2,820.07 million; and income taxes paid of I 717.75 million. The working capital change was due to increase in trade receivables of I 1,545.95 million, increase in loans and advances by I 1,274.12 million and increase in liabilities and provisions by I 408.68 million.

Investing activities

In FY25, the Company used I 7,458.96 of cash from its investing activities. These investing activities included capital expenditure of I 2,236.09 million, including fixed assets purchased and replaced in connection with the Company?s operation centers in UK, USA and India and net purchase of money and debt market mutual funds amounting to I 159.30 million.

In FY24, the Company used I 579.93 million of cash from its investing activities. These investing activities included capital expenditure of I 850.43 million, including fixed assets purchased and replaced in connection with the Company?s operation centers in UK, USA and India and net purchase of money and debt market mutual funds amounting to I 357.34 million.

Financing activities

In FY25, net cash generated in financing activities amounted to I 225.92 million. This comprised of repayment of long term borrowings of I 1,793.68 million, proceeds from long term borrowings of I3,382.11 million, Proceeds of short term borrowings of I 5,198.48 million. The Company paid towards purchase of Non-controlling Interest in a subsidiary of I224.82 million, interest of I 1,579.22 million, purchase of treasury shares (net) of I (362.00) million. During the year, the Company also paid dividend of I 2,758.57 million to its shareholders and repaid lease liability of I 1,636.38 million.

In FY24, net cash used in financing activities amounted to I 5,634.50 million. This comprised of repayment of long term borrowings of I 1,561.24 million, proceeds from long term borrowings of INIL, proceeds of short term borrowings of I 1,277.99 million. The Company paid towards purchase of Non-controlling Interest in a subsidiary of I583.32 million, interest of I 1,010.70 million, purchase of treasury shares (net) of I 58.85 million. During the year, the Company also paid dividend of I 2,405.94 million to its shareholders and repaid lease liability of I 1,410.14 million.

Cash position

The Company funds its short-term working capital requirements through cash flow from operations, working capital overdraft facilities with commercial banks, medium-term borrowings from banks and other commercial financial institutions. As of March 31, 2025, the Company had cash and bank balances of I 1,542.12 million as compared to I 1,747.74 million as of March 31, 2024.

Key financial ratios

Ratios	FY25	FY24
Debtors Turnover	6.83	7.36
Current Ratio	0.9	0.9
Debt Equity Ratio	0.4	0.2
Interest Coverage	5.9	7.1
Operating EBITDA	15.1%	15.1%
Operating EBIT	11.0%	11.0%
Net Profit Margin	7.4%	8.1%

Table presents key financial ratios, as applicable, for Firstsource Solutions Limited.

Internal control systems and their appropriateness

Firstsource has institutionalized a system of internal controls, with documented procedures covering all corporate functions. Internal controls provide reasonable assurance regarding the effectiveness and efficiency of operations, the reliability of financial controls, and compliance with applicable laws and regulations.

Cautionary statement

This document contains statements about expected future events, financial and operating results of the Company, which are forward-looking. By their nature, forward-looking statements require the Company to make assumptions and are subject to inherent risks and uncertainties. There is significant risk that the assumptions, predictions and other forward-looking statements will not prove to be accurate. Readers are cautioned not to place undue reliance on forward-looking statements as several factors could cause assumptions, actual future results and events to differ materially from those expressed in the forward-looking statements. Accordingly, this document is subject to the disclaimer and qualified in its entirety by the assumptions, qualifications and risk factors referred to in the management?s discussion and analysis of Firstsource Solutions Annual Report for the Financial Year 2024-25.