Oracle Financial Services Software Ltd Management Discussions

of financial condition and results of operations

Technology trends in the financial services industry and outlook

The banking and financial services industry has been undergoing a rapid transformation driven by technological advancements. Banks and financial institutions are leveraging cutting-edge tools to enhance customer experiences, streamline operations, manage regulations, and stay competitive in a digital-first world. Technology offers a choice of deployment models to the banks and significantly impacts the investments needed and time to respond to the market.

The factors disrupting the industry are:

Componentization and flexible deployment

Banks gain agility by deploying solutions that are componentized and developed for a cloud native microservices based architecture. Cloud based deployments enable banks to prioritize their investments in areas which give maximum return and provide scalability without burdensome investments. As traditional institutions seek to innovate and adapt to changing consumer preferences, the collaboration between their core solution and Fintechs offering a local niche functionality gives significant time to market advantage. Many banks and financial institutions are now partnering with fintech firms alongside their core solution to enhance digital offerings, improve customer experiences, and drive growth in new markets.

Disruptive innovations

AI (artificial intelligence) paradigms such as machine learning, natural language processing, and predictive analytics are being leveraged by banks to automate routine tasks, personalize customer experiences, manage risks and optimize decision-making processes. Chatbots and virtual assistants powered by AI & ML are enhancing customer experience through an efficient and personalized interaction mechanism.

Generative AI can process large chunks of information in the back-office, performing predictable tasks instantaneously, thereby reducing cycle time. Bankers no longer need to sift through voluminous documents and records, which helps in eliminating manual errors, improving fraud detection, and facilitating credit decisioning. Machine learning and artificial intelligence algorithms play a crucial role in detecting and preventing fraudulent activities in the banking and financial services industry. These technologies can analyze vast amounts of data in real-time to identify suspicious patterns and anomalies that may indicate a potential risk.

Dynamic regulations and security vulnerabilities

As technology further reshapes the banking and financial services landscape, privacy, cybersecurity, and regulatory compliances continue to be the focus areas. Compliance with regulations such as PSD2 and KYC/AML requirements is also critical to maintaining trust and credibility in the eyes of regulators and customers. Financial institutions can significantly reduce the risk of identity theft and unauthorized access through the implementation of robust encryption, biometric authentication and other technology-based tools that can interoperate with their technology solutions.

In summary

The banking and financial services industry is poised for further disruption driven by emerging technologies and evolving competition and regulations. We are committed to empowering financial institutions to become more responsive, agile, collaborative, and insightful in their businesses. Our solutions are architected to enable financial institutions establish new business models, operate flexibly, respond proactively to market conditions, create new business opportunities and drive growth.

Business overview

Our banking technology blueprint is designed for disruptions.

Oracle Financial Services Software Limited is a global leader in providing financial technology solutions for retail banking, corporate banking, captive financial institutions, risk and finance, and financial crime and compliance management. We empower financial institutions to become more responsive, agile, collaborative, and insightful in what they do by leveraging the outcomes of the latest technologies.

The products business is our principal business segment. We provide a comprehensive suite of IT solutions delivering a compelling digital experience and engagement to the financial institutions of varying business focus, geographic spread, and scale. Our customers rely on our solutions to modernize their technology platforms, accelerate digitization and deliver superior customer services.

Finergy is our services business comprising our bespoke consulting services business.

Our solutions are built on three pillars.

Flexible architecture and choice of deployment

Our solutions are architected to enable financial institutions establish new business models, operate flexibly, respond proactively to market conditions, create new business opportunities and drive growth. Our solutions are built on microservices and embedded with AI and designed for easy consumption by the banks. We help solve critical problems in the financial services industry by delivering embedded financial experiences for all banking services, revitalizing global trade and supply chains, modernizing finance and risk management.

Resiliency and high availability

To keep up with the demands of todays global businesses, banks today need resilient systems that are always on and deliver high throughput, which is facilitated through our products. Our product processors enable immediate provisioning and availability, extensive yet simple configurability, and easy bolt-on to legacy systems. Memory grids enable a scalable and concurrent hyperperformance while automated patching and lower disaster recovery switchover times help banks lower costs. Concurrently our analytical applications are designed to perform complex computations on large scale of data for risk management, fraud detection and compliance.

Enhanced customer experiences with innovation built-in

Our solutions deliver a modern and immersive persona-based user experience that offers a responsive design, advanced data visualization capabilities, AI-powered recommendations and natural language interactions for the end users. Our built-in innovations enable banks and financial institutions to leverage advanced technologies such as AI-powered credit decisioning, graph analytics for financial crime investigation, IoT for usage-based lease pricing and blockchain for digital asset banking.

Products

We provide a comprehensive suite of IT solutions delivering a compelling digital experience and digital engagement to the financial services industry.

Oracle Banking

Banks are increasingly looking at cloud-based solutions to reduce costs, faster time to market and gain the flexibility to quickly scale their operations based on demand. We offer true Software as a Service (SaaS) end-to-end infrastructure built on a microservices architecture. Our cloud native SaaS services are designed to help banks modernize their business capabilities faster and with lower risk. The services can run standalone, work seamlessly together, and coexist with other applications to help banks lower costs and risk while powering innovation. The new services are built to deliver performance and can leverage faster provisioning and availability.

Our solutions enable banks to build a truly digital and seamless front-end, and to position themselves as a comprehensive marketplace providing end-to-end offerings through their banking portals. Our SaaS-based, packaged solution offers more than 1,800 ready-to-deploy business and foundational banking APIs to help banks in their quest to offer complete banking as a service. For corporate banks, our solutions dont just deliver enhanced self-service capabilities, but also enable corporates to integrate the banking front-end with their ERP systems through our banking APIs.

Our intelligent front-end customer engagement tools offer advanced capabilities such as voice banking on Alexa and chatbot, P2P payments from social media and digital channels, and even corporate approvals using applications such as WhatsApp. For the mid-office and back-office, AI helps extract identities and information from reports, invoices, and filings, and detect fraud or trace anomalies in unstructured data. OCR tools address the problem of voluminous documentation through automated document extraction and verification capabilities.

Retail Banking

Empowering retail banking customers

Retail banking has witnessed significant disruptions over the past few years led by evolving customer demands, dynamic global business scenarios, and technology disruptions. The customer, exposed to an increasingly personalized experience across the service industries, is now expecting similar empowerment from banks and financial institutions. The retail banks are also facing competition from a slew of non-traditional agile players who operate in niche areas. To keep up with these challenges, banks need software solutions that can not only deliver a stable banking platform, but also leverage disruptive technologies such as AI and ML to analyze customer data and provide personalized services. AI and ML can also be used to detect and prevent fraud, improve customer service, and automate routine tasks. Banks are also exploring the use of blockchain to improve their operations, including reducing transaction times, increasing security, and reducing costs. More and more banks today are looking for ways to deliver not just banking but also other innovative financial products as well as e-commerce services integrated with their banking applications. In summary, the retail banking industry is undergoing significant changes and software solutions are playing a critical role in driving this transformation. Banks that embrace these trends and invest in the right software solutions will be better positioned to meet the changing needs of their customers and stay competitive in the market.

Our retail banking solutions enable banks to innovate and respond with speed and agility to their demanding customers. Over the years, we have built loyalty and trust by delivering customer-centric digital banking and operational intelligence across the customers middle and back offices. Our retail banking solutions offer efficient mobile banking, faster transaction processing, and personalized account insights to build stronger customer relationships and quicker business outcomes. By deploying an agile and adaptive microservices-based architecture with built-in innovation, we offer flexibility in the choice of cloud or on-premises

deployment based on customer preference. A leading global bank used Oracle Banking Digital Experience to reduce the cost per transaction by 90%. A long-standing customer of Oracle automated the majority of processes across the front and back office, improving operational SLAs by more than 50%.

Corporate Banking

Helping corporate banks enable a vibrant global ecosystem

The corporate banking software market has been growing rapidly in recent years, driven by the need for banks to provide better services to their corporate clients and the increasing adoption of digital technologies. Similar to retail customers, the corporate customers also need support of their bank in keeping in step with their own business transformation. The banks also need to cater to new age corporations with a strong digital focus.

To cater to these needs, banks are leveraging disruptive technologies such as artificial intelligence, machine learning, and data analytics to automate processes, improve efficiency, and provide better insights into customer behavior. Using open banking, banks are partnering with fintech startups and other third-party providers to offer their corporate clients a range of solutions that can help them manage their finances more efficiently.

Our corporate banking solutions can help banks adopt to these rapid developments in the industry. Our comprehensive offerings across trade and supply chain finance, corporate credit, and treasury management can help banks better manage their global operations effectively. As one of the leading banking IT solutions providers, we are at the forefront of the ongoing transformation towards componentization and adoption of microservices-based architecture to make each component a standalone unit of value.

Lending and Leasing

Enabling specialized financial institutions deliver tailored financing solutions to their customers

The emergence of the subscription economy has also resulted in the development of new financing options and models for specialized financial institutions. Our solution for asset finance delivers seamless, end-to-end digital capabilities, from origination to servicing through collections and asset management. It offers flexible deployment options in the cloud. Its open architecture can integrate with any compatible system, application, or device. This solution improves the customer experience with a modern digital platform that supports the subscription economy; enables flexibility that drives business growth and increases productivity and efficiency with automated processes and transactions.

Payments

Enabling real-time payments at scale across geographical boundaries

Our payment solutions as well as our digital and open banking capabilities span corporate and retail banking. Our cloud-native digital payments solution is built natively on the ISO 20022 framework and is available by subscription that enables banks and financial institutions process payments in real time, anywhere, and at scale. The solution helps banks stay ahead of the game and optimize transaction efficiency with a one-stop payment processing for multiple payment types, is constantly updated to reflect scheme rulebooks and guidelines, and supports SWIFT GPI for low-value cross-border payments.

A specialized digital payments platform leveraged Oracle Banking Payments to help freelancers and small businesses send and receive money worldwide efficiently and promptly.

Digital Experience

Delivering immersive SaaS cloud-native digital experiences

Our digital banking capabilities ensure that the banks corporate as well as retail customers have access to the latest technology across all contemporary digital channel; be it mobile, desktop, social media, or video banking. Oracles digital banking platform, built on a cloud-native infrastructure, offers high availability and exceptional security ensuring banks meet the dynamic needs of customers with continuous feature enhancements. Oracle caters to the growing need for a mature packaged banking API solution that can help banks accelerate their path to transforming into an open API platform delivering immersive digital banking experiences.

A fast-growing private bank in India implemented Oracle FLEXCUBE and Oracle Banking Digital Experience to bring new capabilities to millions of customers and help support underserved segments of Indian society.

Oracle Banking Products Portfolio

Our product portfolio has significantly expanded over the years and these components can be flexibly offered to suit the business requirements of the banks. Our Oracle FLEXCUBE Universal Banking coupled with Oracle Banking Accounts enables banks to offer retail and corporate banking services that meet evolving customer needs and effectively comply with regulatory guidelines and industry standards. The solution enables streamlining and automation of core processing and operations. Embedded machine learning capabilities help unlock the value of data with new insights.

The portfolio focused on retail banking consists of Oracle Banking Origination which helps reimagine originations by driving a personalized, consistent, and frictionless experience with the customer at the center; Oracle FLEXCUBE for Islamic Banking a comprehensive Sharia-compliant solution for Islamic banks; Oracle Banking Platform a componentized solution designed as a native SOA platform, helping banks progressively transform their business models by streamlining and automating business processes; Oracle Banking Branch that helps reinvent the bank branch from a point of service to a point of sale and advice.

The portfolio focused on corporate banking comprises of Enterprise Limits and Collateral Management, an enterprise offering that enables banks to accelerate credit origination and servicing, prequalify credit lines, track exposures to customers in real time, and mitigate business risks; Virtual Accounts Management that helps corporate banking clients manage complex global account structures and control working capital; Liquidity Management enables banks to run a single centralized, standalone liquidity management solution; Supply Chain Finance, an end-to-end solution that supports the full lifecycle of supply chain finance and factoring across receivables and payables, offering supplier-centric and buyer-centric financing; and Trade Finance, a comprehensive solution for managing trade finance operations in a unified manner.

Further, Oracle Banking Treasury Management, a comprehensive real time solution for the treasury back office; Cash Management that enables banks to help their corporate clients manage their working capital effectively while adhering to regulatory requirements; Corporate Lending, an end-to-end digitally enabled lending solution which enables easy integration with banks internal and external systems of customers, partner banks and agencies which support open interface (API) standards and delivers faster loan processing, coupled with Corporate Lending Process Management that delivers the flexibility needed to manage the complete corporate loan lifecycle; Credit Facilities Process Management, a comprehensive credit management solution; and Trade Finance Process Management that automates and streamlines the entire lifecycle of trade instruments and operations across all stages. Our Oracle Banking Payments is an advanced solution that enables banks and financial institutions process payments in real time, anywhere, and at scale.

Oracle Banking Digital Experience helps banks deliver immersive SaaS cloud native digital banking experiences with a personacentric design engineered for safety, reliability, scale, sustainability, and convenience. Together with Oracle Banking APIs it helps customers jump-start API banking with more than 1,800 ready-to-deploy business and foundational banking APIs.

Oracle Financial Services Lending and Leasing provides end-to-end capabilities from origination into servicing and through collections, and together with Oracle Banking Collections and Recovery, an enterprise-wide collections and recovery module, which supports complete collections lifecycle and optimizes the management of delinquencies at every stage.

Oracle FLEXCUBE Investor Servicing is a flexible, highly configurable, and widely deployed transfer agency platform that helps automate transfer agency operations, fund distribution, and pension recordkeeping.

Modern Risk and Finance and Financial Crime and Compliance Management

Our Modern Risk and Finance and Financial Crime and Compliance Management solutions are led by Oracle Financial Services Analytical Applications (OFSAA) which is a suite of industry leading applications catering to the critical areas of Risk, Finance, Treasury, Front office, Regulatory Reporting and Compliance.

Within OFSAA, we offer a unified set of finance, risk, and compliance applications to banks and insurance companies. These applications are grouped into five portfolios, and each portfolio comprises of a set of related products and services designed to collectively meet the portfolio objectives. In addition, the products in each portfolio work interconnectedly across portfolios. This interconnectivity generates a multiplier value effect for our customers who have purchased these products and services across the portfolios. All our applications are powered by our Analytical Applications Infrastructure (AAI) and Model Management and Governance (MMG) - together they provide globally patented - US Patents & Trademarks (US-PTO) and European Union Patents Office (EPO) - state of the art tools, frameworks, libraries, and models that support building of all the OFSAA applications. They support deterministic, stochastic, and predictive analytics framework that delivers the foundation for Artificial Intelligent (AI), Machine Learning (ML) and Generative Artificial Intelligence (GenAI). The solution portfolios are described below with brief explanations about each of them and mentions a few salient products in each portfolio:

Unified Data Foundation

Analytics is the driving force behind many strategic decisions financial institutions make and the key to meeting regulatory requirements. But, if analytics is a driving force, data is the fuel that feeds this force. Without complete, consistent, and accurate data behind the analytics, the financial institution will struggle to make critical strategic decisions or stay compliant. And without the proper tools, financial institutions spend a lot of time and effort sourcing and cleansing data to help ensure the analytics are leveraging the correct information. Unified Data Foundation solutions provide a proactive, forward-looking use and re-use of traditional and new data sources from a single, unified source.

This portfolio consists of the product Financial Services Data Foundation, which drives our customers business with unprecedented performance, responsiveness, scalability, and manageability by gaining a single view of enterprise-wide data. Accounting Foundation provides a detailed instrument ledger with balance figures that align by design with those in the general ledger. Data Integration Hub manages upstream data acquisition and maintenance powered by ML and GenAI through intuitive business-driven capability. And finally, Data Governance provides active governance for accuracy that can integrate directly into Banks risk and finance processes.

Risk, Profitability & Balance Sheet Management

Having a competitive edge in the marketplace through timely, actionable intelligence and insights is key to the success of financial institutions delivering on their vision. Having systems and services that can process a large amount of data (billions of rows of instrument-level data) with a multitude of dimensions (products, business units, geographies, customer segments, currencies) in a timely manner is required to deliver those insights. Profitability & Balance Sheet Management solutions identify the banks portfolios most profitable customers, products, and organizations. These solutions optimize reward versus risk with accurate, up- to-date financial information. They are also used to develop integrated, accurate, continuous planning and forecasting across multiple dimensions, including lines of business, customer segments, and products.

This portfolio contains the products such as Liquidity Management which optimizes interest and fuse information across various different accounts, so that customers can manage daily liquidity in a consolidated way; Liquidity Risk Regulatory Reporting which addresses the customers liquidity risk requirements, both regulatory and management. It performs and reports regulatory calculations such as Liquidity Coverage Ratio (LCR) and Net Stable Funding Ration (NSFR), based on guidelines issues by Bank of International Settlements (BIS). Profitability Analytics helps identify the most profitable customers, products, and organizations and monitor key performance indicators. The analytics is powered by AI - NLP, NLG and LLMs - which enables meaningful interactions and rapid decision making by the executives.

Accounting Standards & Regulatory Reporting

Accounting standards provide financial institutions with transparency, credibility, and access to capital. Investors and creditors typically prefer financial institutions that follow established accounting standards, as it assures them of the reliability and comparability of financial information. This can make it easier for institutions to access capital through debt and equity markets, helping them fund their growth and operations. These advantages support better decision-making, effective risk management, and stakeholder confidence, ultimately contributing to the banks long-term success and stability.

While accounting rules and disclosures are governed by international standards bodies and are self-regulatory in nature, financial institutions also have legally binding regulatory requirements, and adherence is required to avoid penalties and sanctions. Noncompliance can result in damage to reputation, loss of operating licenses, and legal action. Regulatory requirements such as Basel guidelines and stress testing are designed to promote financial stability by ensuring that financial institutions maintain sufficient capital to absorb potential losses. This reduces the risk of bank failures, which can have severe consequences for the broader financial system and the society at large. By requiring banks to perform stress testing, regulators can assess the resilience of individual institutions, the financial system, and the broader economy. This helps identify potential vulnerabilities and implement measures to mitigate systemic risks.

Accounting Standards & Regulatory Reporting solutions alleviate operating costs of our customers by keeping up with changing standards and regulations with out-of-the-box support for regulations and industry standards. These solutions also make it possible to manage and execute multi-jurisdictional regulatory reporting in a single integrated environment.

This portfolio consists of products IFRS 9 & IFRS 17 which bring transparency in reporting of financial instruments and insurance contracts. Products like CECL & LDTI provide US GAAP accounting standards compliance for credit provisions and insurance contracts. Climate Change Analytics enables International Sustainability Standards Board (ISSB) accounting standards compliance for Banks, Green House Gases (GHG) Emission Scope Reporting and risk analytics. Basel & Regulatory Capital covers Pillar I requirements across Basel II and Basel III guidelines including Risk Weighted Assets (RWA), Capital Ratios, Capital Buffers, Leverage Ratio, CVA computations, and supplementary leverage ratio of the bank. Enterprise Stress Testing & Scenario Analysis empowers banks and financial institutions to define and perform enterprise wise stress tests and scenario analysis in an integrated and centralized manner.

Financial Crime & Compliance Management (FCCM)

Financial institutions are required to safeguard their systems from being used for illicit purposes by detecting and reporting suspicious activities like money laundering, fraud, or other financial crimes of its customers and customers counterparties to local regulatory authorities. They are required to implement strong KYC & Customer Due Diligence program to understand the compliance risk profile of its customers. They are also required to deny access to their services to individuals and entities as per international and national sanctions and embargoes - which involves freezing of assets and restricting financial transactions with certain countries, organizations, or individuals. FCCM solutions - Anti Money Laundering, Know Your Customer, Customer Screening, Sanctions Filtering, Enterprise Case Management and Suspicious Activity Reporting - comprise of a modern, comprehensive, and extensible suite of applications that enable financial institutions with advanced capabilities to effectively combat financial crime and comply with regulations while enhancing operational efficiency. These solutions are built with leveraging AI and Machine Learning platforms, such as Graph, and incorporate principled, responsible AI for ethical use.

One of the key innovative products in FCCM portfolio is the Compliance Studio which has ML based behavioral risk scoring to predict propensity of crime, unsupervised segmentation & anomaly detection to identify changing behaviors and more accurately capture risk. It has regulator accepted scenario catalog, typology-based scenarios and models which look for fingerprints of criminal activity & supervised models which look at many combined red flags to create actionable cases. Compliance Agent deploys "ethical money launderers" to stress test compliance controls and provide program insights to CCOs, robust model ops to ensure models are performing as expected and within policy, automated calibration to self-tune, automated case completion and SAR Filing. Investigation Hub is a user centric platform that combines analytics and case management - graph analytics-based investigation, automated narrative generation to optimize investigator efficiency, LLM investigator to automate L0 & L1 cases and next best case - to serve the right cases at the right time to the right investigators.

Services

Oracle Finergy, across our Consulting Services & Business Process Services business lines, enables financial services enterprises to drive simplicity using technology, helping them engage with their customers in a personalized and frictionless manner.

The Consulting Services business uses a domain-driven design approach to deliver technology solutions across the ‘Change the Bank & ‘Run The Bank spectrum for firms in the Banking, Capital Markets and Insurance industries. This includes transforming onpremise business applications, enabling resiliency through compute & data workload migrations to the cloud, driving cloud native digital innovation, enabling automation-led Application Support, and driving deeper insights from data through Al-led solutions for decision support and intelligent automation.

The Business Process Services business provides cost effective and high-quality services ranging from Transaction Processing, Finance & Accounting Services, Data Ops Services, Reporting Services & Helpdesk services for the banking, capital markets, mortgage & insurance domains, leading with a tech-enabled automation approach backed by use case aligned RPA and AI-led solutions. This comprehensive ecosystem of business process services is backed by a mature process and consulting framework. The business process offerings are ISO 9001 certified for quality management and ISO 27001 certified for information security management.

Analysis of our consolidated financial results

The following discussion is based on our audited consolidated financial statements which have been prepared in accordance with Indian Accounting Standards ("Ind AS") as prescribed under Section 133 of the Companies Act, 2013 ("Act") read with relevant Rules of the Companies (Indian Accounting Standards) Rules, 2015, as amended from time to time.

The consolidated financial statements as at March 31, 2024 include Oracle Financial Services Software Limited ("Company"), its subsidiaries and Controlled Trust (together referred to as "OFSS group" as described in note 1 to the consolidated financial statements).

You should read the following discussion of our financial position and results of operations together with the detailed consolidated Ind AS financial statements and the notes which form integral part of such financial statements. Our financial year ends on March 31 of each year.

Performance summary

Year ended March 31, 2024	Products	Services	Total
Revenue from operations	57,862.01	5,867.60	63,729.61
Operating expenses	(30,388.04)	(4,255.25)	(34,643.29)
Unallocable expenses			(2,284.89)
Income from operations	27,473.97	1,612.35	26,801.43
Operating margin	47%	27%	42%
Profit for the year			22,193.62
Profit margin			35%
Year ended March 31, 2023
Revenue from operations	51,309.00	5,674.09	56,983.09
Operating expenses	(26,838.05)	(4,370.08)	(31,208.13)
Unallocable expenses			(1,994.35)
Income from operations	24,470.95	1,304.01	23,780.61
Operating margin	48%	23%	42%
Profit for the year			18,061.41
Profit margin			32%

Our total revenues in the financial year ended March 31, 2024 were Rs 63,729.61 million, an increase of 12% over our total revenues of Rs 56,983.09 million in the financial year ended March 31,2023. The increase in revenues was primarily attributable to increase in the revenues from our products business.

Income from operations in the financial year ended March 31,2024 was Rs 26,801.43 million representing an increase of 13% from Rs 23,780.61 million in the financial year ended March 31,2023. The profit for the year in the financial year ended March 31,2024 was Rs 22,193.62 million, as against Rs 18,061.41 million in the financial year ended March 31, 2023.

Revenues from operations

Products revenues

Our products revenues represented 91% and 90% of our total revenues for the financial year ended March 31, 2024 and March 31, 2023 respectively. Our products revenues were Rs 57,862.01 million in the financial year ended March 31, 2024, an increase of 13% from Rs 51,309.00 million during the financial year ended March 31, 2023.

The percentages of our products revenues from different streams were as follows:

	Year ended March 31, 2024	Year ended March 31,2023
License fees	15%	15%
Consulting fees	51%	52%
Maintenance fees	34%	33%
Total	100%	100%

Services revenues

Our services revenues represented 9% and 10% of our total revenues for the financial year ended March 31, 2024 and March 31, 2023 respectively. Our services revenues were f 5,867.60 million in the financial year ended March 31,2024, an increase of 3% from f 5,674.09 million in the financial year ended March 31, 2023.

The percentage of total services revenues from time and material contracts was 24% in the financial year ended March 31,2024 and 48% in the financial year ended March 31, 2023, with the remainder of our services revenues attributable to fixed price contracts.

Finance income and other income, net

Our finance and other income primarily comprise of interest on bank deposits and foreign exchange gain / loss. Our finance and other income in the financial year ended March 31,2024 was f 3,421.92 million, as compared to f 1,918.43 million in the financial year ended March 31, 2023.

Expenses

Operating expenses

Our operating expenses consist of costs attributable to compensation of employees, project related travel expenses, professional fees paid to vendors, application software for internal use, selling and marketing expenses (including commissions payable to our partners), research and development expenses, product advertising and marketing expenses, finance cost, contribution towards Corporate Social Responsibility and overhead expenses associated with support functions such as human resources, finance, facilities and infrastructure, along with depreciation and amortization. We recognize these expenses as incurred.

Employee costs

Our employee compensation related expenditure increased by 8% to f 29,828.25 million in the financial year ended March 31, 2024 from f 27,741.72 million in the financial year ended March 31, 2023. Employee costs relate to salaries and bonuses paid to employees, retiral benefits, stock compensation charge along with staff welfare activities for employees. Increase in employee costs was primarily on account of compensation increase during the current financial year.

Travel related expenses

Our travel related expenditure increased by 33% to f 1,228.14 million in the financial year ended March 31, 2024 from f 923.58 million in the financial year ended March 31, 2023. Travel costs relate to airfare, accommodation and other related expenses incurred on travel of our employees on projects, sales and marketing, etc. Increase in travel related expenses was primarily on account of increased in projects related travel.

Professional fees

Our professional fees related expenditure increased by 26% to f 2,624.88 million in the financial year ended March 31, 2024 from f 2,089.39 million in the financial year ended March 31,2023. Increase in professional fees was primarily on account of increase in cloud infrastructure cost and increase in hiring of external consultants to meet the peak period requirements.

Finance cost

Our finance cost increased by 122% to f 281.09 million in the financial year ended March 31,2024 from f 126.55 million in the financial year ended March 31, 2023. Finance cost relates to interest on lease liability and income tax.

Other expenses

Our other expenditure increased by 47% to f 2,223.24 million in the financial year ended March 31, 2024 from f 1,514.62 million in the financial year ended March 31,2023. Other expenses primarily consist of Corporate Social Responsibility expenditure (CSR), bad debts, Impairment loss on contract assets, facilities/infrastructure costs, application software fees, communication expenses, auditors remuneration and other miscellaneous expenses. Increase in other expenses was primarily on account of increase in facilities costs, increase in CSR spend due to increase in average profits for the last 3 years, and increase in impairment loss recognized on contract assets and facilities/infrastructure costs.

Depreciation and amortization

Our depreciation and amortization charge was f 742.58 million and f 806.62 million for the financial year ended March 31,2024 and March 31, 2023 respectively. Depreciation and amortization charge comprises of depreciation on Property, plant and equipment and on Right-of-use assets.

Operating Margin

Operating profit for the financial year ended March 31, 2024 was f 26,801.43 million as against f 23,780.61 million during the financial year ended March 31, 2023.

Income taxes

Our provision for income taxes in the financial year ended March 31,2024 was f 8,029.73 million as against f 7,637.63 million in the financial year ended March 31,2023. Our effective tax rate was 27% and 30% in the financial year 2024 and 2023, respectively. Income taxes also include foreign taxes representing income taxes payable overseas in various countries.

Profit for the year

As a result of the foregoing factors, net profit increased by 23% to f 22,193.62 million in the financial year ended March 31, 2024 from f 18,061.41 million in the financial year ended March 31, 2023.

Analysis of our unconsolidated results

The following discussion is based on our audited unconsolidated financial statements which have been prepared in accordance with Ind AS, as prescribed under Section 133 of the Act read with relevant rules of the Companies (Indian Accounting Standards) Rules, 2015, as amended from time to time.

You should read the following discussion of our financial position and results of operations together with the detailed unconsolidated Ind AS financial statements and the notes which form an integral part of such financial statements. Our financial year ends on March 31 of each year.

Performance summary

Year ended March 31, 2024	Products	Services	Total
Revenue from operations	43,974.31	3,870.65	47,844.96
Operating expenses	(20,066.81)	(2,139.18)	(22,205.99)
Unallocable expenses			(1,673.55)
Income from operations	23,907.50	1,731.47	23,965.42
Operating margin	54%	45%	50%
Profit for the year			20,279.19
Profit margin			42%

 

Year ended March 31,2023	Products	Services	Total
Revenue from operations	38,840.10	3,715.71	42,555.81
Operating expenses	(18,018.64)	(2,088.06)	(20,106.70)
Unallocable expenses			(1,543.50)
Income from operations	20,821.46	1,627.65	20,905.61
Operating margin	54%	44%	49%
Profit for the year			17,725.08
Profit margin			42%

Our total revenues in the financial year ended March 31, 2024 were f 47,844.96 million, an increase of 12% over our total revenues of f 42,555.81 million in financial year ended March 31, 2023. The increase in revenues was contributed by the growth in our products and services business segments.

Income from operations in the financial year ended March 31, 2024 was f 23,965.42 million, representing an increase of 15% from f 20,905.61 million in the financial year ended March 31, 2023. The profit for the year in the financial year ended March 31, 2024 was f 20,279.19 million, representing an increase of 14% from f 17,725.08 million in the financial year ended March 31,2023.

Revenues from operations Products revenues

Our products revenues represented 92% and 91% of our total revenues for the financial year ended March 31, 2024 and March 31,2023 respectively. During the financial year ended on March 31,2024, our products revenues were f 43,974.31 million, an increase of 13% from f 38,840.10 million in the financial year ended March 31,2023.

The percentages of our products revenues from different streams were as follows for:

	Year ended March 31, 2024	Year ended March 31, 2023
License fees	15%	15%
Consulting fees	49%	49%
Maintenance fees	36%	36%
Total	100%	100%

Services revenues

Our services revenues represented 8% and 9% of our total revenues for the financial year ended March 31, 2024 and March 31, 2023 respectively. Our services revenues were f 3,870.65 million in the financial year ended March 31,2024, an increase of 4% from f 3,715.71 million in the financial year ended March 31, 2023.

The percentage of total services revenues from time and material contracts was 20% in the financial year ended March 31,2024 and 41% in financial year ended March 31, 2023, with the remainder of our services revenues attributable to fixed price contracts.

Finance income and other income, net

Our finance and other income primarily comprise of interest on bank deposits and foreign exchange gain / loss. Our finance and other income in the financial year ended March 31,2024 was f 2,396.16 million, as compared to f 2,526.37 million in the financial year ended March 31, 2023.

Expenses

Operating expenses

Our operating expenses consist of costs attributable to compensation of employees, project related travel expenses, professional fees paid to vendors, application software for internal use, selling and marketing expenses, research and development expenses, finance cost on lease liability, bad debts, impairment loss on contract assets, contribution towards Corporate Social Responsibility and overhead expenses associated with support functions such as human resources, finance, facilities and infrastructure, along with depreciation and amortization. We recognize these expenses as incurred.

Employee costs

Our employee compensation costs increased by 8% to f 19,178.83 million in the financial year ended March 31, 2024 from f 17,719.22 million in the financial year ended March 31,2023. Employee costs relate to salaries and bonuses paid to employees, retiral benefits, stock compensation charge along with staff welfare activities for employees. Increase in employee costs was primarily on account of compensation increase during the current financial year.

Travel related expenses

Our travel related expenditure increased by 72% to f 680.07 million in the financial year ended March 31, 2024 from f 396.07 million in the financial year ended March 31, 2023. Travel costs relate to airfare, accommodation, and other related expenses incurred on travel of our employees on projects, sales and marketing, etc. Increase in travel related expenses was primarily on account of increased in project related travel.

Professional fees

Our professional fees related expenditure marginally decreased by 4% to f 1,529.69 million in the financial year ended March 31, 2024 from f 1,590.12 million in the financial year ended March 31,2023.

Finance Cost

Our finance cost pertains to interest on lease liability which decreased by 34% to f 21.11 million in the financial year ended March 31, 2024 from f 32.12 million in the financial year ended March 31, 2023.

Other expenses

Our other expenditure increased by 41% to f 1,872.22 million in the financial year ended March 31, 2024 from f 1,328.82 million in the financial year ended March 31,2023. Other expenses primarily consist of Corporate Social Responsibility expenditure (CSR), bad debts and Impairment loss on contract assets, facilities/infrastructure costs, application software fees, communication expenses, auditors remuneration and other miscellaneous expenses. Increase in other expenses was primarily on account of increase in facilities costs, increase in CSR spend due to increase in average profits for the last 3 years and increase in impairment loss recognized on contract assets.

Depreciation and amortization

Our depreciation and amortization charge was f 597.62 million and f 583.85 million for the financial year ended March 31, 2024 and March 31, 2023 respectively. Depreciation and amortization charge comprises of depreciation on Property, plant and equipment and on Right-of-use assets.

Operating margin

Operating profit for the financial year ended March 31, 2024 was f 23,965.42 million as against f 20,905.61 million during the financial year ended March 31,2023.

Income taxes

Our provision for income taxes in the financial year ended March 31,2024 was f 6,082.39 million as against f 5,706.90 million in the financial year ended March 31,2023. Our effective tax rate was 23% and 24% in the financial year 2024 and 2023, respectively. Income taxes also include foreign taxes representing income taxes payable overseas by the Company in various countries.

Profit for the year

As a result of the foregoing factors, net profit for the financial year ended March 31, 2024 was f 20,279.19 million as against f 17,725.08 million during the year ended March 31,2023, representing an increase of 14%.

Other metrics

Key financial ratios

The following table summarizes the key financial ratios for the financial years ended March 31, 2024 and March 31,2023.

	Consolidated		Unconsolidated
	2024	2023	2024	2023
Financial Performance
Net profit ratio	35%	32%	42%	42%
Financial Position
Current ratio	6.0 times	6.6 times	9.4 times	10.1 times
Net capital turnover ratio	1.0 times	0.9 times	1.1 times	1.1 times
Trade receivables turnover ratio	5.3 times	5.7 times	6.6 times	7.2 times
Trade payables turnover ratio	9.0 times1	13.1 times	8.7 times	10.3 times
Debt service coverage ratio	71.3 times	60.2 times	117.9 times	108.9 times
Debt equity ratio (Lease liabilities on total equity)	0.01 times	0.01 times	0 times2	0.01 times
Return on equity	29%	25%	33%	30%
Return on capital employed	41%	36%	42%	39%
Return on investment	N.A.	N.A.	0%3	12%
Days Sales Outstanding	69 days	62 days	60 days	52 days

1 Trade payables turnover ratio has reduced on account of high value invoices received at year end.

2 Debt equity ratio has reduced on account of payment of lease liabilities.

3 During the year ended March 31, 2023 the Company has received dividend from its wholly owned subsidiary companies.

Trade receivables

As per the Consolidated financials, trade receivables as of March 31, 2024 and 2023 were f 13,193.07 million and f 10,833.73 million respectively. As per the unconsolidated financials trade receivables as of March 31, 2024 and 2023 were f 8,198.41 million and f 6,309.19 million respectively.

We periodically review the trade receivables outstanding as well as the ageing, quality of the trade receivables, customer relationship and the history of the client.

Geographic breakup of revenues

The following table represents the percentage breakup of our consolidated and unconsolidated revenues for our products and services businesses by region:

	Year ended March 31, 2024			Year ended March 31, 2023
	Products Revenues	Services Revenues	Total Revenues	Products Revenues	Services Revenues	Total Revenues
Consolidated
Americas (NAMER)	33%	67%	36%	33%	68%	37%
Europe, Middle East, Africa (EMEA)	34%	22%	33%	34%	20%	33%
Asia Pacific (JAPAC)	33%	11%	31%	33%	12%	30%
Total	100%	100%	100%	100%	100%	100%
Unconsolidated
Americas (NAMER)	28%	62%	31%	28%	64%	31%
Europe, Middle East, Africa (EMEA)	38%	27%	37%	39%	24%	37%
Asia Pacific (JAPAC)	34%	11%	32%	33%	12%	32%
Total	100%	100%	100%	100%	100%	100%

Customer concentration

The percentages of total revenues during financial year ended March 31,2024 and 2023 that we derived from our largest customer, largest five customers and largest ten customers on consolidated and unconsolidated basis are provided in the table below. The Company contracts end customers in several countries through the local subsidiary of Oracle Corporation and entities under common control are considered as a single customer for the purpose of reporting customer concentration.

	Products Revenues		Services Revenues		Total Revenues
	2024	2023	2024	2023	2024	2023
Consolidated
Largest customer	53%	52%	26%	32%	49%	48%
Top 5 customers	68%	68%	74%	73%	66%	66%
Top 10 customers	73%	73%	93%	92%	71%	71%
Unconsolidated
Largest customer	84%	85%	98%	98%	85%	86%
Top 5 customers	92%	93%	100%	100%	93%	94%
Top 10 customers	95%	96%	100%	100%	95%	96%

Internal control systems and their adequacy

Oracle Financial Services Software group has in place adequate systems for internal control commensurate with the size of the business operations. These systems and processes cover all the financial and operating functions and are designed to provide reasonable assurance with regard to maintaining adequate controls, monitoring economy and efficiency of operations, protecting assets from unauthorized use or losses, and ensuring reliability of financial and operational information. The Group continuously strives to align all its processes and controls with global best practices.

Opportunities and threats

We have a strong portfolio of product solutions and services which are robust, proven, and scalable to meet the needs of a very diverse range of Financial Institutions. Our ability to engage with a prospect and deliver the complete range of solutions is unique. With thrust on the R&D spend, your Company is able to rapidly adopt innovations in technology like Artificial Intelligence, Cloud Computing paradigms around security and scale, and architectural constructs like microservices, containerization, and domain driven design.

The industry dynamics which are likely to influence our business include:

- A regulatory environment in which governments, central banks and nodal agencies are working through the regulations which govern Artificial Intelligence, Data residency and cloud computing.

- Increasing threat of financial crime and associated consumer protection paradigms which are evolving as consumers continue to desire latest technologies, devices and newer consumption models.

- The impetuous to nurture an ecosystem of startups implies that newer players will emerge wanting to differentiate themselves with new ideas which incumbent financial institutions will need to grapple with.

These combined with the larger business environment factors continue to be evolving in the business.

- Geopolitical environment is shifting consumer sentiment and global trade which ties back to our customer needing to adjust their business model to address these shifts.

- Countries around the world continue to evolve their mobility regulations in the domestic labor market.

- Environmental, social and governance (ESG) frameworks seek to modify business activities to reduce impact on climate change.

Your Company continues to track these and other local / regional factors and evolve solutions and business strategies to address them.

Liquidity and capital resources

Our capital requirement relates primarily to financing the growth of our business. We have historically sourced majority of our working capital, capital expenditure and other requirements through our operating cash flow. During the financial year ended March 31,2024 and March 31,2023, we generated cash from operations of f 17,906.69 million and f 17,584.15 million respectively as per the consolidated financials and f 16,436.34 million and f 15,057.43 million respectively as per the unconsolidated financials.

We are a zero-debt company. We expect that our primary financing requirements in the future will be capital expenditure and working capital requirements in connection with the expansion of our business. We believe that the cash generated from operations will be sufficient to satisfy our currently foreseeable capital expenditure and working capital requirements.

Human capital

We are a global organization with multi-country teams having diverse backgrounds. Our strong culture and processes ensure seamless collaboration across geographies.

As at March 31,2024, the Company had 7,890 employees (March 31, 2023 - 7,680) and the OFSS Group had 8,754 employees (March 31,2023 - 8,593).

Talent acquisition and retention

We recruit graduates and post-graduates from top engineering and business schools. We also hire domain experts from the banking industry creating a right mix of employees with functional and technology expertise.

We enable our employees to uphold companys goals by fostering a positive and engaging work environment. Our employees are our future, and we help them identify and respond to the changing nature of our business landscape. Our innovation and competitive advantage depend on the talents, skills, and backgrounds of our employees, which are our biggest asset. We continue to hire the right talent and retain the best and be the employer of choice. Investments in employee capability building in varied areas that support the business is of priority to us. Our focus remains on building a highly inclusive, cohesive, and collaborative work culture along with systems that promote and enable the best of talent management practices giving an enriching career experience to our employees.

We encourage employees on creating patents which are unique to our domain as also to write technical papers in reputed journals.

Employee experience and well-being

We have a comprehensive Employee Assistance Program for helping employees cope with the various life stages and changes with resilience and acceptance as a person.

Employee safety, health and over all wellness is of paramount importance to our Company and is committed to providing a safe and respectful work environment. Some of our employee wellness policies highly beneficial to our employees and help us create enhanced employee experience.

Performance management and career development

We have a robust performance management system that helps our employees self-reflect on their journey with us. It provides opportunity to indulge in a performance and career related conversations with their managers that help reach their career goals, explore opportunities for their growth and help build knowledge and grow their skills for today and the future.

We have a plethora of learning resources available for our employees to enhance their skills and capability in technology / functional domains and soft skills. Our learning platform is state of the art, provides anytime, everywhere access to business, leadership, and technical classes, videos, books, articles, reports, learning paths, and other learning resources. Our learning platform caters to varied learning styles of employees. We have also enabled access to highly specialized training courses offered by top universities around the world. Employees completing these programs get a formal certification from respective universities.

Rewards and recognition

Our reward mechanism is geared towards recognizing employee achievements. We have several recognition programs which encourage individual employees, teams as well as groups. Our flagship "Pacesetter Awards program" recognizes individual who exemplify our organizational values such as:

- Customer Satisfaction

- Excellence

- Leadership

- Integrity

- Creativity & Innovation

- Employee Engagement & Performance

Risks and concerns

The Company has a robust plan for managing the risks faced in its global operations. The Risk Management Committee reviews the risks, possible impact and the mitigation plan. Listed below are some of the major risks, their impact and the mitigation plan.

Risks	Mitigation Plan
Human Resources
People are the most important asset of the Company. Industry dynamics and demand for experienced employees increases attrition and creates shortage of critical skills and constrain delivery, quality and commitments besides leading to cost of replacement.	The Company effectively manages the risk adopting a responsive compensation/reward mechanism to retain and develop the talent. The Company endeavors to give employees a healthy, professionally enriching work environment. The Company has invested in a variety of tools to engage employees remotely and established a reliable logistical and support infrastructure to facilitate work from home, including a seamless day-one experience for employees working remotely. The Company also conducts annual ‘Your Voice Survey that helps identifying areas for improvement in creating better employee experience.
	All of these measures together with an accelerated hiring process and softening up of market demand has helped improve retention of key talent.
Change in Buyer Behavior
Changes in the buyer behavior and market demands cause disruptions and can impact the Company. While Cloud-based deployment is attracting increased acceptability with customers, there is also an increased interest in exploring how AI / ML technology could be deployed. This impacts the scale and speed of decision making. Such disruptive changes impact the industry dynamics, could provide room for emergence of new competition.	Assessment of customer behavior changes is intrinsic to the business of the Company and the Company keeps a close watch on market preferences, industry trends and competitive offerings to appropriately tailor its business strategy. Company responds to the changes with upgradation of its product platform through focused R&D, transformation of customer sales and engagement processes.
Competition
The Company faces competition from traditional as well as new age vendors across the globe. In the current economic scenario of rapidly changing buyer preferences, appropriate and timely investments (inclusive of inorganic acquisitions in niche areas) are important to remain competitive. Acquisitions that offer a right fit may be expensive and not value accretive.	The Company has a comprehensive suite of IT product offerings encompassing retail & corporate banking, and a strong portfolio of enterprise risk and compliance solutions based on business analytics. The Company invests in upgrading its suites of products on a continual basis to address changing and growing functional and technological needs of the market.
	The Companys solutions can be deployed in on-premises & SAAS mode and incorporate new technologies such as Artificial Intelligence and Machine Learning (AI/ML) which enable the users to provide a differentiated cloud ready solution to its customers. The Company is strongly positioned globally to offer competitive offerings catering to the digital enablement of its customers businesses.
	The Company endeavors to stay abreast of the competition through investments backed by active market studies and intelligence.
Legal & Tax Claims
Legal risk is the risk of loss to the Company primarily caused by claims being made, or other events occurring, which result in liabilities for the Company. Based on the geographical presence across the continents, and the nature of its business, the Company is exposed to complex laws in various jurisdictions. Litigation claims can arise from commercial disputes, disputes on intellectual property, tax claims, employment matters, etc. Also, world-over the governments are increasingly becoming aggressive in demanding a higher share of income of the MNCs to be subjected to tax in their country. Many nations are trying to introduce a Global Minimum Tax framework to streamline this area.	The Company has a strong process of review of customer commitments and contracts before they are signed. The Company relies on the expertise of its parent, in ensuring compliances in various jurisdictions. The Company has a conservative and strong tax compliance program globally and pays appropriate taxes and files accurate tax returns regularly. The Company provides required information in tax assessments and takes all possible measures against aggressive tax demands by the authorities. The Company reviews the inter-company arrangements periodically and make appropriate changes to the operating model to stay compliant with the changing cross border tax regulations.
	The Company regularly trains its employees on applicable laws and has a strong whistle blower mechanism for reporting any non-compliances.
	The Company has appropriate insurance policies such as Directors and Officers (D&O) policy to cover liabilities of the Companys directors and managers and to protect them from potential claims which might arise from the decisions and actions taken within the scope of their regular duties.
Cyber Risk
Cyber security risk means any risk of loss, disruption or damage to the Company from threats or vulnerabilities in networks, computers, programs and data, flowing from or enabled by connection to digital infrastructure or information systems.	Defense in cybersecurity calls for a range of near real-time, interactive services from the Companys IT infrastructure. Our IT Systems continue to evolve, and the Company is often an early adopter of new technologies. These generally include compute, encryption, tiered storage, analytics, identity and access management, data protection, usage of VPN, event log management, notification, data management, and security policy enforcement services etc.
Data is critical and potentially vulnerable asset of the Company. With digitization of most of the processes and internal records, impact of a cyberattack is increasing world over. With Corporate solutions moving to cloud, remote working, increased focus on cyber security is needed.	The Company continually invests in the latest tools and technologies to stay ahead of the emerging threats and secure the data and operations of the Company against any threats.
Infringement of Intellectual Property
The Companys primary business is IT Products and protecting Intellectual Property (IP) rights is crucial to the Company. Any misappropriation of its IP assets could harm the Companys competitive position. Similarly, it is crucial to ensure that the Companys products do not infringe on any third-party intellectual property.	To protect its proprietary intellectual property rights, the Company relies on a combination of on-going copyright registrations, license agreements, confidentiality agreements with employees, nondisclosure and other contractual confidentiality obligations imposed on its customers and vendors with whom it has entered into marketing, distribution, implementation and/or support services agreements and third parties from whom the Company procures goods / avails services.
	The Company has a highly secured IT environment that prevents unauthorized access to, and reproduction of, the source code and other IP assets. Further the Company subjects all IT products to a mandatory validation against any unauthorized usage of third-party IP.
Regulatory Compliance
The Company is a listed entity in India and has business presence across various countries. It deputes employees on-site for various project requirements.	Strict adherence to the law of land is a key principle that the Company follows and always takes a conservative view when interpretations of regulations are unclear.
The Company complies with all the local laws and regulations where it operates. Ever changing laws and increasing exposure under various statutes, local labor, tax and mobility requirements, immigration laws, cross border FX movement compliances, etc. are some of the regulations which add complexity.	Regular monitoring of the local applicable statutes, and advisory support from the industry professionals are some of the measures that the Company undertakes to ensure that it remains compliant in all jurisdictions. It also relies on expertise of the parent in managing the compliances (legal, tax, mobility, etc.) across various countries.
Customer Contract delivery
Company faces customer contract delivery risk on account of the probability of loss arising from failure in contract performance which may lead to, cost overruns to remedy alleged non-performance, nonpayment of dues, loss of future business or potential legal claim.	Contractual risk management is a means of identifying the risks involved in meeting the contractual obligations and ensuring that the Company is adequately protected from legal, financial and reputation risks.
	The Company enforces standard contracts to protect the revenue recognition and legal risks, and any deviations to the standard clauses require approval of the business, global risk management team and legal. The Company also regularly monitors the health of the project to early detect any deviations and engages into an early dialogue with the customers.
	The Company maintains professional liability (E&O) insurance policy to hedge against any claims made by the clients for compensation against contract delivery deficiencies.
Foreign Exchange Rate Volatility
A substantial portion of the Companys revenue is generated in foreign currencies, while majority of the Companys expenses are incurred in Indian Rupees. Exchange rate volatility can Companys results.	The Company hedges the trade receivables in major currencies with the objective to minimize the volatility in realized exchange gain or loss (i.e., difference in the currency conversion based on the rate when invoice is booked and when it gets collected).
Operational Risk
Amongst various operational risks, fraud is one of the prominent risks that the businesses are exposed to Conflict of interest, malafide transactions, etc. are some other examples. Frauds impact the reputation of the Company and could cause loss to the Company.	Mandatory compliance training programs for employees coupled with strong process control environments of the Company are some of the remedies used to curb the fraudulent transactions. A 360-degree review assisted by data analytics of all the processes which have financial implications is conducted to reduce the risks of fraud.
Companies also face operational risks such as errors and omissions in operations, which require strong controls and operating oversight.	The Company has a highly sophisticated IT system coupled with processes that drive the controls and helps minimize any operational errors.
Geographical Spread
The Companys customer base is spread over 150 countries. It is therefore imperative to manage a multicultural workforce and deal with business dynamics across these countries.	The Companys geographic spread offers it a natural hedge against economic slowdown affecting a region.
Exposure to local conditions including maintenance of work environment and adhering to local laws, are the key factors which may impact the performance of the Company in each of such jurisdictions.	The Company, through its local offices along with expert support of global advisors, aims to ensure compliance with the laws of the land.
Uncertainties due to Pandemic
While vaccination of majority of the population and easing restrictions have brought to normalcy of business operations, further waves of variants of the virus or a new virus could impact the economies and operations of the Company.	The Company has robust IT and data security infrastructure and business continuity processes to help the Company to effectively respond to a new pandemic. The Company continually monitors the situation and calibrates its responses in the best interest of its customers and health and safety of its employees. The experience over the last few years of pandemic fully demonstrates the strength of the Companys processes to manage such risks.
Economic and Political Environment
The Company faces local economic and political challenges in the jurisdictions it operates in. These include changes in the political environment, war situation, inflation, GDP growth, and major changes in economic policies & taxation, mobility constraints, exposure to activism, etc. These can impact business growth and are considered as risks for the Company.	The Companys global operations are also impacted by manmade and natural calamities (e.g., war, epidemics & pandemics, earthquakes, floods, etc.). The Company aims to proactively avoid situations with overt political risk. The Company, through its parent resources, carefully assesses the local situation to minimize impact of such risks on its assets, safety of its personnel, and business.
The Company also faces increasing challenges in staff deployment across countries due to mobility restrictions in various countries.	The Company has a global team which focusses on monitoring the mobility regulations in various countries and attempts to mitigate the requirements through a local hire where feasible.
	The Company also reviews the specific SOS situation in a country / region in which it has business activities and takes appropriate actions to safeguard the interest of its employees. The Company has engaged global organizations that specialize in providing SOS assistance to its personnel globally. The Company also proactively tracks situation of any calamities and various Government & WHO advisories and take appropriate actions for its employees who could potentially be impacted.
The Companys global operations are also impacted by manmade and natural calamities (e.g., war, epidemics & pandemics, earthquakes, floods, etc.).