MIRA INFORM REPORT

Report Date :

10.01.2014

IDENTIFICATION DETAILS

Name :	FIRSTSOURCE SOLUTIONS LIMITED
Registered Office :	5^th Floor, Paradigm ‘B’ Wing, Mindspace, Link Road, Malad (West), Mumbai-400064, Maharashtra
Country :	India
Financials (as on) :	31.03.2013
Date of Incorporation :	06.12.2001
Com. Reg. No.:	11-134147
Capital Investment / Paid-up Capital :	Rs.6576.740 Millions
CIN No.: [Company Identification No.]	L64202MH2001PLC134147
TAN No.: [Tax Deduction & Collection Account No.]	MUM104720C
Legal Form :	A Public Limited Liability Company. The company’s Shares are listed on Stock Exchange.
Line of Business :	Subject is engaged in the business of Providing Contact Center, Transaction Processing and Debt Collection Services including Revenue Cycle Management in the Healthcare Industry.
No. of Employees :	Information denied by the management.

RATING & COMMENTS

MIRA’s Rating :

Ba (50)

RATING		STATUS	PROPOSED CREDIT LINE
41-55	Ba	Overall operation is considered normal. Capable to meet normal commitments.	Satisfactory

Maximum Credit Limit :	USD 49299000
Status :	Satisfactory
Payment Behaviour :	Usually Correct
Litigation :	Clear
Comments :	Subject is an established company having satisfactory track record. Financial position of the company appears to be sound and healthy. Directors are reported to be experienced and respectable businessmen. Trade relations are fair. Business is active. Payment terms are reported to be usually correct. The company can be considered for business dealings at usual trade terms and conditions.

NOTES :

Any query related to this report can be made on e-mail : infodept@mirainform.com while quoting report number, name and date.

INDIAN ECONOMIC OVERVIEW

India’s current account deficit narrowed in the quarter ended September as government measures to curb imports, especially gold, kicked in.  The current account deficit, the excess of a country’s imports of goods and services over exports, narrowed to $ 5.2 billion from $ 21 billion in the year ago period, according to provisional Reserve Bank of India data. Finance Minister P. Chidambaram said the CAD for the year will be less than $ 60 billion or 3 per cent of GDP and the latest data suggests the government may achieve the target.

India was ranked 94^th among the world’s most corrupt nations list. Denmark and New Zealand topped as the cleanest while Somalia emerged as the most corrupt.

India’s services sector activity witnessed a moderate improvement in November over the previous month, even while indicating the fifth successive monthly contraction, according the HSBC survey.

$53 million estimated losses suffered by India due to phishing attacks during the third quarter, according to a study by RSA. India ranks fourth in the list of nations hit by phishing attacks. The US remained at the top of the charts. Phishing is the process of acquiring information such as user names, passwords and credit card details by sending e-mails disguised as official mails.

Rs.4080 million worth of mobile-phone-based transactions by July 2013 compared to Rs.260 million in September, 2012, according to Deloitte report. The number of transactions has shot up from 94000 to 701000.

India aims to earn Rs.400000 million from the bandwidth auction set for January. The merger and acquisition guidelines, cleared by a group of ministers, will be out before the auction begins so that players can make informed decisions on the auctions.

EXTERNAL AGENCY RATING

Rating Agency Name	CRISIL
Rating	BBB+ [Corporate Credit]
Rating Explanation	Moderate degree of safety and moderate credit risk.
Date	12.07.2013

Rating Agency Name	CRISIL
Rating	A2 [Short Term]
Rating Explanation	Strong degree of safety and low credit risk.
Date	12.07.2013

RBI DEFAULTERS’ LIST STATUS

Subject’s name is not enlisted as a defaulter in the publicly available RBI Defaulters’ list.

EPF (Employee Provident Fund) DEFAULTERS’ LIST STATUS

Subject’s name is not enlisted as a defaulter in the publicly available EPF (Employee Provident Fund) Defaulters’ list as of 31-03-2012.

INFORMATION DECLINED BY

Name :	Mr. Yogesh
Designation :	Finance Executive
Contact No.:	91-22-66660888
Date :	09.01.2014

LOCATIONS

Registered / Corporate Office :	5^th Floor, Paradigm ‘B’ Wing, Mindspace, Link Road, Malad (West), Mumbai-400064, Maharashtra, India
Tel. No.:	91-22-66660888
Fax No.:	91-22-66660887
E-Mail :	marketing@firstfources.com sanjay.gupta@firstsource.com
Website :	http://www.firstsources.com
Overseas Offices :	Located At: · United Kingdom · United States of America · Australia · Ireland

DIRECTORS

AS ON 31.03.2013

Name :	Mr. Sanjiv Goenka
Designation :	Chairman
Name :	Dr. Shailesh Jayantilal Mehta
Designation :	Chairman cum Managing Director
Address :	401, Electrrito Ave Hillsborough-94010, California, USA
Date of Birth/Age :	22.04.1949
Date of Appointment :	21.01.2005
Name :	Mr. Haigreve Khaitan
Designation :	Director
Name :	Mr. Subrata Talukdar
Designation :	Director
Name :	Mr. Rajesh Subramaniam
Designation :	Director
Name :	Mr. Charles Miller Smith
Designation :	Director
Name :	Mr. Pradip Roy
Designation :	Director
Name :	Mr. Shashwat Goenka
Designation :	Director
Name :	Mr. Ananda Ranjitkumar Mukerji
Designation :	Director
Address :	RM 1901 and 1902, 19^th Floor, A Wing, Raheja Atlantis, G Kadam Marg, Worli, Mumbai-400018, Maharashtra, India
Date of Birth/Age :	27.11.1959
Date of Appointment :	13.02.2002
Name :	Mr. Yezdi Hrji Malegam
Designation :	Director
Address :	Goolestan, 37, Cuffe Parade, Mumbai-400005, Maharashtra, India
Date of Birth/Age :	24.09.1933
Date of Appointment :	27.07.2006
Name :	Mr. Kanarath Payattiyath Balaraj
Designation :	Director
Address :	304, Embassy Eros, No. 7, Ulsoor Road, Bangalore-560042, Karnataka, India
Date of Birth/Age :	18.01.1970
Date of Appointment :	02.09.2003
Name :	Mr. Donald JR William Layden
Designation :	Managing Director
Address :	6300, Washington Circle, Wauwatosa-53213, USA
Date of Birth/Age :	02.12.1957
Date of Appointment :	20.04.2006

KEY EXECUTIVES

Name :	Mr. Sanjay Venkataraman
Designation :	President – Customer Management
Name :	Mr. Iain Regan
Designation :	EVP – Sales and Client Services
Name :	Mr. David Strickler
Designation :	President and CEO – Healthcare Provider
Name :	Ms. Mitzi Winters
Designation :	Chief Operating Officer - Healthcare Provider
Name :	Mr. Shalabh Jain
Designation :	EVP – Customer Management – Domestic Business
Name :	Mr. Arjun Mitra
Designation :	EVP – Collections
Name :	Mr. Vishwajit Negi
Designation :	EVP – Operations - Customer Management (India) International Business
Name :	Mr. Dinesh Jain
Designation :	Chief Financial Officer
Name :	Ms. Gayatri Anandh
Designation :	Head – Technology
Name :	Ms. Smita Gaikwad
Designation :	Global Head – Marketing & Corporate Communications
Name :	Mr. Satish M
Designation :	EVP – Human Resources
Name :	Mr. Arun Tyagi
Designation :	Chief Compliance Officer
Name :	Kiran Kosaraju
Designation :	Country Head – Philippines

MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN

AS ON 30.09.2013

Category of Shareholder	Total No. of Shares	Total Shareholding as a % of Total No. of Shares
(A) Shareholding of Promoter and Promoter Group
(1) Indian
Bodies Corporate	373976673	56.81
Sub Total	373976673	56.81
(2) Foreign
Total shareholding of Promoter and Promoter Group (A)	373976673	56.81
(B) Public Shareholding
(1) Institutions
Mutual Funds / UTI	400000	0.06
Financial Institutions / Banks	32534720	4.94
Foreign Institutional Investors	6926589	1.05
Sub Total	39861309	6.06
(2) Non-Institutions
Bodies Corporate	32612199	4.95
Individuals
Individual shareholders holding nominal share capital up to Rs.0.100 Million	79285210	12.04
Individual shareholders holding nominal share capital in excess of Rs.0.100 Million	87187135	13.24
Any Others (Specify)	45382475	6.89
Foreign Corporate Bodies	45382175	6.89
Overseas Corporate Bodies	300	0.00
Sub Total	244467019	37.14
Total Public shareholding (B)	284328328	43.19
Total (A)+(B)	658305001	100.00
(C) Shares held by Custodians and against which Depository Receipts have been issued	0	0.00
(1) Promoter and Promoter Group	0	0.00
(2) Public	0	0.00
Sub Total	0	0.00
Total (A)+(B)+(C)	658305001	0.00

SHAREHOLDING OF SECURITIES (INCLUDING SHARES, WARRANTS, CONVERTIBLE SECURITIES) OF PERSONS BELONGING TO THE CATEGORY “PROMOTER AND PROMOTER GROUP”

Sl. No.	Name of the Shareholder	Details of Shares held
		No. of Shares held	As a % of grand total (A)+(B)+(C)
1	SPEN Liq Private Limited	37,39,76,673	56.81
	TOTAL	37,39,76,673	56.81

SHAREHOLDING OF SECURITIES (INCLUDING SHARES, WARRANTS, CONVERTIBLE SECURITIES) OF PERSONS BELONGING TO THE CATEGORY “PUBLIC” AND HOLDING MORE THAN 1% OF THE TOTAL NUMBER OF SHARES

Sl. No.	Name of the Shareholder	Details of Shares held
		No. of Shares held	As a % of grand total (A)+(B)+(C)
1	Metavante Investments Mauritius Limited	45382175	6.89
2	ICICI Bank Limited	32105338	4.88
3	Jhunjhunwala Rakesh Radheshyam	25000000	3.80
	TOTAL	102487513	15.57

SHAREHOLDING OF SECURITIES (INCLUDING SHARES, WARRANTS, CONVERTIBLE SECURITIES) OF PERSONS (TOGETHER WITH PAC) BELONGING TO THE CATEGORY “PUBLIC” AND HOLDING MORE THAN 5% OF THE TOTAL NUMBER OF SHARES OF THE COMPANY

Sl. No.	Name of the Shareholder	Details of Shares held
		No. of Shares held	As a % of grand total (A)+(B)+(C)
1	Metavante Investments Mauritius Limited	45382175	6.89
	TOTAL	45382175	6.89

BUSINESS DETAILS

Line of Business :

Subject is engaged in the business of Providing Contact Center, Transaction Processing and Debt Collection Services including Revenue Cycle Management in the Healthcare Industry.

GENERAL INFORMATION

No. of Employees :

Information denied by the management.

Bankers :

ABN Amro Bank N.A., Nariman Point, Mumbai, Maharashtra, India

Facilities :

Secured Loan	As on 31.03.2013 [Rs. in Millions]	As on 31.03.2012 [Rs. in Millions]
Long Term Borrowings
Term loan - From Banks
External commercial borrowings (ECB)	1080.270	0.000
Long-term maturities of finance lease obligations	26.600	43.090
TOTAL	1106.870	43.090
NOTES: 1. External commercial borrowing carries interest at the rate of LIBOR + 471 bps and is repayable in 23 quarterly installments commencing 1 year from the date of its origination. The loan is secured against pari passu charge on all current assets, non-current assets and fixed assets of the Firstsource and its Subsidiaries, except assets of Anunta, FDS, and Twinlakes-I and Twinlakes-II. 2. Finance lease obligation carries interest in the range of 6%-12.5% for the period of 3 - 5 years from the date of its origination, repayable in quarterly installments. This is secured by way of hypothecation of underlying fixed assets taken on lease. 3. Loan from non-banking financing companies carries interest in the range of 7.5%- 12.5% for the period of 3 - 4 years from the date of its origination, repayable in quarterly installments from the date of its origination.
Unsecured Loan	As on 31.03.2013 [Rs. in Millions]	As on 31.03.2012 [Rs. in Millions]
Long Term Borrowings
Loan from non-banking financing companies	20.770	58.240
Short Term Borrowings
Working capital demand loan Working capital demand loan carries interest rate of 12.75%-13% p.a. The same has been repaid during the year.	0.000	150.000
Export finance from banks Export finance from banks carried interest @ LIBOR + 265 bps. The same has been repaid during the year.	0.000	216.740
TOTAL	0.000	366.740

Banking Relations :	--
Auditors :
Name :	B S R and Company Chartered Accountant
Address :	5^th Floor, Lodha Excellus, Apollo Mills Compound, N M Joshi Marg, Mahalaxmi, Mumbai-400011, Maharashtra, India
Ultimate Holding Company :	· CESC Limited (w.e.f. 5th December, 2012) · Spen Liq Private limited (w.e.f. 5th December, 2012)
Subsidiaries Wherein Control Exists :	· Firstsource Solutions UK Limited (FSL-UK) · Rev IT Systems Private Limited (Rev IT) ( Refer Note 26) · Firstsource Group USA, Inc. (FG US) · Firstsource Business Process Services, LLC. (FBPS) · Firstsource Advantage LLC (FAL) · Twin Lake Property LLC – I (Twinlakes-I) · Twin Lake Property LLC – II (Twinlakes-II) · MedAssist Holding, Inc. (MedAssist) · Firstsource Solutions USA LLC (earlier known as MedAssist LLC) · Anunta Tech Infrastructure Services Limited (Anunta) · Firstsource Transaction Services LLC (FTS) · Firstsource Dialog Solutions (Private) Limited (Earlier known as Dialog Business Services Private Limited) (FDS) · Firstsource BPO Ireland Limited

CAPITAL STRUCTURE

AS ON 31.03.2013

Authorised Capital :

No. of Shares	Type	Value	Amount
872000000	Equity Shares	Rs.10/- each	Rs.8720.000 Millions

Issued, Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount
657673751	Equity Shares	Rs.10/- each	Rs.6576.740 Millions

NOTES:

PARTICULARS OF SHAREHOLDERS HOLDING MORE THAN 5% EQUITY SHARES:

Particular	As on 31.03.2013
	No. of Shares	% of Total Shares
Spen Liq Private Limited	373976673	56.86
Aranda Investments (Mauritius) Private Limited	**	**
Metavante Investments (Mauritius) Limited	45382175	6.90
ICICI Bank Limited	45266823	6.88

**Aranda Investments (Mauritius) Pte Limited holds 3.35%, 22,032,274 shares (31 March 2012: 18.83%, 81,073,488 shares).

RIGHTS, PREFERENCES AND RESTRICTIONS ATTACHED TO EQUITY SHARES:

The Company has a single class of equity shares. Accordingly, all equity shares rank equally with regard to dividends and share in the Company’s residual assets. The equity shares are entitled to receive dividend as declared from time to time. The voting rights of an equity shareholder are in proportion to its share of the paid-up equity capital of the Company.

On winding up of the Company, the holders of equity shares will be entitled to receive the residual assets of the Company, remaining after distribution of all preferential amounts in proportion to the number of equity shares held.

*In accordance with the scheme of amalgamation of RevIT (refer Note 26), the authorized share capital of company stands increased to Rs. 8,720 divided into 872,000,000 equity shares.

FINANCIAL DATA

[all figures are in Rupees Millions]

ABRIDGED BALANCE SHEET

SOURCES OF FUNDS	31.03.2013	31.03.2012	31.03.2011
I. EQUITY AND LIABILITIES
(1)Shareholders' Funds
(a) Share Capital	6576.740	4307.760	4306.380
(b) Reserves & Surplus	5748.170	4493.220	4917.350
(c) Money received against share warrants	0.000	0.000	0.000
(2) Share Application money pending allotment	0.000	0.000	0.000
Total Shareholders’ Funds (1) + (2)	12324.910	8800.980	9223.730
(3) Non-Current Liabilities
(a) long-term borrowings	1127.640	101.330	12676.660
(b) Deferred tax liabilities (Net)	0.000	0.000	0.000
(c) Other long term liabilities	0.000	0.000	0.000
(d) long-term provisions	95.590	46.750	247.710
Total Non-current Liabilities (3)	1223.230	148.080	12924.370
(4) Current Liabilities
(a) Short term borrowings	0.000	366.740	431.820
(b) Trade payables	443.610	526.940	558.500
(c) Other current liabilities	2162.310	13029.180	1310.970
(d) Short-term provisions	49.920	54.470	66.530
Total Current Liabilities (4)	2655.840	13977.330	2367.820
TOTAL	16203.980	22926.390	24515.920
II. ASSETS
(1) Non-current assets
(a) Fixed Assets
(i) Tangible assets	538.960	758.430	791.500
(ii) Intangible Assets	425.170	606.800	782.830
(iii) Capital work-in-progress	17.600	18.730	0.180
(iv) Intangible assets under development	0.000	0.000	0.000
(b) Non-current Investments	11686.070	11608.390	10063.770
(c) Deferred tax assets (net)	406.640	392.840	357.770
(d) Long-term Loan and Advances	868.790	975.380	740.790
(e) Other Non-current assets	650.230	312.260	270.360
Total Non-Current Assets	14593.460	14672.830	13007.200
(2) Current assets
(a) Current investments	0.000	307.000	986.830
(b) Inventories	0.000	0.000	0.000
(c) Trade receivables	827.180	1551.990	1529.880
(d) Cash and cash equivalents	253.320	5563.290	1475.630
(e) Short-term loans and advances	265.850	599.760	6922.590
(f) Other current assets	264.170	231.520	593.790
Total Current Assets	1610.520	8253.560	11508.720
TOTAL	16203.980	22926.390	24515.920

PROFIT & LOSS ACCOUNT

	PARTICULARS		31.03.2013	31.03.2012	31.03.2011
	SALES
		Income	8808.150	7542.560	7029.680
		Other Income	925.760	1019.230	559.550
		TOTAL	9733.910	8561.790	7589.230
Less	EXPENSES
		Employee Benefits Expenses	4715.570	4264.820	3666.650
		Other Expenses	2739.890	2623.950	2385.050
		TOTAL	7455.460	6888.770	6051.700
Less	PROFIT / (LOSS) BEFORE INTEREST, TAX, DEPRECIATION AND AMORTISATION		2278.450	1673.020	1537.530
Less	FINANCIAL EXPENSES		527.980	655.650	268.130
	PROFIT / (LOSS) BEFORE TAX, DEPRECIATION AND AMORTISATION		1750.470	1017.370	1269.400
Less/ Add	DEPRECIATION/ AMORTISATION		576.580	598.790	573.800
	PROFIT / (LOSS) BEFORE TAX		1173.890	418.580	695.600
Less	TAX		0.000	(35.010)	32.730
	PROFIT AFTER TAXATION BEFORE ADJUSTMENT FOR RESULTS OF REVIT SYSTEMS PRIVATE LIMITED ‘REVIT’ FOR THE YEAR ENDED 31 MARCH 2012		1173.890	453.590	662.870
Add/ Less	PROFIT AFTER TAX FOR THE YEAR ENDED 31 MARCH 2012 OF REVIT (INCLUDING REVERSAL OF EXCESS PROVISION) INCORPORATED PURSUANT TO THE SCHEME OF AMALGAMATION		185.760	0.000	0.000
	PROFIT / (LOSS) AFTER TAX		1359.650	453.590	662.870
Add	ACCUMULATED BALANCE OF REV IT SYSTEMS PRIVATE LIMITED BROUGHT FORWARD PURSUANT TO SCHEME OF AMALGAMATION		437.400	0.000	0.000
Add	PREVIOUS YEARS’ BALANCE BROUGHT FORWARD		3401.500	2947.900	2285.000
	BALANCE CARRIED TO THE B/S		5198.550	3401.490	2947.870
	EARNINGS IN FOREIGN CURRENCY
		Income from Services	5722.310	4929.980	4454.440
		Interest Income	7.400	114.230	339.030
		Other Income	122.650	73.670	18.290
		Gain on Sale of Investment in Subsidiary	0.000	0.000	52.020
	TOTAL EARNINGS		5852.360	5117.880	4863.780
	IMPORTS
		Capital Goods	156.770	83.900	56.820
	TOTAL IMPORTS		156.770	83.900	56.820
	Earnings / (Loss) Per Share (Rs.)
	- Basic		2.70	1.05	1.54
	- Diluted		2.66	1.05	1.52

QUARTERLY RESULTS

PARTICULARS	30.06.2013	30.09.2013
Type	1^st Quarter	2^nd Quarter
Net Sales	2248.400	2378.100
Total Expenditure	1860.300	1833.900
PBIDT (Excl OI)	388.100	544.200
Other Income	(10.500)	46.300
Operating Profit	377.600	590.600
Interest	31.500	52.600
Exceptional Items	0.000	0.000
PBDT	346.100	537.900
Depreciation	129.400	145.900
Profit Before Tax	216.700	392.000
Tax	0.000	0.000
Profit After Tax	216.700	392.000
Extraordinary Items	0.000	0.000
Net Profit	216.700	392.000

KEY RATIOS

PARTICULARS		31.03.2013	31.03.2012	31.03.2011
PAT / Total Income	(%)	13.97	5.30	8.73
Net Profit Margin (PBT/Sales)	(%)	13.33	5.55	9.90
Return on Total Assets (PBT/Total Assets}	(%)	28.67	3.84	4.94
Return on Investment (ROI) (PBT/Networth)		0.10	0.05	0.07
Debt Equity Ratio (Total Debt/Networth)		0.09	0.05	1.42
Current Ratio (Current Asset/Current Liability)		0.61	0.59	4.86

LOCAL AGENCY FURTHER INFORMATION

DETAILS OF CURRENT MATURITIES OF LONG TERM DEBT:

Particulars	31.03.2013 [Rs. in millions]	31.03.2012 [Rs. in millions]	31.03.2011 [Rs. in millions]
Current Maturities of Long Term Debt
External commercial borrowings	5.430	0.000	188.100
Finance lease obligation	20.740	21.850	37.390
Foreign currency loan	0.000	0.000	215.690
Foreign currency convertible bonds* * 31 March 2012 pro-rata premium payable on redemption of FCCB amounting to Rs.2881.890 Millions for the year for terms of FCCB	0.000	11421.370	0.000
Loan from non-banking financing companies	37.470	47.890	19.470

Sr. No.	Check List by Info Agents	Available in Report (Yes / No)
1]	Year of Establishment	Yes
2]	Locality of the firm	Yes
3]	Constitutions of the firm	Yes
4]	Premises details	No
5]	Type of Business	Yes
6]	Line of Business	Yes
7]	Promoter's background	Yes
8]	No. of employees	No
9]	Name of person contacted	Yes
10]	Designation of contact person	Yes
11]	Turnover of firm for last three years	Yes
12]	Profitability for last three years	Yes
13]	Reasons for variation <> 20%	--
14]	Estimation for coming financial year	No
15]	Capital in the business	Yes
16]	Details of sister concerns	Yes
17]	Major suppliers	No
18]	Major customers	No
19]	Payments terms	No
20]	Export / Import details (if applicable)	No
21]	Market information	--
22]	Litigations that the firm / promoter involved in	--
23]	Banking Details	Yes
24]	Banking facility details	Yes
25]	Conduct of the banking account	--
26]	Buyer visit details	--
27]	Financials, if provided	Yes
28]	Incorporation details, if applicable	Yes
29]	Last accounts filed at ROC	Yes
30]	Major Shareholders, if available	Yes
31]	PAN of Proprietor/Partner/Director, if available	No
32]	Date of Birth of Proprietor/Partner/Director, if available	Yes
33]	Voter ID No of Proprietor/Partner/Director, if available	No
34]	External Agency Rating, if available	Yes

INDEX OF CHARGES:

S. NO.	CHARGE ID	DATE OF CHARGE CREATION/MODIFICATION	CHARGE AMOUNT SECURED	CHARGE HOLDER	ADDRESS	SERVICE REQUEST NUMBER (SRN)
1	10306196	23/08/2013 *	17,150,250,000.00	IL & FS TRUST COMPANY LIMITED	IL & FS FINANCIAL CENTREPLOT NO C22 G BLOCK BANDRA, KURLA COMPLEX BANDRA EAST, MUMBAI - 400051, MAHARASHTRA, INDIA	B84924604
* Date of charge modification

BACKGROUND:

Subject was incorporated on 6 December 2001. Firstsource is engaged in the business of providing contact center, transaction processing and debt collection services including revenue cycle management in the healthcare industry. During the year ended 31 March 2013, Firstsource Advantage LLC (FAL) acquired 100% stake in Twin Lakes Property LLC- II (Twinlakes-II) and 20% remaining stake in Twin Lake Property LLC-I (Twinlakes-I). Both Twinlakes-I and Twinlakes- II are incorporated under the laws of the State of New York, USA. During the year ended 31 March 2013, Firstsource agreed to sell its investment in “Firstsource Solutions S.A” a subsidiary of Firstsource Solutions UK Limited, incorporated under the laws of Argentina.

RESULT OF OPERATIONS:

The standalone total income increased from Rs. 8561.800 Millions to Rs. 9,733.9 Millions, a growth of 13.7% over the previous financial year. The standalone Profit After Tax increased from Rs. 453.600 Millions to Rs. 1359.700 Millions, a growth of 199.8% over the previous financial year. With a view to conserve cash reserves to meet current financial obligations of the Company, the Directors of the Company do not recommend any dividend for financial year 2012-13.

AMALGAMATION:

During the year, the Board approved the amalgamation of Rev IT Systems Private Limited (‘‘Rev IT”), a wholly owned subsidiary of the Company, with the Company, owing to beneficial impacts from synergies of operations, cost savings, strengthening of financial position and optimum utilization of assets. The Hon’ble High Court of judicature of Bombay, dispensing the meetings of Members and Creditors of both the Companies, vide its order dated November 5, 2012, sanctioned the Scheme of Amalgamation of Rev IT with the Company. The Company and Rev IT filed certified copies of the order of Hon’ble High Court with the Registrar of Companies, Maharashtra. Consequently Rev IT stood amalgamated with the Company during the year as per the scheme of Amalgamation with appointed date being April 1, 2011.

AWARDS AND ACCOLADES:

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

· Best Outsourced center by Welsh Contact Centre Awards, 2012

National Outsourcing Association Awards, 2012, in following prestigious categories:

· Telecommunications, Utilities and High-Tech Outsourcing Project of the Year

· Innovation in Outsourcing

· Outsourcing Contact Centre Provider of the Year

· “Outsourcer of the Year” at the European Call Centre and Customer Service Awards, 2012

· “Contact Centre Agency of the Year Award” by Marketing Magazine’s Awards, 2012

· Ranked # 22 in Global Outsourcing 100R rankings in 2012 by The International Association of Outsourcing Professionals

As per NASSCOM’s Annual rankings:

· Ranked amongst the Top 5 ITES-BPO companies in 2012

· Ranked amongst the Top 15 IT- BPO employers in India in 2012

· Ranked amongst top Indian BPO companies in 7th Annual Global Services GS100

MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis should be read in conjunction with the Company’s financial statements included herein and the notes thereto. The financial statements have been prepared in compliance with the requirements of the Companies Act, 1956 and Generally Accepted Accounting Principles (GAAP) in India. The Company’s management accepts responsibility for the integrity and objectivity of these financial statements, as well as for various estimates and judgments used therein. The estimates and judgments relating to the financial statements have been made on a prudent and reasonable basis, in order that the financial statements reflect in a true and fair manner the form and substance of transactions, and reasonably present the Company’s state of affairs and profits for the year. Investors are cautioned that this discussion contains forward looking statements that involve risks and uncertainties. When used in this discussion, words like ‘will’, ‘shall’, ‘anticipate’, ‘believe’, ‘estimate’, ‘intend’ and ‘expect’ and similar expressions as they relate to the Company or its business are intended to identify such forward-looking statements. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise. Actual results, performances or achievements could differ materially from those expressed or implied in such statements. Factors that could cause or contribute to such differences include those described under the heading “Risk factors” in the Company’s prospectus filed with the Securities and Exchange Board of India (SEBI) as well as factors discussed elsewhere in this report. Readers are cautioned not to place undue reliance on the forward-looking statements as they speak only as on their date of statement.

Information provided in this Management Discussion and Analysis (MD&A) pertains to Firstsource Solutions Limited and its subsidiaries (the Company) on a consolidated basis, unless otherwise stated.

MACRO ECONOMICS AND OUTLOOK:

Four years after the global financial crisis, the economic prospects have improved, but the road to recovery for advanced economies is expected to be a long drawn process. IMF predicts that world output growth shall reach 3.75% in 2013 and 4% in 2014. While private demand is appearing increasingly robust in the United States, in the Euro area it continues to be sluggish. There are good signs of economic activity in the emerging and the developing markets.

Over the last six months of fiscal 2012, advanced economy policymakers have successfully defused two of the biggest short-term threats to global recovery, the threat of Eurozone breakup and a sharp fiscal contraction in the United States caused by a plunge off the ‘fiscal cliff.’ In response, financial markets have rallied.

There was a noticeable slowdown in the emerging markets and developing economies during 2012, a reflection of the sharp deceleration in demand from key advanced economies, domestic policy tightening and the end of investment led growth. However, with consumer demand being resilient and revival of exports, most economies in Asia and Sub-Saharan Africa and many economies in Latin America and the Commonwealth of Independent States are now seeing growth. The recovery should gain momentum in emerging Europe also, as demand from advanced Europe slowly picks up. The IMF while lowering its projection for economic growth in emerging economies to 5.3% in 2013 predicted that Indian economy growth is expected to accelerate from 4% in 2012 to 5.8% in 2013 and 6.2% in 2014. The prospect of increased activity in India is based on external demand, strong consumption, a better monsoon and policy improvements.

In view of the growth outlook, the World Bank forecasts that overall inflation in 2013 will remain relatively moderate. Global inflation is expected to fall in the 3.5 to 4 % range for 2013, which is very similar to the reported global inflation of 3.9 % in 2012. The developing countries are estimated to witness inflation of about 6.3 % in 2013, marginally higher than in 2012, as a result of increasing food prices and a higher allocation of the overall inflation measurement toward basic food staples. During the course of the year 2012, unemployment in the United

States fell by a full percentage point, an encouraging sign that businesses seemed to be hiring in spite of uncertainty. While the underlying trend in unemployment is downward, experts opine that the pace of job growth remains well below what is needed to push wages substantially higher or to significantly reduce the broadest measure of unemployment anytime soon.

In the Indian context, average unemployment rate is expected to rise to 9.4% in 2013 from 9.3% in 2012, as forecast by staffing firm Kelly Services. Overall, India would see a net addition of just under a million jobs and that means 2013 will be better than 2012 in terms of jobs addition. The year 2012 turned out to be a roller-coaster ride for the Indian Rupee. A low -point in the Rupee’s journey in fiscal 2013 came on June 25, 2012, when it touched a one year high of Rs. 57.88 to the US$. However, the rupee did recover from the low and closed at a five-month high of Rs. 52.85, gaining the most in 13 quarters on the expectation of higher Foreign Institutional Investor (FII) inflows due to government-backed reform measures on Foreign Direct Investment (FDI) and diesel price hike.

The fiscal deficit and the trade gap, persistently high inflation, slowdown in growth of total factor productivity, fears about a reversal in capital flows, combined with a gold-buying binge by Indians, has put the rupee under sustained pressure. The central bank, on the other hand, has been categorical that it will only step in to curtail the volatility and not to support the rupee at some predetermined value. Overall, 2012 witnessed a deceleration in growth in major developing countries and economies in transition, reflecting both external vulnerabilities and domestic challenges including financial sector fragility.

FIXED ASSETS:

· Domain Name

· Software

· Computers

· Networking Services Equipment’s

· Furniture and Fixtures and Office Equipment’s

· Leasehold Improvements

· Vehicles

AUDITED FINANCIAL RESULTS FOR THE QUARTER AND SIX MONTHS ENDED SEPTEMBER 30, 2013

Rs. In Millions

Sr. No.	Particular	Quarter Ended		Six Months Ended
		30.09.2013	30.06.2013	30.09.2013
		Audited	Audited	Audited
1.	Net Sales/Income from Operations	2492.270	2304.820	4797.090
	Other Operating Income	(114.150)	(56.420)	(170.570)
	Total Income From Operations (Net)	2378.120	2248.400	4626.520
2.	Expenditure
	Employee benefits expenses	1188.570	1181.880	2370.450
	Depreciation and amortization expenses	145.920	129.360	275.280
	Other expenses	645.31	678.460	1323.770
	Total Expenses	1979.800	1989.700	3969.500
3.	Profit From Operations before Other Income, Interest and Exceptional Items (1-2)	398.320	258.700	657.020
4.	Other Income	46.310	(10.460)	35.850
5.	Profit Before Interest and Exceptional Items (3+4)	444.630	248.240	692.870
6.	Interest	52.610	31.520	84.130
7.	Profit After Interest but before Exceptional Items (5-6)	392.020	216.720	608.740
8.	Exceptional Items	--	--	--
9.	Profit from Ordinary Activities before Tax (7+8)	392.020	216.720	608.740
10.	Tax Expense	--	--	--
11.	Net Profit from Ordinary Activities after Tax (9-10)	392.020	216.720	608.740
12.	Extraordinary Item (net of expense)	--	--	--
13.	Net Profit for the period (11-12)	392.020	216.720	608.740
14.	Paid-up Equity Share Capital (Face Value of Rs.10/- Each)	6583.050	6581.740	6583.050
15.	Reserves Excluding Revaluation Reserve	--	--	--
16.	Basic and Diluted Earning Per Share (EPS) (Rs.)-Not Annualised
	a) Basic and diluted EPS before extraordinary items	0.60	0.33	0.93
	b) Basic and diluted EPS after extraordinary items	0.59	0.32	0.91
17.	Public Shareholding
	-Number of Shares	284328328	284197078	284328328
	- Percentage of Shareholding	43.19	43.18	43.19
18.	Promoters and Promoter Group Shareholding
	a) Pledged/Encumbered
	- Number of Shares	Nil	Nil	Nil
	- Percentage of Shares (as a % of the Total Shareholding of promoter and promoter group)	Nil	Nil	Nil
	- Percentage of Shares (as a % of the Total Share Capital of the Company)	Nil	Nil	Nil
	b) Non Encumbered
	- Number of Shares	373976673	373976673	373976673
	- Percentage of Shares (as a % of the Total Shareholding of Promoter and Promoter Group)	100%	100%	100%
	- Percentage of Shares (as a % of the Total Share Capital of the Company)	56.81	56.82	56.81

NOTES:

1. The above results were reviewed by the Audit Committee and adopted by the Board of Directors at their meeting held on October 23, 2013.

2. Effective year ended March 31, 2009, the Company has early adopted Accounting Standard (AS) 30 "Financial instruments: Recognition and Measurement", pursuant to announcement made by the Institute of Chartered Accountants of India (ICAI).

3. During the quarter, 131,250 Equity shares were issued pursuant to exercise of stock options under the Employee Stock Option Scheme of the Company.

4. During the quarter, Firstsource Philippines, branch of Firstsource is classified as a non-integral operation as against its earlier classification as an integral operation. However, the impact of this change in classification is not considered material.

5. During the quarter, 33 complaints were received from investors which were resolved. There was no complaint pending at the beginning and at the end of the quarter.

6. Figures for the prior periods have been regrouped and / or reclassified wherever considered necessary.

7. STATEMENT OF ASSETS AND LIABILITIES (STANDALONE AUDITED)

Rs. In Millions

PARTICULARS	30.09.2013 Audited
Equity and liabilities
Shareholders' fund
Share capital	6583.050
Reserve & surplus	5886.640
Sub-total - Shareholders' funds	12469.690
Non - current liabilities
Long term borrowings	1294.610
Deferred tax liability (net)	0.000
Long term provisions	90.670
Sub-total - Non-current liabilities	1385.280
Current liabilities
Short term borrowings	208.870
Trade payables	440.370
Other current liabilities	2467.030
Short term provisions	60.240
Sub-total - Current liabilities	3176.510
TOTAL - EQUITY & LIABILITIES	17031.480
Assets
Non-current assets
Fixed assets
- Tangible assets	505.550
- Intangible assets	544.740
Capital work in progress	1.650
Deferred tax assets (net)	11854.520
Non-current investment	406.640
Long term loans & advances	881.450
Other non-current assets	764.780
Sub-total - Non-current Assets	14959.330
Current assets
Inventories	0.000
Trade receivables	1285.280
Cash & bank balances	236.900
Short term loans & advances	245.230
Other current assets	304.740
Sub-total - Current Assets	2072.150
TOTAL – ASSETS	17031.480

CMT REPORT (Corruption, Money Laundering & Terrorism]

The Public Notice information has been collected from various sources including but not limited to: The Courts, India Prisons Service, Interpol, etc.

1] INFORMATION ON DESIGNATED PARTY

No exist designating subject or any of its beneficial owners, controlling shareholders or senior officers as terrorist or terrorist organization or whom notice had been received that all financial transactions involving their assets have been blocked or convicted, found guilty or against whom a judgement or order had been entered in a proceedings for violating money-laundering, anti-corruption or bribery or international economic or anti-terrorism sanction laws or whose assets were seized, blocked, frozen or ordered forfeited for violation of money laundering or international anti-terrorism laws.

2] Court Declaration :

No exist to suggest that subject is or was the subject of any formal or informal allegations, prosecutions or other official proceeding for making any prohibited payments or other improper payments to government officials for engaging in prohibited transactions or with designated parties.

3] Asset Declaration :

No records exist to suggest that the property or assets of the subject are derived from criminal conduct or a prohibited transaction.

4] Record on Financial Crime :

Charges or conviction registered against subject: None

5] Records on Violation of Anti-Corruption Laws :

Charges or investigation registered against subject: None

6] Records on Int’l Anti-Money Laundering Laws/Standards :

Charges or investigation registered against subject: None

7] Criminal Records

No available information exist that suggest that subject or any of its principals have been formally charged or convicted by a competent governmental authority for any financial crime or under any formal investigation by a competent government authority for any violation of anti-corruption laws or international anti-money laundering laws or standard.

8] Affiliation with Government :

No record exists to suggest that any director or indirect owners, controlling shareholders, director, officer or employee of the company is a government official or a family member or close business associate of a Government official.

9] Compensation Package :

Our market survey revealed that the amount of compensation sought by the subject is fair and reasonable and comparable to compensation paid to others for similar services.

10] Press Report :

No press reports / filings exists on the subject.

CORPORATE GOVERNANCE

MIRA INFORM as part of its Due Diligence do provide comments on Corporate Governance to identify management and governance. These factors often have been predictive and in some cases have created vulnerabilities to credit deterioration.

Our Governance Assessment focuses principally on the interactions between a company’s management, its Board of Directors, Shareholders and other financial stakeholders.

CONTRAVENTION

Subject is not known to have contravened any existing local laws, regulations or policies that prohibit, restrict or otherwise affect the terms and conditions that could be included in the agreement with the subject.

FOREIGN EXCHANGE RATES

Currency	Unit	Indian Rupees
US Dollar	1	Rs.62.18
UK Pound	1	Rs.102.31
Euro	1	Rs.84.50

INFORMATION DETAILS

Information Gathered by :	SVA
Report Prepared by :	TPT

SCORE & RATING EXPLANATIONS

SCORE FACTORS	RANGE	POINTS
HISTORY	1~10	5
PAID-UP CAPITAL	1~10	5
OPERATING SCALE	1~10	6
FINANCIAL CONDITION
--BUSINESS SCALE	1~10	6
--PROFITABILIRY	1~10	6
--LIQUIDITY	1~10	6
--LEVERAGE	1~10	6
--RESERVES	1~10	5
--CREDIT LINES	1~10	5
--MARGINS	-5~5	--
DEMERIT POINTS
--BANK CHARGES	YES/NO	YES
--LITIGATION	YES/NO	NO
--OTHER ADVERSE INFORMATION	YES/NO	NO
MERIT POINTS
--SOLE DISTRIBUTORSHIP	YES/NO	NO
--EXPORT ACTIVITIES	YES/NO	NO
--AFFILIATION	YES/NO	YES
--LISTED	YES/NO	YES
--OTHER MERIT FACTORS	YES/NO	YES
--RBI	YES/NO	NO
--EPF	YES/NO	NO
TOTAL		50

This score serves as a reference to assess SC’s credit risk and to set the amount of credit to be extended. It is calculated from a composite of weighted scores obtained from each of the major sections of this report. The assessed factors and their relative weights (as indicated through %) are as follows:

Financial condition (40%) Ownership background (20%) Payment record (10%)

Credit history (10%) Market trend (10%) Operational size (10%)

RATING EXPLANATIONS

RATING		STATUS	PROPOSED CREDIT LINE
>86	Aaa	Possesses an extremely sound financial base with the strongest capability for timely payment of interest and principal sums	Unlimited
71-85	Aa	Possesses adequate working capital. No caution needed for credit transaction. It has above average (strong) capability for payment of interest and principal sums	Large
56-70	A	Financial & operational base are regarded healthy. General unfavourable factors will not cause fatal effect. Satisfactory capability for payment of interest and principal sums	Fairly Large
41-55	Ba	Overall operation is considered normal. Capable to meet normal commitments.	Satisfactory
26-40	B	Capability to overcome financial difficulties seems comparatively below average.	Small
11-25	Ca	Adverse factors are apparent. Repayment of interest and principal sums in default or expected to be in default upon maturity	Limited with full security
<10	C	Absolute credit risk exists. Caution needed to be exercised	Credit not recommended
--	NB	New Business	--

PRIVATE & CONFIDENTIAL : This information is provided to you at your request, you having employed MIPL for such purpose. You will use the information as aid only in determining the propriety of giving credit and generally as an aid to your business and for no other purpose. You will hold the information in strict confidence, and shall not reveal it or make it known to the subject persons, firms or corporations or to any other. MIPL does not warrant the correctness of the information as you hold it free of any liability whatsoever. You will be liable to and indemnify MIPL for any loss, damage or expense, occasioned by your breach or non observance of any one, or more of these conditions

This report is issued at your request without any risk and responsibility on the part of MIRA INFORM PRIVATE LIMITED (MIPL) or its officials.