MIRA INFORM REPORT

 

 

Report No. :

493357

Report Date :

28.02.2018

 

 

 

 

 

 

IDENTIFICATION DETAILS

 

Name :

FIRSTSOURCE SOLUTIONS LIMITED (w.e.f. 21.11.2006)

 

 

Formerly Known As :

ICICI ONESOURCE LIMITED (w.e.f. 02.04.2002)

 

ICICI INFOTECH UPSTREAM LIMITED

 

 

Registered Office :

5th Floor, Paradigm ‘B’ Wing, Mindspace, Link Road, Malad (West), Mumbai-400064, Maharashtra

Tel. No.:

91-22-66660888

 

 

Country :

India

 

 

Financials (as on) :

31.03.2017

 

 

Date of Incorporation :

06.12.2001

 

 

Com. Reg. No.:

11-134147

 

 

Capital Investment / Paid-up Capital :

INR 6813.080 Million

 

 

CIN No.:

[Company Identification No.]

L64202MH2001PLC134147

 

 

IEC No.:

[Import-Export Code No.]

0302000615

 

 

GSTN :

[Goods & Service Tax Registration No.]

27AAACI8904N1Z6

 

 

TAN No.:

[Tax Deduction & Collection Account No.]

Not Available

 

 

PAN No.:

[Permanent Account No.]

AAACI8904N

 

 

Legal Form :

A Public Limited Liability Company. The Company’s Shares are Listed on the Stock Exchanges

 

 

Line of Business :

The Company is engaged in the business of providing customer management services like contact center, transaction processing and debt collection services including revenue cycle management in the healthcare industry. [Registered Activity]

 

 

No. of Employees :

16334 (Approximately)

 

 

RATING & COMMENTS

(Mira Inform has adopted New Rating mechanism w.e.f. 23rd January 2017)

 

MIRA’s Rating :

A+

 

Credit Rating

Explanation

Rating Comments

A+

Low Risk

Business dealings permissible with low risk of default

 

Status :

Good

 

 

Payment Behaviour :

Regular

 

 

Litigation :

Clear

 

 

Comments :

Firstsource Solutions Limited is owned by RP-Sanjiv Goenka Group. It was incorporated in the year 2001 and is a provider of business process outsourcing (BPO) services.


It provides customized business process management to customers in the banking and financial services, customer services, telecom and media, and healthcare sectors.


For the financial year 2017, the company has achieved revenue growth of 7.45% as compared to the previous year along with a fair profit margin of 20.05%.

The sound financial risk profile of the company is marked by adequate net worth base along with strong debt protection metrics due to negligible debt balance sheet profile.


Further, as per the quarterly financials of December 2017, the subject has achieved revenue of INR 8872.38 along with a fair profit margin of 11.53%.

Rating also takes into account the strong financial and managerial support that company receives from its holding entity backed by its well experienced management team.


These rating strengths are partially offset by the subject’s exposure to intense competition in the BPO sector.


Payments seems to be regular.


In view of aforesaid, 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.

 

EXTERNAL AGENCY RATING

 

Rating Agency Name

CRISIL

Rating

Long term borrowing = A-

Rating Explanation

Adequate degree of safety and low credit risk

Date

01.08.2017

 

 

Rating Agency Name

CRISIL

Rating

Short term borrowing = A2+

Rating Explanation

Strong degree of safety and low credit risk.

Date

01.08.2017

 

 

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 31-03-2016.

 

 

BIFR (Board for Industrial & Financial Reconstruction) LISTING STATUS

 

Subject’s name is not listed as a Sick Unit in the publicly available BIFR (Board for Industrial & Financial Reconstruction) list as of 28.02.2018.

 

 

IBBI (Insolvency and Bankruptcy Board of India) LISTING STATUS

 

Subject’s name is not listed in the publicly available IBBI (Insolvency and Bankruptcy Board of India) list as of report date.

 

 

INFORMATION DENIED BY

 

Name :

Mr. Rakesh

Designation :

Finance Department

Contact No.:

91-22-67035700

Date :

21.02.2018

 

 

Management Non-Cooperative (Tel. No.:91-22-66660888)

 

 

LOCATIONS

 

Registered Office :

5th Floor, Paradigm ‘B’ Wing, Mindspace, Link Road, Malad (West), Mumbai-400064, Maharashtra, India 

Tel. No.:

91-22-66660888/ 67035700

Fax No.:

91-22-67035701

E-Mail :

sweta.shah2@firstsource.com

Website :

http://www.firstsource.com

 

 

Branch Offices:

Located at:

 

  • Mumbai
  • Bangalore
  • Chennai
  • Pondicherry
  • Kolkata
  • Trichy
  • Indore
  • Vijayawada
  • Cochin
  • Siliguri
  • Bhubaneshwar
  • Jalandhar
  • Bhopal

 

 

Overseas Offices :

Located At:

 

  • United Kingdom
  • United States
  • Sri Lanka
  • Philippines 

 

 

DIRECTORS

 

AS ON 2018

 

Name :

Mr. Rajesh Subramaniam

Designation :

Managing Director

Address :

Prestige Ozone Villa No.C-67, Whitefield Road Varthur Kodi, Bangalore - 560066, Karnataka, India

Date of Appointment :

01.08.2011

DIN No.:

02617781

 

 

Name :

Mr. Pradip Kumar Khaitan

Designation :

Director

Address :

B-103, Rai Enclave, 7/1A, Sunny Park, Kolkata - 700019, West Bengal, India

Date of Appointment :

14.11.2014

DIN No.:

00004821

 

 

Name :

Mr. Pradip Roy

Designation :

Director

Address :

Building, 2C, Flat N0 -42, Kalpataru Estate, J V L Road, Andheri (East), Mumbai - 400093, Maharashtra, India

Date of Appointment :

03.12.2012

DIN No.:

00026457

 

 

Name :

Mr. Sanjiv Goenka

Designation :

Director

Address :

19, Belvedere Road, Kolkata - 700027, West Bengal, India

Date of Appointment :

03.12.2012

DIN No.:

00074796

 

 

Name :

Mr. Yezdi Hirji Malegam

Designation :

Director

Address :

Goolestan, 37,Cuffe Parade, Colaba, Mumbai - 400005, Maharashtra, India

Date of Appointment :

27.07.2006

DIN No.:

00092017

 

 

Name :

Mr. Charles Miller Smith

Designation :

Director

Address :

23 Egerton Terrace, London, SW32BU, United Kingdom

Date of Appointment :

19.08.2002

DIN No.:

00950635

 

 

Name :

Mr. Donald William Layden JR

Designation :

Director

Address :

923 E Kilbourn Ave, # 2901, Milwaukee, Wi, Milwaukee - 53202, United States of America

Date of Appointment :

20.04.2006

DIN No.:

01268078

 

 

Name :

Mr. Subrata Talukdar

Designation :

Director

Address :

Sivnath Bhavan, Gariahat Road, Flat No.Y-35, Kolkata - 700029, West Bengal, India

Date of Appointment :

05.12.2012

DIN No.:

01794978

 

 

Name :

Mr. Vinod Kumar Sharma

Designation :

Director

Address :

B 804 Park Titanium Park Street, Kalewadi Phata, Wakad, Hinjavadi, Pune - 411057, Maharashtra, India

Date of Appointment :

14.11.2014

DIN No.:

02051084

 

 

Name :

Mrs. Grace Elizabeth Koshie

Designation :

Director

Address :

A – 705, Pearl,Rajhans Dreams, Stella, Barampur, Vasai (West), Thane - 401202, Maharashtra, India

Date of Appointment :

09.02.2015

DIN No.:

06765216

 

 

Name :

Mr. Shashwat Goenka

Designation :

Director

Address :

19, Belvedere Road, Goenka Nivas, Kolkata-700027, West Bengal, India

Date of Appointment :

05.12.2012

DIN No.:

03486121

 

 

KEY EXECUTIVES

 

Name :

Mr. Dinesh Jain

Designation :

Company Financial Officer (KMP)

Address :

1504, 15th Floor, Rustomjee O Zone Tower No. 5, Behind GGN Tele. Exch., Goregaon (West), Mumbai-400062, Maharashtra, India

Date of Appointment :

29.10.2015

PAN No.:

ACDPJ8780F

 

 

Name :

Ms. Pooja S Nambiar

Designation :

Company Secretary and Compliance Officer

Address :

D/310, Aaditya CHS., Sector-II, Charkop, Kandivali (West), Mumbai-400067, Maharashtra, India

Date of Appointment :

31.01.2017

PAN No.:

ADWPR5859H

 

 

Name :

Mr. Rakesh

Designation :

Finance Department

 

 

COMMITTEE DETAILS

Audit Committee :
  • Mr. Y. H. Malegam, Chairman
  • Mr. Charles Miller Smith
  • Ms. Grace Koshie
  • Mr. Subrata Talukdar

 

 

Nomination and

Remuneration Committee :
  • Mr. Y. H. Malegam, Chairman
  • Mr. Charles Miller Smith
  • Mr. Pradip Roy
  • Mr. Subrata Talukdar

 

 

Stakeholders Relationship Committee :
  • Mr. Subrata Talukdar, Chairman
  • Mr. Rajesh Subramaniam

 

 

Corporate Social Responsibility Committee :
  • Mr. Shashwat Goenka, Chairman
  • Mr. Rajesh Subramaniam
  • Mr. Pradip Roy
  • Mr. Subrata Talukdar

 

 

Investment Committee :
  • Mr. Y. H. Malegam, Chairman
  • Mr. Rajesh Subramaniam
  • Mr. Subrata Talukdar

 

 

Strategy Committee :
  • Mr. Shashwat Goenka, Chairman
  • Mr. Rajesh Subramaniam
  • Mr. Donald W. Layden Jr.
  • Mr. Subrata Talukdar

 

 

SHAREHOLDING PATTERN

 

AS ON DECEMBER 2017

 

Category of shareholder

Total nos. shares held

Shareholding as a % of total no. of shares (calculated as per SCRR, 1957)As a % of (A+B+C2)

(A) Promoter & Promoter Group

373976673

54.57

(B) Public

311283671

45.43

Grand Total

685260344

100.00

 

 

 

STATEMENT SHOWING SHAREHOLDING PATTERN OF THE PROMOTER AND PROMOTER GROUP

 

Category of shareholder

Total nos. shares held

Shareholding as a % of total no. of shares (calculated as per SCRR, 1957)As a % of (A+B+C2)

A1) Indian

0.00

Any Other (specify)

373976673

54.57

Spen Liq Private Limited

373976673

54.57

Sub Total A1

373976673

54.57

A2) Foreign

0.00

A=A1+A2

373976673

54.57

 

 

STATEMENT SHOWING SHAREHOLDING PATTERN OF THE PUBLIC SHAREHOLDER

 

Category & Name of the Shareholders

Total no. shares held

Shareholding % calculated as per SCRR, 1957 As a % of (A+B+C2)

B1) Institutions

0.00

Mutual Funds/

8550000

1.25

Aditya Birla Sun Life Trustee Private Limited A/C Aditya Birla Sun Life India Opportunities Fund

8550000

1.25

Foreign Portfolio Investors

40616166

5.93

Sterinberg India Emerging Opportunities Fund Limited

17900000

2.61

Financial Institutions/ Banks

34195267

4.99

ICICI Bank Limited

33577356

4.90

Any Other (specify)

39986

0.01

Sub Total B1

83401419

12.17

B2) Central Government/ State Government(s)/ President of India

0.00

B3) Non-Institutions

0.00

Individual share capital upto INR 0.200 million

91571132

13.36

Individual share capital in excess of INR 0.200 million

90807849

13.25

Jhunjhunwala Rakesh Radheyshyam

20000000

2.92

Tarun Chandmal Jain.

7798576

1.14

NBFCs registered with RBI

729320

0.11

Any Other (specify)

44773951

6.53

Sub Total B3

227882252

33.25

B=B1+B2+B3

311283671

45.43

 

 

BUSINESS DETAILS

 

Line of Business :

The Company is engaged in the business of providing customer management services like contact center, transaction processing and debt collection services including revenue cycle management in the healthcare industry. [Registered Activity]

 

 

Products / Services :

NIC Code No.

Product Description

63999

IT- Enabled Services – BPO

 

 

Brand Names :

Not Available

 

 

Agencies Held :

Not Available

 

 

Exports :

Not Divulged 

 

 

Imports :

Not Divulged 

 

 

Terms :

Not Divulged 

 

 

PRODUCTION STATUS – (NOT AVAILABLE)

 

 

GENERAL INFORMATION

 

Suppliers :

Reference :

Not Divulged 

Name of the Person :

--

Contact No.:

--

Since How Long Known :

--

Maximum Limit Dealt :

--

Experience :

--

Remark :

--

 

 

Customers :

 

Reference :

Not Divulged 

Name of the Person :

--

Contact No.:

--

Since How Long Known :

--

Maximum Limit Dealt :

--

Experience :

--

Remark :

--

 

 

No. of Employees :

16334 (Approximately)

 

 

Bankers :
  • ICICI Bank Limited
  • DBS Bank Limited
  • Citi Bank NA
  • RBL Bank Limited
  • Yes Bank Limited
  • Barclays Bank PLC
  • Deutsche Bank AG
  • Standard Chartered Bank
  • Bank of Philippines Islands
  • Bank of America
  • The PNC Financial Services Group
  • HDFC Bank Limited
  • IDFC Bank Limited

 

 

Facilities :

SECURED LOANS

31.03.2017

INR In Million

31.03.2016

INR In Million

LONG TERM BORROWINGS

 

 

Term loan - from banks

 

 

External commercial borrowings (ECB)

588.080

1102.750

Non-current maturities of finance lease obligations

0.000

8.710

 

 

 

SHORT TERM BORROWINGS

 

 

External commercial Borrowing (ECB)

491.210

130.860

Finance lease obligation

6.690

11.560

Total

1085.980

1253.880

 

Notes:

 

a External commercial borrowing is a dollar denominated borrowing carrying floating interest rate in the range of 3.20% to 3.75%. The loan is repayable by June 2019 in quarterly installments. The loan is secured against pari passu charge on all current assets, non-current assets and fixed assets of the company.

 

b Finance lease obligation carries interest in the range of 4% - 12.5% for the period of 3 - 5 years from April 2013 to March 2018, repayable in quarterly installments. This is secured by way of hypothecation of underlying fixed assets taken on lease.

 

c Loan from non-banking financing companies carries interest in the range of 6.62% - 12.26% for the period of 3 - 4 years from April 2014 to December 2019, repayable in quarterly installments from the date of its origination.

 

d Export finance from banks including post-shipment and pre-shipment, carries interest in the range of 1.30% to 2.50%. The same is repayable on demand / receipt from customers.

 

 

Auditors 1 :

 

Name :

B S R and Company LLP

Chartered Accountants

Address :

1st Floor, Lodha Excellus, Apollo Mills Compound, N. M. Joshi Marg, Mahalaxmi, Mumbai – 400011, Maharashtra, India

Tel. No.:

91-22-43455300

Fax No.:

91-22-43455399

 

 

Auditors 2 :

 

Name :

Deloitte Haskins and Sells LLP

Chartered Accountants

Address :

Indiabulls Finance Centre, Tower 3, 27th-32th Floor, Senapati Bapat Marg, Elphinstone Road (West), Mumbai-400013, Maharashtra, India

Tel. No.:

91-22-61854000

Fax No.:

91-22-61854001

 

 

Memberships :

Not Available

 

 

Collaborators :

Not Available

 

 

Ultimate Holding Company :

CESC Limited

 

 

Holding Company :

Spen Liq Private Limited (Spen Liq)

 

 

Fellow Subsidiary Companies :
  • Spencer Retail Limited (Spencer)
  • Omnipresent Retail India Private Limited (Omnipresent)
  • New Rising Promoters Private Limited

 

 

Associate Company :

Nanobi Data and Analytics Private Limited (Nanobi)

 

 

Subsidiaries wherein control exists :
  • Firstsource Solutions UK Limited (FSL UK)
  • Firstsource Solutions S.A. (FSL-Arg)
  • Firstsource Group USA, Inc. (FG US)
  • Firstsource Business Process Services, LLC (FBPS)
  • Firstsource Advantage LLC (FAL)
  • Firstsource Solutions USA LLC
  • Firstsource Process Management Services Limited (FPMSL) (earlier known as Anunta Tech Infrastructure Services Limited)
  • Firstsource Dialog Solutions (Private) Limited (FDS)
  • Firstsource BPO Ireland Limited (FSL Ireland)
  • One Advantage LLC (OAL)
  • Medassist Holding LLC (Medassist)
  • Firstsource Transaction Services LLC (FTS)
  • ISGN Solutions, Inc. (ISGN-SOL)
  • ISGN Fulfillment Services, Inc. (ISGN-FFS)
  • ISGN Fulfillment Agency, LLC

 

 

CAPITAL STRUCTURE

 

AS ON 31.03.2017

 

Authorised Capital :

No. of Shares

Type

Value

Amount

 

 

 

 

872000000

Equity Shares

INR 10/- each

INR 8720.000 Million

 

 

 

 

 

 

 

 

Issued, Subscribed & Paid-up Capital :

No. of Shares

Type

Value

Amount

 

 

 

 

681308337

Equity Shares

INR 10/- each

INR 6813.080 Million

 

 

 

 

 

 

a) Reconciliation of shares outstanding at the beginning and at the end of the year

 

Particulars

31ST March 2017

 

No. of shares

Amount

At the commencement of the year

673314912

6733.150

Shares allotted during the year- employee stock option scheme

7993425

79.930

At the end of the year

681308337

6813.080

 

b) Particulars of shareholders holding more than 5% equity shares

 

Name of Shareholder

31ST March 2017

 

No. of shares

%

Spen Liq Private Limited

373976673

54.89%

 

c) Shares held by holding company

 

Name of Shareholder

31ST March 2017

 

No. of shares

Amount

Spen Liq Private Limited

373976673

3739.770

 

d) Employee stock options

 

For stock options granted during the period to employees.

 

e) Shares reserved for issue under options

 

19,270,187 (31 March 2016: 26495617, 1 April 2015: 42308052) number of shares are reserved for employees for issue under the employee stock options plan (ESOP) amounting to INR 242.36 (31 March 2016: INR 264.96, 1 April 2015: INR 423.08).

 

f) 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 shareholders 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 Company, remaining after distribution of all preferential amounts in proportion to the number of equity shares held.

 

FINANCIAL DATA

[all figures are INR Million]

 

ABRIDGED BALANCE SHEET [STANDALONE]

 

SOURCES OF FUNDS

31.03.2017

31.03.2016

31.03.2015

 

 

 

 

I.              EQUITY AND LIABILITIES

 

 

 

(1)Shareholders' Funds

 

 

 

(a) Share Capital

6813.080

6733.150

6662.910

(b) Reserves & Surplus

13180.920

10998.070

9620.160

(c) Money received against share warrants

0.000

0.000

0.000

 

 

 

 

(2) Share Application money pending allotment

0.000

0.000

0.200

Total Shareholders’ Funds (1) + (2)

19994.000

17731.220

16283.270

 

 

 

 

(3) Non-Current Liabilities

 

 

 

(a) long-term borrowings

676.600

1159.510

1218.080

(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

117.620

111.480

73.410

Total Non-current Liabilities (3)

794.220

1270.990

1291.490

 

 

 

 

(4) Current Liabilities

 

 

 

(a) Short term borrowings

1184.980

770.090

1007.070

(b) Trade payables

338.530

243.940

254.000

(c) Other current liabilities

327.300

513.720

755.440

(d) Short-term provisions

41.690

33.700

38.110

Total Current Liabilities (4)

1892.500

1561.450

2054.620

 

 

 

 

TOTAL

22680.720

20563.660

19629.380

 

 

 

 

II.          ASSETS

 

 

 

(1) Non-current assets

 

 

 

(a) Fixed Assets

 

 

 

(i) Tangible assets

292.870

256.600

322.270

(ii) Intangible Assets

261.850

132.980

262.500

(iii) Capital work-in-progress

16.180

14.400

0.500

(iv) Intangible assets under development

0.000

0.000

0.000

(b) Non-current Investments

11954.740

11938.280

11813.710

(c) Deferred tax assets (net)

1596.530

1782.770

454.440

(d)  Long-term Loan and Advances

0.000

0.000

2036.050

(e) Other Non-current assets

1382.250

1235.570

26.220

Total Non-Current Assets

15504.420

15360.600

14915.690

 

 

 

 

(2) Current assets

 

 

 

(a) Current investments

1495.170

740.240

649.110

(b) Inventories

0.000

0.000

0.000

(c) Trade receivables

3719.340

3195.570

2335.480

(d) Cash and cash equivalents

157.710

362.990

260.980

(e) Short-term loans and advances

0.000

0.000

486.900

(f) Other current assets

1804.080

904.260

981.220

Total Current Assets

7176.300

5203.060

4713.690

 

 

 

 

TOTAL

22680.720

20563.660

19629.380

 

 

PROFIT & LOSS ACCOUNT [STANDALONE]

 

 

PARTICULARS

31.03.2017

31.03.2016

31.03.2015

 

SALES

 

 

 

 

Income

9400.650

8748.780

9141.390

 

Other Income

147.860

183.250

186.670

 

TOTAL

9548.510

8932.030

9328.060

 

 

 

 

 

Less

EXPENSES

 

 

 

 

Employees benefits expense

4579.960

4239.100

4377.190

 

Other expenses

2523.120

2529.700

2685.160

 

TOTAL

7103.080

6768.800

7062.350

 

 

 

 

 

 

PROFIT / (LOSS) BEFORE INTEREST, TAX, DEPRECIATION AND AMORTISATION

2445.430

2163.230

2265.710

 

 

 

 

 

Less

FINANCIAL EXPENSES

67.750

89.080

202.230

 

 

 

 

 

 

PROFIT / (LOSS) BEFORE TAX, DEPRECIATION AND AMORTISATION

2377.680

2074.150

2063.480

 

 

 

 

 

Less

DEPRECIATION/ AMORTISATION

190.320

318.090

464.300

 

 

 

 

 

 

PROFIT/ (LOSS)  BEFORE TAX

2187.360

1756.060

1599.180

 

 

 

 

 

Less

TAX

302.770

243.830

-38.360

 

 

 

 

 

 

PROFIT/ (LOSS)  AFTER TAX 

1884.590

1512.230

1637.540

 

 

 

 

 

PREVIOUS YEARS’ BALANCE BROUGHT FORWARD

9647.350

8135.120

6543.280

 

 

 

 

 

 

Balance Carried to the B/S

11531.940

9647.350

8180.820

 

 

 

 

 

 

EARNINGS IN FOREIGN CURRENCY

 

 

 

 

Income from services

5004.190

5258.100

 

Other income

 

79.860

80.890

 

Reimbursement of expense

 

103.220

108.580

 

TOTAL EARNINGS

5683.290

5187.270

5447.570

 

 

 

 

 

 

IMPORTS

 

 

 

 

Capital Goods

 NA

82.850

119.470

 

TOTAL IMPORTS

 NA

82.850

119.470

 

 

 

 

 

 

Earnings / (Loss) Per Share (INR)

 

 

 

 

Basic

2.79

2.26

2.47

 

Diluted

2.75

2.16

2.33

 

 

CURRENT MATURITIES OF LONG TERM DEBT DETAILS

 

Particulars

 

31.03.2017

31.03.2016

31.03.2015

Current Maturities of Long term debt

 

 

 

Secured

 

 

 

External commercial borrowing (ECB)

NA

132.510

62.500

Unsecured

 

 

 

Loan from non-banking financing companies

NA

40.130

22.640

Interest accrued but not due on borrowings

NA

2.740

4.380

Total

NA

175.380

89.520

 

 

 

 

Cash generated from operations

NA

NA

NA

Net cash used in operating activities

779.640

768.480

505.790

 

 

QUARTERLY RESULTS

 

PARTICULARS

 

30.06.2017

1st Quarter

30.09.2017

2nd Quarter

31.12.2017

3rd Quarter

 

(Unaudited)

(Unaudited)

(Unaudited)

 

 

 

 

Net Sales

2435.650

2123.270

2109.640

Total Expenditure

1825.440

1584.310

1474.150

PBIDT (Excluding Other Income)

610.210

538.960

635.490

Other Income

47.330

47.560

20.500

Operating Profit

657.540

586.520

655.990

Interest

19.380

22.110

(6.110)

Exceptional Items

NA

NA

NA

PBDT

638.160

564.410

662.100

Depreciation

50.080

54.100

56.04

Profit Before Tax

588.080

510.310

606.060

Tax

82.510

71.780

95.18

Provisions and contingencies

NA

NA

NA

Profit After Tax

505.570

438.530

510.880

Extraordinary Items

NA

NA

NA

Prior Period Expenses

NA

NA

NA

Other Adjustments

NA

NA

NA

Net Profit

505.570

438.530

510.880

 

 

KEY RATIOS

 

EFFICIENCY RATIOS

 

PARTICULARS

 

31.03.2017

31.03.2016

31.03.2015

Average Collection Days

(Sundry Debtors / Income * 365)

144.41

133.32

93.25

 

 

 

 

Account Receivables Turnover

(Income / Sunday Debtors)

2.53

2.74

3.91

 

 

 

 

Average Payment Days

(Sundry Creditors / Purchases * 365 Days)

NA

NA

NA

 

 

 

 

Inventory Turnover

(Operating Income / Inventories)

NA

NA

NA

 

 

 

 

Asset Turnover

(Operating Income / Net Fixed Assets)

4.28

5.35

3.87

 

LEVERAGE RATIOS

 

PARTICULARS

 

31.03.2017

31.03.2016

31.03.2015

Debt Ratio

((Borrowing + Current Liabilities) / Total Assets)

0.11

0.14

0.17

 

 

 

 

Debt Equity Ratio

(Total Liability / Networth)

0.09

0.12

0.14

 

 

 

 

Current Liabilities to Networth

(Current Liabilities / Net Worth)

0.09

0.09

0.13

 

 

 

 

Fixed Assets to Networth

(Net Fixed Assets / Networth)

0.03

0.02

0.04

 

 

 

 

Interest Coverage Ratio

(PBIT / Financial Charges)

36.09

24.28

11.20

 

PROFITABILITY RATIOS

 

PARTICULARS

 

 

31.03.2017

31.03.2016

31.03.2015

Net Profit Margin

[(PAT / Sales) * 100]

%

20.05

17.29

17.91

 

 

 

 

 

Return on Total Assets

((PAT / Total Assets) * 100)

%

8.31

7.35

8.34

 

 

 

 

 

Return on Investment (ROI)

((PAT / Networth) * 100)

%

9.43

8.53

10.06

 

SOLVENCY RATIOS

 

PARTICULARS

 

31.03.2017

31.03.2016

31.03.2015

Current Ratio

(Current Assets / Current Liabilities)

3.79

3.33

2.29

 

 

 

 

Quick Ratio

((Current Assets – Inventories) / Current Liabilities)

3.79

3.33

2.29

 

 

 

 

G-Score Ratio Financial

(Networth / Total Assets)

0.88

0.86

0.83

 

 

 

 

G-Score Ratio Debt

(Debts / Equity Capital)

0.27

0.31

0.35

 

 

 

 

G-Score Ratio Liquidity

(Total Current Assets / Total Current Liabilities)

3.79

3.33

2.29

Total Liability = Short-term Debt + Long-term Debt + Current Maturities of Long-term debts

 

 

STOCK PRICES

 

Face Value

INR 10.00/-

Market Value

INR 48.25/-

 

 

FINANCIAL ANALYSIS

[all figures are INR Million]

 

DEBT EQUITY RATIO

 

Particular

31.03.2015

31.03.2016

31.03.2017

 

INR In Million

INR In Million

INR In Million

Share Capital

6662.910

6733.150

6813.080

Reserves & Surplus

9620.160

10998.070

13180.920

Money received against share warrants

0.000

0.000

0.000

Share Application money pending allotment

0.200

0.000

0.000

Net worth

16283.070

17731.220

19994.000

 

 

 

 

long-term borrowings

1218.080

1159.510

676.600

Short term borrowings

1007.070

770.090

1184.980

Total borrowings

2225.150

1929.600

1861.580

Debt/Equity ratio

0.137

0.109

0.093

 

 

 

YEAR-ON-YEAR GROWTH

 

Year on Year Growth

31.03.2015

31.03.2016

31.03.2017

 

INR In Million

INR In Million

INR In Million

Sales

9141.390

8748.780

9400.650

 

 

(4.295)

7.451

 

 

 

 

 

NET PROFIT MARGIN

 

Net Profit Margin

31.03.2015

31.03.2016

31.03.2017

 

INR In Million

INR In Million

INR In Million

Sales

9141.390

8748.780

9400.650

Profit

1637.540

1512.230

1884.590

 

17.91%

17.29%

20.05%

 

 

 

ABRIDGED BALANCE SHEET [CONSOLIDATED]

 

SOURCES OF FUNDS

 

31.03.2017

31.03.2016

 

 

 

 

I.              EQUITY AND LIABILITIES

 

 

 

(1)Shareholders' Funds

 

 

 

(a) Share Capital

 

6813.080

6733.150

(b) Reserves & Surplus

 

13466.950

11037.010

(c) Money received against share warrants

 

0.000

0.000

 

 

 

 

(2) Share Application money pending allotment

 

0.000

0.000

(3) Minority interest

 

11.750

19.710

Total Shareholders’ Funds (1) + (2)

 

20291.780

17789.870

 

 

 

 

(4) Non-Current Liabilities

 

 

 

(a) long-term borrowings

 

3579.940

4097.750

(b) Deferred tax liabilities (Net)

 

2874.020

2224.060

(c) Other long term liabilities

 

0.000

0.000

(d) long-term provisions

 

287.490

265.880

Total Non-current Liabilities (3)

 

6741.450

6587.690

 

 

 

 

(5) Current Liabilities

 

 

 

(a) Short term borrowings

 

5644.710

4809.170

(b) Trade payables

 

993.770

868.680

(c) Other current liabilities

 

1438.410

1626.210

(d) Short-term provisions

 

82.850

81.810

Total Current Liabilities (4)

 

8159.740

7385.870

 

 

 

 

TOTAL

 

35192.970

31763.430

 

 

 

 

II.          ASSETS

 

 

 

(1) Non-current assets

 

 

 

(a) Fixed Assets

 

 

 

(i) Tangible assets

 

878.050

784.690

(ii) Intangible Assets

 

19800.100

19430.950

(iii) Capital work-in-progress

 

42.850

22.590

(iv) Intangible assets under development

 

0.000

0.000

(b) Non-current Investments

 

105.840

83.800

(c) Deferred tax assets (net)

 

4064.600

3702.120

(d)  Long-term Loan and Advances

 

0.000

0.000

(e) Other Non-current assets

 

2476.340

1264.410

Total Non-Current Assets

 

27367.780

25288.560

 

 

 

 

(2) Current assets

 

 

 

(a) Current investments

 

1522.670

767.740

(b) Inventories

 

0.000

0.000

(c) Trade receivables

 

3041.270

3040.750

(d) Cash and cash equivalents

 

387.310

685.760

(e) Short-term loans and advances

 

0.000

0.000

(f) Other current assets

 

2873.940

1980.620

Total Current Assets

 

7825.190

6474.870

 

 

 

 

TOTAL

 

35192.970

31763.430

 

 

PROFIT & LOSS ACCOUNT [CONSOLIDATED]

 

 

PARTICULARS

 

31.03.2017

31.03.2016

 

SALES

 

 

 

 

Income

 

35556.100

32172.530

 

Other Income

 

32.050

94.440

 

TOTAL

 

35588.150

32266.970

 

 

 

 

 

Less

EXPENSES

 

 

 

 

Employees benefits expense

 

23834.370

21726.730

 

Share in net (loss) of associates

 

0.010

0.000

 

Other expenses

 

7341.830

6544.930

 

TOTAL

 

31176.210

28271.660

 

 

 

 

 

 

PROFIT / (LOSS) BEFORE INTEREST, TAX, DEPRECIATION AND AMORTISATION

 

4411.940

3995.310

 

 

 

 

 

Less

FINANCIAL EXPENSES

 

453.160

524.380

 

 

 

 

 

 

PROFIT / (LOSS) BEFORE TAX, DEPRECIATION AND AMORTISATION

 

3958.780

3470.930

 

 

 

 

 

Less

DEPRECIATION/ AMORTISATION

 

589.610

608.820

 

 

 

 

 

 

PROFIT/ (LOSS)  BEFORE TAX

 

3369.170

2862.110

 

 

 

 

 

Less

TAX

 

576.790

252.860

 

 

 

 

 

 

PROFIT/ (LOSS)  AFTER TAX 

 

2792.380

2609.250

 

 

 

 

 

 

Other comprehensive income

 

 

 

 

Items that will not be reclassified subsequently to profit or loss

 

 

 

 

Remeasurement of the net defined benefit liability / asset

 

(0.520)

(31.480)

 

 

 

 

 

 

Items that will be reclassified subsequently to profit or loss

 

 

 

 

Net changes in fair value of cash flow hedges

 

206.150

(195.940)

 

Exchange difference on translation of foreign operations

 

 (685.700)

 793.600

 

Total other comprehensive income, net of taxes

 

(480.070)

566.180

 

Total other comprehensive income for the year

 

2312.310

3175.430

 

 

 

 

 

 

Earnings / (Loss) Per Share (INR)

 

 

 

 

Basic

 

4.14

3.89

 

Diluted

 

4.08

3.72

 

 

LOCAL AGENCY FURTHER INFORMATION

 

Sr. No.

Check list by info agents

Available in Report (Yes/No)

1

Year of establishment

Yes

2

Constitution of the entity -Incorporation details

Yes

3

Locality of the entity

Yes

4

Premises details

No

5

Buyer visit details

--

6

Contact numbers

Yes

7

Name of the person contacted

Yes

8

Designation of contact person

Yes

9

Promoter’s background

Yes

10

Date of Birth of Proprietor / Partners / Directors

Yes

11

Pan Card No. of Proprietor / Partners

No

12

Voter Id Card No. of Proprietor / Partners

No

13

Type of business

Yes

14

Line of Business

Yes

15

Export/import details (if applicable)

No

16

No. of employees

Yes

17

Details of sister concerns

Yes

18

Major suppliers

No

19

Major customers

No

20

Banking Details

Yes

21

Banking facility details

Yes

22

Conduct of the banking account

--

23

Financials, if provided

Yes

24

Capital in the business

Yes

25

Last accounts filed at ROC, if applicable

Yes

26

Turnover of firm for last three years

Yes

27

Reasons for variation <> 20%

--

28

Estimation for coming financial year

No

29

Profitability for last three years

Yes

30

Major shareholders, if available

Yes

31

External Agency Rating, if available

Yes

32

Litigations that the firm/promoter involved in

--

33

Market information

--

34

Payments terms

No

35

Negative Reporting by Auditors in the Annual Report

No

 

 

COMPANY OVERVIEW

 

The Company was incorporated on 6 December 2001. The Company is engaged in the business of providing customer management services like contact center, transaction processing and debt collection services including revenue cycle management in the healthcare industry.

 

The Company is a public limited company incorporated and domiciled in India having registered office at Mumbai, Maharashtra, India. The company is listed on the Bombay Stock Exchange and National Stock Exchange in India.

 

The Company’s financial statements are approved for issue by the Board of Directors on 5 May 2017.

 

 

FINANCIAL RESULTS:

 

The standalone total income increased from INR 8932.030 Million to INR 9548.510 Million, an increase of 6.90% over the previous financial year. The standalone Profit after Tax increased from INR 1512.230 Million to INR 1884.590 Million, an increase of 24.63% over the previous financial year.

 

 

MANAGEMENT’S DISCUSSION AND ANALYSIS

 

GLOBAL ECONOMIC OUTLOOK

 

A significant uncertainty on the global front compounded by the domestic volatility around the demonetisation exercise cast a shadow on the economy in general. Muted investments, stagnant global trade and currency volatility has left the global economy in a flux.

 

However, given the fiscal initiatives undertaken by the major economies to boost growth, the economy is expected to have a modest pickup in the coming years. The projections estimate a 3.3% growth in CY17, 3.5% in CY18 from 3.0% growth in CY16. Although this is quite a modest recovery, it would still leave the global growth, below the historical average of 4%, during the time prior to the economic downturn. This growth is expected to be in pockets, driven primarily by the emerging economies with China and India leading the growth pack; despite lowering of growth guidance by the World Bank for both these economies. Currency movements, especially the continued sharp decline of the British pound against the dollar and other major currencies have an impact on the companies that have operations in the UK or work for UK customers in other geographies.

 

Collectively, advanced economies are projected to grow by 1.9% in CY17 and 2.0% in CY18. The growth in the US economy is highly dependent on the potential policy changes and potential political stance of the new administration. As per the forecast the US economic growth will increase by 2.3% in 2017 and 2.5% in 2018 from dismal 1.6% growth rate in 2016. A slight recovery in the oil prices and stabilisation of the dollar helped the US economic activity accelerate during the last year. This boost will aid the economic recovery by initiating inventory re-stocking hence, encourage GDP growth.

 

The outlook for the European economies remains unchanged. They are expected to grow at the same moderate pace as that of 2016. High nonperforming loans and labor market slowdown in certain European countries will continue to hold back growth prospects for the Eurozone. The United Kingdom’s growth is projected to decline further than its rate in 2016 as rising inflation weighs on the real income and consumption and weak business investment due to the uncertainty about the future trading relations with the Eurozone after Brexit.

 

Changing policies and shifting priorities under the new administration in the United States and its global spillover, China’s global policy and fiscal stimulus and UK’s departure from the European Union will be viewed as major catalysts for growth rate revision. Therefore, even as the global economic environment remains challenging, the world is trying to take small steps towards recovery.

 

 

INDUSTRY STRUCTURE AND DEVELOPMENT

 

The geo-political rumblings, namely—the Brexit referendum, calls for Border tax in the US, increase in salary wages for H1B visas—the disruptive technology advancement driven by automation, artificial intelligence, analytics and digital, are creating a highly volatile future for the global IT and BPO industries. Today, technology is not only restricted to the traditional corporate sector, but also has crossed over to different segments across a wide spectrum of industries. Enterprises in every sector look towards technology to facilitate their own transformations. Globalisation and the race for competitive advantage have led businesses everywhere to embrace cutting-edge technology. 2016, in particular, has been a year of continued technological disruptions, where technology has been imperative in connecting different business segments. From testing driverless cars on to the use of artificial-intelligence enabled robotics in the mainstream sectors; technology has played a vital role in establishing itself as a unifying force between different segments on one hand and consumers on the other.

 

After a few years of stagnation, the global technological industry saw a modest growth recovery of about 4% in 2016. The worldwide IT spending is projected to be USD 3.5 trillion in 2017, which is 2.7% increase from the spend rates in 2016. The Global IT-BPM market in 2016 stood at USD 1.2 trillion. However, the global sourcing growth continues to outperform the IT-BPM spend growth. As for 2016 the growth for sourcing was at 6.7% and stood at USD 173-178 billion. Adoption of digital technologies would act as a key driver for the global IT-BPM industry, where the addressable market is likely to expand to ~USD 4 trillion by 2025 and a CAGR of 3.6%. It is expected that the industry’s mix between traditional and digital will change significantly over the next decade.

 

The Indian IT-BPM industry has been experiencing the impact of the global economic downturn as well as the political developments around the world. According to NASSCOM strategic review 2017, Indian IT services and BPM industry’s sectoral revenue is expected to reach USD 200-225 billion in 2020 and revenue of USD 350 billion by 2025. Digital technologies have helped in both disrupting as well as transforming the business. From cloud-based applications to big data analytics, digital disruptions have reached a stage where it is important to adapt and adopt to sustain a business successfully. Digital technologies will play an important role in defining the sector and are likely to have 23% share by 2020 and greater than 38% share in 2025. ITBPM exports play a key role in India’s economy. Its share in India’s total service export is over 49% and it accounts for 32% on India’s forex reserves.

 

According to Business wire reports, the global BPM market size is estimated to grow to USD 13.52 billion in 2021, at a CAGR of 14.2% from 2016-2021. The key drivers for the BPM market are the need to improve efficiency and visibility, increased government compliance and overall Return on Investment from the companies.

 

The global business environment is going through fundamental economic, technology, consumer preference and demographic shift. These tectonic shifts have aided the global BPM market to increase enterprise operational efficiencies and gain deeper insight into the business. According to NASSCOM, the global BPM spend in 2016 grew at 4%, a CAGR of (2012- 2016) of 8-9% to reach USD 183 billion. Whereas the global BPM sourcing market has grown 7-8% in 2016, with India contributing 37% to the overall BPM sourcing market. Some of the main growth contributors for the BPM sector were emerging verticals such as healthcare and retail, established verticals such as BFSI, manufacturing and telecom contributed significantly due to their higher base. In terms of BPM segments, Process automation, platform / BPaaS / operation mechanisms and analytics were the main growth drivers. BPM solutions are expected to dominate the industry in the next five years due to the growing need of business compliance and their challenges faced by organisations worldwide. The Indian BPM industry has significantly evolved over the years; not only in terms of scale but also matured itself in terms of scope of service offerings, customer segments served and service delivery models, aiding a major transformation with the industry moving ahead from efficiency to effectiveness.

 

The Indian BPM sector has grown over 1.6 times in the last five years and is expected to cross USD 30 billion in revenues in 2017 at a growth rate of 7.4% over 2016. Over 87% of the revenues of the total Indian BPM market are contributed by exports, while the remaining 13% is from the domestic business. The export market is set to grow 7.5% in 2017 to reach USD 26.3 billion whereas the domestic market is clocking growth of 6.9% to reach 3.8

billion. NASSCOM projects the BPM sector revenues are set to grow to USD 50 billion by the year 2020.

 

Despite the uncertainty and volatility, the Company grew at an impressive 10.5% in rupee terms and 12.9% in constant currency terms which is among the leading growth rates in the industry.

 

SEGMENT-WISE OUTLOOK    

 

HEALTHCARE

 

Firstsource addresses two segments within the Healthcare vertical, the Payer market represented by the Insurance companies and the Provider market represented by hospitals, physician groups in the US. The Global Healthcare BPO market is predicted to grow at a CAGR of almost 6% by 2020. Global healthcare IT-BPM market is expected to grow from USD 170.47 billion revenues in 2016 to USD 276.79 billion in 2021. The market drivers for the Healthcare IT-BPO industry are consolidation among and between payers and providers, telemedicine, consumerisation. In addition, the technological advances like robotics process automation, digital transformation and new new operations and billing models, will contribute to the forecasted growth. (Source: NelsonHall)

 

The Healthcare payer BPM market is segmented into claims processing services, member services, HR services, and finance and accounting services. The health insurance payer market grew by 5.5% in 2016 and is expected to grow to 6.1% in 2020. The impact of regulatory changes and key policyinitiatives are key factors boosting the healthcare payer BPM market.

 

The payer outsourcing sector is positioned to benefit from a number of key macro trends which had been set in motion in the previous years. These trends include escalating costs, widespread consolidation and regulatory complexity, changing business models, payer-provider convergence, and evolution of the patient-centric paradigm. It is being fuelled by mobile computing, social media platforms and ‘anytime-anywhere’ information access. This combination of both disruptive and legacy factors is forcing payers to adopt new technologies, while revamping their existing systems, processes and interfaces. Increasing stringency of regulatory landscape and needs for compliance creating pressure on the profitability of healthcare payers, and focus on value-based care creating challenges for both providers and payers are some of the factors driving adoption of BPO services. While there is still a significant need to reduce costs: administrative and medical, the relationship between healthcare organisations and service providers are expanding beyond cost reduction to quality, engagement and innovation.

 

During the last couple of years the industry has seen a shift in the market as consumerism, competition, and regulation have driven a broader swathe of clients to new operating models and opened the door to service providers. The client base is expanding to include “Blues” plans and networks, healthcare providers, a broader set of services including member-management, providernetwork management, along with health and care management as well as analytics. The solutions are increasingly leveraging third party, service provider tools and platforms to drive outcomes. The contracts are increasingly varied, based on not just headcount, or per member per month (PMPM), but also results.

 

Technology-led solutions are gaining traction in healthcare BPO, with platform solutions being the most preferred by the buyers. Robotic Process Automation (RPA) is expected to play an impactful role in the future. In commodity areas of sourcing claims and provider data/network management in particular, automation is helping to streamline and speed up processing. There is an increasing expectation among clients that automation is “baked into” the solution. Besides automation, the greatest take-up till date has been the increasing use of technology in call centers, and in web-enabling claims, member-management, and Medicaid Management Information Systems (MMIS). With expanding capabilities of service providers, the service provider landscape is expected to become more competitive.

 

In the context of Healthcare provider segment such as hospitals, 2017 is expected to be a year full of challenges and opportunities. The market size growth of the provider segment was 3.2% in 2016 and is expected to grow to 5.3% in 2020 at a CAGR of 4.9%. The Healthcare provider services is segmented into medical billing, medical coding, medical transcription, and revenue cycle management. According to the Everest Group, the USD 7.5- 8.5 billion Revenue Cycle Management (RCM) outsourcing services market represents a significant opportunity with 11%-14% anticipated CAGR growth. Some of the major drivers of this change include: Outsourcing in the RCM market gaining traction as continuously rising administrative expenses putting significant pressure on the profitability of hospitals.

 

Several regulatory changes such as MACRA, ICD-10 conversion, and HITECH act are also pushing towards increased use of outsourcing as a solution; consolidation among the payer community is also driving healthcare providers to optimise non-core spend. Additionally, rising cases of bad debt write-offs are also pushing healthcare providers towards more sophisticated technology systems and solutions.

 

Market for traditionally outsourced RCM functions, such as post-service (medical billing and denial management) getting matured, as over 80% hospitals in the US outsource some part of post-service functions to specialised service providers. However, opportunities in functions, such as pre-service (eligibility verification and appointment scheduling) and service (coding and charge capture), are gaining traction.

 

Automation is becoming the flavour of the industry with buyers asking for solutions that are integrated across different functions and involve automation. There are a lot of possibilities for leveraging automation software in the rulesbased work for utilisation management, and even ways to cut out steps by changing the processes. “Bundles” of care, for example, in packaging a predetermined set of procedures and associated costs for surgery and recovery are taking root and this type of plan will change the utilisation-management process. Legacy patient accounting and practice-management applications lack the automation and analytics to address new reimbursement models and today’s business office challenges. PPACA regulations, ICD-10, and complex processes in billing and collections are resulting in revenue losses while exposing the talent and technology gaps of many providers. For many healthcare finance leaders, a strategy to outsource RCM means resolving near-term cash leakages for long-term revenue integrity.

 

With all the change happening in the healthcare industry, there’s a need to better understand constituents, efficient ways to maximise reimbursements and meet federal regulations, etc., organisations need to aggregate and analyse data efficiently. This represents a significant opportunity that can be realised with analytics.

 

Firstsource is uniquely positioned to harness this growth opportunity as it works for 3 of the top 5 Payers and over 650 hospitals in the US and it offers an end-to-end suite of services to cater to the Payers and Providers. Its presence across both the segments of this market gives the Company a strong differentiating edge. Healthcare segment contributes 35.8% towards the company’s total revenue.

 

TELECOMMUNICATIONS AND MEDIA (T&M):

 

Global Customer Management Services (CMS) market is estimated to be USD 62.7 billion and is expected to grow at a CAGR of 5.1% for the period of 2014 - 2019. The CMS market for Telecom is expected to reach USD 26.6 billion in 2018. The North American market for CMS is expected to grow to approx. USD 9.1 billion in 2018, up from USD 7.2 billion in 2014. The EMEA region is expected to have the largest market share in CMS sector as it is poised to grow to USD 9.5 billion in 2018 from USD 7.9 billion in 2014. Another emerging market for the CMS sector is the Latin American market which is expected to be rising to USD 4.4 billion in 2018. (Source: NelsonHall)

 

According to NelsonHall’s latest report, the global telecom operations’ market which, is estimated to be around USD 3 billion has the potential to grow to a USD 10 billion market. SMACA (Social, Mobility, Automation, Cloud, Analytics) segment contributes to about 7% to the telecom operations’ market and has the potential to reach about 25% of the market size. Although larger telecom companies have been early adopters of the telecom operations services sector, there is a great potential to expand and provide the services to smaller Tier 2 and Tier 3 Telecom companies. With Mobility and Automation are emerging as game-changers for the telecom industry, BPM companies will play a significant role in aiding telecom companies to automate their processes to enable speedy and consistent delivery of their services.

 

Telecom Operations As-a-Service will evolve even faster in the next few years than it has so far. The deployment of IoT solutions, the widespread adoption of network rollout management and other new services leveraging design thinking will lead to significant advances in this offering in the near term.

 

Although some telecom companies are still hesitant to replace their legacy systems, service providers have already started building new solution stacks which can replace legacy telco systems. So service providers are making investments in incremental solutions which are designed to work around or integrate with existing physical and technological investments. Greenfield operators, Mobile Virtual Network Operators, who don’t have legacy investments, are willing to leapfrog to new technology stacks that present significant opportunities.

 

With the world connecting with their networks using telecom as their primary channel of communication, telecom companies have access to large quantities of data. Yet, only a handful of companies have adopted big data architecture and analytics technologies to their advantage. However, with increasing number of telecoms considering investments in data science and over 30% companies already making heavy investments in the same, there is great scope for BPM companies to make a foray in this field. Combining its thorough understanding of socio-demographic data, the telecom industry can get valuable insights by applying big data analytics to consumer behaviour and heavy network usage.

 

The telecom sector continues to be a significant force for growth, innovation and disruption. With the increase of Smartphone usage by the masses, telecom companies have opened new opportunities for IT-BPM companies. One of the emerging areas of focus for the IT-BPM sector is implementation of Internet of Things (IoT) in telecom and media. With the advances in network technology along with higher speeds, IoT technology will help the telecom sector easily deliver content to user screens. Since IoT will push carriers to be frontrunners in the highly competitive environment, business operations and processes have the opportunity to prove their mettle.

 

In a global environment characterised by such rapid technology changes, intense competition and pricing pressures, it is critical for companies to focus on effective customer engagement, reduce churn and improve loyalty andadvocacy; Fortunately, telcos have a combination of traditional interaction channels (IVR, phone support, SMS, email, paper correspondence) and newage technology-driven communication channels (webchat, videochat, social media, and virtual-assistants) at their disposal. Investing in an effective omni-channel framework reduces the overall cost-to-serve for telecom and media organisations. The focus will be on customer journeys across different channels, while orchestrating the customer experience across different channels in a seamless, integrated and consistent manner.

 

Intelligent Automation leveraging RPA, cognitive and analytics is gaining the interest of telcos. Most of the early automation services in telcos came from either order-management or customer support, but lately automation has gained traction in other telco processes such as network design, billing audits, field-force-management, incident and problem management. Almost all service providers are now offering automation solutions either on their own

platforms or leveraging third party solutions.

 

US AND UK CABLE INDUSTRY:

 

According to industry estimates, US cable industry’s broadband advantage and bundling stance will enhance revenues for the industry from 2016 to 2026. Residential revenues are projected to increase from USD 108.38 billion in 2016 to USD 117.7 billion in 2026 or USD 9.32 billion over the 10-year interval. Contributions from commercial services will help push total industry revenue from USD 130.57 billion in 2016 to USD 140.99 billion in 2026 — USD 10.42 billion growth over the 10-year period.

 

Over The Top providers like Netflix and Amazon have become serious competition and are finding rewarding niches by serving a library of movies and TV shows. The cable industry’s TV Everywhere initiative will play a key role in competitive positioning and subscriber retention. Widespread consumption of video on secondary devices, such tablets, will be driven by the competition between Over the Top providers and TV Everywhere, as well as DVR content and sports programming, which is not available on Netflix.

 

In an environment where customer retention is more critical than ever, the importance of Quad Play is growing. More companies are looking to bundle additional products and services with the traditional Triple Play to increase ARPU and customer stickiness. Some multiple system operators may seek to build or strengthen partnerships to offer their own version of an expansion of offerings. The traditional Quad Play adds wireless, though other service offerings (e.g. home security) may also be in the running.

 

While some efficiency has been achieved through technology, there will be another wave of acquisition and consolidation of cable operations. As a result of these shifts, the buying power of Multi-Channel Video programming distributors (MVPDs) will increase and the new scale will allow them to invest in services that compete with the best OTT players. Over the past year, US cable industry reported around USD 126 billion of M&A activity.

 

Availability of new technologies and innovations will make 2017 the year of digital transformation as many telecoms still heavily rely on manual processes. By investing to provide better data infrastructures and technologies, telecom companies will be able to achieve rapid growth and in turn bring about massive growth for IT/BPM sector as well. With connectivity and mobility becoming firmly embedded in today’s society and the ongoing change and innovation in the space of Technology in terms of business processes, 2017 will be an exciting year for the Telecom led IT-BPM sector.

 

The ability to provide an omni-channel interaction across different product lines through an interplay of digital and analytics provides a distinctive advantage to the Company in this business segment.

 

Telecommunication and Media segment contributes 32.2% towards the company’s total revenue.

 

AWARDS AND ACCOLADES:

 

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

 

Welsh Contact Centre Awards 2017

Won in three categories including Diverse Workplace Award, Trainer of the year and Special Industry Champion.

 

Global HR Excellence Awards 2017

Won in Innovation in Retention Strategy category.

 

Asia’s Best Employer Brand Awards 2016

Won the Best Employer Brand Award for excellence in building the Employer Brand as an Employer of Choice.

 

 European Contact Centre & Customer Service Awards 2016

Honored with the Bronze award in the ‘Customer Service Team of the Year’ in partnership with our client giffgaff.

 

100 Best Companies for Women in India

Recognised in the 100 Best Companies for Women in India by the 2016 Working Mother and AVTAR Best Companies for Women in India.

 

Times Ascent - Asia Pacific HRM Congress Awards 2016

Recognised in the Innovative HR practices award category for initiatives in Analytics, Talent Management, GES, Wings Within, INSIGHT – Knowledge capsules, JetSet and Firstsource Academy offerings.

 

Business in the Community Awards

Honored as ‘Employer of Choice’ at the Business In The Community Northern Ireland Awards in Belfast.

 

Best Adversity Management Stories of Asia 2016

Secured the 1st Runner-up position at the ‘Best Adversity Management Stories of Asia’ 2016 Awards for response to the Chennai floods in Nov- Dec 2015.

 

Asia’s Best Employer Brand Awards 2016

Recognised in three categories - ‘Best B-school recruiting programme’, ‘Organisation with Innovative HR Practices’ and ‘Best HR Strategy in line with Business’.

 

UK Customer Experience Awards 2016

Won in the Technology and Telecoms category in partnership with NOW TV client and received the silver award in the ‘Engaging Customers Online’ category in partnership with giffgaff client.

 

Aer Lingus Viscount Awards

Received Employee Champion Award at the Aer Lingus Viscount Awards in association with Ulster Business.

 

 

UNSECURED LOANS:

 

Unsecured Loan

31.03.2017

INR In Million

31.03.2016

INR In Million

Long-term Borrowings

 

 

Loan from non-banking financing companies

88.520

48.050

 

 

 

Short-term borrowings

 

 

Export finance from banks

619.250

584.800

Loan from non-banking financing companies

64.030

40.130

Interest accrued but not due on borrowings

3.800

2.740

Total

775.600

675.720

 

 

INDEX OF CHARGE:

 

SNo

SRN

Charge Id

Charge Holder Name

Date of Creation

Date of Modification

Date of Satisfaction

Amount

Address

1

C64088651

10590699

ICICI Bank Limited

18/08/2015

-

-

2840000000.0

Landmarkrace Cource Circle, Alkapuri, Vadodara-390015, Gujarat, India

2

C67478396

10306196

IL and FS Trust Company Limited

22/07/2011

27/01/2015

24/09/2015

17339999880.0

IL and FS Financial Centre, Plot No. C22 G Block, Bandra Kurla Complex, Bandra (East), Mumbai-400051, Maharashtra, India

3

B16584542

10137871

3i Infotech Trusteeship Services Limited

08/01/2009

-

30/06/2011

60000000.0

3rd to 6th Floor, International Infotech Park, Tower No.5, Vashi Railway Station Complex, Vashi, Navi Mumbai-400703, Maharashtra, India

4

B04835492

90350447

ICICI Bank Limited

08/06/2004

-

21/01/2011

690000000.0

Race Corse Circle, Vadodara, Gujarat, India

5

A59827857

90350521

ABN Amro Bank N.A

22/09/2004

-

01/04/2009

11000000.0

Nariman Point, Mumbai, Maharashtra, India

 

 

 

 

 

CONTINGENT LIABILITIES:

 

(INR in million)

PARTICULARS

31.03.2017

31.03.2016

The estimated amount of contracts remaining to be executed on capital account and not provided for, net of advances

93.750

134.180

Claims not acknowledge as debt

1.350

1.350

Guarantees and letters of credit given

14141.540

11402.070

 

Direct tax matters

 

Income tax demands amounting to INR 1197.930 (31 March 2016: INR 1280.610) for the various assessment years are disputed in appeal by the Company in respect of which it has favorable decisions supporting its stand based on the past assessment or otherwise and hence, the provision for taxation is considered adequate. the Company has paid INR 10.38 (31 March 2016: INR 10.38) tax under protest against the demand raised for the assessment year 2004-05, INR 12.50 (31 March 2016: INR 12.50) tax under protest against the demand raised for the assessment year 2009-10, INR 80.00 (31 March 2016: INR 80.00) tax under protest against the demand raised for the assessment year 2011-12 and INR Nil (31 March 2016: INR 28.10) tax under protest against the demand raised for the assessment year 2012-13

 

Indirect tax matters

 

Service tax demands amounting to INR 172.11 (31 March 2016: INR 172.11) in respect of service tax input credit and FCCB issue expenses is disputed in appeal by the Company. The Company expects favourable appellate decision in this regard.

 

The Company’s pending litigations comprise of claims against the Company and pertaining to proceedings pending with Income tax and service tax. The Company has reviewed all its pending litigations and proceedings and has adequately provided for where provisions are required and disclosed as contingent liabilities where applicable, in the financial statements. The Company does not expect the outcome of these proceedings to have a materially adverse effect on its financial statements.

 

 

Guarantees and letters of credit given consist of the following:

(INR in million)

Particulars

31.03.2017

31.03.2016

Guarantees given for working capital facilities and finance lease on behalf of Firstsource Solution UK Limited (FSL-UK)

3950.090

815.690

Guarantees given for credit facilities and term loans on behalf of Firstsource Group USA, Inc. (FG US)

10173.450

10580.220

Guarantees given to the Government of India, Customs and Central excise department in relation to duty securities

18.000

6.160

 

 

 

 

 

 

 

STANDALONE AUDITED FINANCIAL RESULTS FOR THE QUARTER ENDED AND NINE MONTHS ENDED DECEMBER 31, 2017

 (INR In Million)

Particulars

Quarter ended

Nine months

ended

 

31.12.2017

30.09.2017

31.12.2017

 

(Audited)

(Audited)

(Audited)

INCOME FROM OPERATIONS

 

 

 

Net Sales

1860.200

1886.550

5921.810

Other Operating Income

269.940

284.280

862.140

Total Income from Operations

2130.140

2170.830

6783.950

 

 

 

 

EXPENSES

 

 

 

Employee benefits expense

994.840

1053.320

3254.250

Depreciation and Amortization expenses

56.040

54.100

160.220

Finance Costs

(6.110)

22.110

35.380

Other Expenditure

479.310

530.990

654.290

Total Expenses

1524.080

1660.520

5079.500

Profit / (Loss) before Tax

606.060

510.310

1704.450

Tax Expense

95.180

71.780

249.470

Profit / (Loss) after Tax

510.880

438.530

1454.980

Other comprehensive income, net of taxes

44.690

(189.850)

(319.240)

Total comprehensive income

555.570

248.680

1135.740

Earnings / (Loss) Per Share (INR)

 

 

 

Basic

0.75

0.64

2.13

Diluted

0.74

0.64

2.12

 

 

NOTES:

 

1. The audited interim condensed consolidated financial statements for the quarter and nine months ended December 31, 2017 have been taken on record by the Board of Directors at its meeting held on February 7, 2018. The statutory auditors have expressed an unmodified audit opinion. The information presented above is extracted from the audited interim condensed consolidated financial statements These financial statements are prepared in accordance with the Indian Accounting Standard (Ind AS) as prescribed under Section 133 o( Ihe Companies Act, 2013 read with Rule 3 of the Companies (Indian Accounting Standards) Rules, 2015 and Companies (Indian Accounting Standards) Amendment Rules, 2016.


2. During the nine months ended December 31, 2017, 3952007 equity shares were issued pursuant to exercise of stock options under the Employee Stock Option Scheme of the Company.


3. Tax expense for the quarter ended and nine months ended 31 December 2017, is net of Deferred tax credit of INR 240.770 million, after taking into account reduction in US Federal tax rate.

 

 

FIXED ASSETS:

 

 

PRESS RELEASE / WEBSITE DETAILS

 

IRSTSOURCE SOLUTIONS REPORTS THIRD QUARTER FISCAL 2018 RESULTS WITH INCREASED REVENUES AND IMPROVED PROFIT MARGINS

 

Revenues of INR 8872.000 Million

EBIT of INR 990.000 Million

PAT of INR 995.000 Million

 

Kolkata, February 07, 2018: Firstsource Solutions Limited (NSE:FSL, BSE:532809), a global provider of customised Business Process Management (BPM) services and a RP-Sanjiv Goenka Group company, reported its consolidated financial results for the quarter ended December 2017 according to Ind AS.

 

Highlights for the Quarter ended December 31, 2017:

 

 

Mr. Sanjiv Goenka, Chairman, RP-Sanjiv Goenka Group and Firstsource Solutions said “Their strategic call to exit from the domestic segment last quarter has started showing improvements in their profit margins. In the quarters ahead, they will continue on the growth trajectory, focusing on improving their financial performance and shareholder’s value. As always, they will work on aggressively building their clientele in the segments and markets they operate in.”

 

Business Highlights for the Quarter ended December 31, 2017:

 

Business Wins

 

Won additional contracts in the quarter for the Customer Management, Healthcare, Mortgage and Collections business with existing and new clients.

 

 

Debt Repayment

 

Firstsource Group USA, wholly owned subsidiary of Firstsource Solutions successfully made the quarterly principal repayment of USD 11.25 million on its outstanding debt on December 31, 2017.

 

Awards and Recognitions

 

.

About Firstsource

 

Firstsource Solutions Limited, a RP-Sanjiv Goenka Group company (NSE: FSL, BSE: 532809, Reuters: FISO.BO, Bloomberg: FSOL@IN), is a leading global provider of customised Business Process Management (BPM) services to the Healthcare, Telecom and Media and Banking and Financial Services industries. The company’s clients include Fortune 500, FTSE 100 and Nifty 50 companies. Firstsource has a “rightshore” delivery model with operations in India, Philippines, UK and US.

 

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 records 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 records 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

INR

US Dollar

1

INR 64.85

UK Pound

1

INR 90.58

Euro

1

INR 79.97

 

 

INFORMATION DETAILS

 

Information Gathered by :

SHL

 

 

Analysis Done by :

PRY

 

 

Report Prepared by :

BHG

 

 

SCORE FACTORS

 

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

 

RATING EXPLANATIONS

 

Credit Rating

Explanation

Rating Comments

A++

Minimum Risk

Business dealings permissible with minimum risk of default

A+

Low Risk

Business dealings permissible with low risk of default

A

Acceptable Risk

Business dealings permissible with moderate risk of default

B

Medium Risk

Business dealings permissible on a regular monitoring basis

C

Medium High Risk

Business dealings permissible preferably on secured basis

D

High Risk

Business dealing not recommended or on secured terms only

NB

New Business

No recommendation can be done due to business in infancy stage

NT

No Trace

No recommendation can be done as the business is not traceable

 

NB is stated where there is insufficient information to facilitate rating. However, it is not to be considered as unfavourable.

 

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 are as follows:

 

·         Financial condition covering various ratios

·         Company background and operations size

·         Promoters / Management background

·         Payment record

·         Litigation against the subject

·         Industry scenario / competitor analysis

·         Supplier / Customer / Banker review (wherever available)

 

 

 

 

 

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.