2.14 Provisions and contingencies

The Company creates a provision when there is
present obligation as a result of a past event that
probably requires an outflow of resources and a reliable
estimate can be made of the amount of the obligation. A
disclosure for a contingent liability is made when there
is a possible obligation or a present obligation that may,
but probably will not, require an outflow of resources.
When there is a possible obligation or a present
obligation in respect of which the likelihood of outflow
of resources is remote, no provision or disclosure is
made. Provisions are reviewed at each balance sheet
date and adjusted to reflect the current best estimate.
If it is no longer probable that an outflow of resources
would be required to settle the obligation, the provision
is reversed. Provisions are determined by discounting
the expected future cash flows at a pre tax rate that
reflects the current market assessment of the time
value of money and risk specific to the liability.

Contingent assets are not recognized in the financial
statements. However, contingent assets are assessed
continually and if it is virtually certain that an economic
benefit will arise, the asset and related income are
recognized in the period in which the change occurs.

2.15 Financial instruments

2.15.1 Initial recognition

Financial assets and liabilities are recognized when
the Company becomes a party to the contractual
provisions of the instrument. Financial assets and
liabilities are initially measured at fair value. Transaction
costs that are directly attributable to the acquisition or
issue of financial assets and financial liabilities (other
than financial assets and financial liabilities at fair value
through profit or loss) are added to or deducted from
the fair value measured on initial recognition of financial
asset or financial liability.

2.15.2 Classification and subsequent measurement

a) Non-derivative financial instruments

i) Cash and cash equivalents

The Company considers all highly liquid financial
instruments, which are readily convertible into known
amounts of cash that are subject to an insignificant risk
of change in value and having original maturities of
three months or less from the date of purchase, to be
cash equivalents. Cash and cash equivalents consist

of balances with banks which are unrestricted for
withdrawal and usage.

ii) Financial assets at amortised cost

Financial assets are subsequently measured at
amortised cost if these financial assets are held within a
business whose objective is to hold these assets in order
to collect contractual cash flows and the contractual
terms of the financial asset give rise on specified dates
to cash flows that are solely payments of principal and
interest on the principal amount outstanding.

iii) Financial assets at fair value through other
comprehensive income ('FVOCI')

Financial assets are measured at fair value through
other comprehensive income if these financial assets
are held within a business whose objective is achieved
by both collecting contractual cash flows and selling
financial assets and the contractual terms of the
financial asset give rise on specified dates to cash
flows that are solely payments of principal and interest
on the principal amount outstanding. The Company
has made an irrevocable election to present in other
comprehensive income subsequent changes in the fair
value of equity investments not held for trading.

iv) Financial assets at fair value through profit and loss
('FVTPL')

Financial assets are measured at fair value through
profit and loss unless it is measured at amortised cost
or at fair value through other comprehensive income
on initial recognition. The transaction costs directly
attributable to the acquisition of financial assets
and liabilities at fair value through profit and loss are
immediately recognized in statement of profit and loss.

v) Financial liabilities

Financial liabilities are measured at amortised cost
using the effective interest method. For trade and other
payables maturing within one year from the balance
sheet date, the carrying amount approximate fair value
to short-term maturity of these instruments.

vi) Equity instruments

An equity instrument is a contract that evidences
residual interest in the assets of the Company after
deducting all of its liabilities.

Equity instruments are recognized by the Company at
the proceeds received net of direct issue cost.

b) Derivative financial instruments

Cash flow hedge

The Company designates certain foreign exchange
forward, option and future contracts as hedge

instruments in respect of foreign exchange risks. These
hedges are accounted for as cash flow hedges.

The Company uses hedging instruments that are
governed by policies, which are approved by the Board
of Directors, which provide written principles on the
use of such financial derivatives consistent with the
risk management strategy of the Company. The hedge
instruments are designated and documented as hedges
at the inception of the contract. The effectiveness
of hedge instruments to reduce the risk associated
with the exposure being hedged is assessed and
measured at inception and on an ongoing basis. The
ineffective portion of designated hedges is recognized
immediately in the statement of profit and loss.

The effective portion of change in the fair value of the
designated hedging instrument is recognized in Other
comprehensive income and accumulated under the
heading Cash flow hedge reserve.

Hedge accounting is discontinued when the hedging
instrument expires or is sold, terminated or no longer
qualifies for hedge accounting. Any gain or loss
recognized in Other comprehensive income and
accumulated in equity till that time remains and is
recognized in statement of profit and loss when the
forecasted transaction is no longer expected to occur;
the cumulative gain or loss accumulated in statement
of changes in equity is transferred to the statement of
profit and loss.

c) Share capital

Ordinary shares

Ordinary shares are classified as equity. Incremental
costs directly attributable to the issuance of new
ordinary shares and share options are recognized as a
deduction from equity, net of any tax effects.

2.15.3 De-recognition of financial instruments

The Company de-recognises a financial asset when the
contractual rights to the cash flows from the financial
assets expire or it transfers the financial assets and
such transfer qualifies for de-recognition under Ind AS
109. A financial liability (or a part of financial liability)
is de-recognized from the Company's balance sheet
when obligation specified in the contract is discharged
or cancelled or expired.

2.15.4 Fair value of financial instrument

In determining the fair value of its financial instrument,
the Company uses the methods and assumptions
based on market conditions and risk existing at each
reporting date. Methods of assessing fair value result
in general approximation of value, and such value
may never actually be realised. For all other financial
instruments, the carrying amounts approximate the fair
value due to short maturity of those instruments.

2.16 Business combinations

Business combinations have been accounted for using
the acquisition method under the provisions of Ind AS
103, Business Combinations.

The cost of an acquisition is measured at the fair value
of the assets transferred, equity instruments issued and
liabilities incurred or assumed at the date of acquisition,
which is the date on which control is transferred to the
Company. The cost of acquisition also includes the
fair value of any contingent consideration. Identifiable
assets acquired and liabilities and contingent liabilities
assumed in a business combination are measured
initially at their fair value on the date of acquisition.

Business combinations between entities under
common control is accounted for at carrying value.

Transaction costs that the Company incurs in connection
with a business combination such as finders' fees, legal
fees, due diligence fees, and other professional and
consulting fees are expensed as incurred.

2.17 Cash flow statement

Cash flows are reported using the indirect method,
whereby profit for the period is adjusted for the effects
of transactions of a non-cash nature, any deferrals or
accruals of past or future operating cash receipts or
payments and items of income or expenses associated
with investing or financing cash flows. The cash flows
from operating, investing and financing activities of the
Company are segregated.

2.18 Recent Accounting Pronouncements:

Ministry of Corporate Affairs (“MCA”) notifies new
standards or amendments to the existing standards
under Companies (Indian Accounting Standards) Rules
as issued from time to time. MCA has not notified
any new standards or amendments to the existing
standards applicable to the Group which are effective
for any period on or after April 1, 2025.

d Employee stock options

During the year ended March 31, 2025, the Company granted 8,343,871 (March 31, 2024: 5,709,000) options at an
exercise price of I 10 (March 31, 2024: I 10.00).

e) Shares reserved for issue under options

16,602,716 (March 31, 2024: 13,391,679) number of shares are reserved for employees for issue under the employee
stock options plan (ESOP) amounting to I 166.03 (March 31, 2024: I 133.92).

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.

g) Dividend

During the year ended March 31, 2025, the Company has declared interim dividend of I 4 per share (March 31, 2024:
I 3.50), the Company has incurred a net cash outflow of I 2,758.57 (March 31, 2024: I 2,405.94) (excluding dividend
paid on treasury shares).

Revenues recognized in excess of invoicing are classified as contract assets (which is referred as unbilled revenues).
Changes in contract assets are directly attributable to revenue recognized based on the accounting policy defined
and the invoicing done during the year. Applying the practical expedient as given in Ind AS 115, the Company has not
disclosed the remaining performance obligation related disclosures as the revenue recognized corresponds directly
with the value to the customer of the company's performance completed to date.

II. Fair value hierarchy:

The table below analyses financial instruments carried at fair value, by valuation method. The different levels have been
defined as follows:

Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities.

Level 2: inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either
directly (i.e. as prices) or indirectly (i.e. derived from prices).

Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs).

The following table presents fair value hierarchy of assets and liabilities measured at fair value on a recurring basis as
at March 31, 2025:

The fair value of other financial assets and liabilities approximate the carrying value.

The fair value of Mutual and other funds is based on quoted price. Derivative financial instruments are valued based on
quoted prices for similar assets and liabilities in active markets or inputs that are directly or indirectly observable in the
marketplace. The fair value of equity instruments and preference instruments is based on inputs that are not based on
observable market data.

III. Financial risk management:

Financial risk factors:

The Company's activities are exposed to a variety of financial risks: market risk, credit risk, and liquidity risk. The
Company's primary focus is to foresee the unpredictability of financial markets and seek to minimize potential adverse
effects on its financial performance. The primary market risk to the Company is foreign exchange risk. The Company
uses derivative financial instruments to mitigate foreign exchange related risk exposures. The Company's exposure to
credit risk is influenced mainly by the individual characteristic of each customer and the concentration of risk from the
top few customers.

a) Market risk

The Company operates internationally and a major portion of the business is transacted in several currencies and
consequently the Company is exposed to foreign exchange risk through its services from India for contracts in
the overseas geographies, primarily in the United States of America and United Kingdom and purchases from
overseas suppliers in foreign currencies. The Company holds derivative financial instruments such as foreign
exchange forward and option contracts to mitigate the risk of changes in exchange rates on foreign currency
exposures. The exchange rate between the Indian rupee and foreign currencies has changed substantially in
recent years and may fluctuate substantially in the future. Consequently, the results of the Company's operations
may be affected as the Rupee fluctuates against these currencies.

The following table analyzes foreign currency risk as of March 31, 2025:

5% appreciation/ depreciation of the respective foreign currencies with respect to functional currency Firstsource
Solutions Limited would result in increase / decrease in the Company's profit before tax approximately I 413.67 for
the year ended March 31, 2025 (March 31, 2024: I 333.26).

Derivative financial instruments

The Company holds derivative financial instruments such as foreign currency forward contracts to mitigate the risk
of changes in exchange rates on foreign currency exposures. The counterparty for these contracts is generally a
bank. These derivative financial instruments are valued based on quoted prices for similar assets and liabilities in
active markets or inputs that are directly or indirectly observable in the marketplace.

c) Liquidity risk:

Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its
financial liabilities that are settled by delivering cash or another financial asset. The Company's approach to
manage liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities
when due, under both normal and stressed conditions, without incurring unacceptable losses or risk to the
Company's reputation.

Future cash outflows in respect of certain leasehold properties to which the Company is potentially exposed as a
lessee that are not reflected in the measurement of the lease liabilities include exposures from options of extension
and termination. In assessing whether the Company is reasonably certain to exercise an option to extend a
lease, or not to exercise an option to terminate a lease, the Management has considered all relevant facts and
circumstances that create an economic incentive for the Company as a lessee to exercise the option to extend
the lease or not to exercise the option to terminate the lease as at March 31, 2025. The Company shall revise the
lease term when there is a change in the facts and circumstances.

The table below provides details regarding the contractual maturities of significant financial liabilities as at
March 31, 2025 and March 31, 2024:

b) Credit risk

Credit risk refers to the risk of default on its obligation by the counterparty resulting in a financial loss. The maximum
exposure to the credit risk at the reporting date is primarily from trade receivables amounting to I 8,677.06 as at
March 31, 2025 (March 31, 2024 : I 7,155.75) and unbilled revenue amounting to I 268.62 as at March 31, 2025
(March 31, 2024 : I 137.48). Trade receivables and unbilled revenue are typically unsecured and are derived from
revenue earned from customers primarily located in the United States, United Kingdom, Philippines and other
locations. Credit risk has always been managed by the Company by continuously monitoring the credit worthiness
of customers to which the Company grants credit terms in the normal course of business.

Management expects the recoveries from current financial assets as at the year end and the net cash inflows from
operations during the ensuing financial year to be sufficient for the Company to be able to meet these obligations of
lease and other significant financial liabilities. In addition, the Company also has unused lines of credit.

26 Employee stock option plan

Employee stock option Scheme 2003 (‘Scheme 2003’)

The Employee Stock Option Scheme 2003 ('the Scheme') approved by the Board of Directors and the members
of the Company and administered by the Nomination & Remuneration Committee ('the Committee') is effective
October 11, 2003. The key terms and conditions included in the scheme are in line with Securities and Exchange Board
of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 ( as amended by
SEBI (shared based employee benefits) Regulations, 2014).

Firstsource Solutions Limited Employee Stock Option Plan 2019 ('ESOP 2019 PLAN')

The Company established ESOP 2019 Plan, pursuant to approval of the Board of Directors and the shareholders at the
Annual General Meeting on August 2, 2019 and administered by the Committee. The key terms and conditions included
in the ESOP 2019 Plan are in compliance with Securities and Exchange Board of India (Share Based Employee
Benefits) Regulations, 2014, as amended.

As per the ESOP 2019 Plan, the Committee will issue stock options to the identified eligible employees/ director(s) of
the Company and its Subsidiaries at an exercise price which will be the face value of the Shares or any higher price
which may be decided by the Committee considering the prevailing market conditions and the norms as prescribed by
the Securities and Exchange Board of India ('SEBI') and other relevant regulatory authorities. Further the stock options
under the said plan would vest & be exercisable in tranches as determined by the Committee.

The ESOP 2019 Plan is proposed to include grants to identified eligible employees under the Long Term Incentive
Structure ('LTI'). The LTI will be tenure based or performance based as per the vesting conditions below:
*Attainment of options can range between 0% and 150% of tranche eligible for vesting for the respective performance measurement period.
Each tranche is separate. Performance and vesting in one period has no bearing on performance and vesting in another period;

Under both the above structures grants will be issued at face value of the shares or any higher price which may be
decided by the Committee and will have an exercise period up to ten years as per the Scheme and as determined by
the Committee.

The ESOP 2019 Plan shall be implemented by the Firstsource Employee Benefit Trust ('the Trust') which will be
administered by the Committee. The Company shall provide financial assistance to the Trust for secondary acquisition
of equity shares of the Company for the purpose of implementation of ESOP 2019 Plan. The terms and conditions for
the financial assistance provided shall be in Compliance with the Companies Act, 2013 read with Companies (Share
Capital and Debenture) Rules, 2014 and SEBI regulations.

During the year ended March 31, 2025, the Trust has purchased 1,714,706 (March 31, 2024: 100,000) equity shares
through secondary acquisition. As on March 31, 2025, the trust holds 7,732,074 (March 31, 2024: 9,376,900) number of
equity shares .

GRANTS TO THE MANAGING DIRECTOR & CEO (MD & CEO) UNDER ESOP 2019 PLAN

In view of the Shareholder's approval via postal ballot on October 30, 2023 through a special resolution wherein it was
approved that the MD & CEO shall be entitled to participate in the equity based LTI of the Company. Accordingly the
Committee on September 1, 2023 has approved the grant of 4,500,000 options under ESOP Plan 2019 at the face value of
I 10/- of the shares to the MD and CEO which is performance based structure. The brief details of these grants are mentioned
herein below:

28 Employee benefits

The Company has a defined benefit gratuity plan in India (funded). The Company's defined benefit gratuity plan is a final
salary plan for employees, which requires contributions to be made to a separately administered fund.

The gratuity plan is governed by the Payment of Gratuity Act, 1972. Under the Act, Indian employee who has completed
five years or more of service is entitled to specific benefit. The level of benefits provided depends on the member's
length of service and salary at retirement age. The fund has the form of a trust and it is governed by the Board of
Trustees, which consists of an equal number of employer and employee representatives. The Board of Trustees is
responsible for the administration of the plan assets and for the definition of the investment strategy.

Each year, the Board of Trustees reviews the level of funding in the India gratuity plan. Such a review includes the asset-
liability matching strategy and investment risk management policy. This includes employing the use of annuities and
longevity swaps to manage the risks. The Board of Trustees decides its contribution based on the results of this annual
review. Generally, investments are in debt mutual funds. Annual contributions are at a level such that no plan deficits
(based on valuation performed) will arise.

Direct tax matters

I ncome tax demands amounting to I 1,930.70 (March 31, 2024: 11,917.41) 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
1 10.38 (March 31, 2024: 1 10.38) tax under protest against the demand raised for the assessment year 2004-05,
1 12.50 (March 31,2024: 1 12.50) tax under protest against the demand raised for the assessment year 2009-10, 1 80.00
(March 31, 2024: 1 80.00) tax under protest against the demand raised for the assessment year 2011-12. 1 5.00
(March 31, 2020: 1 5.00) tax under protest against the demand raised for the assessment year 2014-15, 1 2.50
(March 31, 2024: 1 2.50) tax under protest against the demand raised for the assessment year 2015-16.

Indirect tax matters

Service tax demands amounting to 1 192.52 (March 31, 2024: 1 192.52) 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.

Goods and Service tax demands amounting to 1 79.50 in respect of GST departmental audit findings is disputed in
appeal by the Company. The Company expects favourable appellate decision in this regard. The Company has paid
1 4.56 tax under protest against the demand raised.

The Company's pending litigations comprise of claims against the Company and pertaining to proceedings pending
with Income tax, service tax and GST. 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.

32 Long-term contracts

The Company has a process whereby yearly all long-term contracts (including derivative contracts) are assessed
for material foreseeable losses. At the year end, the Company has reviewed and ensured that adequate provision as
required under any law / Accounting Standards for material foreseeable losses on such long-term contracts (including
derivative contracts) has been made in the books of account.

33 Corporate social responsibility (CSR)

As per Section 135 of the Companies Act, 2013, funds have been contributed by the Company to the RP-Sanjiv Goenka
Group CSR Trust and are to be utilized on the activities which are specified in Schedule VII to the Act. The areas
identified by the CSR trust includes activities for promoting healthcare, art / culture, sports and education as the four
priority areas to be pursued in phases and in a manner aligned with the CSR rules and regulations.The trust has
informed that they are working on a project to set up school which will offer IB and IGCSE courses. The amount paid
towards our contribution is being utlized to purchase land for setting up this school.

34 Micro, small and medium enterprises

There are no outstanding dues to Micro and Small enterprises as at March 31, 2025 and March 31, 2024 respectively.
Micro and Small Enterprises have been identified based on information collected by the Company.

Change in the ratios of more than 25% as compared to the preceding year is a derivation of the change in the numerator
defined against each ratio.

36 Exceptional items

Exceptional items comprise of fair value adjustment on the contingent consideration payable on account of an earlier
business combination resulting in a credit of I 651.44 and charge of special bonus of I 100.

37 Subsequent events

The Board of directors at its meeting held on April 28, 2025 has approved the consolidated financial statements as at
and for the year ended March 31, 2025.

As per our report of even date attached.

For DELOITTE HASKINS & SELLS LLP For and on behalf of the Board of Directors of

Chartered Accountants Firstsource Solutions Limited

Firm's Registration No.: 117366W/W-100018

Mukesh Jain Dr Sanjiv Goenka Pradip Kumar Khaitan Ritesh Mohan Idnani

Partner Chairman Director Managing Director and CEO

Membership No.: 108262 (DIN 00074796) (DIN 00004821) (DIN 06403188)

Shashwat Goenka ^{Utsav Parekh Subrata Talukdar}

Vice-Chairman Director Director

(DIN 03486121) (DIN 00027642) (DIN 01794978)

Sunil Mitra T C Suseel Kumar Vanita Uppal

Director Director Director

(DIN 00113473) (DIN 06453310) (DIN 07286115)

Rekha Sethi Dr. Rajiv Kumar

Director Director

(DIN 06809515) (DIN 02385076)

Gurugram Mumbai Pooja Nambiar Dinesh Jain

April 28, 2025 April 28, 2025 Company Secretary President and CFO