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Sr.
No.
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Key Audit Matter
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Auditor’s Response
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1.
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Revenue recognition and measurement in respect of
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Principal audit procedures performed included the
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un-invoiced amounts
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following:
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(Refer Note 9 of the Standalone Financial Statements)
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a) We gained an understanding of the Company's processes
in collating the evidence supporting delivery of services for
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The Company, in its contracts with customers, promises to
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each disaggregated type of revenue. We also obtained an
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transfer distinct services (“performance obligations”) to its
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understanding of the design of key controls for quantifying
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customers which may be rendered in the form of customer
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units of services that would be invoiced and the application
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management, transaction processing (including revenue cycle
management in the healthcare industry) and debt collection
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of appropriate prices for each of such services.
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services. Revenue is recognized based on the pattern of benefits
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b) We have tested the design and operating effectiveness of
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from the performance obligations to the customer in an amount
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management's key controls in collating the units of services
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that reflects the consideration received or expected to be
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delivered and in the application of accurate prices for each
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received in exchange for the services (“transaction price”). The
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of such services for a sample of the un-invoiced revenue
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agreed contractual terms for service deliveries that are based
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entries.
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on unit-of-work, time and material or a specified contingency
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c) We have tested a sample of un-invoiced revenue entries
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(such as recovery of dues or disbursement of loans) adjusted
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with reference to the manual records used for tracking
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for rebates, volume discounts, incentives or penalties (“variable
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inputs relating to the services delivered to confirm the
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consideration”). At each reporting date, revenue is accrued for
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units of services delivered and contractual rates for the
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work performed that may not have been invoiced. Identifying
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application of appropriate price for each of services.
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whether the Company's performance has resulted in a billable
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We also tested the adjustments on account of volume
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service that is collectable where the service deliveries have
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discounts and committed service levels of performance.
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not been acknowledged by customers as of the reporting date
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With regard to incentives, our tests were focused to ensure
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involves a fair amount of judgment.
Recognition of revenue before acknowledgment of receipt of
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that accruals were restricted to only those items where
contingencies were minimal.
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services by customer could lead to an over or understatement of
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d) We have performed substantive analytical procedures
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revenue and profit, whether intentionally or in error.
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to evaluate the reasonableness of un-invoiced revenues
recognized. Un-invoiced revenues from fixed fee based
service contracts were not significant resulting in lower risk
relating to cut off and accuracy. Therefore, we focused our
attention on time and unit priced based service contracts
in performing substantive analytical procedures. These
procedures involved developing sufficiently precise
expectations using a plausible and predictable relationship
among appropriately disaggregated data.
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Sr. Key Audit Matter
No.
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Auditor’s Response
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e)
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We also extended our testing up to the date of approval
of the standalone financial statements by the Board of
Directors of the Company to verify adjustments, if any, that
may have been necessary for services delivered prior to
the reporting date and / or collections against those.
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f)
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We evaluated the delivery and collection history of
customers against whose contracts un-invoiced revenue
relating to period more than a month is recognized.
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g)
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For the samples selected, we tested cut-offs for revenue
recognized against un-invoiced amounts by matching the
revenue accrual against accruals for corresponding cost.
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We have audited the accompanying standalone financial
statements of Firstsource Solutions Limited (the
“Company”), which comprise the Balance Sheet as at
March 31, 2025, and the Statement of Profit and Loss
(including Other Comprehensive Income), the Statement
of Changes in Equity and the Statement of Cash Flows
for the year ended on that date, and notes to the financial
statements, including a summary of material accounting
policies and other explanatory information (hereinafter
referred to as the “Standalone Financial Statements”).
In our opinion and to the best of our information and according
to the explanations given to us, the aforesaid standalone
financial statements give the information required by the
Companies Act, 2013 (the “Act”) in the manner so required
and give a true and fair view in conformity with the Indian
Accounting Standards prescribed under Section 133 of the
Act, (“Ind AS”) and other accounting principles generally
accepted in India, of the state of affairs of the Company as at
March 31, 2025, and its profit, total comprehensive income,
changes in equity and its cash flows for the year ended on
that date.
Basis for opinion
We conducted our audit of the standalone financial statements
in accordance with the Standards on Auditing specified
under Section 143(10) of the Act (“SA”s). Our responsibilities
under those Standards are further described in the Auditor's
Responsibility for the Audit of the Standalone Financial
Statements section of our report. We are independent of
the Company in accordance with the Code of Ethics issued
by the Institute of Chartered Accountants of India (“ ICAI”)
together with the ethical requirements that are relevant to
our audit of the standalone financial statements under the
provisions of the Act and the Rules made thereunder, and we
have fulfilled our other ethical responsibilities in accordance
with these requirements and the ICAI's Code of Ethics. We
believe that the audit evidence obtained by us is sufficient
and appropriate to provide a basis for our audit opinion on
the standalone financial statements.
Key audit matters
Key audit matters are those matters that, in our professional
judgment, were of most significance in our audit of the
standalone financial statements of the current financial
year. These matters were addressed in the context of our
audit of the standalone financial statements as a whole,
and in forming our opinion thereon, and we do not provide a
separate opinion on these matters. We have determined the
matters described below to be the key audit matters to be
communicated in our report.
Information other than the financial
Statements and auditor’s report thereon
(“other information”)
• The Company's Board of Directors is responsible for
the other information. The other information comprises
the information included in the Report of the Board of
Directors including Annexures thereto, Management
Discussion and Analysis report, Business Responsibility
report and report on Corporate Governance, but does not
include the consolidated financial statements, standalone
financial statements and our auditor's report thereon.
• Our opinion on the standalone financial statements does
not cover the other information and we do not express any
form of assurance conclusion thereon.
• In connection with our audit of the standalone financial
statements, our responsibility is to read the other
information and, in doing so, consider whether the other
information is materially inconsistent with the standalone
financial statements or our knowledge obtained during
the course of our audit or otherwise appears to be
materially misstated.
• If, based on the work we have performed, we conclude
that there is a material misstatement of this other
information, we are required to report that fact. We have
nothing to report in this regard.
Responsibilities of management and board
of directors for the standalone financial
statements
The Company's Board of Directors is responsible for the
matters stated in Section 134(5) of the Act with respect to
the preparation of these standalone financial statements
that give a true and fair view of the financial position,
financial performance including other comprehensive
income, changes in equity and cash flows of the Company
in accordance with the accounting principles generally
accepted in India, including Ind AS. This responsibility also
includes maintenance of adequate accounting records in
accordance with the provisions of the Act for safeguarding
the assets of the Company and for preventing and detecting
frauds and other irregularities; selection and application
of appropriate accounting policies; making judgments and
estimates that are reasonable and prudent; and design,
implementation and maintenance of adequate internal
financial controls, that were operating effectively for
ensuring the accuracy and completeness of the accounting
records, relevant to the preparation and presentation of the
standalone financial statements that give a true and fair view
and are free from material misstatement, whether due to
fraud or error.
In preparing the standalone financial statements,
management and Board of Directors are responsible for
assessing the Company's ability to continue as a going
concern, disclosing, as applicable, matters related to going
concern and using the going concern basis of accounting unless
Board of Directors either intend to liquidate the Company or to
cease operations, or has no realistic alternative but to do so.
The Company's Board of Directors is also responsible for
overseeing the Company's financial reporting process.
Auditor’s Responsibility for the Audit of the
Standalone Financial Statements
Our objectives are to obtain reasonable assurance about
whether the standalone financial statements as a whole are free
from material misstatement, whether due to fraud or error, and to
issue an auditor's report that includes our opinion. Reasonable
assurance is a high level of assurance, but is not a guarantee
that an audit conducted in accordance with SAs will always
detect a material misstatement when it exists. Misstatements
can arise from fraud or error and are considered material if,
individually or in the aggregate, they could reasonably be
expected to influence the economic decisions of users taken on
the basis of these standalone financial statements.
As part of an audit in accordance with SAs, we exercise
professional judgment and maintain professional skepticism
throughout the audit. We also:
• Identify and assess the risks of material misstatement of
the standalone financial statements, whether due to fraud
or error, design and perform audit procedures responsive to
those risks, and obtain audit evidence that is sufficient and
appropriate to provide a basis for our opinion. The risk of
not detecting a material misstatement resulting from fraud is
higher than for one resulting from error, as fraud may involve
collusion, forgery, intentional omissions, misrepresentations,
or the override of internal control.
ii. The Company has made provision, as required
under the applicable law or accounting
standards, for material foreseeable losses,
if any, on long-term contracts including
derivative contracts;
iii. There were no amounts which were required
to be transferred to the Investor Education and
Protection Fund by the Company.
iv. (a) The Management has represented that,
to the best of its knowledge and belief,
no funds have been advanced or loaned
or invested (either from borrowed funds
or share premium or any other sources
or kind of funds) by the Company to or in
any other person(s) or entity(ies), including
foreign entities (“Intermediaries”), with
the understanding, whether recorded in
writing or otherwise, that the Intermediary
shall, directly or indirectly lend or invest in
other persons or entities identified in any
manner whatsoever by or on behalf of the
Company (“Ultimate Beneficiaries”) or
provide any guarantee, security or the like
on behalf of the Ultimate Beneficiaries;
(b) The Management has represented that,
to the best of its knowledge and belief, no
funds have been received by the Company
from any person(s) or entity(ies), including
foreign entities (“Funding Parties”), with
the understanding, whether recorded in
writing or otherwise, that the Company
shall, directly or indirectly, lend or invest in
other persons or entities identified in any
manner whatsoever by or on behalf of the
Funding Party (“Ultimate Beneficiaries”) or
provide any guarantee, security or the like
on behalf of the Ultimate Beneficiaries; and
(c) Based on the audit procedures performed
that have been considered reasonable and
appropriate in the circumstances, nothing
• Obtain an understanding of internal financial controls
relevant to the audit in order to design audit procedures
that are appropriate in the circumstances. Under Section
143(3)(i) of the Act, we are also responsible for expressing
our opinion on whether the Company has adequate internal
financial controls with reference to standalone financial
statements in place and the operating effectiveness of
such controls.
• Evaluate the appropriateness of accounting policies used
and the reasonableness of accounting estimates and related
disclosures made by the management.
• Conclude on the appropriateness of management's use of
the going concern basis of accounting and, based on the
audit evidence obtained, whether a material uncertainty
exists related to events or conditions that may cast significant
doubt on the Company's ability to continue as a going
concern. If we conclude that a material uncertainty exists,
we are required to draw attention in our auditor's report to the
related disclosures in the standalone financial statements
or, if such disclosures are inadequate, to modify our opinion.
Our conclusions are based on the audit evidence obtained
up to the date of our auditor's report. However, future events
or conditions may cause the Company to cease to continue
as a going concern.
• Evaluate the overall presentation, structure and content of the
standalone financial statements, including the disclosures,
and whether the standalone financial statements represent
the underlying transactions and events in a manner that
achieves fair presentation
Materiality is the magnitude of misstatements in the standalone
financial statements that, individually or in aggregate, makes
it probable that the economic decisions of a reasonably
knowledgeable user of the standalone financial statements
may be influenced. We consider quantitative materiality and
qualitative factors in (i) planning the scope of our audit work
and in evaluating the results of our work; and (ii) to evaluate
the effect of any identified misstatements in the standalone
financial statements.
We communicate with those charged with governance
regarding, among other matters, the planned scope and
timing of the audit and significant audit findings, including any
significant deficiencies in internal controls that we identify
during our audit.
We also provide those charged with governance with a
statement that we have complied with relevant ethical
requirements regarding independence, and to communicate
with them all relationships and other matters that may
reasonably be thought to bear on our independence, and
where applicable, related safeguards.
From the matters communicated with those charged with
governance, we determine those matters that were of most
significance in the audit of the standalone financial statements
of the current period and are therefore the Key Audit Matters.
We describe these matters in our auditor's report unless law or
regulation precludes public disclosure about the matter or when,
in extremely rare circumstances, we determine that a matter
should not be communicated in our report because the adverse
consequences of doing so would reasonably be expected to
outweigh the public interest benefits of such communication.
Report on Other Legal and Regulatory
Requirements
1. As required by Section 143(3) of the Act, based on our
audit we report that:
a) We have sought and obtained all the information and
explanations which to the best of our knowledge and
belief were necessary for the purposes of our audit.
b) In our opinion, proper books of account as required
by law have been kept by the Company so far as it
appears from our examination of those books.
c) The Balance Sheet, the Statement of Profit and
Loss including Other Comprehensive Income, the
Statement of Changes in Equity and the Statement
of Cash Flows dealt with by this Report are in
agreement with the relevant books of account.
d) In our opinion, the aforesaid standalone financial
statements comply with the Ind AS specified under
Section 133 of the Act.
e) On the basis of the written representations received
from the directors as on March 31, 2025 taken
on record by the Board of Directors, none of the
directors are disqualified as on March 31, 2025 from
being appointed as a director in terms of Section
164(2) of the Act.
f) With respect to the adequacy of the internal financial
controls with reference to standalone financial
statements of the Company and the operating
effectiveness of such controls, refer to our separate
Report in 'Annexure A'. Our report expresses an
unmodified opinion on the adequacy and operating
effectiveness of the Company's internal financial
controls with reference to standalone financial
statements.
g) With respect to the other matters to be included
in the Auditor's Report in accordance with the
requirements of section 197(16) of the Act, as
amended, in our opinion and to the best of our
information and according to the explanations given
to us, the remuneration paid by the Company to its
directors during the year is in accordance with the
provisions of section 197 of the Act.
h) With respect to the other matters to be included in
the Auditor's Report in accordance with Rule 11 of
the Companies (Audit and Auditors) Rules, 2014,
as amended in our opinion and to the best of our
information and according to the explanations given
to us:
i. The Company has disclosed the impact of
pending litigations on its financial position in its
standalone financial statements - Refer Note 31
to the standalone financial statements;
has come to our notice that has caused us
to believe that the representations under
sub-clause (i) and (ii) of Rule 11(e) as
provided under (a) and (b) above, contain
any material misstatement.
v. With respect of dividend declared and paid:
a) The interim dividend declared and paid
by the Company during the year and until
the date of this report is in compliance with
Section 123 of the Act.
b) The Company has not proposed final
dividend for the year.
vi. Based on our examination, which included test
checks, the Company has used accounting
software systems for maintaining its books of
account for the financial year ended March 31,
2025 which have the feature of recording audit
trail (edit log) facility and the same has operated
throughout the year for all relevant transactions
recorded in the software systems.
Further, during the course of our audit we did
not come across any instance of the audit trail
feature being tampered with and the audit trail
has been preserved by the Company as per the
statutory requirements for record retention.
2. As required by the Companies (Auditor's Report) Order,
2020 (the 'Order') issued by the Central Government
in terms of Section 143(11) of the Act, we give in
“Annexure B” a statement on the matters specified in
paragraphs 3 and 4 of the Order.
For DELOITTE HASKINS & SELLS LLP
Chartered Accountants
(Firm's Registration No. 117366W/W-100018)
MUKESH JAIN
Partner
(Membership No. 108262)
Gurugram, April 28, 2025 (UDIN: 25108262BMNTFW3415)
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