|WNS (HOLDINGS) LTD filed this Form 20-F on 05/16/2018|
General and Administrative Expenses
The following table sets forth the composition of our general and administrative expenses for the periods indicated:
The increase in general and administrative expenses was primarily due to an increase in employee costs as a result of higher salaries on account of a higher headcount, wage inflation and higher share-based compensation expenses primarily due to an increase in grant date fair value of RSUs; higher legal and professional expenses (including costs related to our acquisitions) and higher other costs. Further, the depreciation of the Indian rupee and South African rand against the US dollar by an average of 2.6% and 2.3%, respectively, for fiscal 2017, as compared to the respective average exchange rates for fiscal 2016, resulted in a decrease of approximately $1.1 million in general and administrative expenses.
Foreign Exchange Loss / (Gains), Net
The following table sets forth our foreign exchange loss / (gains), net for the periods indicated:
The foreign exchange gains were higher primarily due to higher gains of $2.8 million from our rupee and pound denominated hedge contracts as a result of a depreciation of the pound sterling against the US dollar, and a higher foreign currency revaluation gain of $0.8 million arising from a $3.9 million gain in fiscal 2017 compared to a gain of $3.1 million in fiscal 2016. We expect our foreign exchange gains to be higher in fiscal 2018 as compared to fiscal 2017, based on our current hedge positions and exchange rates.
Impairment of Goodwill
During the fourth quarter of fiscal 2017, proposed changes to the laws of the UK governing personal injury claims generated uncertainty regarding the future earnings trajectory of our legal services business in our WNS Auto Claims BPM segment, as a result of which we had expected that we would eventually exit from providing legal services in relation to personal injury claims. We had also experienced a decrease in volume of and loss of business from certain clients of our traditional repair services in our WNS Auto Claims BPM segment in fiscal 2017. As a result, we had expected the future performance of our WNS Auto Claims BPM segment to decline significantly and therefore significantly reduced our financial projections and estimates of our WNS Auto Claims BPM segment. Accordinly, we performed an impairment review of the goodwill associated with the companies we had acquired for our auto claims business and recorded an impairment charge of $21.7 million to our results of operations for fiscal 2017.