SEC Filings

WNS (HOLDINGS) LTD filed this Form 20-F on 05/16/2018
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(Amounts in thousands, except share and per share data)


Derivative financial instruments

The primary risks managed by using derivative instruments are foreign currency exchange risk and interest rate risk. Forward and option contracts up to 24 months on various foreign currencies are entered into to manage the foreign currency exchange rate risk on forecasted revenue denominated in foreign currencies and monetary assets and liabilities held in non-functional currencies. Interest rate swaps are entered to manage interest rate risk associated with the Company’s floating rate borrowings. The Company’s primary exchange rate exposure is with the US dollars and pound sterling against the Indian rupee. For derivative instruments which qualify for cash flow hedge accounting, the Company records the effective portion of gain or loss from changes in the fair value of the derivative instruments in other comprehensive income (loss), which is reclassified into earnings in the same period during which the hedged item affects earnings. Derivative instruments qualify for hedge accounting when the instrument is designated as a hedge; the hedged item is specifically identifiable and exposes the Company to risk; and it is expected that a change in fair value of the derivative instrument and an opposite change in the fair value of the hedged item will have a high degree of correlation. Determining the high degree of correlation between the change in fair value of the hedged item and the derivative instruments involves significant judgment including the probability of the occurrence of the forecasted transaction. When it is highly probable that a forecasted transaction will not occur, the Company discontinues the hedge accounting and recognizes immediately in the consolidated statement of income, the gains and losses attributable to such derivative instrument that were accumulated in other comprehensive income (loss).

The following table presents the notional values of outstanding foreign exchange forward contracts, foreign exchange option contracts and interest rate swap contracts:


     As at  
     March 31,
     March 31,

Forward contracts (Sell)


In US dollars

   $ 242,418      $ 241,673  

In United Kingdom Pound Sterling

     132,591        126,441  

In Euro

     23,883        14,769  

In Australian dollars

     48,147        43,474  


     2,332        3,511  






   $ 449,371      $ 429,868  







Option contracts (Sell)


In US dollars

   $ 107,629      $ 84,490  

In United Kingdom Pound Sterling

     116,401        94,094  

In Euro

     21,483        14,494  

In Australian dollars

     28,828        19,412  


     927        1,978  






   $ 275,268      $ 214,468  







Interest Rate Swap contracts


In US dollars

     89,900        118,000  

The amount of gain/ (loss) reclassified from other comprehensive income into consolidated statement of income in respective line items for the years ended March 31, 2018, 2017 and 2016 are as follows:


     Year ended March 31,  
     2018      2017      2016  


   $ 11,231      $ 7,952      $ 7,941  

Foreign exchange gain, net

     15,766        16,896        6,281  

Finance expense

     (561      (71      —    

Income tax related to amounts reclassified into consolidated statement of income

     (9,965      (8,998      (5,230











   $ 16,471      $ 15,779      $ 8,992