|WNS (HOLDINGS) LTD filed this Form 20-F on 05/16/2018|
General and Administrative Expenses
Our general and administrative expenses comprise primarily employee costs for senior management and other support personnel, travel expenses, legal and professional fees, share-based compensation expense and other general expenses not related to cost of revenue and selling and marketing.
General and administrative expenses as a proportion of revenue was 15.5% in fiscal 2018 as compared with 15.2% and 14.0% for fiscal 2017 and 2016, respectively. General and administrative expenses as a proportion of revenue less repair payments (non-GAAP) was 15.9% in fiscal 2018 as compared with 15.9% and 14.9% for fiscal 2017 and 2016, respectively. We expect our general and administrative expenses to increase in fiscal 2019 as we continue to strengthen our support and enabling functions and invest in leadership development but at a lower rate than the increase in our revenue less repair payments (non-GAAP).
Foreign Exchange Loss / (Gain), Net
Foreign exchange gains or losses, net include:
We had a foreign exchange gain of $15.0 million in fiscal 2018 as compared to $14.5 million and $11.0 million in fiscal 2017 and 2016, respectively. We expect our foreign exchange gains to be lower in fiscal 2019 as compared to fiscal 2018, based on our current hedge positions and exchange rates. Further, on adoption of IFRS 9 Financial Instruments (IFRS 9), with effect from April 1, 2018 cash flow hedging gains and losses, which are currently reported in the foreign exchange gains or losses, net line item, will be reported in the revenue line item.
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 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 in fiscal 2017 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. Accordingly, 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. There is no impairment charge recognized in fiscal 2018.
Amortization of Intangible Assets
Amortization of intangible assets is primarily associated with our acquisitions of Aviva Global in July 2008 (included up to November 2016) Fusion in June 2012, Value Edge and its subsidiaries in June 2016, Denali in January 2017, HealthHelp in March 2017 and the acquisition of a customer contract from Telkom SA SOC LIMITED (Telkom) in May 2015.
Other Income, Net
Other income, net comprises interest income, income from investments, gain or loss on sale of assets and other miscellaneous expenses.
Finance expense primarily relates to interest charges payable on our term loans and short term borrowings, transaction costs and the gains/losses on settlement of our related derivative instruments. We expect our finance expense to be lower in fiscal 2019 as compared to fiscal 2018 on account of repayment of loans that were obtained to fund our acquisitions of Denali and HealthHelp.