SEC Filings

6-K
WNS (HOLDINGS) LTD filed this Form 6-K on 08/06/2018
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Table of Contents

Cash Flows from Investing Activities

Net cash used in investing activities increased to $19.7 million for the three months ended June 30, 2018 as compared to net cash provided by investing activities of $17.0 million for the three months ended June 30, 2017. This was primarily on account of a net cash outflow of $10.1 million towards marketable securities for the three months ended June 30, 2018 as compared to a cash inflow of $23.5 million from sale of marketable securities for the three months ended June 30, 2017; a cash outflow of $9.2 million towards purchase of property, plant and equipment (comprising primarily leasehold improvements, furniture and fixtures, office equipment and information technology equipment) and intangible assets (comprising computer software) for the three months ended June 30, 2018 as compared to $7.3 million for the three months ended June 30, 2017.

Cash Flows from Financing Activities

Net cash used in financing activities was $22.6 million for the three months ended June 30, 2018 as compared to net cash provided by financing activities of $1.1 million for the three months ended June 30, 2017. This was primarily on account of a cash outflow of $23.0 million towards share repurchases for the three months ended June 30, 2018 as compared to a cash outflow of $Nil for the three months ended June 30, 2017 and a decrease in cash inflow from the exercise of options by grantees under our share plans of $Nil for the three months ended June 30, 2018 as compared to $1.3 million for the three months ended June 30, 2017, which was partially offset by a decrease in cash outflow towards debt issuance costs of $Nil for the three months ended June 30, 2018 as compared to $0.3 million for the three months ended June 30, 2017.

Share Repurchases

In March 2018, our shareholders authorized a share repurchase program for the repurchase of up to 3.3 million of our ADSs, each representing one ordinary share, at a price range of $10 to $100 per ADS. Pursuant to the terms of the repurchase program, our ADSs may be purchased in the open market from time to time for 36 months from March 30, 2018, the date on which the shareholders resolution approving the repurchase program was passed. We intend to fund the repurchases of ADSs under the repurchase program with cash on hand. We are not obligated under the repurchase program to repurchase a specific number of ADSs, and the repurchase program may be suspended at any time at our discretion. We intend to hold the shares underlying any such repurchased ADSs as treasury shares.

During the three months ended June 2018, we repurchased 450,300 ADSs for a total consideration of $23.3 million (including transaction costs of $4,503), in the open market, under the above-mentioned share repurchase program. The shares underlying these ADSs are recorded as treasury shares.

Further, in July 2018, we have repurchased 408,142 ADSs for a total consideration of $20.7 million (including transaction costs of $4,081), in the open market, under the above mentioned share repurchase program. The shares underlying these ADSs are recorded as treasury shares.

Tax Assessment Orders

Transfer pricing regulations to which we are subject require that any international transaction among the WNS group enterprises be on arm’s-length terms. We believe that the international transactions among the WNS group enterprises are on arm’s-length terms. If, however, the applicable tax authorities determine that the transactions among the WNS group enterprises do not meet arm’s-length criteria, we may incur increased tax liability, including accrued interest and penalties. This would cause our tax expense to increase, possibly materially, thereby reducing our profitability and cash flows. We have signed an advance pricing agreement with the Government of India providing for the agreement on transfer pricing matters over certain transactions covered thereunder for a period of five years starting from April 2013. We have filed an application for a renewal of the advance pricing agreement for another five years starting from April 2018 and will continue to apply the same methodology as set out in the advance pricing agreement pending the renewal of the agreement. The applicable tax authorities may also disallow deductions or tax holiday benefits claimed by us and assess additional taxable income on us in connection with their review of our tax returns.

From time to time, we receive orders of assessment from the Indian tax authorities assessing additional taxable income on us and/or our subsidiaries in connection with their review of our tax returns. We currently have orders of assessment for fiscal 2004 through fiscal 2014 pending before various appellate authorities. These orders assess additional taxable income that could in the aggregate give rise to an estimated 2,885.2 million ($42.1 million based on the exchange rate on June 30, 2018) in additional taxes, including interest of 1,123.2 million ($16.4million based on the exchange rate on June 30, 2018).

 

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