FORM 20-F
Table of Contents

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

 

FORM 20-F

 

 

 

REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934

OR

 

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended March 31, 2020

OR

 

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from              to             

OR

 

SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Date of event requiring this shell company report

Commission file number 001-32945

 

 

WNS (Holdings) Limited

(Exact name of Registrant as specified in its charter)

 

 

Not Applicable

(Translation of Registrant’s name into English)

Jersey, Channel Islands

(Jurisdiction of incorporation or organization)

Gate 4, Godrej & Boyce Complex

Pirojshanagar, Vikhroli (W)

Mumbai 400 079, India

(Address of principal executive offices)

Gopi Krishnan

General Counsel

Gate 4, Godrej & Boyce Complex

Pirojshanagar, Vikhroli (W)

Mumbai 400 079, India

(91-22) 4095-2100

gopi.krishnan@wns.com

(Name, Telephone, E-mail and/or Facsimile number and Address of Company Contact Person)

Securities registered or to be registered pursuant to Section 12(b) of the Act.

 

Title of each class

 

Trading Symbol(s)

 

Name of each exchange on which  registered

American Depositary Shares, each represented by   WNS   The New York Stock Exchange
one Ordinary Share, par value 10 pence per share    

Securities registered or to be registered pursuant to Section 12(g) of the Act.

None

(Title of Class)

Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act

None

(Title of Class)

Indicate the number of outstanding shares of each of the issuer’s classes of capital or common stock as of the close of the period covered by the annual report.

As at March 31, 2020, 49,733,640 ordinary shares, par value 10 pence per share, were issued and outstanding, of which 49,467,872 ordinary shares were held in the form of American Depositary Shares (“ADSs”). Each ADS represents one ordinary share.

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.    ☒  Yes    ☐  No

If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.    ☐  Yes    ☒  No

Note — Checking the box above will not relieve any registrant required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 from their obligations under those Sections.

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.     ☒  Yes    ☐  No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).     ☒  Yes    ☐  No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or an emerging growth company. See definition of “large accelerated filer,” “accelerated filer,” and “emerging growth company,” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer  ☒

   Accelerated filer  ☐              Non-accelerated filer  ☐
      Emerging growth company  ☐

If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.    ☐

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report.    ☒

Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:

 

U.S. GAAP  ☐

  

International Financial Reporting Standards as issued

by the International Accounting Standards Board  ☒

   Other  ☐

If “Other” has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has elected to follow:    ☐  Item 17     ☐  Item 18

If this report is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    ☐  Yes    ☒  No

 

 

 


Table of Contents

TABLE OF CONTENTS

WNS (HOLDINGS) LIMITED

 

     Page  

PART I

  

ITEM 1. IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS

     4  

ITEM 2. OFFER STATISTICS AND EXPECTED TIMETABLE

     4  

ITEM 3. KEY INFORMATION

     4  

ITEM 4. INFORMATION ON THE COMPANY

     34  

ITEM 4A. UNRESOLVED STAFF COMMENTS

     81  

ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS

     82  

ITEM 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES

     130  

ITEM 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS

     157  

ITEM 8. FINANCIAL INFORMATION

     160  

ITEM 9. THE OFFER AND LISTING

     164  

ITEM 10. ADDITIONAL INFORMATION

     165  

ITEM 11. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

     191  

ITEM 12. DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES

     192  

PART II

  

ITEM 13. DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES

     193  

ITEM 14. MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS

     193  

ITEM 15. CONTROLS AND PROCEDURES

     193  

ITEM 16A. AUDIT COMMITTEE FINANCIAL EXPERT

     195  

ITEM 16B. CODE OF ETHICS

     195  

ITEM 16C. PRINCIPAL ACCOUNTANT FEES AND SERVICES

     195  

ITEM 16D. EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES

     196  

ITEM 16E. PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS

     196  

ITEM 16F. CHANGE IN REGISTRANT’S CERTIFYING ACCOUNTANT

     198  

ITEM 16G. CORPORATE GOVERNANCE

     198  

ITEM 16H. MINE SAFETY DISCLOSURE

     198  

PART III

  

ITEM 17. FINANCIAL STATEMENTS

     199  

ITEM 18. FINANCIAL STATEMENTS

     199  

ITEM 19. EXHIBITS

     200  

SIGNATURES

     202  

INDEX TO WNS (HOLDINGS)  LIMITED’S CONSOLIDATED FINANCIAL STATEMENTS

     F-1  

Ex-2.3 Description of securities registered under Section 12 of the Securities Exchange Act of 1934, as amended

Ex-8.1 List of subsidiaries of WNS (Holdings) Limited

Ex-12.1 Certification by the Chief Executive Officer to 17 CFR 240, 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

Ex-12.2 Certification by the Chief Financial Officer to 17 CFR 240, 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

Ex-13.1 Certification by the Chief Executive Officer to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

Ex-13.2 Certification by the Chief Financial Officer to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

Ex-15.1 Consent of Grant Thornton India LLP, independent registered public accounting firm

 

1


Table of Contents

CONVENTIONS USED IN THIS ANNUAL REPORT

In this annual report, references to “US” are to the United States of America, its territories and its possessions. References to “UK” are to the United Kingdom. References to “EU” are to the European Union. References to “India” are to the Republic of India. References to “China” are to the People’s Republic of China. References to “South Africa” are to the Republic of South Africa. References to “$” or “dollars” or “US dollars” are to the legal currency of the US, references to “  ” or “Indian rupees” are to the legal currency of India, references to “pound sterling” or “£” are to the legal currency of the UK, references to “pence” are to the legal currency of Jersey, Channel Islands, references to “Euro” are to the legal currency of the European Monetary Union, references to “South African rand” or “R” or “ZAR” are to the legal currency of South Africa, references to “A$” or “AUD” or “Australian dollars” are to the legal currency of Australia, references to “CHF” or “Swiss Franc” are to the legal currency of Switzerland, references to “RMB” are to the legal currency of China, references to “LKR” or “Sri Lankan rupees” are to the legal currency of Sri Lanka, references to “PHP” or “Philippine Peso” are to the legal currency of the Philippines and references to “NZD” or “New Zealand Dollar” are to the legal currency of New Zealand. Our financial statements are presented in US dollars. Our financial statements included in this annual report are prepared in accordance with the International Financial Reporting Standards and its interpretations (“IFRS”), as issued by the International Accounting Standards Board (“IASB”). Unless otherwise indicated, references to “GAAP” in this annual report are to IFRS, as issued by the IASB.

References to a particular “fiscal” year are to our fiscal year ended March 31 of that calendar year. Any discrepancies in any table between totals and sums of the amount listed are due to rounding. Any amount stated to be $0.0 million represents an amount less than $5,000.

In this annual report, unless otherwise specified or the context requires, the term “WNS” refers to WNS (Holdings) Limited, a public company incorporated under the laws of Jersey, Channel Islands, and the terms “our company,” “we,” “our” and “us” refer to WNS (Holdings) Limited and its subsidiaries.

In this annual report, references to “SEC” or “Commission” are to the United States Securities and Exchange Commission.

We also refer in various places within this annual report to “revenue less repair payments,” which is a non-GAAP financial measure that is calculated as (a) revenue less (b) in our auto claims business, payments to repair centers for “fault” repair cases where we act as the principal in our dealings with the third party repair centers and our clients. This non-GAAP financial information is not meant to be considered in isolation or as a substitute for our financial results prepared in accordance with GAAP.

We refer to information regarding the business process management (“BPM”) industry, our company and our competitors from market research reports, analyst reports and other publicly available sources. Although we believe that this information is reliable, we have not independently verified the accuracy and completeness of the information. We caution you not to place undue reliance on this data. BPM services are also sometimes referred to as business process outsourcing (“BPO”) services.

 

2


Table of Contents

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This annual report contains “forward-looking statements” that are based on our current expectations, assumptions, estimates and projections about our company and our industry. The forward-looking statements are subject to various risks and uncertainties. Generally, these forward-looking statements can be identified by the use of forward-looking terminology such as “anticipate,” “believe,” “estimate,” “expect,” “intend,” “will,” “project,” “seek,” “should” and similar expressions. Those statements include, among other things, the discussions of our business strategy and expectations concerning our market position, future operations, margins, profitability, liquidity and capital resources, tax assessment orders and future capital expenditures. We caution you that reliance on any forward-looking statement inherently involves risks and uncertainties, and that although we believe that the assumptions on which our forward-looking statements are based are reasonable, any of those assumptions could prove to be inaccurate, and, as a result, the forward-looking statements based on those assumptions could be materially incorrect. These risks and uncertainties include but are not limited to:

 

   

worldwide economic and business conditions;

 

   

our dependence on a limited number of clients in a limited number of industries;

 

   

the impact of the ongoing COVID-19 pandemic on our and our clients’ business, financial condition, results of operations and cash flows;

 

   

currency fluctuations among the Indian rupee, the pound sterling, the US dollar, the Australian dollar, the Euro, the South African rand and the Philippine peso;

 

   

political or economic instability in the jurisdictions where we have operations;

 

   

regulatory, legislative and judicial developments;

 

   

increasing competition in the business process management (“BPM”) industry;

 

   

technological innovation;

 

   

our liability arising from fraud or unauthorized disclosure of sensitive or confidential client and customer data;

 

   

telecommunications or technology disruptions;

 

   

our ability to attract and retain clients;

 

   

negative public reaction in the US or the UK to offshore outsourcing;

 

   

our ability to collect our receivables from, or bill our unbilled services to, our clients;

 

   

our ability to expand our business or effectively manage growth;

 

   

our ability to hire and retain enough sufficiently trained employees to support our operations;

 

   

the effects of our different pricing strategies or those of our competitors;

 

   

our ability to successfully consummate, integrate and achieve accretive benefits from our strategic acquisitions, and to successfully grow our revenue and expand our service offerings and market share;

 

   

future regulatory actions and conditions in our operating areas; and

 

   

volatility of our ADS price.

These and other factors are more fully discussed in “Part I — Item 3. Key Information — D. Risk Factors,” “Part I — Item 5. Operating and Financial Review and Prospects” and elsewhere in this annual report. In light of these and other uncertainties, you should not conclude that we will necessarily achieve any plans, objectives or projected financial results referred to in any of the forward-looking statements. Except as required by law, we do not undertake to release revisions of any of these forward-looking statements to reflect future events or circumstances.

 

3


Table of Contents

PART I

ITEM 1.  IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS

Not applicable.

ITEM 2.  OFFER STATISTICS AND EXPECTED TIMETABLE

Not applicable.

ITEM 3.  KEY INFORMATION

A. Selected Financial Data

Our consolidated financial statements as at and for the years ended March 31, 2020, 2019, 2018, 2017 and 2016 have been prepared in conformity with IFRS, as issued by the IASB.

The following selected financial data should be read in conjunction with “Part I — Item 5. Operating and Financial Review and Prospects” and our consolidated financial statements included elsewhere in this annual report.

The following selected consolidated statement of income data for fiscal 2020, 2019 and 2018 and selected consolidated statement of financial position data as at March 31, 2020 and 2019 have been derived from our audited consolidated financial statements included elsewhere in this annual report. The selected consolidated statement of income data for fiscal 2017 and 2016 and selected consolidated statement of financial position data as at March 31, 2018, 2017 and 2016 have been derived from our audited consolidated financial statements which are not included in this annual report.

 

     For the year ended March 31,  
     2020     2019     2018     2017     2016  
     (US dollars in millions, except share and per share data)  

Consolidated statement of income data:

          

Revenue

   $ 928.3     $ 809.1     $ 758.0     $ 602.5     $ 562.2  

Cost of revenue(1) (3)

     583.9       518.2       503.1       403.3       365.4  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Gross profit

     344.3       290.9       254.8       199.2       196.8  

Operating expenses:

          

Selling and marketing expenses(1)

     52.8       44.6       41.8       32.6       30.8  

General and administrative expenses(1)

     128.6       115.2       117.6       91.7       78.9  

Foreign exchange gains, net(2)

     (3.4     (4.5     (15.0     (14.5     (11.0

Impairment of goodwill

     4.1       —         —         21.7       —    

Amortization of intangible assets

     15.7       15.8       15.5       20.5       25.2  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Operating profit

     146.6       119.8       94.9       47.2       72.9  

Other income, net

     (14.4     (14.6     (11.2     (8.7     (8.5

Finance expense(3)

     17.0       3.2       4.3       0.5       0.3  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Profit before income taxes

     144.0       131.1       101.8       55.3       81.1  

Income tax expense

     27.2       25.7       15.4       17.5       21.2  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Profit after tax

   $ 116.8     $ 105.4     $ 86.4     $ 37.8     $ 59.9  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Earnings per share of ordinary share:

          

Basic

   $ 2.35     $ 2.10     $ 1.72     $ 0.75     $ 1.17  

Diluted

   $ 2.24     $ 2.02     $ 1.63     $ 0.71     $ 1.12  

Basic weighted average ordinary shares outstanding

     49,726,636       50,139,389       50,388,440       50,582,852       51,372,117  

Diluted weighted average ordinary shares outstanding

     52,036,940       52,278,113       52,915,600       52,940,308       53,639,670  

 

4


Table of Contents
     As at March 31,  
     2020      2019     2018     2017     2016  
     (US dollars in millions)  

Consolidated statement of financial position data:

      

Assets

      

Cash and cash equivalents

   $ 96.9      $ 85.4     $ 99.8     $ 69.8     $ 41.9  

Investments

     125.6        67.9       121.0       112.0       133.0  

Trade receivables including unbilled revenue, net

     147.8        140.6       133.1       109.3       99.2  

Contract assets (4)

     7.5        4.2       —         —         —    

Other current assets(5)

     51.0        37.3       46.7       71.9       48.4  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

 

Total current assets

     428.8        335.4       400.6       363.0       322.5  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

 

Goodwill and intangible assets, net

     191.4        211.0       224.9       230.6       103.4  

Property and equipment, net

     57.0        61.0       60.6       54.8       50.4  

Right-of-use assets(3)

     159.1        —         —         —         —    

Deferred tax assets

     28.9        23.8       27.4       16.7       22.5  

Investments

     80.1        82.5       0.5       0.4       —    

Contract assets (4)

     28.9        22.0       —         —         —    

Other non-current assets (6)

     38.0        49.9       45.6       38.5       26.7  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

 

Total non-current assets

     583.5        450.2       359.0       341.1       203.0  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

 

Total assets

     1,012.3        785.6       759.6       704.1       525.5  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

 

Liabilities and equity

      

Current portion of long-term debt

     16.7        28.0       27.7       27.6       —    

Trade payables

     29.3        17.8       19.7       14.2       19.9  

Lease liabilities(3)

     23.4        —         —         —         —    

Other current liabilities(7)

     136.4        116.2       119.9       106.9       83.5  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

 

Total current liabilities

     205.8        162.0       167.3       148.7       103.4  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

 

Long-term debt

     16.7        33.4       61.4       89.1       —    

Lease liabilities(3)

     155.5        —         —         —         —    

Other non-current liabilities(8)

     47.2        37.8       35.9       51.2       13.9  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

 

Total non-current liabilities

     219.4        71.2       97.3       140.3       13.9  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

 

Share capital (ordinary shares $0.16 (10 pence) par value, authorized 60,000,000 shares; issued: 49,733,640, 51,153,220 54,834,080, 53,312,559 and 52,406,304 shares each as at March 31, 2020, 2019, 2018, 2017 and 2016, respectively)

     7.9        8.1       8.5       8.3       8.2  

Share premium

     187.3        269.5       371.8       338.3       306.9  

Other shareholders’ equity (9)

     392.0        331.2       248.9       163.2       123.6  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

 

Total shareholders’ equity, including shares held in treasury

     587.1        608.8       629.2       509.8       438.7  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

 

Less: Nil shares as at March 31, 2020, 1,101,300 shares as at March 31, 2019, 4,400,000 shares as at March 31, 2018, 3,300,000 shares as at March 31, 2017 and 1,100,000 shares as at March 31, 2016, held in treasury, at cost

     —          (56.4     (134.2     (94.7     (30.5
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

 

Total shareholders’ equity

     587.1        552.4       495.0       415.1       408.2  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

 

Total liabilities and equity

   $ 1,012.3      $ 785.6     $ 759.6     $ 704.1     $ 525.5  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

 
           

 

5


Table of Contents

The following table sets forth for the periods indicated selected consolidated financial data, non-GAAP financial data and operating data:

 

     For the year ended March 31,  
     2020     2019     2018     2017     2016  
     (US dollars in millions, except percentages
and employee data)
 

Other Consolidated Financial Data:

          

Revenue

   $ 928.3     $ 809.1     $ 758.0     $ 602.5     $ 562.2  

Gross profit as a percentage of revenue

     37.1 %     36.0 %     33.6 %     33.1 %     35.0

Operating profit as a percentage of revenue

     15.8 %     14.8 %     12.5 %     7.8 %     13.0

Non-GAAP Financial Data:

          

Revenue less repair payments (non-GAAP)(10)

   $ 896.2     $ 794.0     $ 741.0     $ 578.4     $ 531.0  

Gross profit as a percentage of revenue less repair payments (non-GAAP)

     38.4 %     36.6 %     34.4 %     34.4 %     37.1

Operating profit as a percentage of revenue less repair payments (non-GAAP)

     16.4 %     15.1 %     12.8 %     8.2 %     13.7

Operating Data:

          

Number of employees (at year end) (11)

     44,292       39,898       36,540       34,547       32,388  

Notes:

 

(1) 

Includes the following share-based compensation expense amounts:

 

     For the year ended March 31,  
     2020      2019      2018      2017      2016  
     (US dollars in millions)  

Cost of revenue

   $ 4.6      $ 4.3      $ 3.8      $ 2.8      $ 1.9  

Selling and marketing expenses

   $ 4.8      $ 4.0      $ 2.6      $ 1.7      $ 1.4  

General and administrative expenses

   $ 28.1      $ 22.0      $ 24.2      $ 18.5      $ 14.6  

 

(2) 

On adoption of IFRS 9 “Financial Instruments” (“IFRS 9”) with effect from April 1, 2018, cash flow hedging gains and losses, which were previously reported in foreign exchange gains or losses, net, are now reported in revenue. The comparative information has not been restated and continues to be reported in accordance with the principles of IAS 39 –“Financial Instruments: Recognition and Measurement.”

(3) 

Disclosed separately on adoption of IFRS 16 “Leases” with effect from April 1, 2019. The comparative information has not been restated and continues to be reported in accordance with the principles of IAS 17 “Leases.” Finance cost includes interest on lease liabilities which was earlier accounted as part of facilities cost included in cost of revenue as per IAS 17 “Leases.”

(4) 

Disclosed separately on adoption of IFRS 15 “Revenue from Contracts with Customers” with effect from April 1, 2018. The comparative information has not been restated and continues to be reported in accordance with the principles of IAS 18 “Revenue.”

(5) 

Consists of funds held for clients, derivative assets, and prepayments and other current assets.

(6) 

Consists of non-current portion of derivative assets, and other non-current assets.

(7) 

Consists of provisions and accrued expenses, derivative liabilities, pension and other employee obligations, contract liabilities, current taxes payable and other liabilities.

(8) 

Consists of non-current portion of derivatives liabilities, pension and other employee obligations, contract liabilities, deferred tax liabilities and other non-current liabilities.

(9) 

Consists of retained earnings and other components of equity.

(10) 

Revenue less repair payments is a non-GAAP financial measure which is calculated as (a) revenue less (b) in our auto claims business, payments to repair centers for “fault” repair cases where we act as the principal in our dealings with the third party repair centers and our clients. The following table reconciles our revenue (a GAAP financial measure) to revenue less repair payments (a non-GAAP financial measure) for the indicated periods:

 

6


Table of Contents
     For the year ended March 31,  
     2020      2019      2018      2017      2016  
     (US dollars in millions)  

Revenue (GAAP)

   $ 928.3      $ 809.1      $ 758.0      $ 602.5      $ 562.2  

Less: Payments to repair centers(a)

     32.0        15.2        17.0        24.1        31.2  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Revenue less repair payments (non-GAAP)

   $ 896.2      $ 794.0      $ 741.0      $ 578.4      $ 531.0  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 
              

Note:

 

(a) 

Consists of payments to repair centers in our auto claims business for “fault” repair cases where we act as the principal in our dealings with the third party repair centers and our clients.

We have two reportable segments for financial statement reporting purposes — WNS Global BPM and WNS Auto Claims BPM. In our WNS Auto Claims BPM segment, we provide both “fault” and “non-fault” repairs and legal services in relation to personal injury claims. For “fault” repairs, we provide claims handling and repair management services, where we arrange for automobile repairs through a network of third party repair centers. In our repair management services, where we act as the principal in our dealings with the third party repair centers and our clients, the amounts which we invoice to our clients for payments made by us to third party repair centers are reported as revenue. Where we are not the principal in providing the services, we record revenue from repair services net of repair cost. Since we wholly subcontract the repairs to the repair centers, we evaluate the financial performance of our “fault” repair business based on revenue less repair payments (non-GAAP) to third party repair centers, which is a non-GAAP financial measure. We believe that revenue less repair payments (non-GAAP) for “fault” repairs reflects more accurately the value addition of the business process management services that we directly provide to our clients.

For our “non-fault” repairs business, we generally provide a consolidated suite of accident management services including credit hire and credit repair, and we believe that measurement of such business on a basis that includes repair payments in revenue is appropriate. Revenue including repair payments is therefore used as a primary measure to allocate resources and measure operating performance for accident management services provided in our “non-fault” repairs business. Our “non-fault” repairs business, where we provide accident management services, accounts for a relatively small portion of our revenue for our WNS Auto Claims BPM segment.

This non-GAAP financial information is not meant to be considered in isolation or as a substitute for our financial results prepared in accordance with GAAP. We believe that the presentation of this non-GAAP financial measure in this annual report provides useful information for investors regarding the financial performance of our business and our two reportable segments. Our revenue less repair payments (non-GAAP) may not be comparable to similarly titled measures reported by other companies due to potential differences in the method of calculation.

 

(11) 

Commencing fiscal 2018, we are including in our disclosed total “headcount” the number of apprentices employed under the India government scheme, National Employability Enhancement Mission, pursuant to which apprentices undergo a three to 36 month apprenticeship to enhance their employability. There is no guarantee of employment with WNS following the completion of the apprenticeship. Our previously disclosed total “headcount” does not include apprentices. The total “headcount” presented for prior periods in the table above have been re-computed to include apprentices for comparative purposes.

B. Capitalization and Indebtedness

Not applicable.

 

7


Table of Contents

C. Reason for the Offer and the Use of Proceeds

Not applicable.

D. Risk Factors

This annual report contains forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from those anticipated in these forward-looking statements as a result of a number of factors, including those described in the following risk factors and elsewhere in this annual report. If any of the following risks actually occur, our business, financial condition, results of operations and cash flows could suffer and the trading price of our ADSs could decline.

Risks Related to Our Business

The global economic and geo-political conditions have been and continue to be challenging and have had, and may continue to have, an adverse effect on the financial markets and the economy in general, which has had, and may continue to have, a material adverse effect on our business, financial performance, results of operations and cash flows and the prices of our equity shares and ADSs.

The recent global outbreak and spread of the respiratory illness caused by a coronavirus strain known as COVID-19, which was reported to have surfaced in December 2019, has caused, and is likely to continue to cause, additional slowdown in the global economy, as is evidenced by the recent declines in investments, exports and industrial production. On March 27, 2020, the International Monetary Fund officially declared that the global economy has entered into a recession, as a result of the spread of COVID-19. Its global spread has created, and is likely to continue to create, significant volatility and uncertainty and economic disruption. In addition, volatility in the domestic politics of major markets may lead to changes in the institutional framework of the international economy. For further information, see “— Our business operations and future growth may be negatively impacted on account of the COVID-19 pandemic.”

The withdrawal of the UK from the EU in January 2020, commonly referred to as “Brexit,” has also created significant political and economic uncertainty regarding the future trading relationship between the UK and the EU. These developments, or the perception that any of them could occur, have had and may continue to have a material adverse effect on global economic conditions and the stability of global financial markets, and may significantly reduce global market liquidity, restrict the ability of key market participants to operate in certain financial markets or restrict our access to capital. Any of these factors could have a material adverse effect on our business, financial condition, results of operations and cash flows.

28.5% of our revenues and 26.0% of our revenue less repair payments (non-GAAP) in fiscal 2020 and 29.0% of our revenues and 27.6% of our revenue less repair payments (non-GAAP) in fiscal 2019 are denominated in pound sterling. The extent and duration of the decline in the value of the pound sterling to the US dollar and other currencies is unknown at this time. A long-term reduction in the value of the pound sterling as a result of Brexit or otherwise could adversely impact our earnings growth rate and profitability. We believe that our hedging program is effective, however there is no assurance that it will protect us against fluctuations in foreign currency exchange rates.

In the US, there are concerns over the possibility of its economy entering into a deep recession, including on account of the COVID-19 pandemic, and there continue to be similar signs of continued economic slowdown and weakness in parts of Europe and India. Globally, countries may require additional financial support, sovereign credit ratings may continue to decline, and there may be default on sovereign debt obligations of certain countries. Any of these global economic conditions may increase the cost of borrowing and cause credit to become more limited, which could have a material adverse effect on our business, financial condition, results of operations and cash flows.

These economic and geo-political conditions may affect our business in a number of ways, as we have operations in 12 countries and we service clients across multiple geographic regions. The general level of economic activity, such as decreases in business and consumer spending, could result in a decrease in demand for our services, thus reducing our revenue. The cost and availability of credit has been and may continue to be adversely affected by illiquid credit markets and wider credit spreads. The current global economic slowdown and the possibility of continued turbulence or uncertainty in the European, US, Asian and international financial markets and economies, and the political climate in the US and the UK, may adversely affect our liquidity and financial condition, and the liquidity and financial condition of our clients. If these market conditions continue or worsen, they may limit our ability to access financing or increase our cost of financing to meet liquidity needs, and affect the ability of our clients to use credit to purchase our services or to make timely payments to us, resulting in adverse effects on our financial condition and results of operations.

Changing economic conditions may also have an effect on foreign exchange rates, which in turn may affect our business. For further information, see “— Currency fluctuations among the Indian rupee, the pound sterling, the US dollar, the Australian dollar, the Euro, the South African rand and the Philippine peso could have a material adverse effect on our results of operations.”

The current global economic slowdown and uncertainty about the future global economic conditions could also continue to increase the volatility of our ADS price. We cannot predict the timing or duration of an economic slowdown or the timing or strength of a subsequent economic recovery generally or in our targeted industries, including the travel and leisure and insurance industries. If macroeconomic conditions worsen or the current global economic conditions continue for a prolonged period of time, we are not able to predict the impact that such conditions will have on our targeted industries, in general, and our results of operations specifically.

 

8


Table of Contents

A few major clients account for a significant portion of our revenue and any loss of business from these clients could reduce our revenue and significantly harm our business.

We have derived and believe that we will continue to derive in the near term a significant portion of our revenue from a limited number of large clients. In fiscal 2020 and 2019, our five largest clients accounted for 25.1% and 27.1% of our revenue and 26.0% and 27.6% of our revenue less repair payments (non-GAAP), respectively. In fiscal 2020 and 2019, our three largest clients accounted for 17.7% and 18.1% of our revenue and 18.4% and 18.5% of our revenue less repair payments (non-GAAP), respectively. In fiscal 2020, our largest client individually accounted for 6.9% and 7.1% of our revenue and revenue less repair payments (non-GAAP), respectively, as compared to 6.9% and 7.1% in fiscal 2019, respectively. Any loss of business from any major client could reduce our revenue and significantly harm our business.

For example, one of our top five clients by revenue contribution in fiscal 2014, an online travel agency (“OTA”), provided us with lower volume of business in fiscal 2015 as the OTA entered into a strategic marketing agreement with another OTA in August 2013, pursuant to which it, over a period of time, from the fourth quarter of fiscal 2014 to the fourth quarter of fiscal 2015, moved its customer care and sales processes that were previously managed by us to a technology platform managed by the other OTA. As a result, we lost most of our business from that OTA and in June 2015, we ceased to provide services to that OTA. That OTA accounted for 2.5% and 6.1% of our revenue and 2.6% and 6.5% of our revenue less repair payments (non-GAAP) in fiscal 2015 and 2014, respectively. The other OTA uses several BPM vendors to manage such processes on its technology platform. We are approved as one of the other OTA’s providers of BPM services. We have managed to compete with incumbent BPM vendors for the other OTA’s business and the other OTA has become one of our large clients.

We have derived, and we expect to continue deriving for the foreseeable future, a significant portion of our revenue from Aviva Global Services (Management Services) Private Limited (“Aviva MS”). Under our master services agreement with Aviva MS, Aviva MS is permitted to terminate the agreement without cause with 180 days’ notice upon payment of a termination fee.

In addition, the volume of work performed for specific clients is likely to vary from year to year, particularly since we may not be the exclusive outside service provider for our clients. Thus, a major client in one year may not provide the same level of revenue in any subsequent year. For example, until fiscal 2018, Aviva MS was our largest client and revenue from Aviva MS decreased from $54.5 million in fiscal 2017 to $51.9 million in fiscal 2018 to $50.1 million in fiscal 2019 and increased to $53.3 million in fiscal 2020. Part of this decline in revenue of fiscal 2018 and 2019 was attributable to revised pricing terms and part was attributable to a reduction of services due to automation performed by Aviva MS and the automation of certain services by WNS. The loss of some or all of the business of any large client could have a material adverse effect on our business, results of operations, financial condition and cash flows. A number of factors other than our performance could cause the loss of or reduction in business or revenue from a client, and these factors are not predictable. For example, a client may demand price reductions, change its outsourcing strategy or move work in-house. A client may also be acquired by a company with a different outsourcing strategy that intends to switch to another business process management service provider or return work in-house.

Our revenue is highly dependent on clients concentrated in a few industries, as well as clients located primarily in the US, the UK, Europe and Australia. Economic slowdowns or factors that affect these industries or the economic environment in the US, the UK, Europe or Australia could reduce our revenue and seriously harm our business.

A substantial portion of our clients are concentrated in the insurance industry and the travel and leisure industry. In fiscal 2020 and 2019, 27.7% and 26.6% of our revenue, respectively, and 25.2% and 25.2% of our revenue less repair payments (non-GAAP), respectively, was derived from clients in the insurance industry. During the same periods, clients in the travel and leisure industry contributed 18.0% and 17.4% of our revenue, respectively, and 18.6% and 17.8% of our revenue less repair payments (non-GAAP), respectively. Our business and growth largely depend on continued demand for our services from clients in these industries and other industries that we may target in the future, as well as on trends in these industries to outsource business processes.

 

9


Table of Contents

The current global economic slowdown has affected, and may continue to affect, both the industries in which our clients are concentrated and the geographies in which we do business. For more information, see “— The global economic and geo-political conditions have been and continue to be challenging and have had, and may continue to have, an adverse effect on the financial markets and the economy in general, which has had, and may continue to have, a material adverse effect on our business, financial performance, results of operations and cash flows and the prices of our equity shares and ADSs.” Certain of our targeted industries are especially vulnerable to crises in the financial and credit markets and potential economic downturns. Our results of operations depend on, among other things, our ability to maintain and increase our sales volume with existing clients and to attract new clients. We expect the COVID-19 pandemic’s impact to affect the demand for our services across industries, depending on the ability of each client, and the nature of their industries, products and services, in coping with the crisis. A downturn in any of our targeted industries, a slowdown or reversal of the trend to offshore business process outsourcing in any of these industries or the introduction of regulation which restricts or discourages companies from outsourcing could result in a decrease in the demand for our services and adversely affect our results of operations. Our business will be more significantly impacted in industry verticals where clients are directly affected by the containment measures, such as travel and leisure, diversified businesses (especially manufacturing and retail) and certain segments of banking and financial services, than clients who are able to deliver their products and services remotely, such as insurance. Further, we believe that there are industry verticals, such as healthcare and telecom, where we might see a medium- to long-term increase in the business.

In addition, any further weakening of or uncertainty in worldwide economic and business conditions could result in some of our clients reducing or postponing their outsourced business requirements. Additionally, the COVID-19 pandemic may cause significant financial distress to some of our clients. These issues impacting our clients in turn could decrease the demand for our services and adversely affect our results of operations. In particular, our revenue is highly dependent on the economic environments in the US, the UK, Europe and Australia. In fiscal 2020 and 2019, 42.3% and 41.5% of our revenue, respectively, and 43.8% and 42.3% of our revenue less repair payments (non-GAAP), respectively, were derived from clients located in the US. During the same periods, 31.4% and 31.4% of our revenue, respectively, and 28.9% and 30.1% of our revenue less repair payments (non-GAAP), respectively, were derived from clients located in the UK, 8.0% and 7.0% of our revenue, respectively, and 8.3% and 7.1% of our revenue less repair payments (non-GAAP), respectively, were derived from clients located in Europe (excluding the UK), and 8.6% and 9.5% of our revenue, respectively, and 8.9% and 9.7% of our revenue less repair payments (non-GAAP), respectively, were derived from clients located in Australia. Any weakening of or uncertainty in the US, UK, European or Australian economy will likely have a further adverse impact on our revenue.

Other developments may also lead to a decline in the demand for our services in our targeted industries. Significant changes in the financial services industry or any of the other industries on which we focus, or a consolidation in any of these industries or acquisitions, particularly involving our clients, may decrease the potential number of buyers of our services and have an adverse impact on our profitability. Any significant reduction in or the elimination of the use of the services we provide within any of these industries would result in reduced revenue and harm our business. Our clients may experience rapid changes in their prospects, substantial price competition and pressure on their profitability. Although such pressures can encourage outsourcing as a cost reduction measure, they may also result in increasing pressure on us from clients in these key industries to lower our prices which could negatively affect our business, results of operations, financial condition and cash flows.

 

10


Table of Contents

Our business operations and future growth may be negatively impacted on account of the COVID-19 pandemic.

The global outbreak of COVID-19 continues to rapidly evolve. The COVID-19 pandemic has spread to a majority of countries around the world, including countries where all of our delivery centers are located, and has created significant uncertainty and disruption. Governmental measures and regulations, such as city or country-wide lockdowns, local, domestic and international travel restrictions as well as closures of the enabling ecosystem necessary for our business to operate smoothly, have resulted in our inability to fully deliver services to our clients. Such measures present concerns that may dramatically affect our ability to conduct our business effectively, including, but not limited to adverse effect on employees’ health, a slowdown and often a stoppage of delivery, work, travel and other activities which are critical for maintaining on-going business activities. Our ability to continue operations is dependent on a number of factors, such as the continued availability of high-quality internet bandwidth, an uninterrupted supply of electricity and the sustainability of social infrastructure to enable our remote-working employees to continue delivering services.

Given the uncertainty around the extent and timing of the future spread or mitigation of the COVID-19 and around the imposition or relaxation of protective measures, we cannot reasonably estimate the impact to our future results of operations, cash flows or financial condition. In addition, the unknown scale and duration of these developments have macro and micro negative effects on the financial markets and global economy which could result in an economic downturn that could affect demand for our services and have a material adverse effect on our operations and financial results, earnings, cash flow, financial condition and our ADS price. These effects could be material and long-term in duration.

Following guidance from local public health authorities in the countries in which we operate, we have taken various measures, and transitioned into a new process, to help reduce the spread of the virus and maintain the health and safety of our workforce, including but not limited to, implementing remote-working arrangements, restricting access to sites and implementing other measures to help maintain the safety of our workforce, which will allow us to carry out operations from our delivery centers when the local public health authorities allow it. The effects of these policies may negatively impact productivity and the magnitude of any effect will depend, in part, on the length and severity of the restrictions and other limitations on our ability to conduct our business in the ordinary course. Some of these measures have required us to provide services and operate client processes in an unsupervised environment, and while this has been acknowledged by our clients, such alternative operating models may result in breaches of our contractual obligations. Also, if a natural disaster, power outage, connectivity issue, or other event occurred that impacted our employees’ ability to work remotely, it may be difficult or, in certain cases, impossible, for us to continue our business for a substantial period of time. The increase in remote working may also result in client privacy, IT security and fraud concerns as well as increase our exposure to potential wage and hour issues.

For example, in India, the Philippines, South Africa and the United States, we have large concentrations of employees performing critical operations. The closure of those facilities, or restrictions inhibiting our employees’ ability to access those facilities, has disrupted, and could in the future disrupt our ability to provide our services and solutions and result in, among other things, terminations of client contracts and losses of revenue. In addition, clients may also defer decision making, delay planned work or seek to terminate current agreements. International, as well as domestic, travel bans imposed as emergency measures by governments, our reduced ability to hire new employees, disruptions to our supply chain, lockdowns in geographies where clients are located and temporary closure of our delivery centers have impaired, and may continue to impair, our ability to sell new business or expand our relationships with existing clients and hence may have an impact on our growth, financial condition, results and/or ADS price. Further, we might suffer delays in managerial and financial reporting and SEC filings, inability to perform audits and apply effective financial controls, or failures under other regulatory or compliance requirements to which we are subject.

To the extent the COVID-19 pandemic adversely affects our business, financial condition, results of operations and cash flows, it may also have the effect of heightening many of the other risks described in this “Risk Factors” section, such as, but not limited to, those relating to:

 

   

the global economic and geo-political conditions and financial markets and the economy in general and the resultant potential fluctuations in foreign exchange rates;

 

   

our revenue being highly dependent on clients concentrated in a few industries, as well as clients located primarily in the US, the UK, Europe and Australia;

 

   

our potentially causing disruptions to our clients’ businesses, providing inadequate service or being in breach of our representations or obligations;

 

   

the negative public reaction to offshore outsourcing, proposed legislation or otherwise;

 

   

our operating results, which may differ from period to period and make it difficult for us to prepare accurate internal financial forecasts for responding in a timely manner to offset such period to period fluctuations;

 

   

a substantial portion of our assets and operations being located in India and we being subjected to regulatory, economic, social and political uncertainties in India;

 

   

restrictions on entry visas that may affect our ability to compete for and provide services to clients in the US and the UK; and

 

   

our ability to maintain effective controls that may materially impact or are reasonably likely to materially impact our disclosure controls and procedures and internal controls over financial reporting.

Currency fluctuations among the Indian rupee, the pound sterling, the US dollar, the Australian dollar, the Euro, the South African rand and the Philippine peso could have a material adverse effect on our results of operations.

Although substantially all of our revenue is denominated in pound sterling, US dollars, and to a lesser extent, Australian dollars, Euro and South African rand, a significant portion of our expenses (other than payments to repair centers, which are primarily denominated in pound sterling) are incurred and paid in Indian rupees and, to a lesser extent, in South African rand and Philippine peso. Therefore, a weakening of the rate of exchange for the pound sterling, the US dollar, Euro or the Australian dollar against the Indian rupee or, to a lesser extent, a weakening of the pound sterling against the South African rand or the Philippine peso would adversely affect our results. Furthermore, we report our financial results in US dollars and our results of operations would be adversely affected if the pound sterling, Euro or the Australian dollar depreciates against the US dollar, or if the Indian rupee or, to a lesser extent, the South African rand or the Philippine peso appreciates against the US dollar. Fluctuations between the pound sterling, the Indian rupee, the South African rand, the Australian dollar or the Philippine peso, on the one hand, and the US dollar, on the other hand, expose us to translation risk when transactions denominated in such currencies are translated to US dollars, our reporting currency. The exchange rates between each of the pound sterling, Indian rupee, South African rand, Australian dollar, Euro and the Philippine peso, on the one hand, and the US dollar, on the other hand, have changed substantially in recent years and may fluctuate substantially in the future. In addition, the impact of COVID-19 on macroeconomic conditions may impact the proper functioning of financial and capital markets and result in unpredictable fluctuations in foreign currency exchange rates.

The withdrawal of the UK from the EU in January 2020 has created significant political and economic uncertainty regarding the future trading relationship between the UK and the EU. See “—The UK’s withdrawal from the EU may have a negative effect on global economic conditions, financial markets and our operations in the UK and EU, which could reduce the value of our ADS.” These developments have caused, and may continue to cause, volatility in the exchange rates between the pound sterling and other currencies.

The average Indian rupee to US dollar exchange rate was approximately  70.91 per $1.00 in fiscal 2020, which represented a depreciation of the Indian rupee by an average of 1.4% as compared with the average exchange rate of approximately  69.92 per $1.00 in fiscal 2019, which in turn represented a depreciation of the Indian rupee by an average of 8.5% as compared with the average exchange rate of approximately  64.46 per $1.00 in fiscal 2018.

The average pound sterling to US dollar exchange rate was approximately £0.79 per $1.00 in fiscal 2020, which represented a depreciation of the pound sterling by an average of 3.2% as compared with the average exchange rate of £0.76 per $1.00 in fiscal 2019, which represented a depreciation of the pound sterling by an average of 0.9% as compared with the average exchange rate of £0.75 per $1.00 in fiscal 2018.

The average Australian dollar exchange rate was approximately A$1.47 per $1.00 in fiscal 2020, which represented a depreciation of the Australian dollar by an average of 6.5% as compared with the average exchange rate of approximately A$1.37 per $1.00 in fiscal 2019, which in turn represented a depreciation of the Australian dollar by an average of 5.8% as compared with the average exchange rate of approximately A$1.29 per $1.00 in fiscal 2018.

The average Euro exchange rate was approximately €0.90 per $1.00 in fiscal 2020, which represented a depreciation of the Euro by an average of 4.1% as compared with the average exchange rate of approximately €$0.86 per $1.00 in fiscal 2019, which in turn represented a depreciation of the Euro by an average of 1.0% as compared with the average exchange rate of approximately €0.85 per $1.00 in fiscal 2018.

The average South African rand exchange rate was approximately R14.76 per $1.00 in fiscal 2020, which represented a depreciation of the South African rand by an average of 7.3% as compared with the average exchange rate of approximately R13.76 per $1.00 in fiscal 2019, which in turn represented a depreciation of the South African rand by an average of 6.0% as compared with the average exchange rate of approximately R12.98 per $1.00 in fiscal 2018.

The average Philippine peso exchange rate was approximately PHP 51.43 per $1.00 in fiscal 2020, which represented an appreciation of the Philippine peso by an average of 2.8% as compared with the average exchange rate of approximately PHP 52.91 per $1.00 in fiscal 2019, which in turn represented a depreciation of the Philippine peso by an average of 4.2% as compared with the average exchange rate of approximately PHP 50.76 per $1.00 in fiscal 2018.

Our results of operations would be adversely affected if the Indian rupee appreciates significantly against the pound sterling or the US dollar or if the pound sterling or the Australian dollar depreciates against the US dollar or, to a lesser extent, the South African rand or the Philippine peso appreciates significantly against the US dollar.

For example, the depreciation of the Indian Rupee and the South African rand against the US dollar in fiscal 2020 positively impacted our results of operations whereas the depreciation of the pound sterling and the Australian dollar against the US dollar negatively impacted our results of operations during that year.

The depreciation of the Indian Rupee and the South African rand against the US dollar in fiscal 2019 positively impacted our results of operations whereas the depreciation of the pound sterling and the Australian dollar against the US dollar negatively impacted our results of operations during that year.

We hedge a portion of our foreign currency exposures using options and forward contracts. We cannot assure you that our hedging strategy will be successful or will mitigate our exposure to currency risk.

 

11


Table of Contents

The international nature of our business exposes us to several risks, such as unexpected changes in the regulatory requirements and governmental policy changes of multiple jurisdictions.

We have operations in China, Costa Rica, India, the Philippines, Poland, Romania, South Africa, Spain, Sri Lanka, Turkey, the UK and the US, and we service clients across Asia, Europe, South Africa, Australia and North America. Our corporate structure also spans multiple jurisdictions, with our parent holding company incorporated in Jersey, Channel Islands, and intermediate and operating subsidiaries (including branch offices) incorporated in Australia, China, Costa Rica, France, India, Mauritius, the Netherlands, the Philippines, Romania, South Africa, Singapore, Sri Lanka, Spain, Turkey, the United Arab Emirates, the UK and the US. As a result, we are exposed to risks typically associated with conducting business internationally, many of which are beyond our control. These risks include:

 

   

legal uncertainty owing to the overlap of different legal regimes, and problems in asserting contractual or other rights across international borders;

 

   

potentially adverse tax consequences, such as scrutiny of transfer pricing arrangements by authorities in the countries in which we operate;

 

   

potential tariffs and other trade barriers;

 

   

unexpected changes in legal regimes and regulatory requirements;

 

   

policy changes due to changes in government;

For example, 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 in fiscal 2017.

During the fourth quarter of fiscal 2020, Brexit had a negative impact on the insurance industry and applied downward pressure on the expected future performance of the WNS Auto Claims reportable segment, due to contract renegotiations and loss of certain clients. These factors, together with the highly uncertain operating environment in the UK, have negatively impacted and caused us to significantly reduce our financial projections and estimates of the WNS Auto Claims BPM reportable segment from our previous estimates. 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 $4.1 million to our results of operations in fiscal 2020 for the remaining goodwill balance of our auto claims business.

The occurrence of other changes in legal regimes or regulatory requirements, or any other events associated with the risks of conducting business internationally, could have a material adverse effect on our results of operations and financial condition.

Our global operations expose us to numerous and sometimes conflicting legal and regulatory requirements. Failure to adhere to the laws and regulations that govern our business or our clients’ businesses that we are required to comply with in performing our services could harm our business.

We have operations in 12 countries and our corporate structure spans multiple jurisdictions. Further, we service clients across multiple geographic regions and multiple industries. We are required to comply with numerous, and sometimes conflicting and uncertain, laws and regulations including on matters relating to import/export controls, trade restrictions, taxation, immigration, internal disclosure and control obligations, securities regulation, anti-competition, data privacy and protection, anti-corruption, and employment and labor relations. In addition, we are required to obtain and maintain permits and licenses for the conduct of our business in various jurisdictions. Our clients’ business operations are also subject to numerous regulations in the jurisdiction in which they operate or that are applicable to their industry, and our clients may contractually require that we perform our services in compliance with regulations applicable to them or in a manner that will enable them to comply with such regulations. For example, regulations to which our and our clients’ business operations are subject include the Gramm-Leach-Bliley Act, the Health Insurance Portability and Accountability Act, the Health Information Technology for Economic and Clinical Health Act and the California Consumer Privacy Act in the US, the Financial Services Act in the UK and the General Data Protection Regulation in the EU. In addition, HealthHelp, which we acquired in March 2017, administers programs offered by the Centers for Medicare & Medicaid Services, a United States federal agency that administers Medicare and Medicaid. Regulatory changes may result in our exiting certain parts of our business.

On account of the global nature of our and our clients’ operations, compliance with diverse legal and regulatory requirements is difficult, time-consuming and requires significant resources. Further, the extent of development of legal systems varies across the countries in which we operate and local laws may not be adequately developed or be able to provide us clear guidance to sufficiently protect our rights. Specifically, in many countries including those in which we operate and/or seek to expand to, the practices of local businesses may not be in accordance with international business standards and could violate anti-corruption laws and regulations, including the UK Bribery Act 2010 and the US Foreign Corrupt Practices Act 1977. Our employees, subcontractors, agents, business partners, the companies we acquire and their employees, subcontractors and agents, and other third parties with which we associate, could act in a manner which violates policies or procedures intended to ensure compliance with laws and regulations, including applicable anti-corruption laws or regulations.

Violations of such laws or regulations by us, our employees or any of these third parties could subject us to criminal or civil enforcement actions (whether or not we participated or were aware of the actions leading to the violations), including fines or penalties, breach of contract damages, disgorgement of profits and suspension or disqualification from work, any of which could materially and adversely affect our business, including our results of operations and our reputation. If we are unable to maintain our licenses, permits or other qualifications necessary to provide our services, we may not be able to provide services to existing clients or be able to attract new clients and could lose revenue, which could have a material adverse effect on our business.

 

12


Table of Contents

We face competition from onshore and offshore business process management companies and from information technology companies that also offer business process management services. Our clients may also choose to run their business processes themselves, either in their home countries or through captive units located offshore.

The market for outsourcing services is very competitive and we expect competition to intensify and increase from a number of sources. We believe that the principal competitive factors in our markets are price, service quality, sales and marketing skills, business process transformation capabilities and industry expertise. We face significant competition from our clients’ own in-house groups including, in some cases, in-house departments operating offshore or captive units. Clients who currently outsource a significant proportion of their business processes or information technology services to vendors in India may, for various reasons, including diversifying geographic risk, seek to reduce their dependence on any one country. We also face competition from onshore and offshore business process management and information technology services companies. In addition, the trend toward offshore outsourcing, international expansion by foreign and domestic competitors and continuing technological changes will result in new and different competitors entering our markets.

These competitors may include entrants from the communications, software and data networking industries or entrants in geographic locations with lower costs than those in which we operate. Technological changes include the development of complex automated systems for the processing of transactions that are formerly labor intensive, which may reduce or replace the need for outsourcing such transaction processing.

Some of these existing and future competitors have greater financial, human and other resources, longer operating histories, greater technological expertise, more recognizable brand names and more established relationships in the industries that we currently serve or may serve in the future. In addition, some of our competitors may enter into strategic or commercial relationships among themselves or with larger, more established companies in order to increase their ability to address client needs, or enter into similar arrangements with potential clients. Increased competition, our inability to compete successfully against competitors, pricing pressures or loss of market share could result in reduced operating margins which could harm our business, results of operations, financial condition and cash flows.

Changes in technology could lead to changes in our clients’ businesses as well as their requirements for business process services, which may adversely impact our business and results of operations.

Proliferation of accessible technology, such as smartphones and internet, has had an impact on the manner in which customers and businesses interact with each other. Companies are increasingly adopting social media platforms, online self-help portals and mobile applications for communicating with and servicing their customers rather than utilizing business process management companies such as ourselves to manage these interactions. Our clients also continue to invest in technology by upgrading their platforms and application capabilities towards increased automation of transactions. Advances in software, such as artificial intelligence, machine learning, robotic process automation and voice recognition, have the potential to reduce dependency on human processing transactions. Such developments and other innovations, such as autonomous vehicles, have the potential to significantly change the way our clients’ businesses operate and may reduce their dependency on business process management companies, including our company, for managing their business processes. We are therefore subject to a risk of disintermediation on account of such changes in technology, which could impact our future growth prospects and may require continued investments in our business.

If we cause disruptions to our clients’ businesses, provide inadequate service or are in breach of our representations or obligations, our clients may have claims for substantial damages against us. Our insurance coverage may be inadequate to cover these claims and, as a result, our profits may be substantially reduced.

Most of our contracts with clients contain service level and performance requirements, including requirements relating to the quality of our services and the timing and quality of responses to the client’s customer inquiries. In some cases, the quality of services that we provide is measured by quality assurance ratings and surveys which are based in part on the results of direct monitoring by our clients of interactions between our employees and our clients’ customers. Lockdowns and other measures imposed by governments around the world, as well as other resulting impact of the COVID-19 pandemic, may result in our temporary inability to meet the service level and performance requirements of our clients. Failure to consistently meet service requirements of a client or errors made by our associates or the software/platforms we use in the course of delivering services to our clients could disrupt the client’s business and result in a reduction in revenue or a claim for substantial damages against us. For example, some of our agreements stipulate standards of service that, if not met by us, will require us to pay penalties to our clients or result in lower payment to us. Failure to meet these service level requirements could result in the payment of significant penalties by us to our clients which in turn could have an adverse effect on our business, results of operations, financial condition and cash flows. In addition, in connection with acquiring new business from a client or entering into client contracts, our employees may make various representations, including representations relating to the quality of our services, abilities of our associates and our project management techniques. A failure or inability to meet a contractual requirement or our representations could seriously damage our reputation and affect our ability to attract new business or result in a claim for substantial damages against us.

 

13


Table of Contents

Our dependence on our offshore delivery centers requires us to maintain active data and voice communications between our main delivery centers in China, Costa Rica, India, the Philippines, Poland, Romania, South Africa, Spain, Sri Lanka, Turkey, the UK and the US, our international technology hubs in the UK and the US and our clients’ offices. Although we maintain redundant facilities and communications links, disruptions could result from, among other things, technical and electricity breakdowns, computer glitches and viruses and adverse weather conditions. Any significant failure of our equipment or systems, or any major disruption to basic infrastructure like power and telecommunications in the locations in which we operate, could impede our ability to provide services to our clients, have a negative impact on our reputation, cause us to lose clients, reduce our revenue and harm our business.

We depend on human resources to process transactions for our clients. Disruptive incidents, including man-made events such as civil strikes and shutdowns, may impact the ability of our employees to commute to and from our operating premises. Non-natural disasters, whether unintentional (such as those caused by accidents) or intentional (such as those caused by terrorist attacks), may also disrupt our operations. While we have implemented business continuity plans for clients where we have contractually agreed to do so, we may not always be able to provide services to our clients for the duration of such incidents.

Although under most of our contracts with our clients, our liability for breach of our obligations is limited to actual damages suffered by the client and capped at a portion of the fees paid or payable to us under the relevant contract, our liability for breach of our obligations under certain of our contracts is unlimited. With respect to those of our contracts that contain limitations on liability, such limitations may be unenforceable or otherwise may not protect us from liability for damages. In addition, certain liabilities, such as claims of third parties for which we may be required to indemnify our clients, are generally not limited under those agreements. Further, although we have professional indemnity insurance coverage, the coverage may not continue to be available on reasonable terms or in sufficient amounts to cover one or more large claims and our insurers may disclaim coverage as to any future claims. The successful assertion of one or more large claims against us that exceed available insurance coverage, or changes in our insurance policies (including premium increases or the imposition of large deductible or co-insurance requirements), could have a material adverse effect on our business, reputation, results of operations, financial condition and cash flows.

 

14


Table of Contents

We are liable to our clients for damages caused by unauthorized disclosure of sensitive or confidential information, whether through a breach or circumvention of our or our clients’ computer systems and processes, through our employees or otherwise. Further, cybersecurity and data privacy considerations could impact our business.

We are typically required to manage, utilize and store sensitive or confidential client data in connection with the services we provide. Under the terms of our client contracts, we are required to keep such information strictly confidential. Our client contracts do not include any limitation on our liability to them with respect to breaches of our obligation to maintain confidentiality of the information we receive from them. Although we seek to implement measures to protect sensitive and confidential client data, there can be no assurance that we would be able to prevent breaches of security. Further, some of our projects require us to conduct business functions and computer operations using our clients’ systems over which we do not have control and which may not be compliant with industry security standards. In addition, some of the client designed processes that we are contractually required to follow for delivering services to them and which we are unable to unilaterally change, could be designed in a manner that allows for control weaknesses to exist and be exploited. Any vulnerability in a client’s system or client designed process, if exploited, could result in breaches of security or unauthorized transactions and result in a claim for substantial damages against us. Although we have implemented appropriate policies, procedures and infrastructure to reduce the possibility of physical, logical and personnel security breaches, along with appropriate audit oversight for verifying continued operating effectiveness of the same through internal audits and external SSAE18 / ISAE3402, ISO27001 and PCI-DSS reviews, such measures can never completely eliminate the risk of cybersecurity attacks. Additionally, remote-working solutions deployed during the COVID-19 pandemic situation could potentially result in heightened confidentiality risks on account of services being delivered in a physically unsupervised environment. If any person, including any of our employees, penetrates our or our clients’ network security or otherwise mismanages or misappropriates sensitive or confidential client data, we could be subject to significant liability and lawsuits from our clients or their customers for breaching contractual confidentiality provisions or privacy laws.

To date, although there has not been a material cybersecurity attack that has had an adverse effect on our operations, there can be no assurance that there will be no material adverse effect in the future. Rapid advancements and changes to the technological landscape may require us to make significant further investments in the domain of cybersecurity in order to protect our and our clients’ data and infrastructure. In addition, such advancements coupled with the rise in the sophisticated nature of cyber threats and attacks make it possible that certain threats or vulnerabilities may not be detected in time to prevent an attack on our or our clients’ business. On account of the interconnected nature of our business, there is an interdependency between our clients, business partners and our business to implement appropriate cybersecurity controls in order to mitigate cybersecurity risk. A failure of cybersecurity controls at our client or business partners could therefore result in a breach at our company.

While we have insurance coverage for mismanagement or misappropriation of such information by our employees, that coverage may not continue to be available on reasonable terms or in sufficient amounts to cover one or more large claims against us, and our insurers may disclaim coverage as to any future claims. Penetration of the network security of our or our clients’ data centers or computer systems or unauthorized use or disclosure of sensitive or confidential client data, whether through breach of our or our clients’ computer systems, systems failure, loss or theft of assets containing confidential information or otherwise, could also have a negative impact on our reputation which would harm our business.

We also cannot be certain that advances in criminal capabilities (including cyber-attacks or cyber intrusions over the internet, malware, computer viruses and the like), discovery of new vulnerabilities or attempts to exploit existing vulnerabilities in our or our clients’ or business partners’ systems, other data thefts, physical system or network break-ins or inappropriate access, or other developments will not compromise or breach the technology protecting our or our client’s or business partners’ computer systems and networks that access and store sensitive information. Cyber threats, such as phishing and trojans, could intrude into our or our clients’ or business partners’ network to steal data or to seek sensitive information. Any intrusion into our network or our clients’ or business partners’ network (to the extent attributed to us or perceived to be attributed to us) that results in any breach of security could cause damage to our reputation and adversely impact our business and financial results. A significant failure in security measures could have a material adverse effect on our business, reputation, results of operations and financial condition.

Our business could be materially and adversely affected if we do not protect our intellectual property or if our services are found to infringe on the intellectual property of others.

Our success depends in part on certain methodologies, practices, tools and technical expertise we utilize in designing, developing, implementing and maintaining applications and other proprietary intellectual property rights. In order to protect our rights in such intellectual properties, we rely upon a combination of nondisclosure and other contractual arrangements as well as trade secret, copyright and trademark laws. We also generally enter into confidentiality agreements with our employees, consultants, clients and potential clients, and limit access to and distribution of our proprietary information to the extent required for our business purpose.

India is a member of the Berne Convention, an international intellectual property treaty, and has agreed to recognize protections on intellectual property rights conferred under the laws of other foreign countries, including the laws of the United States. There can be no assurance that the laws, rules, regulations and treaties in effect in the United States, India and the other jurisdictions in which we operate and the contractual and other protective measures we take, are adequate to protect us from misappropriation or unauthorized use of our intellectual property, or that such laws will not change. We may not be able to detect unauthorized use and take appropriate steps to enforce our rights, and any such steps may not be successful. Infringement by others of our intellectual property, including the costs of enforcing our intellectual property rights, may have a material adverse effect on our business, results of operations and financial condition.

 

15


Table of Contents

Our clients may provide us with access to, and require us to use, third party software in connection with our delivery of services to them. Our client contracts generally require our clients to indemnify us for any infringement of intellectual property rights or licenses to third party software when our clients provide such access to us. If the indemnities under our client contracts are inadequate to cover the damages and losses we suffer due to infringement of third party intellectual property rights or licenses to third party software to which we were given access, our business and results of operations could be adversely affected. We are also generally required by our client contracts to indemnify our clients for any breaches of intellectual property rights by our services. Although we believe that we are not infringing on the intellectual property rights of others, claims may nonetheless be successfully asserted against us in the future. The costs of defending any such claims could be significant, and any successful claim may require us to modify, discontinue or rename any of our services. Any such changes may have a material adverse effect on our business, results of operations and financial condition.

Our clients may terminate contracts before completion or choose not to renew contracts, which could adversely affect our business and reduce our revenue.

The terms of our client contracts typically range from three to five years. Many of our client contracts can be terminated by our clients with or without cause, with three to six months’ notice and, in most cases, without penalty. The termination of a substantial percentage of these contracts could adversely affect our business and reduce our revenue. Contracts that will expire on or before March 31, 2021 (including work orders/statement of works that will expire on or before March 31, 2021) represented approximately 14.3% of our revenue and 14.8% of our revenue less repair payments (non-GAAP) from our clients in fiscal 2020. Failure to meet contractual requirements could result in cancellation or non-renewal of a contract. Some of our contracts may be terminated by the client if certain of our key personnel working on the client project leave our employment and we are unable to find suitable replacements. In addition, a contract termination or significant reduction in work assigned to us by a major client could cause us to experience a higher than expected number of unassigned employees, which would increase our cost of revenue as a percentage of revenue until we are able to reduce or reallocate our headcount. We may not be able to replace any client that elects to terminate or not renew its contract with us, which would adversely affect our business and revenue. Further, we may face difficulties in providing end-to-end business solutions or delivering complex, large or unique projects for our clients that could cause clients to terminate or not renew their contracts with us, which in turn could harm our business and our reputation.

In addition, one of our top five clients by revenue contribution in fiscal 2014, an OTA, provided us with a lower volume of business in fiscal 2015 as the OTA entered into a strategic marketing agreement with another OTA in August 2013 pursuant to which it over a period of time, from the fourth quarter of fiscal 2014 to the fourth quarter of fiscal 2015, moved its customer care and sales processes that were previously managed by us to a technology platform managed by the other OTA. As a result, we lost most of our business from that OTA and since June 2015, we ceased to provide services to that OTA. That OTA accounted for 2.5% and 6.1% of our revenue and 2.6% and 6.5% of our revenue less repair payments (non-GAAP) in fiscal 2015 and 2014, respectively. The other OTA uses several BPM vendors to manage such processes on their technology platform. We are approved as one of the other OTA’s providers of BPM services. We have managed to compete with incumbent BPM vendors for the other OTA’s business and the other OTA has become one of our largest clients. For more information, see “— A few major clients account for a significant portion of our revenue and any loss of business from these clients could reduce our revenue and significantly harm our business.”

Some of our client contracts contain provisions which, if triggered, could result in lower future revenue and have an adverse effect on our business.

In many of our client contracts, we agree to include certain provisions which provide for downward revision of our prices under certain circumstances. For example, certain contracts allow a client in certain limited circumstances to request a benchmark study comparing our pricing and performance with that of an agreed list of other service providers for comparable services. Based on the results of the study and depending on the reasons for any unfavorable variance, we may be required to make improvements in the service we provide or to reduce the pricing for services to be performed under the remaining term of the contract. Some of our contracts also provide that, during the term of the contract and for a certain period thereafter ranging from six to 12 months, we may not provide similar services to certain or any of their competitors using the same personnel. These restrictions may hamper our ability to compete for and provide services to other clients in the same industry, which may result in lower future revenue and profitability.

Some of our contracts specify that if a change in control of our company occurs during the term of the contract, the client has the right to terminate the contract. These provisions may result in our contracts being terminated if there is such a change in control, resulting in a potential loss of revenue.

 

16


Table of Contents

Fraud on account of circumvention of controls within our or our clients’ computer systems and processes could adversely impact our business.

Our business is dependent on the secure and reliable operation of controls within our and our clients’ information systems and processes, whether operated or executed by our clients themselves or by us in connection with our provision of services to them. Although we take adequate measures to safeguard against system-related and other fraud, there can be no assurance that we would be able to prevent fraud or even detect them on a timely basis, particularly where it relates to our clients’ information systems which are not managed by us. For example, we have identified incidences where our employees have allegedly exploited weaknesses in information systems as well as processes in order to record fraudulent transactions. Additionally, the physically unsupervised nature of remote-working during the COVID-19 pandemic could potentially expose us to potential instances of fraud. We are generally required to indemnify our clients from third party claims arising out of such fraudulent transactions and our client contracts generally do not include any limitation on our liability to our clients’ losses arising from fraudulent activities by our employees. Our expansion into new markets may create additional challenges with respect to managing the risk of fraud due to the increased geographical dispersion and use of intermediaries. Accordingly, we may have significant liability arising from fraudulent transactions which may materially affect our business and financial results. Although we have professional indemnity insurance coverage for losses arising from fraudulent activities by our employees, that coverage may not continue to be available on reasonable terms or in sufficient amounts to cover one or more large claims against us, and our insurers may also disclaim coverage as to any future claims. We may also suffer reputational harm as a result of fraud committed by our employees, or by our perceived inability to properly manage fraud related risks, which could in turn lead to enhanced regulatory oversight and scrutiny.

Our business may not develop in ways that we currently anticipate due to negative public reaction to offshore outsourcing, proposed legislation or otherwise.

We have based our strategy of future growth on certain assumptions regarding our industry, services and future demand in the market for such services. However, the trend to outsource business processes may not continue and could reverse. In addition, we cannot accurately predict the impact that the COVID-19 pandemic might have on our clients’ outsourcing demands and efforts, which might be lower in the future, as some of our clients might decide to refrain from offshore outsourcing due to the pressures they face from their increased unemployment resulting from the COVID-19 pandemic.

The issue of domestic companies outsourcing services to organizations operating in other countries is a topic of political discussion in the United States, as well as in Europe, Asia Pacific and other regions in which we have clients. Some countries and special interest groups have expressed concerns about a perceived association between offshore outsourcing and the loss of jobs in the domestic economy. This has resulted in increased political and media attention, especially in the United States, where the subject of outsourcing and immigration reform has been a focus of the current presidential administration. It is possible that there could be a change in the existing laws that would restrict or require disclosure of offshore outsourcing or impose new standards that have the effect of restricting the use of certain visas in the foreign outsourcing context. The measures that have been enacted to date are generally directed at restricting the ability of government agencies to outsource work to offshore business service providers. These measures have not had a significant effect on our business because governmental agencies are not a focus of our operations. However, some legislative proposals would, for example, require contact centers to disclose their geographic locations, require notice to individuals whose personal information is disclosed to non-US affiliates or subcontractors, require disclosures of companies’ foreign outsourcing practices, or restrict US private sector companies that have federal government contracts, federal grants or guaranteed loan programs from outsourcing their services to offshore service providers. Potential changes in tax laws may also increase the overall costs of outsourcing or affect the balance of offshore and onshore business services. Such changes could have an adverse impact on the economics of outsourcing for private companies in the US, which could in turn have an adverse impact on our business with US clients.

Such concerns have also led the UK and other EU jurisdictions to enact regulations which allow employees who are dismissed as a result of transfer of services, which may include outsourcing to non-UK or EU companies, to seek compensation either from the company from which they were dismissed or from the company to which the work was transferred. This could discourage EU companies from outsourcing work offshore and/or could result in increased operating costs for us. In addition, there has been publicity about the negative experiences, such as theft and misappropriation of sensitive client data, of various companies that use offshore outsourcing, particularly in India.

 

17


Table of Contents

Current or prospective clients may elect to perform such services themselves or may be discouraged from transferring these services from onshore to offshore providers to avoid negative perceptions that may be associated with using an offshore provider. Any slowdown or reversal of existing industry trends towards offshore outsourcing would seriously harm our ability to compete effectively with competitors that operate out of facilities located in the UK or the US.

Adverse changes to our relationships with the companies with whom we have an alliance or in the business of the companies with whom we have an alliance could adversely affect our results of operations.

We have alliances with companies whose capabilities complement our own. For example, some of our services and solutions are based on technology, software or platforms provided by these companies. The priorities and objectives of these companies with whom we have an alliance may differ from ours. As most of our alliance relationships are non-exclusive, these companies with whom we have an alliance are not prohibited from competing with us or forming closer or preferred arrangements with our competitors. One or more of these companies with whom we have an alliance may be acquired by a competitor, or may merge with each other, either of which could reduce our access over time to the technology, software or platforms provided by those companies. In addition, these companies with whom we have an alliance could experience reduced demand for their technology, software or platforms, including, for example, in response to changes in technology, which could lessen related demand for our services and solutions. If we do not obtain the expected benefits from our alliance relationships for any reason, we may be less competitive and our ability to offer attractive solutions to our clients may be negatively affected, which could have an adverse effect on our results of operations.

If we are unable to collect our receivables from, or bill our unbilled services to, our clients, our results of operations and cash flows could be adversely affected.

Our business depends on our ability to successfully obtain payment from our clients for work performed. We evaluate the financial condition of our clients and usually bill and collect on relatively short cycles. We maintain allowances, using the expected credit loss model, against receivables and unbilled services. Actual losses on client balances could differ from those that we currently anticipate and, as a result, we might need to adjust our allowances. We might not accurately assess the creditworthiness of our clients. Macroeconomic conditions, such as any domestic or global credit crisis and disruption of the global financial system, including on account of the COVID-19 pandemic, could also result in financial difficulties for our clients, including, but not limited to, limited access to the credit markets, insolvency or bankruptcy and, as a result, could cause clients to delay payments to us, request modifications to their payment arrangements that could increase our receivables balance, or default on their payment obligations to us. Timely collection of client balances also depends on our ability to complete our contractual commitments and bill and collect our contracted revenues. If we are unable to meet our contractual requirements, we might experience delays in collection of and/or be unable to collect our client balances, and if this occurs, our results of operations and cash flows could be adversely affected. In addition, if we experience an increase in the time to bill and collect for our services, our cash flows could be adversely affected.

We may face difficulties as we expand our operations to establish delivery centers in onshore locations and offshore in countries in which we have limited or no prior operating experience.

In April 2014 our delivery center in South Carolina in the US became fully operational. We also opened an additional delivery center in Pennsylvania in the US in September 2014. In 2016, we opened an additional delivery center in the Philippines at Iloilo, and in fiscal 2017 we expanded into France, Germany and Turkey. In fiscal 2019, we added new facilities in Palma, Spain, and the Philippines. In fiscal 2020, we added new facilities in Pune and Gurgaon, India and the Philippines. We intend to continue to expand our global footprint in order to maintain an appropriate cost structure and meet our clients’ delivery needs. We plan to establish additional delivery centers in the Asia Pacific, North America and Europe, which may involve expanding into countries other than those in which we currently operate. Our expansion plans may also involve expanding into less developed countries, which may have less political, social or economic stability and less developed infrastructure and legal systems. As we expand our business into new countries we may encounter regulatory, personnel, technological and other difficulties that increase our expenses or delay our ability to start up our operations or become profitable in such countries. This may affect our relationships with our clients and could have an adverse effect on our business, results of operations, financial condition and cash flows.

We may be unable to effectively manage our growth and maintain effective internal controls, which could have a material adverse effect on our operations, results of operations and financial condition.

We were founded in April 1996, and we have experienced growth and significantly expanded our operations. For example, over the last five fiscal years, our employees have increased to 44,292 as at March 31, 2020 from 28,890 as at March 31, 2015. In fiscal 2015, our delivery centers in South Carolina and Pennsylvania, in the US, as well as in South Africa, became fully operational, as did our newest facility in China. In fiscal 2016, we added new facilities in Durban and Port Elizabeth, South Africa and Iloilo, the Philippines. In fiscal 2017, we added new facilities in Durban and Centurion, South Africa. In fiscal 2019, we added new facilities in Palma, Spain and the Philippines. In fiscal 2020, we added new facilities in Pune and Gurgaon, India and the Philippines. We now have delivery centers across 12 countries in China, Costa Rica, India, the Philippines, Poland, Romania, South Africa, Spain, Sri Lanka, Turkey, the UK, and the US. We intend to further expand our global delivery capability, and we are exploring plans to do so in Asia Pacific, North America and Europe.

We have also completed numerous acquisitions. For example, in the first quarter of fiscal 2017, we acquired Value Edge Research Services Private Limited (“Value Edge”), a provider of commercial research and analytics services to clients in the pharma industry based in India, the US and Europe. In January 2017, we acquired Denali, a leading provider of strategic procurement BPM solutions based in the United States. In March 2017, we acquired HealthHelp, an industry leader in care management based in the United States. For more information about more recent acquisitions, see “—We may not succeed in identifying suitable acquisition targets or integrating any acquired business into our operations, which could have a material adverse effect on our business, results of operations, financial condition and cash flows.”

 

18


Table of Contents

This growth places significant demands on our management and operational resources. In order to manage growth effectively, we must implement and improve operational systems, procedures and internal controls on a timely basis. If we fail to implement these systems, procedures and controls on a timely basis, we may not be able to service our clients’ needs, hire and retain new employees, pursue new business, complete future acquisitions or operate our business effectively. Failure to effectively transfer new client business to our delivery centers, properly budget transfer costs or accurately estimate operational costs associated with new contracts could result in delays in executing client contracts, trigger service level penalties or cause our profit margins not to meet our expectations or our historical profit margins. As a result of any of these potential problems associated with expansion, our business, results of operations, financial condition and cash flows could be materially and adversely affected.

Our executive and senior management team and other key team members in our business units are critical to our continued success and the loss of such personnel could harm our business.

Our future success substantially depends on the performance of the members of our executive and senior management team and other key team members in each of our business units. These personnel possess technical and business capabilities including domain expertise that are difficult to replace. There is intense competition for experienced senior management and personnel with technical and industry expertise in the business process management industry, and we may not be able to retain our key personnel due to various reasons, including the compensation philosophy followed by our company as described in “Part I — Item 6. Directors, Senior Management and Employees — Compensation.” Although we have entered into employment contracts with our executive officers, certain terms of those agreements may not be enforceable and in any event these agreements do not ensure the continued service of these executive officers. In the event of a loss of any key personnel, there is no assurance that we will be able to find suitable replacements for our key personnel within a reasonable time. The loss of key members of our senior management or other key team members, particularly to competitors, could have a material adverse effect on our business, results of operations, financial condition and cash flows. A loss of several members of our senior management at the same time or within a short period may lead to a disruption in the business of our company, which could materially adversely affect our performance.

We may fail to attract and retain enough sufficiently trained employees to support our operations, as competition for highly skilled personnel is significant and we experience significant employee attrition. These factors could have a material adverse effect on our business, results of operations, financial condition and cash flows.

The business process management industry relies on large numbers of skilled employees, and our success depends to a significant extent on our ability to attract, hire, train and retain qualified employees. The business process management industry, including our company, experiences high employee attrition. During each of fiscal 2020, 2019 and 2018, the attrition rate for our employees who have completed six months of employment with us was 30%, 31% and 29%, respectively. The attrition rate for our employees decreased in fiscal 2020 and we cannot assure you that our attrition rate will not continue to increase or decrease in the future. There is significant competition in the jurisdictions where our operation centers are located, including India, the Philippines, Romania, South Africa and Sri Lanka, for professionals with the skills necessary to perform the services we offer to our clients. Increased competition for these professionals, in the business process management industry or otherwise, could have an adverse effect on us. A significant increase in the attrition rate among employees with specialized skills could decrease our operating efficiency and productivity and could lead to a decline in demand for our services.

In addition, our ability to maintain and renew existing engagements and obtain new business will depend largely on our ability to attract, train and retain personnel with skills that enable us to keep pace with growing demands for outsourcing, evolving industry standards and changing client preferences. Our failure either to attract, train and retain personnel with the qualifications necessary to fulfill the needs of our existing and future clients or to assimilate new employees successfully could have a material adverse effect on our business, results of operations, financial condition and cash flows.

Employee strikes and other labor-related disruptions may adversely affect our operations.

Our business depends on a large number of employees executing client operations. Strikes or labor disputes with our employees at our delivery centers may adversely affect our ability to conduct business. Our employees are not unionized, although they may in the future form unions. We cannot assure you that there will not be any strike, lock out or material labor dispute in the future. Work interruptions or stoppages could have a material adverse effect on our business, results of operations, financial condition and cash flows.

 

19


Table of Contents

Our loan agreements impose operating and financial restrictions on us and our subsidiaries.

We have incurred a substantial amount of indebtedness in connection with recent acquisitions. As at March 31, 2020, we had total indebtedness of $33.6 million in secured bank loans. See “Part I — Item 5. Operating and Financial Review and Prospects — Liquidity and Capital Resources.” Our loan agreements contain a number of covenants and other provisions that, among other things, may impose operating and financial restrictions on us and our subsidiaries. These restrictions could put a strain on our financial position. For example:

 

   

they may increase our vulnerability to general adverse economic and industry conditions;

 

   

they may require us to dedicate a substantial portion of our cash flow from operations to payments on our loans, thereby reducing the availability of our cash flow to fund capital expenditure, working capital and other general corporate purposes;

 

   

they may require us to seek lenders’ consent prior to paying dividends on our ordinary shares;

 

   

they may limit our ability to incur additional borrowings or raise additional financing through equity or debt instruments; and

 

   

they may impose certain financial covenants on us that we may not be able to meet, which may cause the lenders to accelerate the repayment of the balance loan outstanding.

Further, the restrictions that may be contained in our loan agreements may limit our ability to plan for or react to market conditions, meet capital needs or make acquisitions or otherwise restrict our activities or business plans. Our ability to comply with the covenants of our loan agreements may be affected by events beyond our control, and any material deviations from our forecasts could require us to seek waivers or amendments of covenants or alternative sources of financing or to reduce expenditures. We cannot assure you that such waivers, amendments or alternative financing could be obtained, or if obtained, would be on terms acceptable to us.

To fund our capital expenditures, service our indebtedness and fund other potential liquidity requirements, we will require a significant amount of cash. Our ability to generate cash depends on many factors beyond our control and we may need to access the credit market to meet our liquidity requirements.

Our ability to fund planned capital expenditures and to make payments on our outstanding loans will depend on our ability to generate cash in the future. This, to a large extent, is subject to general economic, financial, competitive, legislative, regulatory and other factors that are beyond our control. Furthermore, given the recent global economic slowdown and that the uncertainty over global economic conditions remains, including on account of the COVID-19 pandemic, there can be no assurance that our business activity will be maintained at our expected level to generate the anticipated cash flows from operations or that our credit facilities would be available or sufficient. If the current global economic slowdown and uncertainties continue, we may experience a decrease in demand for our services, resulting in our cash flows from operations being lower than anticipated. This may in turn result in our need to obtain financing.

If we cannot fund our capital expenditures, service our indebtedness or fund our other potential liquidity requirements, we may have to take actions such as seeking additional equity or debt or reducing or delaying capital expenditures, strategic acquisitions and investments. We cannot assure you that any such actions, if necessary, could be effected on commercially reasonable terms or at all.

 

20


Table of Contents

If we fail to maintain an effective system of internal control over financial reporting, we may not be able to accurately report our financial results or prevent or detect fraud. As a result, current and potential investors could lose confidence in our financial reporting, which could harm our business and have an adverse effect on our ADS price.

Effective internal control over financial reporting is necessary for us to provide reliable financial reports. The effective internal controls together with adequate disclosure controls and procedures are designed to prevent or detect fraud. Deficiencies in our internal controls may adversely affect our management’s ability to record, process, summarize, and report financial data on a timely basis. As a public company, we are required by Section 404 of the Sarbanes-Oxley Act of 2002 to include a report of management’s assessment on our internal control over financial reporting and an independent auditor’s attestation report on our internal control over financial reporting in our annual reports on Form 20-F.

If material weaknesses are identified in our internal controls over financial reporting, we could be required to implement remedial measures. If we fail to maintain effective disclosure controls and procedures or internal control over financial reporting, we could lose investor confidence in the accuracy and completeness of our financial reports, which could have a material adverse effect on our ADS price.

Wage increases may prevent us from sustaining our competitive advantage and may reduce our profit margin.

Salaries and related benefits of our operations staff and other employees in countries where we have delivery centers, in particular India, are among our most significant costs. Wage costs in India have historically been significantly lower than wage costs in the US and Europe for comparably skilled professionals, which has been one of our competitive advantages. However, rapid economic growth in India, increased demand for business process management outsourcing to India, increased competition for skilled employees in India, and regulatory developments resulting in wage increases in India, may reduce this competitive advantage. For example, in August 2019, the Government of India introduced the Code on Wages, 2019, which replaced four central labor laws, including the Minimum Wages Act, 1948, the Payment of Wages Act, 1936, the Payment of Bonus Act, 1965, and the Equal Remuneration Act, 1976, and introduced a national minimum wage for all employees to be determined by the appropriate government. The Indian Supreme Court recently clarified that certain allowances paid by an employer to an employee should be included in the definition of “basic wage” for the purposes of employee provident fund contributions. As a result, our wage costs in India may increase. In addition, if the US dollar or the pound sterling declines in value against the Indian rupee, wages in the US or the UK will further decrease relative to wages in India, which may further reduce our competitive advantage. We may need to increase our levels of employee compensation more rapidly than in the past to remain competitive in attracting the quantity and quality of employees that our business requires. Wage increases may reduce our profit margins and have a material adverse effect on our financial condition and cash flows.

Further, following the establishment of our delivery centers in the US in 2014, our operations in the US have expanded and our wage costs for employees located in the UK and the US now represent a larger proportion of our total wage costs. Wage increases in the UK and the US may therefore also reduce our profit margins and have a material adverse effect on our financial condition and cash flows.

Our operating results may differ from period to period, which may make it difficult for us to prepare accurate internal financial forecasts and respond in a timely manner to offset such period to period fluctuations.

Our operating results may differ significantly from period to period due to factors such as client losses, variations in the volume of business from clients resulting from changes in our clients’ operations, the business decisions of our clients regarding the use of our services, delays or difficulties in expanding our operational facilities and infrastructure, changes to our pricing structure or that of our competitors, inaccurate estimates of resources and time required to complete ongoing projects, currency fluctuations and seasonal changes in the operations of our clients. For example, our clients in the travel and leisure industry experience seasonal changes in their operations in connection with the US summer holiday season, as well as episodic factors such as adverse weather conditions. Transaction volumes can be impacted by market conditions affecting the travel industry, including natural disasters, outbreak of infectious diseases (such as the outbreak of the COVID-19 virus across the world) or other serious public health concerns and terrorist attacks. In addition, our contracts do not generally commit our clients to provide us with a specific volume of business.

 

21


Table of Contents

In addition, the long sales cycle for our services, which typically ranges from three to 12 months, and the internal budget and approval processes of our prospective clients make it difficult to predict the timing of new client engagements. The extent to which the COVID-19 pandemic impacts the length of sales cycle for our services will depend on numerous evolving factors that we may not be able to accurately predict, including: the duration and scope of the pandemic; the effect on our potential and existing clients and client demand for our services and solutions; our ability to sell and provide our services and solutions; the ability of our clients to pay for our services and solutions; and any further closures of our and our clients’ offices and facilities. Commencement of work and ramping up of volume of work with certain new and existing clients have in the past been slower than we had expected and may in the future be slower than we expect. Revenue is recognized upon actual provision of services and when the criteria for recognition are achieved. Accordingly, the financial benefit of gaining a new client may be delayed due to delays in the implementation of our services. These factors may make it difficult for us to prepare accurate internal financial forecasts or replace anticipated revenue that we do not receive as a result of those delays. Due to the above factors, it is possible that in some future quarters our operating results may be significantly below the expectations of the public market, analysts and investors.

If our pricing structures do not accurately anticipate the cost and complexity of performing our work, our profitability may be negatively affected.

The terms of our client contracts typically range from three to five years. In many of our contracts, we commit to long-term pricing with our clients, and we negotiate pricing terms with our clients utilizing a range of pricing structures and conditions. Depending on the particular contract, these include input-based pricing (such as full-time equivalent-based pricing arrangements), fixed-price arrangements, output-based pricing (such as transaction-based pricing), outcome-based pricing, and contracts with features of all these pricing models. Our pricing is highly dependent on our internal forecasts and predictions about our projects and the marketplace, which are largely based on limited data and could turn out to be inaccurate. If we do not accurately estimate the costs and timing for completing projects, our contracts could prove unprofitable for us or yield lower profit margins than anticipated. Some of our client contracts do not allow us to terminate the contracts except in the case of non-payment by our client. If any contract turns out to be economically non-viable for us, we may still be liable to continue to provide services under the contract.

We intend to focus on increasing our service offerings that are based on non-linear pricing models (such as fixed-price and outcome-based pricing models) that allow us to price our services based on the value we deliver to our clients rather than the headcount deployed to deliver the services to them. Non-linear revenues may be subject to short-term pressure on margins as initiatives in developing the products and services take time to deliver. The risk of entering into non-linear pricing arrangements is that if we fail to properly estimate the appropriate pricing for a project, we may incur lower profits or losses as a result of being unable to execute projects with the amount of labor we expected or at a margin sufficient to recover our initial investments in our solutions. While non-linear pricing models are expected to result in higher revenue productivity per employee and improved margins, they also mean that we continue to bear the risk of cost overruns, wage inflation, fluctuations in currency exchange rates and failure to achieve clients’ business objectives in connection with these projects.

Our profit margin, and therefore our profitability, is largely a function of our asset utilization and the rates we are able to recover for our services. An important component of our asset utilization is our seat utilization rate, which is the average number of work shifts per day, out of a maximum of three, for which we are able to utilize our work stations, or seats. During fiscal 2020, 2019 and 2018, we incurred significant expenditures to increase our number of seats by establishing additional delivery centers or expanding production capacities in our existing delivery centers. If we are not able to maintain the pricing for our services or an appropriate seat utilization rate, without corresponding cost reductions, our profitability will suffer. The rates we are able to recover for our services are affected by a number of factors, including our clients’ perceptions of our ability to add value through our services, competition, introduction of new services or products by us or our competitors, our ability to accurately estimate, attain and sustain revenue from client contracts, margins and cash flows over increasingly longer contract periods and general economic and political conditions. Our profitability is also a function of our ability to control our costs and improve our efficiency. As we increase the number of our employees and execute our strategies for growth, we may not be able to manage the significantly larger and more geographically diverse workforce that may result, which could adversely affect our ability to control our costs or improve our efficiency. Further, because there is no certainty that our business will ramp-up at the rate that we anticipate, we may incur expenses for the increased capacity for a significant period of time without a corresponding growth in our revenue. Commencement of work and ramping up of volume of work with certain new and existing clients have in the past been slower than we had expected and may in the future be slower than we expect. If our revenue does not grow at our expected rate, we may not be able to maintain or improve our profitability. The global outbreak of COVID-19 has also led to, and may continue to lead to, increased costs, as we have to incur additional expenses in relation to the measures we have implemented to safeguard our employees’ health and safety and client operations, such as enhanced sanitization measures at our office premises, laptop rental costs for employees who are working remotely, telecommunications costs for mobile broadband devices, additional software licenses and logistics costs for the movement of equipment and we may need to pay higher costs for compensation, rental, accommodation and other fixed costs as a result of disruptions caused by the continued spread of the virus.

 

22


Table of Contents

We have in the past and may in the future enter into subcontracting arrangements for the delivery of services. For example, in China, in addition to delivering services from our own delivery center, we used to deliver services through a subcontractor’s delivery center. We could face greater risk when pricing our outsourcing contracts, as our outsourcing projects typically entail the coordination of operations and workforces with our subcontractor, and utilizing workforces with different skill sets and competencies. Furthermore, when outsourcing work we assume responsibility for our subcontractors’ performance. Our pricing, cost and profit margin estimates on outsourced work may include anticipated long-term cost savings from transformational and other initiatives that we expect to achieve and sustain over the life of the outsourcing contract. There is a risk that we will underprice our contracts, fail to accurately estimate the costs of performing the work or fail to accurately assess the risks associated with potential contracts. In particular, any increased or unexpected costs, delays or failures to achieve anticipated cost savings, or unexpected risks we encounter in connection with the performance of this work, including those caused by factors outside our control, could make these contracts less profitable or unprofitable, which could have an adverse effect on our profit margin.

We may not succeed in identifying suitable acquisition targets or integrating any acquired business into our operations, which could have a material adverse effect on our business, results of operations, financial condition and cash flows.

Our growth strategy involves gaining new clients and expanding our service offerings, both organically and through strategic acquisitions. It is possible that in the future we may not succeed in identifying suitable acquisition targets available for sale or investments on reasonable terms, have access to the capital required to finance potential acquisitions or investments, or be able to consummate any acquisition or investments. Future acquisitions or joint ventures may also result in the incurrence of indebtedness or the issuance of additional equity securities, which may present difficulties in financing the acquisition or joint venture on attractive terms. The inability to identify suitable acquisition targets or investments or the inability to complete such transactions may affect our competitiveness and our growth prospects.

Historically, we have expanded some of our service offerings and gained new clients through strategic acquisitions. For example, in January 2017, we acquired Denali, a leading provider of strategic procurement BPM solutions in the high technology, retail and CPG, banking and financial services, utilities and healthcare verticals, and in March 2017, we acquired HealthHelp, an industry leader in care management whose solutions are delivered by combining a proprietary technology platform rooted in evidence-based medical research, high-end predictive analytics, and deep healthcare industry expertise. In June 2016, we acquired Value Edge, a provider of commercial research and analytics services to clients in the pharma industry. The lack of profitability of any of our acquisitions or joint ventures could have a material adverse effect on our operating results.

In addition, our management may not be able to successfully integrate any acquired business into our operations or benefit from any joint ventures that we enter into, and any acquisition we do complete or any joint venture we do enter into may not result in long-term benefits to us. For instance, if we acquire a company, we could experience difficulties in assimilating that company’s personnel, operations, technology and software, or the key personnel of the acquired company may decide not to work for us. There is no assurance that these acquisitions will be profitable for us. Further, we face the risk that the legal regime or regulatory requirements imposed on any business that we acquire may change following our acquisition and such changes may adversely affect our ability to achieve the expected accretive benefits from the acquisition, which could in turn require us to recognize an impairment of goodwill associated with the acquired business. For more information see “—The international nature of our business exposes us to several risks, such as unexpected changes in the regulatory requirements and government policy changes of multiple jurisdictions.”

We also face risks arising from acquisitions of businesses reliant upon a small number of key clients. The value of such acquisitions may decline in the event that their key clients decide not to renew their contracts, or decrease their volume of business or the prices paid for services. For example, HealthHelp is primarily reliant on one client. A decline in the volume of business from this client or in the pricing of our services to this client would likely adversely affect our ability to achieve the expected accretive benefits from our acquisition of HealthHelp.

Further, we may receive claims or demands by the sellers of the entities acquired by us on the indemnities that we have provided to them for losses or damages arising from any breach of contract by us. Conversely, while we may be able to claim against the sellers on their indemnities to us for breach of contract or breach of the representations and warranties given by the sellers in respect of the entities acquired by us, there can be no assurance that our claims will succeed, or if they do, that we will be able to successfully enforce our claims against the sellers at a reasonable cost. Acquisitions and joint ventures also typically involve a number of other risks, including diversion of management’s attention, legal liabilities and the need to amortize acquired intangible assets, any of which could have a material adverse effect on our business, results of operations, financial condition and cash flows.

 

23


Table of Contents

Goodwill, intangible or other assets that we carry on our balance sheet could give rise to significant impairment charges in the future.

As at March 31, 2020, we had goodwill and intangible assets of approximately $191.4 million, which primarily resulted from our acquisitions of HealthHelp, Denali and Value Edge. Under IFRS, we are required to review our goodwill, intangibles or other assets for impairment when events or changes in circumstances indicate the carrying value may not be recoverable. In addition, goodwill, intangible or other assets with indefinite lives are required to be tested for impairment at least annually. For example, 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 in fiscal 2017. During the fourth quarter of fiscal 2020, Brexit had a negative impact on the insurance industry and applied downward pressure on the expected future performance of the WNS Auto Claims reportable segment, due to contract renegotiations and loss of certain clients. These factors, together with the highly uncertain operating environment in the UK, have negatively impacted and caused us to significantly reduce our financial projections and estimates of the WNS Auto Claims BPM reportable segment from our previous estimate. 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 $4.1 million to our results of operations in fiscal 2020 for the remaining goodwill balance of our auto claims business. See also “—The international nature of our business exposes us to several risks, such as unexpected changes in the regulatory requirements of multiple jurisdictions.” We may be required to record further impairment charges to our goodwill and intangible assets associated with other acquisitions in the future. For example, of the total $191.4 million in goodwill and intangible assets we had as at March 31, 2020, $89.2 million pertains to our acquisition of HealthHelp in fiscal 2017. This goodwill and intangible assets associated with our acquisition of HealthHelp is primarily attributable to HealthHelp’s expected business from one client. We expect this client to renegotiate the pricing of our services to them but there is no certainty as to when that may occur. Further, there is no assurance that our pricing terms with this client will remain on terms acceptable to us. If there is a significant decline in the prices charged for services to this client or a decrease in the volume of business from this client, we may be required to review our goodwill and intangible assets for impairment and record a further impairment charge. Further, if, for example, the research and analytics industry experiences a significant decline in business and we determine that we will not be able to achieve the cash flows that we had expected from our acquisitions of Marketics Technologies (India) Private Limited, a provider of offshore analytics services which we acquired in 2007, and Value Edge, we may have to record an impairment of all or a portion of the goodwill or intangible assets relating to those acquisitions. Any further impairment to our goodwill or intangible assets may have a significant adverse impact on our results of operations.

We are incorporated in Jersey, Channel Islands and are subject to Jersey laws and regulations. If the tax benefits enjoyed by our company are withdrawn or changed, we may be liable for higher tax, thereby reducing our profitability.

As a company incorporated in Jersey, Channel Islands, we are currently subject to Jersey income tax at a rate of 0%. Although we continue to enjoy the benefits of the Jersey business tax regime, if Jersey tax laws change or the tax benefits we enjoy are otherwise withdrawn or changed, we may become liable for higher tax, thereby reducing our profitability.

 

24


Table of Contents

Risks Related to Key Delivery Locations

A substantial portion of our assets and operations are located in India and we are subject to regulatory, economic, social and political uncertainties in India.

Our primary operating subsidiary, WNS Global Services Private Limited (“WNS Global”), is incorporated in India, and a substantial portion of our assets and employees are located in India. The Government of India, however, has exercised and continues to exercise significant influence over many aspects of the Indian economy. The Government of India has provided significant tax incentives and relaxed certain regulatory restrictions in order to encourage foreign investment in specified sectors of the economy, including the business process management industry. Those programs that have benefited us include tax holidays, liberalized import and export duties and preferential rules on foreign investment and repatriation. We cannot assure you that such liberalization policies will continue. The Government of India may also enact new tax legislation or amend the existing legislation that could impact the way we are taxed in the future. For more information, see “—Tax legislation and the results of actions by taxing authorities may have an adverse effect on our operations and our overall tax rate.” Other legislation passed by the Government of India may also impact our business. For example, in August 2019, the Government of India introduced the Code on Wages, 2019, which replaced four central labor laws, including the Minimum Wages Act, 1948, the Payment of Wages Act, 1936, the Payment of Bonus Act, 1965,and the Equal Remuneration Act, 1976, and introduced a national minimum wage for all employees to be determined by the appropriate government. The Indian Supreme Court recently clarified that certain allowances paid by an employer to an employee should be included in the definition of “basic wage” for the purposes of employee provident fund contributions. As a result, our wage costs in India may increase. In December 2019, the Parliament of India passed the Citizenship (Amendment) Act, 2019, which provides citizenship to religious minorities in Pakistan, Bangladesh and Afghanistan, prompting protests across India. In addition, there are concerns over the slowing growth of India’s economy and the negative impact that COVID-19 may have on our business, financial condition, results of operations and cash flows. Our financial performance and the market price of our ADSs may be adversely affected by changes in inflation, exchange rates and controls, interest rates, Government of India policies (including taxation regulations and policies), social stability or other political, economic or diplomatic developments affecting India in the future.

India has witnessed communal clashes in the past. Although such clashes in India have, in the recent past, been sporadic and have been contained within reasonably short periods of time, any such civil disturbance in the future could result in disruptions in transportation or communication networks, as well as have adverse implications for general economic conditions in India. Such events could have a material adverse effect on our business, the value of our ADSs and your investment in our ADSs.

The UK’s withdrawal from the EU may have a negative effect on global economic conditions, financial markets and our operations in the UK and EU, which could reduce the value of our ADS.

We have operations in the UK, Romania, Spain and Poland. Brexit has created significant political and economic uncertainty regarding the future trading relationship between the UK and the EU and could cause disruptions to, and create uncertainty surrounding, our operations in the UK and the EU. The long-term effects of Brexit will depend on the agreements or arrangements with the EU for the UK to retain access to EU markets either during a transitional period or more permanently. These developments may have an adverse effect on our operations in the UK and the EU, the value of our ADSs and your investment in our ADSs.

Our business in South Africa is evaluated for compliance with the South African government’s Broad-Based Black Economic Empowerment (“BBBEE”) legislation. Failure to maintain a minimum BBBEE rating would result in a loss of certain government grants, and may also result in us losing certain business opportunities or clients imposing contractual penalties on us.

Our business in South Africa is evaluated for compliance with the South African government’s BBBEE legislation against a BBBEE scorecard, which has different levels based on various criteria. South African government grants are available to businesses that meet specified conditions, including achieving a specified minimum BBBEE rating. A level one BBBEE rating has the most rigorous criteria. Additionally, many South African companies require their service providers to maintain a minimum BBBEE rating, and many of our South African client contracts contain clauses that allow our clients to terminate their contracts with us or impose specified penalties on us if we do not maintain a minimum BBBEE rating.

We conduct our domestic business in South Africa (serving clients based in South Africa) through our South Africa subsidiary, WNS South Africa (Pty) Ltd, and our international business in South Africa (serving clients based outside South Africa) through our South Africa subsidiary, WNS Global Services SA (Pty) Limited. During fiscal 2020, pursuant to the requirements of the South African government’s BBBEE Codes of Good Practice, the WNS B-BBEE Staff Share Trust subscribed to one participating preference share issued by WNS Global Services SA (Pty) Ltd, which entitles it to 45.56% of voting rights in WNS South Africa (Pty) Ltd. We achieved a level two rating in respect of WNS South Africa (Pty) Ltd in September 2019, which is valid until September 2020. Our program developed for the purpose of meeting the criteria to achieve the requisite BBBEE rating in respect of WNS Global Services SA (Pty) Limited includes, among other measures, divesting some of our interests in such subsidiary to address the criterion relating to the percentage of ownership of an entity by “black people” (as defined under the applicable legislation). We achieved a level seven rating in respect of WNS Global Services SA (Pty) Limited in our BBBEE verification audit in October 2019, which is valid until October 2020. With the achievement of a level two rating in respect of WNS South Africa (Pty) Ltd and a level seven rating in respect of WNS Global Services SA (Pty) Limited, we currently continue to meet the minimum BBBEE rating required under our South African client contracts and be eligible for government grants associated with our domestic and international business.

However, there is no assurance that we will maintain our existing BBBEE rating with respect to WNS South Africa (Pty) Ltd or WNS Global Services SA (Pty) Limited in our next annual BBBEE verification audits or thereafter. If we fail to maintain or achieve the required minimum BBBEE ratings, we will cease to be eligible for government grants, will be disqualified from bidding for certain business, and certain of our clients may terminate their contracts with us or impose penalties on us. These outcomes would have an adverse effect on our business, results of operations, financial condition and cash flows.

 

25


Table of Contents

Our facilities are at risk of damage by natural disasters.

Our operational facilities and communication hubs may be damaged in natural disasters such as earthquakes, floods, heavy rains, tsunamis and cyclones. For example, Chennai was affected by severe flooding in November 2015. Although our clients experienced minimal disruptions during the Chennai flood due to the business continuity planning and infrastructure resiliency measures we have implemented with a view to minimizing the impact of natural disasters on our business, such measures may be rendered less effective in other circumstances. In addition, we have operational facilities and communication hubs located in regions which are considered to be particularly vulnerable to natural disasters, such as the Philippines and Houston in the United States, which have experienced severe natural disasters such as typhoons, hurricanes and floods. Such natural disasters may lead to disruption to information systems and telephone service for sustained periods. Damage or destruction that interrupts our provision of BPM services could damage our relationships with our clients and may cause us to incur substantial additional expenses to repair or replace damaged equipment or facilities. We may also be liable to our clients for disruption in service resulting from such damage or destruction. While we currently have property damage insurance and business interruption insurance, our insurance coverage may not be sufficient. Furthermore, we may be unable to secure such insurance coverage at premiums acceptable to us in the future or secure such insurance coverage at all. Prolonged disruption of our services as a result of natural disasters would also entitle our clients to terminate their contracts with us.

If the tax benefits and other incentives that we currently enjoy are reduced or withdrawn or not available for any other reason, our financial condition would be negatively affected.

We have benefitted from, and continue to benefit from, certain tax holidays and exemptions in various jurisdictions in which we have operations.

In fiscal 2020 and 2019, our tax rate in India and the Philippines impacted our effective tax rate. In fiscal 2018, our tax rate in India, the Philippines and Sri Lanka impacted our effective tax rate. We would have incurred approximately $17.7 million, $15.7 million and $9.4 million in additional income tax expense on our combined operations in our Special Economic Zone operations in India, the Philippines and Sri Lanka in fiscal 2020, fiscal 2019 and fiscal 2018, respectively, if the tax holidays and exemptions described below had not been available for the respective periods.

We expect our tax rate in India and the Philippines to continue to impact our effective tax rate. Our effective tax rate in Sri Lanka has been impacted by the withdrawal of tax exemption on export income in Sri Lanka with effect from April 1, 2018, following which the income from export of service has been subject to tax at 14% on net basis.

In the past, the majority of our Indian operations were eligible to claim income tax exemption with respect to profits earned from export revenue from operating units registered under the Software Technology Parks of India (“STPI”). The benefit was available for a period of 10 years from the date of commencement of operations, but not beyond March 31, 2011. Effective April 1, 2011, upon the expiration of this tax exemption, income derived from our operations in India became subject to the prevailing annual tax rate of 34.95%, in fiscal 2020 and 2019, and 34.61% in fiscal 2018. In December 2019, the Government of India enacted the India Tax Law effective retroactively to April 1, 2019 that enables Indian companies to elect to be taxed at a lower income tax rate of 25.17% as compared to the current rate of 34.95%. Once a company elects into the lower income tax rate, a company may not benefit from any tax holidays associated with Special Economic Zones and certain other tax incentives and may not reverse its election. Our current intent is to continue to be subject to the current rate of 34.95% and claim tax holidays associated with SEZ. See “Part I — Item 4. Information on the Company — B. Business Overview — Regulations.”

When any of our tax holidays or exemptions expire or terminate, or if the applicable government withdraws or reduces the benefits of a tax holiday or exemption that we enjoy, our tax expense may materially increase and this increase may have a material impact on our results of operations. The applicable tax authorities may also disallow deductions claimed by us and assess additional taxable income on us in connection with their review of our tax returns.

 

26


Table of Contents

Tax legislation and the results of actions by taxing authorities may have an adverse effect on our operations and our overall tax rate.

The government of India, the US or other jurisdictions where we have a presence could enact new tax legislation which would have a material adverse effect on our business, results of operations and financial condition. In addition, our ability to repatriate surplus earnings from our delivery centers in a tax-efficient manner is dependent upon interpretations of local laws, possible changes in such laws and the renegotiation of existing double tax avoidance treaties. Changes to any of these may adversely affect our overall tax rate, or the cost of our services to our clients, which would have a material adverse effect on our business, results of operations and financial condition.

We are subject to transfer pricing and other tax related regulations and any determination that we have failed to comply with them could materially adversely affect our profitability.

Transfer pricing regulations to which we are subject require that any international transaction among our company and its subsidiaries, or 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, which has been renewed on similar terms for another five years starting from April 2018.

 

27


Table of Contents

We may be required to pay additional taxes in connection with audits by the tax authorities.

From time to time, we receive orders of assessment from 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 in fiscal 2004 through fiscal 2016 pending before various appellate authorities. These orders assess additional taxable income that could in the aggregate give rise to an estimated  2,439.2 million ($32.3 million based on the exchange rate on March 31, 2020) in additional taxes, including interest of  835.6 million ($11.1 million based on the exchange rate on March 31, 2020).

These orders of assessment allege that the transfer prices we applied to certain of the international transactions between WNS Global or WNS Business Consulting Services Private Limited (“WNS BCS”), each of which is one of our Indian subsidiaries, as the case may be, and our other wholly-owned subsidiaries were not on arm’s-length terms, disallow a tax holiday benefit claimed by us, deny the set-off of brought forward business losses and unabsorbed depreciation and disallow certain expenses claimed as tax deductible by WNS Global or WNS BCS, as the case may be. As at March 31, 2020 we have provided a tax reserve of  774.3 million ($10.2 million based on the exchange rate on March 31, 2020) primarily on account of the Indian tax authorities’ denying the set off of brought forward business losses and unabsorbed depreciation. We have appealed against these orders of assessment before higher appellate authorities. For more details on these assessments, see “Part I — Item 5. Operating and Financial Review and Prospects—Tax Assessment Orders.”

In addition, we currently have orders of assessment pertaining to similar issues that have been decided in our favor by appellate authorities, vacating tax demands of  3,704.6 million ($49.0 million based on the exchange rate on March 31, 2020) in additional taxes, including interest of  1,253.9 million ($16.6 million based on the exchange rate on March 31, 2020). The income tax authorities have filed or may file appeals against these orders at higher appellate authorities.

In case of disputes, the Indian tax authorities may require us to deposit with them all or a portion of the disputed amounts pending resolution of the matters on appeal. Any amount paid by us as deposits will be refunded to us with interest if we succeed in our appeals. We have deposited  916.4 million ($12.1 million based on the exchange rate on March 31, 2020) of the disputed amount with the tax authorities and may be required to deposit the remaining portion of the disputed amount with the tax authorities pending final resolution of the respective matters.

As at March 31, 2020, corporate tax returns in fiscal 2017 and thereafter remain subject to examination by tax authorities in India.

After consultation with our Indian tax advisors and based on the facts of these cases, certain legal opinions from counsel, the nature of the tax authorities’ disallowances and the orders from appellate authorities deciding similar issues in our favor in respect of assessment orders for earlier fiscal years, we believe these orders are unlikely to be sustained at the higher appellate authorities and we intend to vigorously dispute the orders of assessment.

In 2016, we also received an assessment order from the Sri Lankan Tax Authority, demanding payment of LKR 25.2 million ($0.1 million based on the exchange rate on March 31, 2020) in connection with the review of our tax return in fiscal 2012. The assessment order challenges the tax exemption that we have claimed for export business. We have filed an appeal against the assessment order with the Sri Lankan Tax Appeal Commission. Based on consultations with our tax advisors, we believe this order of assessment is more likely than not to be upheld in our favor. We intend to continue to vigorously dispute the assessment.

No assurance can be given, however, that we will prevail in our tax disputes. If we do not prevail, payment of additional taxes, interest and penalties may adversely affect our results of operations, financial condition and cash flows. There can also be no assurance that we will not receive similar or additional orders of assessment in the future.

 

28


Table of Contents

Terrorist attacks and other acts of violence involving India or its neighboring countries could adversely affect our operations, resulting in a loss of client confidence and materially adversely affecting our business, results of operations, financial condition and cash flows.

Terrorist attacks and other acts of violence or war involving India or its neighboring countries may adversely affect worldwide financial markets and could potentially lead to economic recession, which could adversely affect our business, results of operations, financial condition and cash flows. South Asia has, from time to time, experienced instances of terrorism, civil unrest and hostilities in and among neighboring countries, including Sri Lanka, India and Pakistan. In April 2019, several churches and hotels in Sri Lanka, including premises within one kilometer of one of our delivery centers, were targeted in a series of coordinated terrorist bombings. In previous years, military confrontations between India and Pakistan have occurred in the region of Kashmir and along the India/Pakistan border. There have also been incidents in and near India, such as the bombings of the Taj Mahal Hotel and Oberoi Hotel in Mumbai in 2008, a terrorist attack on the Parliament of India, troop mobilizations along the India/Pakistan border and an aggravated geopolitical situation in the region. Such military activity or terrorist attacks in the future could disrupt our operations or influence the Indian economy by disrupting communications and making travel more difficult. Resulting political tensions could create a greater perception that investments in Indian companies involve a high degree of risk. Such political tensions could similarly create a perception that there is a risk of disruption of services provided by India-based companies, which could have a material adverse effect on the market for our services. Furthermore, if India were to become engaged in armed hostilities, particularly hostilities that were protracted or involved the threat or use of nuclear weapons, we might not be able to continue our operations.

Restrictions on entry visas may affect our ability to compete for and provide services to clients in the US and the UK, which could have a material adverse effect on future revenue.

The vast majority of our employees are Indian nationals. The ability of some of our executives to work with and meet our European and North American clients and our clients from other countries depends on the ability of our senior managers and employees to obtain the necessary visas and entry permits. In response to previous terrorist attacks and global unrest, US and European immigration authorities have sharply increased the level of scrutiny in granting visas. Immigration laws in those countries may also require us to meet certain other legal requirements as a condition to obtaining or maintaining entry visas. These restrictions have significantly lengthened the time requirements to obtain visas for our personnel, which has in the past resulted, and may continue to result, in delays in the ability of our personnel to meet with our clients. Further, the COVID-19 pandemic has resulted in the temporary suspension of existing visas and several governments not granting new visas. In addition, immigration laws are subject to legislative change and varying standards of application and enforcement due to political forces, economic conditions or other events, including terrorist attacks. We cannot predict the political or economic events that could affect immigration laws or any restrictive impact those events could have on obtaining or monitoring entry visas for our personnel. If we are unable to obtain the necessary visas for personnel who need to visit our clients’ sites or, if such visas are delayed, we may not be able to provide services to our clients or to continue to provide services on a timely basis, which could have a material adverse effect on our business, results of operations, financial condition and cash flows.

If more stringent labor laws become applicable to us, our profitability may be adversely affected.

India has stringent labor legislation that protects the interests of workers, including legislation that sets forth detailed procedures for dispute resolution and employee removal and legislation that imposes financial obligations on employers upon retrenchment. Though we are exempt from a number of these labor laws at present, there can be no assurance that such laws will not become applicable to the business process management industry in India in the future. In addition, our employees may in the future form unions. If these labor laws become applicable to our workers or if our employees unionize, it may become difficult for us to maintain flexible human resource policies, discharge employees or downsize, and our profitability may be adversely affected.

Most of our delivery centers operate on leasehold property and our inability to renew our leases on commercially acceptable terms or at all may adversely affect our results of operations.

Most of our delivery centers operate on leasehold property. Our leases are subject to renewal and we may be unable to renew such leases on commercially acceptable terms or at all. Our inability to renew our leases, or a renewal of our leases with a rental rate higher than the prevailing rate under the applicable lease prior to expiration, may have an adverse impact on our operations, including disrupting our operations or increasing our cost of operations. In addition, in the event of non-renewal of our leases, we may be unable to locate suitable replacement properties for our delivery centers or we may experience delays in relocation that could lead to a disruption in our operations. Any disruption in our operations could have an adverse effect on our results of operations.

 

29


Table of Contents

Risks Related to our ADSs

Substantial future sales of our shares or ADSs in the public market could cause our ADS price to fall.

Sales by us or our shareholders of a substantial number of our ADSs in the public market, or the perception that these sales could occur, could cause the market price of our ADSs to decline. These sales, or the perception that these sales could occur, also might make it more difficult for us to sell securities in the future at a time or at a price that we deem appropriate or to pay for acquisitions using our equity securities. As at March 31, 2020, we had 49,733,640 ordinary shares outstanding, including 49,467,872 shares represented by 49,467,872 ADSs. In addition, as at March 31, 2020, a total of 2,851,797 ordinary shares or ADSs are issuable upon the exercise or vesting of options and restricted share units (“RSUs”) outstanding under our 2006 Incentive Award Plan (as amended and restated, the “2006 Incentive Award Plan”) and our 2016 Incentive Award Plan (as amended and restated, the “2016 Incentive Award Plan”). All ADSs are freely transferable, except that ADSs owned by our affiliates may only be sold in the US if they are registered or qualify for an exemption from registration, including pursuant to Rule 144 under the Securities Act of 1933, as amended (the “Securities Act”). The remaining ordinary shares outstanding may also only be sold in the US if they are registered or qualify for an exemption from registration, including pursuant to Rule 144 under the Securities Act.

The market price for our ADSs may be volatile.

The market price for our ADSs is likely to be highly volatile and subject to wide fluctuations in response to factors including the following:

 

   

announcements of technological developments;

 

   

regulatory developments in our target markets affecting us, our clients or our competitors;

 

   

actual or anticipated fluctuations in our operating results;

 

   

changes in financial estimates by securities research analysts;

 

   

changes in the economic performance or market valuations of other companies engaged in business process management;

 

   

addition or loss of executive officers or key employees;

 

   

sales or expected sales of additional shares or ADSs;

 

   

loss of one or more significant clients; and

 

   

a change in control, or possible change of control, of our company.

In addition, securities markets generally and from time to time experience significant price and volume fluctuations that are not related to the operating performance of particular companies. These market fluctuations may also have a material adverse effect on the market price of our ADSs.

 

30


Table of Contents

We may not be able to pay any dividends on our shares and ADSs.

We have never declared or paid any dividends on our ordinary shares. We cannot give any assurance that we will declare dividends of any amount, at any rate or at all. Because we are a holding company, we rely principally on dividends, if any, paid by our subsidiaries to us to fund our dividend payments, if any, to our shareholders. Any limitation on the ability of our subsidiaries to pay dividends to us could have a material adverse effect on our ability to pay dividends to you.

Any future determination to pay cash dividends will be at the discretion of our Board of Directors and will be dependent upon our results of operations and cash flows, our financial position and capital requirements, general business conditions, legal, tax, regulatory and any contractual restrictions on the payment of dividends and any other factors our Board of Directors deems relevant at the time.

Subject to the provisions of the Companies (Jersey) Law 1991 (the “1991 Law”) and our Articles of Association, we may by ordinary resolution declare annual dividends to be paid to our shareholders according to their respective rights and interests in our distributable reserves. Any dividends we may declare must not exceed the amount recommended by our Board of Directors. Our Board of Directors may also declare and pay an interim dividend or dividends, including a dividend payable at a fixed rate, if paying an interim dividend or dividends appears to the Board to be justified by our distributable reserves. We can only declare dividends if our directors who are to authorize the distribution make a prior statement that, having made full enquiry into our affairs and prospects, they have formed the opinion that:

 

   

immediately following the date on which the distribution is proposed to be made, we will be able to discharge our liabilities as they fall due; and

 

   

having regard to our prospects and to the intentions of our directors with respect to the management of our business and to the amount and character of the financial resources that will in their view be available to us, we will be able to continue to carry on business and we will be able to discharge our liabilities as they fall due until the expiry of the period of 12 months immediately following the date on which the distribution is proposed to be made or until we are dissolved under Article 150 of the 1991 Law, whichever first occurs.

Subject to the deposit agreement governing the issuance of our ADSs, holders of ADSs will be entitled to receive dividends paid on the ordinary shares represented by such ADSs. See “ — Risks Related to Our Business — Our loan agreements impose operating and financial restrictions on us and our subsidiaries.”

Holders of ADSs may be restricted in their ability to exercise voting rights.

At our request, the depositary of our ADSs will mail to you any notice of shareholders’ meeting received from us together with information explaining how to instruct the depositary to exercise the voting rights of the ordinary shares represented by ADSs. If the depositary timely receives voting instructions from you, it will endeavor to vote the ordinary shares represented by your ADSs in accordance with such voting instructions. However, the ability of the depositary to carry out voting instructions may be limited by practical and legal limitations and the terms of the ordinary shares on deposit. We cannot assure you that you will receive voting materials in time to enable you to return voting instructions to the depositary in a timely manner. Ordinary shares for which no voting instructions have been received will not be voted.

As a foreign private issuer, we are not subject to the proxy rules of the Commission, which regulate the form and content of solicitations by US-based issuers of proxies from their shareholders. The form of notice and proxy statement that we have been using does not include all of the information that would be provided under the Commission’s proxy rules.

 

31


Table of Contents

Holders of ADSs may be subject to limitations on transfers of their ADSs.

The ADSs are transferable on the books of the depositary. However, the depositary may close its transfer books at any time or from time to time when it deems necessary or advisable in connection with the performance of its duties. In addition, the depositary may refuse to deliver, transfer or register transfers of ADSs generally when the transfer books of the depositary are closed, or at any time or from time to time if we or the depositary deem it necessary or advisable to do so because of any requirement of law or of any government or governmental body or commission or any securities exchange on which the American Depositary Receipts or our ordinary shares are listed, or under any provision of the deposit agreement or provisions of or governing the deposited shares, or any meeting of our shareholders, or for any other reason.

Holders of ADSs may not be able to participate in rights offerings or elect to receive share dividends and may experience dilution of their holdings, and the sale, deposit, cancellation and transfer of our ADSs issued after exercise of rights may be restricted.

If we offer our shareholders any rights to subscribe for additional shares or any other rights, the depositary may make these rights available to them after consultation with us. We cannot make rights available to holders of our ADSs in the US unless we register the rights and the securities to which the rights relate under the Securities Act, or an exemption from the registration requirements is available. In addition, under the deposit agreement, the depositary will not distribute rights to holders of our ADSs unless we have requested that such rights be made available to them and the depositary has determined that such distribution of rights is lawful and reasonably practicable. We can give no assurance that we can establish an exemption from the registration requirements under the Securities Act, and we are under no obligation to file a registration statement with respect to these rights or underlying securities or to endeavor to have a registration statement declared effective. Accordingly, holders of our ADSs may be unable to participate in our rights offerings and may experience dilution of your holdings as a result. The depositary may allow rights that are not distributed or sold to lapse. In that case, holders of our ADSs will receive no value for them. In addition, US securities laws may restrict the sale, deposit, cancellation and transfer of ADSs issued after exercise of rights.

We may be classified as a passive foreign investment company, which could result in adverse US federal income tax consequences to US holders of our ADSs or ordinary shares.

Based on our financial statements and relevant market and shareholder data, we believe that we should not be treated as a passive foreign investment company for US federal income tax purposes (“PFIC”) with respect to our most recently closed taxable year. However, the application of the PFIC rules is subject to uncertainty in several respects, and we cannot assure you that we will not be a PFIC for any taxable year. A non-US corporation will be a PFIC for any taxable year if either (i) at least 75% of its gross income for such year is passive income or (ii) at least 50% of the value of its assets (based on an average of the quarterly values of the assets) during such year is attributable to assets that produce passive income or are held for the production of passive income. A separate determination must be made after the close of each taxable year as to whether we were a PFIC for that year. Because the value of our assets for purposes of the PFIC test will generally be determined by reference to the market price of our ADSs and ordinary shares, fluctuations in the market price of the ADSs and ordinary shares may cause us to become a PFIC. In addition, changes in the composition of our income or assets may cause us to become a PFIC. If we are a PFIC for any taxable year during which a US holder (as defined in “Part I — Item 10. Additional Information — E. Taxation — US Federal Income Taxation”) holds an ADS or ordinary share, certain adverse US federal income tax consequences could apply to such US holder.

If a United States person is treated as owning at least 10% of our ordinary shares (or ADSs), such holder may be subject to adverse US federal income tax consequences.

If a United States person is treated as owning (directly, indirectly or constructively) at least 10% of the value or voting power of our ordinary shares (or ADSs), such person may be treated as a “United States shareholder” with respect to each “controlled foreign corporation” in our group (if any). Because our group includes one or more US subsidiaries, certain of our non-US subsidiaries could be treated as controlled foreign corporations regardless of whether we are or are not treated as a controlled foreign corporation (although there is currently a pending legislative proposal to limit the application of these rules). A United States shareholder of a controlled foreign corporation may be required to annually report and include in its US taxable income its pro rata share of “Subpart F income,” “global intangible low-taxed income” and investments in US property by controlled foreign corporations, whether or not we make any distributions. An individual that is a United States shareholder with respect to a controlled foreign corporation generally would not be allowed certain tax deductions or foreign tax credits that would be allowed to a United States shareholder that is a US corporation. A failure to comply with these reporting obligations may subject such holder to significant monetary penalties and may prevent the statute of limitations with respect to such holder’s US federal income tax return for the year for which reporting was due from starting. We cannot provide any assurances that we will assist investors in determining whether any of our non-US subsidiaries are treated as a controlled foreign corporation or whether such investor is treated as a United States shareholder with respect to any of such controlled foreign corporations or furnish to any United States shareholders information that may be necessary to comply with the aforementioned reporting and tax paying obligations. A United States investor should consult its own advisors regarding the potential application of these rules to its investment in our ordinary shares (or ADSs).

 

32


Table of Contents

Our share repurchase program could affect the price of our ADSs.

In March 2018, our shareholders approved a share repurchase program authorizing the repurchase of up to 3,300,000 of our ADSs, each representing one ordinary share, at a price range of $10 to $100 per ADS. Under this repurchase program, our ADSs may be purchased in the open market from time to time over 36 months from March 30, 2018, the date the shareholders resolution approving the repurchase program was passed. We intend to fund the share repurchase program with cash on hand. The program would not obligate us to repurchase any dollar amount or number of ADSs, and may be suspended or discontinued at any time at our discretion. To date, we have repurchased 2,200,000 ADSs in the open market under this repurchase program.

Any repurchases pursuant to our repurchase program could affect the price of our ADSs and increase its volatility. The existence of a repurchase program could also cause the price of our ADSs to be higher than it would be in the absence of such a program and could potentially reduce the market liquidity of our ADSs. There can be no assurance that any repurchases will enhance shareholder value because the market price of our ADSs may decline below the levels at which we repurchase any ADSs. In addition, although our repurchase program is intended to enhance long-term shareholder value, short-term price fluctuations in our ADSs could reduce the program’s effectiveness. Significant changes in the price of our ADSs and our ability to fund our proposed repurchase program with cash on hand could impact our ability to repurchase ADSs. The timing and amount of future repurchases is dependent on our cash flows from operations, available cash on hand and the market price of our ADSs. Furthermore, the program does not obligate us to repurchase any dollar amount or number of ADSs and may be suspended or discontinued at any time, and any suspension or discontinuation could cause the market price of our ADSs to decline.

We have certain anti-takeover provisions in our Articles of Association that may discourage a change in control.

Our Articles of Association contain anti-takeover provisions that could make it more difficult for a third party to acquire us without the consent of our Board of Directors. These provisions include:

 

   

a classified Board of Directors with staggered three-year terms; and

 

   

the ability of our Board of Directors to determine the rights, preferences and privileges of our preferred shares and to issue the preferred shares without shareholder approval, which could be exercised by our Board of Directors to increase the number of outstanding shares and prevent or delay a takeover attempt.

These provisions could make it more difficult for a third party to acquire us, even if the third party’s offer may be considered beneficial by many shareholders. As a result, shareholders may be limited in their ability to obtain a premium for their shares.

It may be difficult for you to effect service of process and enforce legal judgments against us or our affiliates.

We are incorporated in Jersey, Channel Islands, and our primary operating subsidiary, WNS Global, is incorporated in India. A majority of our directors and senior executives are not residents of the US and the majority of our assets and the assets of those persons are located outside the US. As a result, it may not be possible for you to effect service of process within the US upon those persons or us. In addition, you may be unable to enforce judgments obtained in courts of the US against those persons outside the jurisdiction of their residence, including judgments predicated solely upon the securities laws of the US.

 

33


Table of Contents

ITEM 4.  INFORMATION ON THE COMPANY

A. History and Development of our Company

WNS (Holdings) Limited was incorporated as a private liability company on February 18, 2002 under the laws of Jersey, Channel Islands, and maintains a registered office in Jersey at 22 Grenville Street, St Helier, Jersey JE4 8PX, Channel Islands. We converted from a private limited company to a public limited company on January 4, 2006 in accordance with Article 17A of the 1991 Law. We gave notice of this to the Jersey Financial Services Commission (“JFSC”) in accordance with Article 17(3) of the 1991 Law on January 12, 2006. Our principal executive office is located at Gate 4, Godrej & Boyce Complex, Pirojshanagar, Vikhroli (W), Mumbai 400 079, India, and the telephone number for this office is (91-22) 4095-2100. Our website address is www.wns.com. Information contained on our website does not constitute part of this annual report. Our agent for service in the US is our subsidiary, WNS North America Inc., 15 Exchange Place, 3rd Floor, Suite 310, Jersey City, New Jersey 07302, US.

We began operations as an in-house unit of British Airways in 1996 and became a business process outsourcing service provider for third parties in fiscal 2003. Warburg Pincus acquired a controlling stake in our company from British Airways in May 2002 and inducted a new senior management team.

In July 2006, we completed our initial public offering, whereupon our ADSs became listed on the New York Stock Exchange (the “NYSE”) under the symbol “WNS.” In February 2012, in connection with our follow-on offering, we issued new ordinary shares in the form of ADSs, at a price of $9.25 per ADS, aggregating approximately $50.0 million and at the same time, Warburg Pincus divested 6,847,500 ordinary shares in the form of ADSs. In February 2013, Warburg Pincus sold its remaining 14,519,144 ordinary shares in the form of ADSs, thereby divesting its entire stake in our company.

From 2004 to July 2007, we provided business process outsourcing services to Aviva International Holdings Limited (“Aviva”). In July 2008, we acquired Aviva Global from Aviva.

We have made a number of acquisitions since fiscal 2003, including our acquisition of Town & Country Assistance Limited. We subsequently rebranded the company as WNS Assistance, which is part of WNS Auto Claims BPM, our reportable segment for financial statement purposes. In fiscal 2004, we acquired the health claims management business of Greensnow Inc. In fiscal 2006, we acquired Trinity Partners Inc. (which we merged into our subsidiary, WNS North America Inc.), a provider of BPM services to financial institutions, focusing on mortgage banking. In August 2006, we acquired from PRG Airlines Services Limited (“PRG Airlines”) its fare audit services business. In September 2006, we acquired from GHS Holdings LLC (“GHS”) its financial accounting business. In May 2007, we acquired Marketics, a provider of offshore analytics services. In June 2007, we acquired Flovate Technologies Limited (“Flovate”), a company engaged in the development and maintenance of software products and solutions, which we subsequently renamed as WNS Workflow Technologies Limited. In March 2008, we entered into a joint venture with Advanced Contract Solutions, Inc. (“ACS”), a provider in BPO services and customer care in the Philippines, to form WNS Philippines Inc. and in November 2011, we acquired ACS’s shareholding in WNS Philippines Inc., which became our wholly-owned subsidiary. In April 2008, we acquired Chang Limited, an auto insurance claims processing services provider in the UK, through its wholly-owned subsidiary, Accidents Happen Assistance Limited (“AHA”) (formerly known as Call 24-7 Limited, or Call 24-7). In June 2008, we acquired Business Applications Associates Limited (“BizAps”), a provider of Systems Applications and Products (“SAP ® ) solutions to optimize the enterprise resource planning functionality for our finance and accounting processes. In June 2012, we acquired Fusion Outsourcing Services (Proprietary) Limited (“Fusion”), a provider of a range of outsourcing services, including contact center, customer care and business continuity services, to both South African and international clients. Following our acquisition of Fusion, we have renamed it as WNS Global Services SA (Pty) Ltd. In June 2016, we acquired Value Edge, a leading provider of commercial research and analytics services to clients in the Pharma / Biopharma industry. In January 2017, we acquired Denali, a leading provider of strategic procurement BPM solutions. In March 2017, we acquired HealthHelp, an industry leader in BPM care management.

 

34


Table of Contents

Most recently in April 2017, we established the WNS B-BBEE Staff Share Trust with the principal objective of creating meaningful participation of the Black employees (as defined in the applicable legislation) of our South African subsidiaries in the growth of the company. We are committed to transformation in South Africa and are implementing this structure to benefit Black People in accordance with the objectives and requirements of the Codes of Good Practice on Black Economic Empowerment as promulgated by section 9(1) of the Broad-Based Black Economic Empowerment Act No. 53 of 2003 of South Africa. In June 2017, we established WNS New Zealand Limited, a wholly owned subsidiary of WNS Global Services (Australia) Pty Ltd. In July 2017, we merged Value Edge into WNS Global Services Private Limited. In September 2018, we established WNS Global Services (UK) International Limited, a wholly owned subsidiary of WNS (Mauritius) Limited. In October 2018, we established WNS Global Services North Americas Inc., a wholly owned subsidiary of WNS Global Services (UK) International Limited and WNS Global Services (UK) Limited, Sucursal En España, a new branch of WNS Global Services (UK) Limited. In December 2018, we established WNS SA Domestic (Pty) Ltd, a wholly owned subsidiary of WNS Global Services SA (Pty) Limited and WNS-Healthhelp Philippines Inc, a wholly owned subsidiary of HealthHelp LLC. In September 2019, we changed the name of our wholly-owned South African subsidiary, WNS SA Domestic (Pty) Ltd to WNS South Africa (Pty) Ltd. In November 2019, we established WNS Denali Sourcing Services Inc, a wholly-owned subsidiary of Denali Sourcing Service Inc. On January 9, 2020, we changed the name of our wholly-owned Netherlands subsidiary, WNS Global Services Netherlands Cooperatief U.A., to WNS Global Services Netherlands B.V and our Ireland branch, WNS Global Services Netherlands Cooperatief U.A. (Ireland Branch), to WNS Global Services Netherlands B.V. (Ireland Branch). On March 17, 2020, we demerged our Netherlands subsidiary, WNS Global Services Netherlands B.V., and formed WNS Business Consulting Netherlands B.V. On April 28, 2020, we established a new entity in Canada, WNS Gestion des Processus d’Affaire Inc., a wholly-owned subsidiary of the Company. Our organizational structure now comprises 39 entities in 24 countries, and 10 branches in Poland, UAE, China, Singapore, France, Romania, Turkey, Ireland and Spain. Of these 39 entities, WNS Cares Foundation, which is a wholly-owned subsidiary of WNS Global, is a not-for-profit organization registered under the former Section 25 of the Indian Companies Act, 1956 (which has become Section 8 of the Indian Companies Act, 2013), India. The WNS Cares Foundation was formed for the purpose of promoting corporate social responsibilities and does not qualify as a subsidiary under IFRS 10— Consolidated Financial Statements and hence is not considered for the purpose of preparing our consolidated financial statements.

We have our principal executive office in Mumbai, India, and we have client service offices in Dubai (United Arab Emirates), Jersey City, New Jersey (the US), Sydney (Australia), London (the UK), and Singapore, and we have delivery centers in Guangzhou, Dalian and Shanghai (China), San Jose (Costa Rica), Bangalore, Chennai, Gurgaon, Mumbai, Nashik, Pune, Noida and Vizag (India), Manila, Iloilo and Alabang (the Philippines), Gydnia (Poland), Bucharest and Constanta (Romania), Cape Town, Johannesburg, Durban and Port Elizabeth (South Africa), Colombo (Sri Lanka), Zurich (Switzerland), Istanbul (Turkey), Ipswich, Manchester and Mansfield (the UK), Spain and Columbia, South Carolina, Pittsburgh, Pennsylvania, Bellevue, Washington, Boston, Massachusetts, Houston, Texas, and Albany, New York (the US).

 

35


Table of Contents

Our capital expenditures in fiscal 2020, 2019 and 2018 amounted to $27.9 million, $32.3 million and $33.7 million, respectively. Our principal capital expenditures were incurred for the purposes of setting up new delivery centers, expanding existing delivery centers and developing new technology-enabled solutions to enable execution and management of clients’ business processes. Given the current lack of visibility due to the ongoing COVID-19 pandemic, we are not in a position to provide an estimate for our expected capital expenditure needs in fiscal 2021. The geographical distribution, timing and volume of our capital expenditures in the future will depend on new client contracts we may enter into or the expansion of our business under our existing client contracts.

As at March 31, 2020, we had commitments for capital expenditures of $9.6 million (net of advances to capital vendors) relating to the purchase of property and equipment for our delivery centers. Of this committed amount, we plan to spend approximately $5.0 million in India, approximately $3.6 million in Philippines, approximately $0.2 million in South Africa, and approximately $0.8 million in the rest of the world. We expect to fund these estimated capital expenditures from cash generated from operating activities, existing cash and cash equivalents and the use of existing credit facilities. See “Part I — Item 5. Operating and Financial Review and Prospects — Liquidity and Capital Resources” for more information.

Recent Developments

In response to the ongoing COVID-19 pandemic, we have implemented a number of strategic business initiatives designed to protect the health and safety of our employees, maximize our ability to service our clients, and manage the financial impacts to our business. For further information on COVID-19’s impact, see “Part I — Item 5. Operating and Financial Review and Prospects — Global Economic Conditions — Impact of COVID-19.”

Employee Health and Safety

We have taken the following measures to protect our employees:

 

   

Established a command and control center for communication and coordination across the organization;

 

   

Implemented proactive communication, education, and awareness programs on employee health, safety and prevention measures;

 

   

Provided for preventive and detective health measures at our offices, including conducting temperature checks upon entry and providing face masks and hand sanitizers;

 

   

Deployed trained medical staff on our premises;

 

   

Created procedures for cleaning, sanitization and quarantine measures in the event of potential contamination; and

 

   

Adhered to various advice, guidelines and directives of global, national, and local health and governmental agencies, including in relation to travel restrictions, social distancing, quarantines, virus prevention, and medical protocols.

Client Collaboration

We have been working closely with our clients to maximize our ability to service their rapidly changing business requirements, which includes the following:

 

   

Understand the changes to required volumes, so as to prioritize workloads, and modify service levels;

 

   

Obtain our clients’ approvals, where necessary, on the adoption of “work-from-home” delivery methods, solution changes, service-level revisions and risk or data privacy waivers; and

 

   

Discuss post-COVID-19 requirements, business needs and engagement models.

Business Continuity

We have activated business continuity programs to help manage our clients’ businesses. These programs include a combination of implementing “work-from-home” solutions, allowing work to continue to be provided from our facilities (where possible) and transitioning work to other WNS locations. These solutions have required us to:

 

   

Arrange for equipment (such as laptops and desktops), software and internet connectivity to be available at our employees’ homes. This has included moving existing WNS assets, and the renting and purchasing of new assets;

 

   

Organize our information security and IT teams to create revised solutions to address compatibility, data integrity, and risk mitigation issues;

 

   

Address productivity challenges, including those related to infrastructure, bandwidth, and connectivity capabilities; and

 

   

Create alternative transportation and provide accommodation for employees, who have been authorized to work from our facilities.

Financial Impacts

We have seen the following financial impacts to our business as a result of the COVID-19 pandemic:

 

   

Declining business volumes and activity levels for certain clients, resulting in revenue loss for certain services;

 

   

Receiving requests from certain clients for economic relief, including volume reductions, reduced pricing, discounts and extended payment terms;

 

   

Not receiving approval from certain clients for some services to be performed through “work-from-home” models, because of the sensitive nature of the work involved;

 

   

Incurring costs associated with the additional compensation for overtime and the temporary carrying costs of non-productive resources;

 

   

Experiencing reduced employee productivity in some “work-from-home” delivery locations, as a result of information technology or infrastructure challenges, including those related to internet access, connectivity and bandwidth issues;

 

   

Seeing longer sales cycles as a result of business disruption for our clients caused by the COVID-19 pandemic and longer sales cycles, transitioning and ramp-up of new projects because of the inability of our sales, solutions and delivery personnel to travel domestically and internationally;

 

   

Incurring additional costs from our service delivery, resulting from the shift to “work-from-home” delivery models, which include incurring expenses for equipment (such as the rental and purchase of desktops and laptops), providing or solving software, internet and connectivity capabilities or issues, providing hotel and local accommodations, meals and allowances and transportation, and ensuring facility monitoring, sanitizing, cleaning, protection and administration; and

 

   

Facing increased uncertainty, especially with respect to revenue and expense levels, resulting from currency fluctuations driven by the stock market and macro-economic volatility.

 

36


Table of Contents

B. Business Overview

We are a global BPM company, offering an array of end-to-end industry-specific and cross-industry solutions. We combine our deep industry knowledge with technology, analytics and process expertise to co-create innovative, digitally enabled transformational solutions with more than 400 clients across various industries. Our solutions and capabilities encompass intelligent automation (robotic process automation (“RPA”), artificial intelligence (“AI”) and cognitive computing), natural language processing and machine learning, blockchain, internet of things (“IoT”), business process-as-a-service (“BPaaS”) platforms, embedded analytics and process re-engineering frameworks.

A key element in all our outsourcing engagements is our ability to deliver business value through the co-creation of solutions and products with our clients and strategic partners. This, combined with our client-centric approach, enables us to align our people, processes and delivery network with our clients’ businesses. Our industry-aligned approach helps us provide a specialized focus on each of the sectors that we target, effectively manage our clients’ business processes, and offer customized solutions and business insights designed to improve their competitive positioning. The major industry verticals that we currently focus on are: insurance, diversified businesses (including manufacturing, retail and consumer packaged goods (“CPG”), media and entertainment, and telecommunication or telecom), travel and leisure, healthcare, utilities, shipping and logistics, consulting and professional services, and banking and financial services.

Our cross-industry solutions, common across multiple industries, include customer interaction services, finance and accounting (including procurement), human resource, research and analytics, technology, and governance, risk and compliance services.

We measure our execution of clients’ business processes against multiple performance parameters, and aim to consistently meet and exceed these parameters in order to maintain and expand our client relationships. We strive to build long-term client relationships, and typically sign multi-year contracts with our clients that provide us with recurring revenue. In fiscal 2020, 140 and 132 clients contributed more than $1 million to our revenue and revenue less repair payments (non-GAAP), respectively. In fiscal 2019, 125 and 120 clients contributed more than $1 million to our revenue and revenue less repair payments (non-GAAP), respectively.

As at March 31, 2020, we had 44,292 employees executing business processes for our 401 clients (with each client generating more than $0.01 million in revenue in fiscal 2020).

In fiscal 2020, our revenue was $928.3 million, our revenue less repair payments (non-GAAP) was $896.2 million and our profit was $116.8 million. Our revenue less repair payments is a non-GAAP financial measure. For a discussion of our revenue less repair payments (non-GAAP) and a reconciliation of our revenue less repair payments (non-GAAP) to revenue, see “Part I – Item 5. Operating and Financial Review and Prospects – Overview.”

 

37


Table of Contents

Industry Overview

The global outsourcing market continues to evolve in response to a disruptive business landscape. While companies are still looking to benefit from process efficiency, cost advantage and labor arbitrage from their BPM solution providers, there is now a broader and more strategic narrative to outsourcing with a strong focus on innovation-led value. As customer experience, data-led insights and digital solutions have become integral to business success, enterprises now expect their BPM solution providers to play a bigger and more profound role in driving transformational outcomes. As companies outsource more of their complex and high-end business processes, the key consideration for them is the ability of the BPM provider to understand their requirements, develop transformational plans, execute intricate, multi-layered process transitions and successfully manage these processes on an ongoing basis. Increasingly, companies with the aim of optimizing processes and improving competitive positioning are demanding higher-value, cost-effective services such as process re-engineering and business transformation from their BPM providers. The increased focus on variable cost structures and the creation of tangible business benefit has resulted in alternative service delivery and pricing models such as transaction-based, outcome-based and subscription models.

While BPM companies continue to address business disruption caused by digital and technological changes and evolving customer expectations, the COVID-19 pandemic has highlighted additional client and provider challenges regarding business continuity. Going forward, we expect the BPM service providers and BPM solutions will need to adapt to pandemic scenarios, addressing business continuity requirements during a crisis as well as co-architecting new and flexible solutions post-crisis.

The COVID-19 pandemic underscores the need for flexible, resilient operating models that enable business continuity during a wide array of adverse situations. The ability to create and implement business continuity and disaster recovery solutions is expected to become an important factor in evaluating BPM providers. BPM companies will be required to leverage a diversified geographical footprint and deliver continuity solutions that will enable clients to maximize operational agility, scalability and sustainability. These solutions are expected to include traditional business continuity models, increased deployment of technology and automation, and the potential for increased adoption of remote work, or “work-from-home,” models.

We believe that as companies look to recover from the impact of the COVID-19 pandemic, clients will increasingly focus their attention on reducing costs, accelerating business transformation and digital adoption, and adopting outcome-based pricing models. We expect that BPM providers will play a key role in helping clients create and digitize end-to-end processes across industries. Delivering customized digital transformation solutions will be required to help reduce operational costs, improve end-to-end customer experience, generate actionable insights, reduce risk, and improve competitive positioning. For further information, see “Part I — Item 5. Operating and Financial Review and Prospects — Global Economic Conditions — Impact of COVID-19.”

In light of the existing environment, businesses are thus undertaking a rigorous and multi-faceted evaluation process when selecting a BPM provider. Based on our experience, a client typically seeks several key attributes in a business process management provider, including:

 

   

Domain knowledge and industry-specific expertise;

 

   

Process expertise across horizontal service offerings;

 

   

“Skin in the game” approach denoting the ability to work as a true partner, absorb risks and prioritize outcomes;

 

   

Ability to innovate, transform, provide operational expertise and drive best practices based on internal and external benchmarking;

 

   

Proven ability to execute a diverse range of mission-critical and often complex business processes;

 

   

Ability to tie service delivery, technology implementation and process automation with the client’s existing information technology (“IT”) infrastructure, negating the need for large IT overhauls;

 

   

Capabilities to drive improved process standardization across business units and multiple locations, demonstrating strong global delivery capabilities;

 

   

Comprehensive analytical capabilities to deliver actionable business insights; domain-led analytics solutions customized to industry requirements and embedded as part of the larger BPM services portfolio;

 

   

Technology-enabled services and solutions, including RPA, cognitive computing, intelligent automation, artificial intelligence, IoT, industrial robotics, blockchain, cloud-based offerings and platform-based BPM;

 

   

Robust operational models to swiftly and comprehensively manage disruptions and drive maximum business continuity, underpinned by extensive geographical footprint, a seamless transition methodology, digital ways of working and a strong remote work model;

 

   

Global presence through a mix of offshore, nearshore and onshore delivery centers to access talent and capabilities, create cultural alignment, leverage language skills, and mitigate risks; and

 

   

Capability to scale employees and infrastructure without a diminution in quality of service.

The recent outsourcing trends have driven BPM providers to be more innovative, strategic and forward-looking in their outlook. Against the backdrop of this changed environment, we believe WNS, with our focused domain, technology and analytics capabilities, guiding principles of co-creation and client centricity, extensive global footprint, robust business continuity planning (“BCP”) methodologies and transformational and re-engineering frameworks, is well positioned to deliver business value to our clients. We offer technology-enabled BPaaS solutions that help companies adapt rapidly to changing business conditions. Further, we offer customized engagement models that cater to each client’s scale and transformation journey. In addition to traditional pricing models based on headcount (often referred to as full-time equivalents (“FTEs”)), we offer transaction- and outcome-based pricing models to provide clients with cost flexibility and measurable business benefit.

In fiscal 2020, 33.7% of our total revenues were generated from “non-FTE” models. These “non-linear” pricing models, which de-link the relationship between headcount and revenue for BPM providers, create an incentive for the providers to improve the productivity of their employees, increase the use of technology, and enhance the overall efficiency of their operations.

 

38


Table of Contents

Competitive Strengths

We believe that we have the competitive strengths necessary to maintain and enhance our position as a leading global provider of BPM services.

Well-positioned for the evolving BPM market

The BPM industry, which started with the first wave of simple outsourced processes, has now expanded to include complex business processes and higher-value services that involve process re-engineering, business and digital transformation, management of mission-critical operations, and generation of business insights to aid decision-making. We believe that our industry-specific expertise, end-to-end service offerings, transformation capabilities, technology-enabled solutions, process management skills, advanced analytics, global delivery network and customer-centric approach position us at the forefront of the evolving BPM market.

The COVID-19 crisis, and its disruptive impact on global businesses, are driving further evolution of the BPM market and highlighting the need for robust business continuity measures. As governments around the world took, and continue to take, stringent measures to contain the spread of the COVID-19 pandemic, including full and partial lockdowns, businesses have faced challenges to adapt. WNS has implemented new processes and delivery solutions to help protect employee health and safety, while maximizing our ability to service our client’s rapidly changing business requirements. For further information, see “Part I— Item 4. Information on the Company — Recent Developments” and “Part I — Item 5. Operating and Financial Review and Prospects — Global Economic Conditions — Impact of COVID-19.”

Deep industry expertise

We have established deep expertise in the industries we target as a result of our vertical organizational structure, legacy client relationships, proprietary technology offerings, key acquisitions and the hiring of management with specific industry knowledge. Our deep domain expertise in each of the 12 industries we serve helps us develop keen insights and transform them into leading-edge impactful business solutions with the help of technology, analytics and process rigor. We have developed methodologies, frameworks, proprietary knowledge and industry-specific technology platforms applicable to our target industries that allow us to provide industry-focused solutions and help clients compete within these industries.

We have organized our company into business units aligned with each of the industries on which we focus. By doing so, we are able to approach clients in each of our target industries with a combined sales, marketing and delivery effort that leverages our in-depth industry knowledge and industry-specific technology platforms and solutions.

 

39


Table of Contents

We have received numerous recognitions for our industry leadership. Our awards and recognitions in fiscal 2020 and 2019 are set forth below:

Vertical-specific Recognitions

Insurance:

 

   

A “Leader and Star Performer” in Everest Group’s Property and Casualty Insurance – Service Provider Landscape with Services PEAK Matrix Assessment 2020

 

   

A “Leader” in NelsonHall’s Vendor Evaluation and Assessment Tool (“NEAT”) for Property and Casualty Insurance Business Process Services (“BPS”) 2020

 

   

A “Leader” in Property and Casualty and Life and Annuity Third-Party Administration (“TPA”) Services, and a “Rising Star” in Life and Annuity in Information Services Group’s (“ISG”) Provider Lens Digital Insurance BPO Services US Quadrant 2019

 

   

A “Leader” in all four buyer archetypes in ISG’s Provider Lens Digital Insurance BPO Services Buyer Archetype 2019

 

   

A “Major Contender” in Everest Group’s Life and Pensions Insurance BPO – Service Provider Landscape with Services PEAK Matrix Assessment 2019

 

   

A “Major Contender” in Everest Group’s Non-Life Insurance TPA – Service Provider Landscape with Services PEAK Matrix Assessment 2019

Banking and Financial Services:

 

   

A “Leader” in NelsonHall’s NEAT for Digital Banking 2020

 

   

A “Major Contender” in Everest Group’s Financial Crime and Compliance Operations Services PEAK Matrix Assessment and Service Provider Landscape 2020

 

   

A “Major Player” in NelsonHall’s NEAT for Transforming Wealth and Asset Management Services 2019

 

   

A “Major Player” in International Data Corporation (“IDC”) MarketScape: Worldwide Business Process Outsourcing for Anti-Money Laundering and Know-Your-Customer Vendor Assessment (December 2019)

 

   

A “Major Contender” in Everest Group’s Banking BPS – Service Provider Landscape with Services PEAK MatrixAssessment 2019

Retail and CPG Services:

 

   

Ranked number 8 in HFS Research’s Top 10 for Retail and CPG Services 2019

Healthcare:

 

   

A “Major Contender” in Everest Group’s Life Sciences BPS – Service Provider Landscape with Services PEAK Matrix Assessment 2019

 

   

A “Leader” in NelsonHall’s NEAT for Healthcare Commercial Payer BPS 2019

 

40


Table of Contents

Horizontal-specific Recognitions

Customer Interaction Services:

 

   

A “Leader” in NelsonHall’s NEAT for Cognitive Customer Experience Services 2020

 

   

A “Major Contender” in Everest Group’s Contact Center – Service Provider Landscape with Services PEAK Matrix Assessment 2019

Finance and Accounting (including Procurement and Supply Chain):

 

   

A “Major Contender and Star Performer” in Everest Group’s Finance and Accounting Outsourcing Digital Capability Platform – Service Provider Landscape with Services PEAK Matrix Assessment 2020

Research and Analytics:

 

   

A “Leader” in NelsonHall’s NEAT for Advanced Analytics 2019

 

   

A “Major Contender” in Everest Group’s Advanced Analytics and Insights BPS – Service Provider Landscape with Services PEAK Matrix Assessment 2019

 

   

A “Major Contender” in Everest Group’s Data and Analytics BPS – Service Provider Landscape with Services PEAK Matrix Assessment 2019

 

   

A “Major Contender” in Everest Group’s Customer Experience Analytics – Service Provider Landscape with Services PEAK Matrix Assessment 2019

 

   

A “Major Player” in IDC MarketScape: Worldwide Analytics for Business Operations Services 2019 Vendor Assessment (October 2019)

Procurement:

 

   

Ranked number 6 in HFS Research’s Top 10 for Source to Pay Services 2019

 

   

A “Leader” in NelsonHall’s NEAT for Next Generation Supply Chain Management 2019

Human Resources:

 

   

A “Major Player” in NelsonHall’s NEAT for Payroll 2019

 

   

A “Major Contender” in Everest Group’s Multi-Process Human Resources Outsourcing – Service Provider Landscape with Services PEAK Matrix Assessment 2019

 

41


Table of Contents

Corporate:

 

   

CNBC-TV 18 India Risk Management Awards 2020 in Best Risk Management Framework & Systems – Cybersecurity category

 

   

Nine Stevie Sales and Customer Service Awards 2020:

 

   

Customer Service Complaints Team of the Year – Business Services Industries (Gold Award)

 

   

Front-Line Customer Service Team of the Year – Business Services Industries (Bronze Award)

 

   

Sales Growth Achievement of the Year (Bronze Award)

 

   

Award for Innovation in Customer Service – Other Service Industries-1 (Silver Award)

 

   

Award for Innovation in Customer Service – Other Service Industries-2 (Silver Award)

 

   

e-Commerce Customer Service Award – Other Service Industries (Gold Award)

 

   

Best Customer Satisfaction Strategy (Silver Award)

 

   

Best Use of Customer Insight-1 (Silver Award)

 

   

Best Use of Customer Insight-2 (Bronze Award)

 

   

Innovative In-house Team of the Year at the Asian Legal Business India Law Awards 2020

 

   

Nine Stevie International Business Awards 2019:

 

   

Executive of the Year – Computer Services for our Group Chief Executive Officer, Keshav Murugesh (Gold Award)

 

   

Insurance Solution (Gold Award)

 

   

Artificial Intelligence / Machine Learning Solution (Bronze Award)

 

   

Customer Service Team of the Year-1 (Bronze Award)

 

   

FinTech Solution (Bronze Award)

 

   

Business or Competitive Intelligence Solution (Bronze Award)

 

   

Business Technology Solution – Other (Bronze Award)

 

   

Customer Service Team of the Year-2 (Bronze Award)

 

   

Customer Service Team of the Year-3 (Bronze Award)

 

   

Golden Peacock Global Award for Corporate Governance 2019

 

   

WNS Sri Lanka ranked number 7 amongst Sri Lanka’s Top Employers of Chartered Institute of Management Accountants professionals 2019

 

   

Chief Procurement Officer Innovation Award 2019 in the Procurement Innovation category

 

   

Great Learning Data Science Award 2019 for Best Compliance Framework of the Year

 

   

Compliance Leadership Awards 2019 for Best Compliance Framework of the Year

 

   

Top 50 Providers to Know by Spend Matters 2019

 

   

Two Martech Leadership Awards 2019:

 

   

Best Personalization Campaign

 

   

Best New Product / Service for a Contact Center

 

   

Three Cape Town BPO Awards 2019:

 

   

Top Non-technical Innovation

 

   

Judy Robison, Executive Director of Ucademy (Pty) Ltd, a WNS subsidiary, was named Top GBS Support Professional

 

   

Priscilla Brink from the human resources team at Ucademy (Pty) Ltd, a WNS subsidiary, won the Top GBS Trainer / Coach Award

 

   

Our Group Chief Executive Officer, Keshav Murugesh, recognized as ‘Most Influential Business Leaders of Asia’ at the 4th Edition of the Economic Times Asian Business Leaders Conclave 2019

 

   

Golden Peacock Innovation Management Award 2019

 

   

Future of Sourcing Awards for Innovations in the Outsourcing category 2019

 

42


Table of Contents

Technology:

 

   

IDG CIO’s (a magazine related to technology) 100 Award 2019 – Hall of Fame

 

   

IDG CIO’s (a magazine related to technology) Power List 2019 for the category “Hyper Converged Technology Icon”

Human Resources (“HR”):

 

   

Association for Talent Development Best Award 2020

 

   

Learning and Development Team of the Year Award 2019 – South Africa

 

   

WNS Named in Top 50 for Learning and Development Leadership by People Capital Index 2019

Corporate Social Responsibility (“CSR”):

 

   

Golden Peacock Global Award for Corporate Social Responsibility 2020

 

   

Stakeholder Engagement Award at CSR Summit and Awards 2019

 

   

Stevie International Business Award 2019 for Corporate Social Responsibility Program of the Year – in Asia, Australia and New Zealand (Silver Award)

 

43


Table of Contents

End-to-end service portfolio including higher-value transformational services and technology-enabled solutions

We seek to focus our service portfolio on more complex processes and solutions, and to shift away from reliance on services that are less integral to our clients’ business operations, such as commoditized voice and transactional services (telemarketing and technical helpdesks), which characterized the business process outsourcing industry in its early days. We offer an array of higher-value, judgment-based services that seek to not only reduce cost and improve operating efficiency, but also enable improved decision-making, competitive positioning and business outcomes for our clients. These include high-end finance and accounting services, including strategic sourcing through supply chains, transformation services, technology-enabled offerings and analytics capabilities. We also provide a wide array of industry-specific solutions, which cut across these traditional “horizontal” services. These solutions are designed to help clients address process efficiency requirements, provide digital capabilities, generate business insights, and improve competitive positioning within their respective industries.

We have also developed and continue to develop technology-enabled, or “automated,” solutions that utilize our proprietary software and licensed software in conjunction with our core business process management services. These integrated, technology-enabled solutions allow us to offer higher-value, differentiated services, which are more scalable and repeatable and create value for our clients through increased process efficiency and quality. We also collaborate with technology companies, combining their software tools, platforms and expertise with our service capabilities to deliver business solutions to the marketplace. These technologies include RPA, cognitive computing, machine learning, artificial intelligence, and natural language processing. We believe that technology-enabled “automated” solutions will enable us to grow our revenue in a non-linear way by decoupling revenue growth from headcount growth.

To this end, we offer platform-enabled BPM or BPaaS that tightly integrates our domain expertise, business processes, automation, embedded analytics and a cloud-based infrastructure.

Proven global delivery platform

We deliver our services from 61 delivery centers in 12 countries around the world, located in China, Costa Rica, India, the Philippines, Poland, Romania, South Africa, Spain, Sri Lanka, Turkey, the UK and the US. Our ability to offer services delivered from a mix of onshore, nearshore and offshore locations benefits our clients from the perspectives of access to skills and talent, cultural alignment, language capabilities, business continuity, risk mitigation, scalability, efficiency and cost-effectiveness.

We believe the breadth of our delivery capability allows us to meet our clients’ needs, diversifies our workforce and allows us to access local talent pools around the world.

Our client-centric focus

We have a client-centric engagement model that leverages our industry-specific and shared-services expertise, flexible pricing models, “client-partner” relationship approach, as well as our global delivery platform to offer business solutions designed to meet our clients’ specific needs.

We seek to enhance our value proposition to our clients by providing them with flexible pricing models that align our objectives with those of our clients. In addition to traditional full-time equivalent-based pricing, we provide alternative pricing models such as transaction-based pricing, outcome-based pricing and subscription pricing. A sizable percentage of our revenue, being 33.7% in fiscal 2020, is derived from these “non-FTE”-based pricing models. These models enable our clients to pay only for actual work performed or tangible benefit received.

We have also adopted a client-centric sales model, which is tightly integrated with our vertical organizational structure. Strategic client accounts are assigned a dedicated “client-partner” from our team who is responsible for managing the day-to-day relationship with the client. The “client-partner” is typically a seasoned resource with deep domain experience, who often works directly in the client’s local offices. Within our company, the “client-partner” is assigned to a specific vertical, and directly manages sales resources responsible for expanding client relationships (farmers). The “client-partner” is responsible for driving business value to our clients, monitoring quality of delivery and customer satisfaction, and managing account growth and profitability.

 

44


Table of Contents

Experience in transitioning processes and running them efficiently

Many of the business processes that clients outsource to us are core to their operations, requiring substantial program management expertise to enable the transition of work to us. A well-planned and effectively managed transition is the cornerstone of our business proposition and helps our clients outsource their operations effectively and efficiently, focus on their business priorities and implement operating models that are designed to help them achieve their business strategies.

Our transition approach is structured to help deliver business outcomes to our clients by:

 

   

Minimizing risk and achieving rapid transition of services;

 

   

Ramping up operations with minimal disruption to existing business, metrics, customers and suppliers;

 

   

Effectively managing changes brought about by transformative tools and technologies;

 

   

Managing a seamless transfer of responsibilities from any incumbent service provider to us; and

 

   

Adapting to the changes due to COVID-19 and engaging with clients to continue transitions, despite lockdowns in various geographies, by leveraging on a remote training model.

At its core, all aspects of the transition process are governed by EnABLE, our proprietary transition toolkit, which has been tested and evolved over 20 years. EnABLE embeds multi-level governance, visibility, transparency, flexibility and compliance across the entire transition lifecycle.

Our differentiators include:

 

   

Customer-centricity: Our practice of “early transition voice of customer” identifies and addresses opportunities to do better at meeting clients’ objectives and success criteria.

 

   

Robust governance: Our multi-level governance approach seeks to ensure that transition reviews are conducted at all levels up to executive leadership. Risks are assessed and proactive support is provided with a view to achieving clients’ objectives.

 

   

Strong leadership and experience: We have a robust and mature transition methodology with a strong record in managing and delivering transitions from clients as well as from major incumbent players.

 

   

Global presence: Our team of skilled transition managers operates from all our major global delivery locations. Our agile and readily deployable team is always available for clients’ needs.

Extensive investment in human capital development

At WNS, we have created a learning organization with the objective of empowering employees with skills that will help them to constantly collaborate, co-create and outperform in a changing business landscape. This learning organization is designed to offer developmental programs to every employee band level in the organization, across business units and enabling units. It is responsible for developing organization-wide skills within focus groups, such as behavioral, domain, technical, leadership, functional as well as process-related skills. See “– Human Capital – Training and Development.”

 

45


Table of Contents

The learning organization comprises the following building blocks:

 

  i.

Learning Academy (“LA”): The LA not only focuses on developing initiatives and programs that aim to enable high-impact leadership and potential across all employee band levels and geographies, but also focuses on building internal capability to create a future-ready and digital-savvy workforce. The LA has over 300 unique programs for various employee band levels and behavioral skill areas that are conducted across locations based on the learning strategies defined for each team.

 

  ii.

Digital Capability Building:

 

  a)

WNS Education: In line with the digital transformation strategy, WNS Education (a niche arm of the LA) strives to create bespoke certifications for capabilities that are not readily available either in the education system or the industry. WNS Education aims to achieve the following:

 

   

Building capabilities to lead digital transformation in the BPM space;

 

   

Raise the organization’s digital quotient;

 

   

Prepare workforce as digital natives; and

 

   

Re-purpose and re-skill the workforce since BPM-specific education is not available in the ecosystem.

 

  b)

Digital Future (“DiFu”) Digital Competency Framework: This is a digital readiness assessment platform that helps employees assess their digital competencies based on their role and enables them to undertake a learning and skill-upgrading journey. The objective is to create a future-ready workforce through customized digital training. Recently, DiFu was launched for employees at the leadership level.

 

  c)

Immersive Learning Experience On-Demand (“GLINT”): This is an AI-led digital learning and knowledge platform comprising tailored modules mapped to specific business requirements. GLINT facilitates an environment of knowledge sharing and peer-to-peer learning, helping to drive collaboration among employees.

 

  iii.

Domain University: The process and domain training team addresses process orientation, new hire training, basic soft skills training and refresher courses for various processes within the business vertical through an online portal called “Domain University.” WNS has strong offerings in travel, insurance, healthcare and banking and financial services. Hence, the Domain University was conceptualized to focus on consolidating, building and sharing our domain knowledge.

 

  iv.

Center of Excellence (“CoE”): WNS has a CoE that focuses on nurturing and developing the future leaders of the organization:

 

   

Aspire Plus: A specially curated program for top talent at leadership levels in WNS. These employees are taken through a specially designed journey which includes, among others, tie-ups with reputed academic institutes, speaker sessions and live projects, all of which are aimed to give the organization a strong talent pipeline at the leadership level.

 

   

Centurion: This is a talent development program for future women leaders. It is an initiative to proactively identify and nurture women employees from the frontline manager population to build their capabilities for the next role and create an enabling environment for career opportunities.

 

  v.

Business Process Excellence and Transformation (“BPET”) Learning Center: The BPET learning center focuses on building capability to transform process quality. This team teaches process improvement through certifications such as “Six Sigma,” “Lean,” and “Kaizen” methodologies.

 

  vi.

Developing Research and Analytics Capability – Mastermind: Mastermind training program is a series of dedicated technical trainings customized for certain employee role band levels that perform work relating to research and analytics. This initiative is primarily geared towards enhancing our employees’ research and analytics capabilities.

 

  vii.

Culture Building and Transformation – Millennial Council: This is an initiative where our most junior employees get an opportunity to work closely with senior leaders in the company. The council members are tasked to help the WNS brand stay in alignment with changing trends.

Experienced management team

We benefit from the effective leadership of a global management team with diverse backgrounds, including extensive experience in outsourcing. Members of our executive and senior management team have, on average, over 20 years of experience in diverse industries, including in the business process and information technology outsourcing sector, and in the course of their respective careers have gathered experience in developing long-standing client relationships, leveraging technology, launching practices in new geographies, developing new service offerings and successfully integrating acquisitions.

 

46


Table of Contents

Business Strategy

Our objective is to further strengthen our position as a leading global business process management provider and continue to be a partner of choice for our clients. We seek to increase our client base and expand our existing relationships. We intend to achieve this through deep industry expertise, our ability to develop trusted client relationships and by being a strategic partner to support our clients’ business strategies and transformational requirements. We continue to invest in domain expertise, digital capabilities including data and analytics, technology, customer experience, intelligent automation, agile execution, and employees to serve our clients better. We also intend to make select acquisitions to fill capability gaps.

We have made significant investments to accelerate our growth. These investments include:

 

   

Expansion and re-organization of our sales force and the development of onshore digital transformation teams, so as to be closer to our clients and address their business challenges and needs;

 

   

Expansion of other sales channels including the development of new partnerships and alliances, and broadening our engagement with outsourcing industry advisors and analysts;

 

   

Increase in the range of services and solutions offered to our clients across different industries and business functions, including services to assess, design and execute digital transformations such as:

 

   

Building industry-specific and cross-industry digital BPM solutions, and augmenting our digital and automation capabilities through strategic collaborations and targeted acquisitions;

 

   

Building our analytics capabilities through internally developed intellectual property, strategic collaborations and acquisitions; and

 

   

Applying agile approaches to support the design and delivery of our customer services, including the use of targeted operating model design, CoE or shared services approaches, business process re-engineering (such as value stream mapping, Lean or Six Sigma initiatives, and process modernization and standardization), customer experience and design thinking.

 

   

Increasing expertise, and management and digital capability of our workforce;

 

   

Expansion of our global delivery platform; and

 

   

Focused strategic acquisitions to improve our capabilities.

The key elements of our growth strategy are described below:

Increase business from existing clients and new clients

We have organized our company into vertical business units and were the first BPM company in the industry to do so. Our sales force of 114 members as at March 31, 2020, provides broad sales coverage and management experience. Our sales force is organized into two groups, one focused primarily on expanding existing client relationships (“farmers”) and another focused on adding new clients (“hunters”).

We seek to expand our relationships with existing clients by cross-selling new services (such as technology-based and analytics offerings), moving up the value chain, and expanding into other lines of business and geographies within each client. Our account managers and “client-partners” have industry-specific knowledge and expertise, and are responsible for maintaining a thorough understanding of our clients’ strategies and outsourcing roadmaps, as well as identifying and advocating new business solutions and outsourcing opportunities. As a result of this strategy, we have built a strong track record of extending the scope of our client relationships over time.

For new clients, we seek to provide value-added solutions by leveraging our deep industry knowledge built on the back of process expertise, digital enablement, data and analytics, and digital transformation solutions. As a result of our capabilities and industry vertical go-to-market approach, we have been able to compete effectively for new opportunities.

Reinforce leadership in existing industries

Through our industry-focused operating model, we have established leading business process management practices in various industry verticals and business sectors. We intend to leverage our knowledge of the following industries to penetrate additional client opportunities: insurance; diversified businesses (including manufacturing, retail, CPG, media and entertainment and telecom); travel and leisure; healthcare; utilities; shipping and logistics; consulting and professional services; and banking and financial services.

To complement our industry-focused approach, we continue to invest in digital capabilities (including data and analytics, customer experience, artificial intelligence, intelligent automation and other new technologies), agile execution and talent with the goal of expanding our business and acquiring industry-specific expertise to improve our service offerings across industries.

 

47


Table of Contents

Provide higher value-added services

The BPM market is continuing to evolve, bringing the ability to foster innovation and transformation into sharp focus. Enterprises now increasingly expect their BPM providers to play a strategic role in driving business transformation centered around digital, customer experience and data-driven intelligence. In line with the larger shifts, we are enhancing our client value proposition by leveraging our extensive domain expertise; our portfolio of higher-value services such as our finance and accounting services, research and analytics services, transformation services and technology-enabled solutions; and our flexible pricing models. We expect that as the BPM market further matures, the demand for industry-specific services and non-linear pricing models will increase. Accordingly, we have made significant investments in both these areas which we expect will give us a competitive advantage. We intend to broaden the scope of our higher-value service offerings to capture new market opportunities. By delivering a wider portfolio of higher-value services to our clients, and migrating them towards transaction and outcome-based pricing models, we aim to move up the value chain with our clients and thereby enhance the size, strength and profitability of these relationships.

Our constant focus has been on building capabilities and product offerings around analytics, and technology and digital process models supporting targeted industry sectors. We are proactively addressing the shift to technology, analytics and automation through a combination of strategic collaborations, acquisitions and internal capability development. Our analytics practice, comprising data scientists, researchers, and artificial and machine learning experts, is well positioned to empower clients with a host of solutions including “Infra to Insights” (that is, data ingestion, harmonization, analysis and visualization), advanced analytics, domain-led analytics and analytics-as-a-service offering. We have also set up an “Analytics Innovation Center” to quickly experiment with the latest analytics technologies in developing end-to-end modularized digital solutions. We are constantly updating our suite of comprehensive digital BPM solutions to keep up with the ever-changing technology needs of our clients (especially in the area of next-generation technologies including robotics, cognitive automation, artificial intelligence, blockchain and IoT) by developing comprehensive enterprise technology platforms as well as plug-and-play solutions to suit client needs.

Enhance awareness of the WNS brand name

Our reputation for operational excellence, domain expertise, and technology and analytics capabilities among our clients has been instrumental in attracting and retaining new clients as well as talented and skilled employees. We believe that our guiding principles of co-creation and client centricity resonate favorably with clients as they are indicative of our intent to completely align with client needs and leverage synergistic collaboration (with clients and strategic partners) to drive outcomes. Our proactive response to COVID-19 included actions taken quickly to initiate BCP, rapidly transitioning to “work-from-home” models and continuing to collaborate closely with our clients. We also believe that we have benefited from strong word-of-mouth references that have helped us to scale our business. We are actively increasing our efforts to enhance awareness of the WNS brand in our target client and employee markets. To accomplish this, we have a dedicated global marketing team comprised of experienced industry talent. We are also focusing on developing channels to increase market awareness of the WNS brand, including participation in industry events and conferences, exposure in industry publications, publication of articles and white papers, webinars and podcasts, internet and digital media, and other initiatives that create enhanced visibility of the WNS brand and establish WNS’ thought leadership capabilities in the BPM industry. Given COVID-19’s impact, we have augmented our digital engagement by leveraging various platforms to further enhance our brand presence. We are working to improve visibility and positioning with the BPM industry analysts, sourcing advisors, general management consulting firms, and boutique outsourcing firms, who are often retained by prospective clients to provide strategic advice, act as intermediaries in the sourcing processes, develop scope specifications, and aid in the partner selection process.

Expand our delivery capabilities

We currently operate from 61 delivery centers located in 12 countries around the world. In fiscal 2020, we expanded our delivery capacity by 2,015 seats or approximately 6.1% of our capacity at the end of fiscal 2019. We will expand our global delivery capability through additional delivery centers in onshore, nearshore and offshore locations as well through collaborations with other providers, based on client demand and market trends. This approach will allow us to offer our clients maximum value and flexibility, as well as gain access to potential clients and markets that may have specific delivery requirements or constraints.

Broaden industry expertise and enhance growth through selective acquisitions and partnerships

Our acquisition strategy is focused on adding new service offerings and digital capabilities (including analytics, technology-enabled automation tools and platforms, artificial intelligence), deeper industry expertise, and geographic delivery presence. Our acquisition track record demonstrates our ability to integrate, manage and develop the specific capabilities we acquire. One of our key objectives is to continue to pursue targeted acquisitions in the future and rely on our integration capabilities to expand the strategic positioning and growth of our business.

 

48


Table of Contents

Business Process Management Service Offerings

We offer our services to clients through industry-focused business units. We are organized into the following vertical business units to provide more specialized focus on each of these industries and more effectively manage our sales, solutions, marketing and delivery processes:

 

   

Insurance;

 

   

Diversified businesses (including manufacturing, retail, CPG, media and entertainment, and telecom);

 

   

Travel and leisure;

 

   

Healthcare;

 

   

Utilities;

 

   

Shipping and logistics;

 

   

Consulting and professional services; and

 

   

Banking and financial services.

In addition to industry-specific services, we offer a range of services that are common across multiple industries (which we refer to as our horizontal services), including customer interaction services, finance and accounting (including procurement), research and analytics and technology services. In addition, our global transformation practice offers higher-value services such as transformation services, which are designed to help our clients modify their business processes to enhance productivity, manage changes in the business environment, and leverage business knowledge to increase market competitiveness. We help clients drive these initiatives with technology-enabled solutions, process re-design including initiatives such as Six Sigma or Lean, and business analytics.

To achieve an in-depth understanding of our clients’ industries and the geographies in which they operate, we manage and conduct our sales processes in our four key markets – Europe, North America, Asia-Pacific and Africa. Our sales teams are led by senior professionals who focus on target industries, processes and clients. Each business unit is staffed by a dedicated team of managers and employees engaged in providing business process management client solutions. In addition, each business unit draws upon common support services from our information technology, human resources, training, corporate communications, corporate finance, risk management and legal departments, which we refer to as our corporate-enabling units.

 

49


Table of Contents

Vertical Business Units:

Insurance

Our insurance services (actuarial and non-actuarial) are structured into lines of business offerings customized for multiple sectors within the industry. We cater to a diverse and sizeable number of clients globally, and have significant experience across a broad range of insurance product lines.

The key insurance industry sectors we serve include:

 

   

Life insurance and annuity providers;

 

   

Property and casualty insurance providers;

 

   

Reinsurers;

 

   

Insurance and reinsurance brokers and managing general agents;

 

   

Loss assessors;

 

   

Motor insurance companies;

 

   

Self-insured auto fleet owners; and

 

   

Lloyds of London Market.

We offer a range of next-generation solutions such as digital accelerators that seek to enable continuous innovation by leveraging on human-machine interactions. This solution is designed to help in future process design and capacity planning, documentation, training, re-engineering and automation. Skense™, our proprietary data extraction and contextualization platform, leverages machine learning to extract data insights from any document structure and feed into downstream systems. It can be utilized across the value chain (by insurers and brokers) with the view to driving efficiencies and speed-to-market. Our advanced mobility solution, “Broker Connect,” is designed to meet the requirements of insurance brokers and financial advisors. It has features such as real-time status update / push notifications on new policy set-up as well as policy amendments. In addition, our digital claims application allows for real-time notification of claims, thereby providing immediate support to customers involved in motor accidents. Our offerings also include the eAdjudicator® tool that automates the end-to-end adjudication process of various types of claims. It is powered by RPA and analytics, and improves the insurer’s claims settlement rate with enhanced efficiency and accuracy. We also offer “WNS IPAS,” an insurance policy administration system integrator that provides a unified view of operations spread across multiple geographies with the real-time distribution of work to manage high-transaction volumes. Our “Claim Lodgment IntelliBot,” a text analytics and automation tool, enables automated e-mail claim lodgment from unstructured data, leveraging natural language processing and text mining combined with robotics. Our new blockchain offering “VeriChain” is a smart contract blockchain solution which addresses the challenges of document trails in multi-party syndication exchanges and provides a fool-proof audit trail of back-and-forth communications. We also have “WinBot” in our suite of solutions. WinBot is a self-serve chatbot, with a deep machine learning (“ML”) core that improves the knowledge base and ability of the chatbot to respond to the increasing complexities of customer interactions.

As at March 31, 2020, we had 11,019 employees working in this business unit. In fiscal 2020 and 2019, this business unit accounted for 27.7% and 26.6% of our revenue, and 25.2% and 25.2% of our revenue less repair payments (non-GAAP), respectively.

 

50


Table of Contents

The following table illustrates the key areas of services that we provide to clients in this business unit:

 

Insurance – Service Offerings

Property and Casualty

  

Actuarial

  

Analytics

  

Life and Annuity

Sales and service, underwriting and support, policy administration, risk and compliance,

premium / billing management, claims management, actuarial services, research and analytics, shared services (procurement and claims, supply chain, finance and accounting, technology support, HR and payroll, consulting services), customer service (voice and non-voice), platform consulting and implementation support, consulting and transformation services (automation, business process re-engineering, digital)

  

Actuarial services in life insurance: In-force model projections / reporting, financial modeling, product management and pricing, capital management, asset liability management;

Actuarial services in property and casualty insurance: Reserving and claims analysis, solvency II (a regulatory framework applicable to insurance companies) and capital modeling, pricing and underwriting support, catastrophe modeling

   Claims analytics, subrogation and recovery analytics, fraud analytics, customer analytics, broker analytics, underwriting analytics, reserve estimation, risk selection and analytics, speech analytics, pricing analytics, digital analytics SocioSEERTM, Brandttitude®, Skense™, Agilius™, data mining and management services, reporting, dashboarding and visualization, data science and predictive modeling across claims, and claims liability decision tool   

Sales and service, underwriting and support, policy administration, risk and compliance,

premium / billing management, claims management, actuarial services, research and analytics, shared services (finance and accounting, technology support, HR and payroll, consulting services), closed book, customer service (voice and non-voice), consulting and transformation services (automation, business process re-engineering, digital)

Diversified Businesses (including Manufacturing, Retail, Consumer Packaged Goods, Media and Entertainment and Telecom)

We deliver comprehensive BPM services for diversified businesses, including manufacturing, retail, consumer packaged goods, media and entertainment, and telecom.

As at March 31, 2020, we had 4,431 employees in this business unit. In fiscal 2020 and 2019, this business unit accounted for 16.5% and 17.6% of our revenue and 17.1% and 17.9% of our revenue less repair payments (non-GAAP), respectively.

Manufacturing: Our manufacturing team has rich experience in delivering metrics-driven solutions and transformation programs for our manufacturing clients. The key manufacturing sectors that we serve include:

 

   

Electronics manufacturers;

 

   

Metal and mining companies;

 

   

Optical equipment and imaging product manufacturers;

 

   

Building and construction product manufacturers;

 

   

Aeronautical product manufacturers;

 

   

Precision engineering companies;

 

   

Industrial manufacturing companies;

 

   

Specialty chemicals companies;

 

   

High-tech products companies; and

 

   

Food processing companies.

 

51


Table of Contents

The following table illustrates the key areas of services provided to clients in this business unit:

 

Manufacturing—Service Offerings

Supply Chain Planning

        and Forecasting        

  

Sourcing and

Procurement

  

Fulfillment and

    Logistics    

  

Warranty and

Returns

 Management 

  

Shared Services

  

Sales,

Marketing and

Customer

        Services         

Sales and operations planning, demand forecasting, supply planning, inventory management, inventory analytics    Strategic sourcing, category management, contract management, spending analytics, transactional procurement    Order entry and processing, order tracking, billing / invoicing, transport management, logistics optimization    Warranty customer operations, warranty claims management, parts / repair management, warranty financial management, returns management, customer helpdesk    Finance and accounting services, statutory and compliance support, customer care services, human resource services, IT service desk and application support    Global market opportunities, brand building, go to market strategy, customer services, order management, acquisition analysis, retention analysis

Retail and Consumer Packaged Goods: Our retail and CPG solutions are designed to help our clients derive consumer behavioral insights, optimize marketing expenditures, plan their growth strategy, reduce operational costs and streamline processes through efficiency, quality and productivity improvements, and improve customer service.

The key retail and CPG companies that we serve include:

 

   

Beverage companies;

 

   

Fast food chains and restaurants;

 

   

Processed food suppliers;

 

   

Cosmetics and healthcare companies;

 

   

Apparel and footwear;

 

   

General merchandize retailers;

 

   

Specialty retailers; and

 

   

E-commerce retailers.

Our services are supported by a research and analytics platform, WADESM, which was designed and developed to enable retail and CPG companies to access, organize and analyze data from various external sources and further use the insights gained to make informed decisions.

 

52


Table of Contents

The following table illustrates the key areas of services that we provide to clients in this business unit:

 

Retail and Consumer Packaged Goods—Service Offerings

Strategy Solutions

  

Customer Service Solutions

  

Supply Chain Solutions

  

Revenue Management

             Solutions            

  

Content Services

  

Shared Services

Market entry strategy, balancing portfolio investments, consumer and market insights, innovation strategies, power brand strategy, marketing spending optimization    Omni-channel (phone, e-mail, fax, website, live chat, social media) customer relationship management    Retailer-supplier collaboration for demand-driven supply chain and retail execution management, supply intelligence, supplier performance and risk monitoring, contract management, supply chain orchestration – global trade shared services, trading partner helpdesks, logistics    Planning and execution of transaction and interaction-based campaign strategies, loyalty management, credit control and collections   

Product catalogs, user-generated content moderation,

digital content protection,

web / print content,

website analytics and optimization

   Finance and accounting services, statutory and compliance support, sourcing and procurement services, human resource services, IT service desk and application support

Media and Entertainment: Our media and entertainment offerings are designed to help our clients create new revenue streams, capitalize on emerging digital opportunities, harness new-age consumers to their advantage and boost margins. The key media and entertainment sectors that we serve include:

 

   

Music;

 

   

Publishing;

 

   

Television;

 

   

Radio;

 

   

Filmed entertainment;

 

   

Gaming and animation;

 

   

Sports entertainment; and

 

   

Internet and outdoor advertising firms.

Working with some of the largest media and entertainment companies in the world gives us an undisputed advantage in understanding the nuances of the business. We leverage years of industry and process experience, and a large team of digital media experts in delivering new-age cost-effective solutions to clients in this industry.

 

53


Table of Contents

The following table illustrates the key areas of services that we provide to clients in this business unit:

 

Media and Entertainment—Service Offerings

Strategy Solutions

  

Digital Operations and

Royalty Management

             Solutions            

  

Sales, Marketing and

Distribution Solutions

  

Customer Service Solutions

  

Content Services

  

Shared Services

Market entry strategy, balancing portfolio investments, consumer and market insights, innovation strategies, brand power strategy, marketing expense optimization    Digital operations solutions to help companies successfully expand into the digital business; royalty management solutions to help clients manage rights and royalties in both new media and traditional media; piracy protection services to help companies prevent media piracy issues    Seamless integration of traditional and digital product sales, marketing and distribution to enable clients to roll out timely innovative pricing / packaging strategies    Omni-channel (phone, e-mail, fax, website, live chat, social media) customer relationship management    Product catalogs, user-generated content moderation, digital content protection, web / print content, website analytics and optimization   

Finance and accounting services,

statutory and compliance support, sourcing and procurement services, human resource services, IT service desk and application support

Telecom: Our experience in consolidating and centralizing the functions of our telecommunications clients with built-in variable capacity to meet business requirements helps us deliver business value. With end-to-end BPM services, our solutions are designed to enable telecom companies to transform their value chain while tackling myriad challenges. Our solutions are underpinned by the right mix of analytics, technology, domain and process expertise that enable our clients to achieve cost efficiencies and drive sustainable growth strategies. The following table illustrates the key areas of services that we provide to clients in this business unit:

 

Telecommunications—Service Offerings

Customer Acquisition

  

Order Provisioning and Order

                 Management                

  

Operations and Customer

Relationship Management

                 (“CRM”)                

  

Shared Services

Contract administration, sales order processing, service administration and data control    New products and services, service delivery process creation, order provisioning, technical validation and support, rejected order tracking, order tracking, proactive order management, billing, data management (for example, forms and administration)    Inbound customer interaction services, logging and monitoring service requests, CRM analytics, collection analytics, web correspondence, IT customer care (global service desk)    Finance and accounting services, statutory and compliance support, sourcing and procurement services, human resource services, IT service desk and application support

Travel and Leisure

We deliver end-to-end services to clients across the travel and leisure industry value chain. We provide a wide range of scalable solutions that support air, car rental, hotel, cruise lines and packaged travel and leisure services offered by our clients. The key travel and leisure industry verticals that we serve include:

 

   

Airlines and airports;

 

   

Travel agencies, including online travel agencies, tour operators and travel management companies;

 

   

Global distribution systems (“GDS”) providers;

 

   

Car rental companies and motor clubs; and

 

   

Hotels and cruise lines.

 

54


Table of Contents

As at March 31, 2020, we had 10,995 employees in this business unit, several hundred of whom have International Air Transport Association, Universal Federation of Travel Agents or other travel industry related certifications. In fiscal 2020 and 2019, this business unit accounted for 18.0% and 17.4% of our revenue and 18.6% and 17.8% of our revenue less repair payments (non-GAAP), respectively. The following table illustrates the key areas of services that we provide to clients in this business unit:

 

Travel and Leisure—Service Offerings

Front-office

  

Mid-office

  

Back-office

Reservations / sales, fares support, multi-channel customer interaction, mishandled baggage management, disruption management, loyalty program management    Fare filing and distribution, revenue integrity, fulfillment services, refunds processing, fraud management, cargo operations support, contract loading, content management    Finance and accounting, procurement, revenue accounting, human resource management, cabin crew management, helpdesk, training, project management

Research and analytics: Loyalty analytics, customer interaction service analytics, commercial intelligence, flight operations, pricing and revenue management

Robotic process automation: Process automation of contact center, finance and accounting and industry-specific functions combined with artificial intelligence and machine learning

Business process consulting: Short-term, engagement-based consulting service with a focus on business process re-engineering

Technology Platforms:

The following technology platforms are designed to improve passengers’ and guests’ experience:

 

   

RePAXSM: Automated flight disruption management solution;

 

   

Unison: End-to-end omni-channel customer interaction journey platform powered by advanced analytics, natural language processing techniques and proprietary machine learning algorithms;

 

   

SpIQ (Speech IQ): Speech analytics tool;

 

   

GuestKonnectTM: Omni-channel customer interaction analytics;

 

   

SocioSEER: Social media analytics platform; and

 

   

InTouchTM: Social media engagement platform.

The following technology platforms are designed to uplift revenue:

 

   

Verifare Plus 3.0®: Fare audit tool;

 

   

SmartPro®: Interline audit tool;

 

   

Protect 360TM: Integrated solution for end-to-end airline revenue integrity;

 

   

Rapid Refund: Refund automation; and

 

   

AnciFly: Ancillary revenue analytics engine.

The following technology platforms are designed to improve efficiency:

 

   

QbaySM: Multi-GDS platform for queue management;

 

   

Qmail: e-mail categorization solution based on artificial intelligence and machine learning;

 

   

GDS Interconnect: Integrates multiple GDSs in a single graphical user interface;

 

   

Auto Even Exchange: Reissue of tickets due to schedule changes; and

 

   

WinBot: Chatbot solution.

 

55


Table of Contents

The following technology platform is designed to improve operations control:

 

   

Commercial Planning Suite: An integrated revenue analytics platform; and

 

   

Skense: Cognitive data capture and processing platform to drive automation.

We also collaborate with third-party global technology solution providers with a view to enhancing customer experience with innovative service offerings in chatbots and omni-channel customer relationship management.

Healthcare

We deliver end-to-end BPM services across the healthcare industry value chain. We offer services that are designed to enable our clients to reduce administrative costs through process transformation, automation and robotics. Our services also seek to help clients enhance their quality of care by driving improved compliance with clinical pathways and derive deeper insights for better decision-making through advanced analytics. The healthcare industry segments that we serve include:

 

   

Durable medical equipment manufacturers;

 

   

Health insurance companies;

 

   

Healthcare provider practices and hospitals;

 

   

Pharmaceutical and biotech companies; and

 

   

Third-party administrators.

We are well-positioned in the pharmaceutical and biopharmaceutical industry with research and analytics expertise to support drug development and commercial services. For this, we leverage Integrate Edge (a cloud-based, fully customizable competitive intelligence platform), AgiliusTM (a proprietary cloud-based business intelligence self-serve analytics platform), SocioSEERTM (a unique social-media analytics platform), Therapy Area Analyzer (a proprietary therapy area knowledge repository, covering 12 disease areas and 120 indications and providing information on disease etiology, epidemiology and product analysis for 15 countries) and other technology or domain intellectual property (“IP”), which we have built with a view to delivering additional value to our clients.

Further, we believe we are well-positioned to be a strategic provider, helping the healthcare industry deliver benefits management across several key specialty healthcare areas, including radiology, cardiology, oncology, sleep care, orthopedics and pain management. Our analytics-based and medical-content-rules-driven platforms, ConsultTM and Protus, seek to deliver the right care to patients and reduce cost of care for our clients in the process. Our Analytics Knowledge Center comprising more than 800 analytics experts leverages its deep pharma domain knowledge, strong analytics capabilities and proprietary frameworks to deliver actionable business insights to leading pharma companies.

 

56


Table of Contents

As at March 31, 2020, we had 4,029 employees in this business unit. In fiscal 2020 and 2019, this business unit accounted for 15.8% and 15.3% of our revenue and 16.4% and 15.6% of our revenue less repair payments (non-GAAP), respectively. The following table illustrates the key areas of services that we provide to client segments in this business unit:

 

Healthcare—Service Offerings

Providers

  

Payer

  

Durable Medical

Equipment Manufacturers

  

Enterprise Shared Services

  

Pharmaceutical and

Consumer Health

Revenue cycle management, medical coding, bill preparation, receivables management, payment posting, debt analysis    Claims administration, member and provider services, clinical support, overpayment recovery, fraud detection and investigation, utilization management services (that is, optimizing payer healthcare spend on areas such as tests and procedures without compromising the patient care-quality-safety norms)    Billing and submissions, fulfillment support, collections, patient services, collection analytics, reporting and dashboarding, sales force effectiveness    Finance and accounting, workflow / platforms, research and analytics (knowledge process outsourcing), technology solutions, front-end / mailroom, customer interaction services    Competitive intelligence, pipeline analysis, product profiling, key performance indicators (“KPI”) reporting, epidemiology analysis, market opportunity assessment, social media analysis, key opinion leader (“KOL”) research, modeling and tool building support, pricing analytics, patient data analytics, market mix model, big data platform development, data governance

Utilities

We are a leading utilities BPM service provider, with domain expertise across the utilities value chain — generation, transmission and distribution. Our service portfolio supports utility companies catering to the residential, industrial, and small and medium enterprise (“SME”) segments.

The key energy and utilities industry sectors we serve include:

 

   

Oil and gas;

 

   

Electricity;

 

   

Water; and

 

   

Renewable energy.

As at March 31, 2020, we had 3,172 employees working in this business unit. In fiscal 2020 and 2019, this business unit accounted for 6.3% and 7.0% of our revenue, and 6.5% and 7.1% of our revenue less repair payments (non-GAAP), respectively.

We are a strategic outsourcing provider for clients from the US, the UK, Asia-Pacific and African regions. We offer digital-driven, technology-enabled, analytics-led and automation-infused services. We support business-to-consumer and business-to-business processes for our clients through our offerings spanning meter-to-cash services (including customer acquisition and management, billing and metering, payment processing, credit and collections) and other areas within the utilities value chain, including distribution and field services. Our long-standing relationships with leading companies globally have helped us develop geography- and industry-specific domain expertise and capabilities in the above-mentioned service segments. Our service delivery is enabled by analytics, digital platforms, tools and solutions, and automation through AI and cognitive intelligence solutions.

Our capabilities to support clients across processes in oil and gas, electricity and water suppliers include end customer support, back-office processes, asset management, FAO services (including procurement services), debt management and other enabling services, such as meter reading, bill printing and digital support services (including smart metering). We offer platform integration, application integration, data integration, process integration, component integration and system integration capabilities to enhance process management through technology-enabled platforms. We also work with clients to provide a single view of the customer, using social media analytics and big data analytics across multiple channels. Our analytics offerings include data mining of structured and unstructured data, speech and text analysis, and debt management analytics with a view to increasing customer satisfaction, helping our clients acquire more customers and improving cross-sell, up-sell and collection rates. Our offerings in RPA, AI and ML include feasibility studies to identify processes, build solution design and develop codes to automate processes for deployment in live environments.

 

57


Table of Contents

The table below illustrates the key services that we provide to our utility clients:

 

Utilities

Digital Meter-to-Cash Revenue Cycle

                 Operations                

  

Customer Management

  

RPA, AI and ML

  

IT Solutions

  

Research and Analytics

Managing customer lifecycle, which covers acquisition, billing, payment and withdrawal along with dispute resolution, exception handling, customer debt management, payment management for electricity, gas and water utilities across residential and business customers, all-encompassing smart and analog meters    Sales CoE encompassing customer acquisitions, retention, enhancement, cross- selling / up-selling, customer care – queries, correspondence, asset management    Feasibility studies to identify processes, build solution design, develop codes to automate processes for deployment in live environments    Document control and digitization, master data management, enterprise resource planning (“ERP”) implementation and support, digital meter-to-cashbusiness-process-as-a-service, workflow, support for SAP implementations and Webchat CoE    Data mining, decision support services, smart collections covering propensity to pay, customer analytics – segmentation, lifetime value analysis, net promoter score (“NPS”) analysis, speech analytics and text analytics

 

Shared Services

Finance and Accounting, Supply Chain Management and Procurement

  

Human Resource Management

E-sourcing, vendor rationalization, supplier management, procurement optimization, sourcing, procure-to-pay (“P2P”) transactions, supply chain analytics, order-to-cash (“O2C”) transactions and record-to-report    Administration support and payroll services

Shipping and Logistics

We maintain a strategic focus on the shipping and logistics BPM market. This is demonstrated through our organizational structure, wherein we have a dedicated shipping and logistics vertical that caters to more than 20 leading logistics brands (including several Fortune 500 companies). We have approximately 3,500 trained and dedicated logistics professionals servicing these companies. Our clients represent several sub-verticals within the shipping and logistics market, including global air express, ocean shipping, freight forwarding, non-vessel operating common carrier, trucking and rail road. The services we provide to our clients spans the entire shipment life cycle, such as booking, documentation, core operations support, customer services, finance and accounting, customer interaction services, business technology and data analytics.

We have a long-term strategic focus on developing and deploying new-age technology, tools and platforms that are designed to create sustainable cost and quality advantage for our clients:

 

   

Malkom is an AI- and ML-enabled optical character recognition billing platform that is designed to digitize and automate approximately 60 to 70 percent of a bill of lading with a front-end application;

 

   

IMX is an AI- and ML-led cognitive data capture and processing solution that is designed to extract data from multiple structured and unstructured data sources, and thereby eliminate human interventions and digitize back-office processes; and

 

   

Shipping Automation Blue Print: Automation -as-a-Service integrates automation, analytics and AI to provide intelligent process automation across the shipping management value chain of sales and marketing, customer service, operations, export and import documentation, finance and accounting, and human resources. It is designed to bring the domain and digital together to simulate human intelligence in addressing a wide array of requirements in the shipping industry and ensuring seamless future-readiness.

We leverage our analytics expertise in combination with our strong industry domain knowledge and custom-built proprietary frameworks to help clients make informed decisions at the right time. We provide an array of services to our clients, such as complex data integration, cutting-edge advanced analytics, personalization and big data. Our analytics platforms such as Agilius, Fintinel and SocioSEER are being adopted by our clients with the goal of gaining deep business insights. The key shipping and logistics industry sectors that we serve include:

 

   

Global express and courier companies;

 

58


Table of Contents
   

Ocean sector – non-vessel operating common carrier, ocean liners, ports and terminals and shipping agencies;

 

   

Trucking sector – less-than-truckload, full truckload, truck rental and leasing, compliance, safety and accountability companies;

 

   

Third and fourth-party logistics;

 

   

Car and roll-on / roll-off carriers; and

 

   

IT companies in the logistics sector.

As at March 31, 2020, we had 3,390 employees working in this business unit. In fiscal 2020 and 2019, this business unit accounted for 6.0% and 6.2% of our revenue, and 6.3% and 6.3% of our revenue less repair payments (non-GAAP), respectively.

The following table illustrates the key areas of services provided to clients in this business unit:

 

Shipping and Logistics

Sales and Marketing

  

Customer Service

  

    Document    

    Processing         

  

    

  

Operations

    Support    

  

Finance and

Accounting

  

Research and

    Analytics    

  

Technology

    Services    

Tariff filing and maintenance, rate quotes, service contract / rate agreement creation and maintenance, master data management    Customer file and debtor file administration, customer helpdesk, booking desk-phone / e-mail / electronic data interchange, web rating    Exports and imports bill of lading, processing and data entry, advance manifest processing, freight audit, billing and invoicing, vessel closures, imports, import data quality process / checks, arrival notifications import general manifest filings with delivery order issuance, customs document processing, verified gross mass updating    Vessel schedules – long-term support , vessel schedules – coastal, routing module maintenance, traffic control coordination, booking with carrier, hazardous cargo approvals, vendor management – vendor file administration, purchase order / job order creation, gate moves, ship husbanding, stowage planning, bay plan submission and distribution, inbound and outbound trans-shipment, maintenance and repairs, global stock reconciliation, container leasing validation, vessel performance reports, inventory management, chart corrections management, safety and environmental KPI monitoring onshore and equipment control    Accounts payable, accounts receivables, disbursement accounting, credit and collections, agency reconciliations, general ledger / bank reconciliation, cash reporting and audit / vendor reconciliation, financial management reporting, vendor helpdesk, monthly closing / quarterly / yearly closing, treasury support, agency audits, claims management    Metrics realization and analysis, network design and optimization, transport management, shipping performance management, tonnage analytics, carrier sourcing analytics, fleet analysis and maintenance, corporate management, revenue analytics, reverse logistics analytics, revenue analytics, distribution center analytics    Digitization service provider, intranet support, claims management, data hubbing, e-commerce registration, e-learning module content management, e-learning module content creation

 

59


Table of Contents

Consulting and Professional Services

Our consulting and professional services (“CPS”) business unit’s objective is to help clients differentiate and outperform in their industry by leveraging industry-specific knowledge and domain expertise. We currently service more than 25 clients from our key delivery centers in India, Romania, China, the Philippines and Sri Lanka.

Our CPS business unit offers an array of services to a range of client sectors in consulting and professional services. These sectors include:

 

   

Content and information publishers;

 

   

High technology (“Hi-tech”) firms;

 

   

Legal services firms;

 

   

Executive search firms;

 

   

Real estate service firms; and

 

   

Marketing service providers.

As at March 31, 2020, we had 2,372 employees in the business unit. In fiscal 2020 and 2019, this business unit accounted for 5.4% and 5.5% of our revenue, and 5.5% and 5.6% revenue less repair payments (non-GAAP), respectively.

We provide a wide range of services from complex business and financial research and analytics to very simple data management operations. Besides providing shared services support to our clients for functions such as finance and accounting, human resource management, customer support, procurement and IT and infrastructure management, we provide the following domain-specific offerings:

 

Content and Information Publishers

  

Hi-tech Firms

  

Legal Services Firms

Content sourcing, content creation, database creation, maintenance and update, aggregation / indexing and / tagging, content copy editing and proofing, content enrichment, analysis and product creation, content review and quality assurance, design and production services for digital / print products, advertising operations and order fulfillment, analytics and CRM support    Customer interaction services, consultative selling, sales CoE, content management, data engineering and governance, data advisory, CRM and web analytics, digital marketing, finance and accounting, human resources and procurement support    Legal support, legal and business research, case management, document management, digital dictation transcription, pitch support, patent and trademark searches, contract management, title checking, lease management, company secretarial services, legal transcription, personal injury support

 

Executive Search Firms

  

Real Estate Services Firms

  

Marketing Service Providers

Sourcing and pre-sourcing, pre-screening, name identification, interview and offer management, pitch book support, business intelligence, industry and company research, database clean-up, update and management, document management, business executive support    Real estate accounting, lease management, surveying and lettings support, business and financial research, real estate analytics, portfolio and fund accounting, sales and marketing support, end-to-end conveyancing process, contract management and secretarial services    Industry, company and product research, market research operations, market research analytics, shopper and CRM analytics, web / digital analytics, campaign management and analytics, database management, digital content management and production support (designing and development)

 

60


Table of Contents

Banking and Financial Services

Our banking and financial services practice supports more than 25 leading clients, including large commercial and retail banks, wholesale and retail lenders, wealth advisors, asset managers, hedge funds, financial technology (or commonly referred to as FinTech) organizations and mortgage servicing companies, with a comprehensive suite of business process management and transformation solutions.

We seek to add value to our clients’ businesses by improving customer experience, unlocking cost efficiencies and revenue opportunities, streamlining processes, and leveraging a wide range of process re-engineering, automation (robotic and non-robotic), and digital and advanced analytics (AI / ML) solutions.

The key banking and financial sectors that we serve include:

 

   

Retail and commercial banking;

 

   

Mortgage and loans;

 

   

Wealth and investment banking;

 

   

Financial technology;

 

   

Capital markets and asset management;

 

   

Financial advisory firms;

 

   

Financial research and financial market intelligence companies;

 

   

Trade finance; and

 

   

Financial institutions.

As at March 31, 2020, we had 2,277 employees working in this business unit. In fiscal 2020 and 2019, this business unit accounted for 4.4% and 4.5% of our revenue, and 4.5% and 4.6% of our revenue less repair payments (non-GAAP), respectively.

 

61


Table of Contents

The following table illustrates the key areas of services that we provide to clients in this business unit:

 

    

Banking and Financial Services—Service Offerings

         

Retail Banking

  

Commercial Banking

  

Capital Markets

  

Mortgage Banking

  

Fintech

Acquisition: Lead generation and deployment, customer behavioral analysis, campaign management, product development / management and support;

 

On-boarding: Application scanning and indexing, account opening, product application processing, detailed documentation review and verification, underwriting / spend limit assignment, welcome calls;

 

Maintenance and servicing: Account maintenance, account and general inquiries, customer data maintenance, statement generation, payment processing, funds allocation and return payment processing, complaint handling, fund transfers, remittance, refunds and settlements, billing queries and statement processing;

 

Collections: Collections and recovery, skip tracing (that is, locating people who have defaulted on a debt), pre-delinquency management, payment plans; and

 

Bank Secrecy Act / Anti-money laundering: Alert elimination, enhanced due diligence, fraud and cyber-crime, politically exposed persons and negative news.

  

Trade finance: Account opening, bills for collection, export bills negotiation, import bills, letter of credit processing, bank guarantee credit limits;

 

Credit risk management: Financial spreading, proposal development, reconciliation, credit analysis, collateral management, renewal support, billing and contribution management, audit support;

 

Cash management: Funds transfer, trade processing, foreign exchange settlement reporting, reconciliations, accrual calculations, investigations, payment processing, settlement, reference data management, reporting;

 

Commercial lending: Account opening, “know your customer,” loan onboarding, documentation, covenant monitoring, billing, statutory accounting.

 

Treasury services: Cash management, foreign exchange settlements, bill discounting, rates updates, mark to market, margin allocation; and

 

Compliance reporting and support: Assist clients in compliance reporting and complaints analysis.

  

Front office: Financial and business research, investment strategy and modeling, order entry, allocation / rebalancing; portfolio construction support, pitch book support; financial statement spreading (that is, spreading of financial statements using percentages to forecast future financials. It is a process of standardizing the presentation of financials);

 

Middle office: Reference data management, cash flow forecasting, risk management, amendments / maintenance of existing data, manual trade allocations, manual trade booking, trade exception / rejection management, trade amendment, trade confirmation, queries handling;

 

Back office – Accounting: Expense and income processing, securities lending, corporate actions processing, fund accounting / net asset value calculations, financial reporting, settlement follow-up with clients;

 

Back office – Asset servicing: Clearing and settlement, custody / record keeping, stock transfer, collateral management, transfer agency, claims management; and

 

Back office – Treasury: Cash management, cash forecasting, payment processing, invoicing / billing processing.

  

Originations: Indexing, pre-underwriting checklist, pre-funding audit, correspondent indexing, title commitment, credit evaluation, contact point verification, disbursals;

 

Servicing: Customer service, loan boarding and set-up, adjustable rate mortgage audit, payments processing, assignments and endorsements, lien release, escrow management / periodic analysis, final documents follow up and audit;

 

Default servicing: Pre-loss mitigation, foreclosure support, borrower research, operations intake, claims processing, investor reporting, closing and monitoring functions, trial period monitoring (forbearance support), loan modification document preparation; and

 

Secondary markets services: Post close audit, due diligence of acquired packets, documentary fulfillment.

  

Origination: Application data entry, document review and verification, account set-up;

 

Credit evaluation: Supporting financial research, ability to pay, annual review, collateral monitoring;

 

Servicing: Fulfillment of customer requests, complaints, transaction processing exception management, customer account maintenance; and

 

Advisory services: Enable robust process controls, operational best practices and effective risk management.

The following table highlights our research and analytics practice tailored to the banking and financial services sector:

 

Retail Banking

  

Investment Banking

  

Commercial Banking

  

Wealth Management

  

Asset Management

Loans, cards,

profitability,

attrition,

risk,

fraud

  

Mergers and acquisitions (“M&A”), initial public offerings,

private placements

  

Financial statement spreading,

credit appraisal,

risk ratings,

portfolio construction,

portfolio measurement,

probability of default, loss given default exposure at default prediction models

  

Current investment reviews,

new business, pitch books,

CRM support,

fund research,

portfolio research

  

Fixed income,

equities,

investment strategies, portfolio monitoring

 

  

Data Mining and Data Management

Analysis of structured and unstructured data across the banking and finance sector, organization of data for retrieval and analysis

  

 

  

Financial Crime and Compliance

Anti-money laundering and know-your-customer (or commonly referred to as “KYC”) verification, suspicious transaction monitoring and remediation, and others

  

 

  

Reporting, Dash-boarding and Visualization

Generation and presentation of data-driven insights, communication tools for analysts

  

 

  

Model Development and Recalibration

Actionable models for optimization of operations and strategic planning, insights for changing market conditions

  

 

  

Consulting-led Transformation

Collaborating with clients on robotic process automation, artificial intelligence and business process re-engineering to optimize costs, increase efficiencies and improve customer satisfaction

  

 

 

62


Table of Contents

Horizontal Units

Customer Interaction Services

Our customer interaction services leverage a “human-centered” design that seeks to ensure that digital (technology and analytics) is at the core to empower people and simplify processes across domains. The objective is to deliver superior business outcomes and build customer trust. Customer interaction services are offered across our vertical business units.

As at March 31, 2020, we had 12,980 employees in this horizontal unit. In fiscal 2020 and 2019, this horizontal unit accounted for 20.7% and 22.6% of our revenue, and 21.5% and 23.1% of our revenue less repair payments (non-GAAP), respectively.

The following table illustrates the key customer interaction services that we provide:

 

    

Customer Interaction Services—Service Offerings

    

Services

  

Channels

  

Languages

CoEs: Sales (sales, up-sell or cross-sell), fulfillment (transaction processing, customer retention), assisted digital channels and collections (early stage, late stage, skip tracing (that is, locating people who have defaulted on a debt))

Journey orchestration (deflection to digital channels)

Customer experience consulting

Digital content management: Digital merchandizing and marketing

Automated customer experience management

As-a-service models (quality, training, workforce management)

Analytics (interaction analytics, customer segmentation, loyalty management, voice of customer, sales analytics)

  

Traditional channels: Interactive voice response, voice, e-mail, short messaging service

Assisted digital channels: Chat, social media (traditional sites such as Facebook, Twitter, forums, blogs and review sites), digital engagement (mobile, web), asynchronous messaging

   We provide support in English globally. Additionally, we offer support in French, Italian, Spanish, German, Arabic and Afrikaans along with over 20 key regional languages across Europe, Middle-East and Africa, Asia-Pacific, North America and Latin America regions    

Finance and Accounting

Our finance and accounting service offerings include a comprehensive suite of finance and accounting processes, business process re-engineering, and transformation, including automation and digitalization of finance operations. Finance and accounting services are offered across all our vertical business units. We have experience in delivering large-scale and complex finance and accounting transformation programs, which include:

 

   

Industry-specific accounting processes such as disbursement accounting, royalty accounting, fiduciary accounting, actuarial science, revenue recovery management and airline passenger revenue accounting;

 

   

Source-to-pay procurement, including a full range of strategic procurement capabilities such as advisory and organizational assessment, process improvement, training and capability building, category management, contract management, strategic sourcing, contracting, supplier management, transactional procurement, working capital optimization, payables and spend analytics, financial risk and audit analytics;

 

   

Services across order-to-cash, including order management, supply chain fulfillment support, supply chain management, working capital optimization, receivables and collections analytics, credit risk analytics and revenue assurance;

 

   

End-to-end processes ranging from simple, transaction-based processes (such as journals and reconciliations) to high-end, judgment-intensive processes, such as analytics and treasury;

 

   

Global risk and compliance services such as forensics, background screening and digital credit screening;

 

   

Automation suite for accounting activities, including WNS IP best practices, robotics process automation, embedded analytics and reporting, under the “CFO TRAC” offerings delivered through our proprietary and third-party led solutions enabled through an optimal combination of cloud and hosted platforms;

 

   

End-to-end business transformation through our proprietary “Outperforming CFO Framework” which includes a host of assessment tools such as “Investor Analyst View,” “Business Readiness Maturity Model” and “Process Maturity Model.” These tools enable objective assessment of not only an organization’s processes, technology and people, but also of their ability to respond to business disruptions. Business process re-engineering is powered by “ADAPT,” our proprietary methodology that combines the art and science of process, technology, transformation and risk management with a view of enabling us to provide our clients with optimized outcomes;

 

   

Rapid, large-scale transitions;

 

   

Implementation of shared service centers and rationalization of financial systems to optimize and consolidate our clients’ information technology platforms; and

 

   

Multi-location, multi-system global finance and accounting consolidation.

As at March 31, 2020, we had 6,708 employees in this horizontal unit. In fiscal 2020 and 2019, this horizontal unit accounted for 22.7% and 21.7% of our revenue, and 23.6% and 22.1% of our revenue less repair payments (non-GAAP), respectively.

The following table illustrates the key finance and accounting services we provide:

 

    

Finance and Accounting—Service Offerings

    

Source-to-Pay

  

Order-to-Cash

  

Record-to-Report

  

Decision Support

  

Corporate Functions

Sourcing services including strategic sourcing and category management, procurement and administration, invoice / expense processing and payment, accounts payables, accounting and treasury support, month-end close    Master data, credit management, contract management, quote management, order management, billing management, collections and deductions management, cash application, customer request and inquiries, reports and analytics dashboards, revenue assurance    General accounting, fixed assets, general ledger reconciliations, period-end reporting and consolidation, tax filing and reporting, cost accounting, inter-company accounting, statutory reporting    Budgeting, forecasting, variance analysis, management reporting    Treasury, cash management, financial planning and analysis, tax and compliance, decision support, management accounting

 

Supply Chain

      Finance      

  

Industry-specific

      Accounting      

  

Technology Solutions

  

Governance, Risk, Compliance and

                   Audit Services                  

Product costing, inventory accounting, manufacturing accounting, supply chain analytics, supply chain fulfillment support    Passenger revenue accounting, revenue audit and recovery, claims management, loan account maintenance, royalty accounting, fiduciary accounting, trip records, freight and fuel charges accounting, cost accounting, franchise accounting, meter reading, pre-payment billing, disbursement accounting   

ERP: Implementation, hosting, optimization

 

Bolt-on tools: Reconciliations – workbench, query management, accounts payable transformation platform with e-invoicing, early payment programs, e-supplier portal, an activity tracking and reconciliation workflow solution called “eClose JE TRACTM”; duplicate record tracker

 

Enablers: Mailroom solution, workflow

   Governance consulting, risk analytics services, compliance services and audit services

Proprietary Platform:

 

   

Proprietary platform-based service offerings include: “CFO TRAC – Finance and Accounting Automation Suite” and “Xponential – The ERP Card SolutionTM,” a part of our BizAps P2P solutions. We also have several portals and solutions that are designed to aid collaboration, planning, knowledge management, transition and operations.

 

63


Table of Contents

Research and Analytics

With more than 2,500 employees, our research and analytics practice helps more than 100 global clients make critical business decisions with data-driven insights. We combine our consultative approach with deep domain knowledge and advanced analytics to provide decision support to our clients. Across the entire “Infra to Insights” spectrum, we offer support to our clients – comprising analytics services from data infrastructure set-up to insights generation, ranging from data aggregation and data processing to visualization of insights and data. This is achieved by leveraging customized big data, machine learning, artificial intelligence, social media analytics and advanced analytics solutions to drive digital transformation, better customer understanding, improved marketing efficiencies, and risk reduction.

Our industry analytics portfolio spans various verticals, including retail and CPG, healthcare, hospitality, travel, banking and insurance, utilities and other emerging industries.

Our integrated business analytics services provide focused solutions to clients and seek to create long-term business value. We employ our proprietary frameworks, products and techniques based on the business context to generate actionable insights, focus on operational goals of quality and efficiency, and aid transformational initiatives. Our “Analytics Innovation Center,” a specialized research and development-focused unit comprising data scientists and leading analytics experts, develops cutting-edge solutions, products and capabilities with the view to enhance our clients’ returns on their analytics investments.

Continued investments in AI / ML have helped create innovative solutions and products. In an increasingly blended digital and analytics ecosystem, new capabilities and products in areas such as personalization are helping to improve digital customer experience for our clients.

As at March 31, 2020, we had 2,715 employees in this horizontal unit. In fiscal 2020 and 2019, this horizontal unit accounted for 10.4% and 11.3% of our revenue, and 10.7% and 11.6% of our revenue less repair payments (non-GAAP), respectively.

The following illustrates our key research and analytics products and services:

“AgiliusTM” is our proprietary big data analytics platform providing end-to-end “Infra to Insights” solutions including data ingestion, integration, storage and analytics coupled with our domain expertise. The platform enables analytics solutions across multiple verticals (retail and CPG, banking and financial services, healthcare, and utilities) and horizontals (procurement, finance and accounting, and customer interaction services).

“SocioSEERTM” is our proprietary big-data-enabled social media analytics platform that lets organizations create brand advantage by harnessing the power of social media. SocioSEERTM combines machine learning and deep domain expertise with a view to helping brands proactively manage and outperform their stated goals around brand health, customer centricity and topline growth.

“SkenseTM” is our proprietary cognitive data contextualization and summarization platform that employs AI / ML algorithms to extract data from multiple unstructured data sources (such as image, e-mail, documents, and spreadsheets) to create structured datasets. Its application extends across multiple industries and various functions, including quality control for fast-moving consumer goods firms, automated financial statement spreading for banks, and medical record summarization for insurance and healthcare firms.

“ImagnTM” is our proprietary image analytics platform that employs AI / ML algorithms in multiple use cases designed to improve business process efficiencies. Its objective is to help insurance companies to identify roof-top damages based on images captured by drones and reduce the time to estimate the magnitude and value of damages.

“Brandttitude®” is our proprietary cloud-based big data analytics product designed to track brand performance and perceptions over multiple dimensions across varied data sources to help clients make informed decisions. The product is built using open source technologies on a scalable data harmonization platform. Leading consumer brands are already using this product in a licensing model to identify insights from harmonized data, such as the correlation between weather patterns and brand sales.

“UnisonTM” is our proprietary multi-channel customer interaction analytics platform that is designed to provide 360-degree customer insights (including insights generated from multiple channels such as social media, e-mail, website, mobile apps, CRM and other offline channels) based on sentiment analysis. It is flexible and scalable to add additional channels of customer interaction and provides actionability and insights through key customer service metrics that are contextualized to specific industries using our proprietary categorization engine.

“InTouchTM” is another proprietary intelligent social media, customer service and analytics platform designed to enable quick, automated and customized audience engagement across multiple social media channels, blogs and forums to help drive long-term brand and customer-centricity for clients. The artificial-intelligence-powered platform prioritizes customer interactions according to severity of issues and manages interactions across multiple languages, making it a one-stop solution for intelligently managing customer queries.

 

64


Table of Contents

Research and Analytics—Service Offerings

AI and ML

  

Big Data and Analytics Consulting

  

Data and Information Management

                      Advisory                     

•   Modeling and algorithm design

•   Knowledge discovery

•   Cognitive and predictive analytics

•   Natural language processing and generation

  

•   Strategy roadmap and consulting

•   Solution architecture

  

•   Data modeling and integration

•   Data engineering and governance

•   Data visualization and virtualization

Customer Analytics and Personalization

  

Digital Transformation and Social Media
             Analytics                 

  

HR Analytics

•   Acquisition / retention / cross-sell / up-sell

•   Campaign management analytics

•   Loyalty management

•   Sales and marketing analytics

•   Pricing analytics

  

•   Social media management

•   Web analytics

•   Sentiment and text analytics

•   Image / video analytics

  

•   Smarter workforce solution

•   Employee satisfaction analytics

•   Attrition analytics

Chief Procurement Officer (“CPO”) / Chief
Financial Officer (“CFO”) Analytics

  

Financial Analytics

  

Operations and Supply Chain Analytics

•   Sourcing and procurement analytics

•   Spend / payables analytics

•   Supplier capability profiling

•   Revenue assurance analytics

  

•   Capital asset pricing modeling

•   Actuarial and collections analytics

•   Budgeting and forecasting

•   Working capital analytics

  

•   Contact center analytics

•   Customer satisfaction (“CSAT”) / NPS analytics

•   Demand and inventory analytics

•   Sales and operations planning

Market Research Services

         

•   Competitive research

•   Financial research

•   Survey programming

•   Business intelligence dashboards and reporting

     

 

65


Table of Contents

Industry-specific Analytics

Insurance Analytics

  

Travel and Leisure Analytics

  

Banking and Financial Analytics

Claims analytics, subrogation analytics, fraud analytics, customer analytics   

Loyalty analytics, customer interaction service analytics, commercial intelligence, flight operations, pricing and revenue management, ancillary revenue enhancement analytics, hyper-personalization,

affinity and propensity modeling

   Data mining and data management: Analysis of structured and unstructured data across the banking and finance sector; reporting, dashboarding and visualization; financial model development and recalibration

Utilities Analytics

  

Shipping and Logistics Analytics

  

Healthcare (Pharma and Consumer Health)

                             Analytics                             

Data mining, decision support services, collections optimization, customer analytics – segmentation, lifetime value analysis, NPS analysis, predictive analytics, text analytics   

Pricing and promotion analytics,

market mix modeling, trade promotion optimization, lifetime value and taxonomy assessment, hyper-personalization, customer analytics

   Competitive intelligence, pipeline analysis, product profiling, KPI reporting, epidemiology analysis, market opportunity assessment, social media analysis, KOL research, modeling and tool building support, pricing analytics, patient data analytics

Technology Services

“WNS TRAC®,” our consolidated suite of comprehensive digital BPM solutions, is differentiated by our deep domain expertise in strategic verticals and process know-how in key horizontal domains that equip us with an ability to identify suitable technology for our clients’ business outcomes. The WNS TRAC® solutions are available in the form of (a) all-inclusive and comprehensive enterprise platforms that are a combination of our own IP with key partner products, and (b) as plug and play solutions that are designed to seamlessly integrate with the clients’ existing technology environment without the need for a complete overhaul. Also, the solutions are pre-configured with best practices and industrialized accelerators designed to drive implementation around social, mobility, analytics, cloud, robotics and intelligent automation, with a host of deployment options and commercial models to choose from. We are also working on several next-generation technologies such as cognitive automation, artificial intelligence, blockchain and IoT, to address emerging client demands.

From consulting to application management and operations, WNS TRAC® drives seamless technology deployment across the business process lifecycle with a view to achieving sustained growth and profitability.

As at March 31, 2020, we had 301 employees in this horizontal unit. In fiscal 2020 and 2019, this horizontal unit accounted for 1.4% and 1.6% of our revenue, and 1.5% and 1.6% of our revenue less repair payments (non-GAAP), respectively.

The following table illustrates our industry-specific and cross-industry solutions available as part of WNS TRAC®:

 

WNS TRAC®

Industry-specific solutions

Travel

  

Insurance

  

Healthcare

  

Shipping and Logistics

  

Utilities

 

CPG and Retail

•   “Verifare” – Fare audit solution

•   Interline proration queue management

•   Commercial planning suite

  

•   Insurance-in-a-box (a platform and business process management as-a-service target operating model)

•   Mobile-enabled first notice of loss

•   “eAdjudicator®

  

•   O2C for medical device manufacturing

•   Pharma analytics

•   Clinical care management

  

•   Malkom (Less-than-truckload billing transformation solution)

•   Enterprise solution for shipping and logistics

  

•   Meter-to-cash solution

•   Smart metering solution

 

•   Supply chain solutions

•   Deductions and warranty management

 

66


Table of Contents

WNS TRAC®

Cross-industry solutions

Solutions for Chief Financial

                   Officers                  

  

Solutions for Chief

Procurement Officers

  

Analytics

  

Digital Customer Interaction

                   Services                  

•   Procure-to-pay solution

•   Order-to-cash solution

•   Record-to-report solution

•   Reporting and analytics

  

•   Source-to-contract

•   WNS Procurement Card solution

•   WNS supplier portal

•   WNS spend analytics

  

•   SocioSEERTM

•   Brandttitude®

•   AgiliusTM

•   Big data solutions

  

•   WNS interaction analytics

•   WNS omni-channel solution

•   Robo-advisor / Chatbots

•   Voice bots

 

Robotic Process

    Automation    

  

Cognitive / AI

  

Blockchain

•   RPA consulting

•   Enterprise RPA CoE

•   RPA-as-a-service

•   RPA implementation and support

  

•   Unstructured document processing

•   Infringement identification for media

•   Event review for shipping and logistics

•   Fraud detection for insurance

  

•   Insurer-broker risk syndication solution called “VeriChain”

•   Shipment management on TradeLens (an open and neutral supply chain platform underpinned by blockchain technology)

•   Payment reconciliation for finance and accounting

Sales and Marketing

The sales cycle for business process management services is time-consuming and complex in nature. The extended sales cycle generally includes initiating client contact, submitting requests for information and requests for proposals for client business, hosting client visits to our delivery centers, and performing analysis (including diagnostic studies, proofs-of-concept, and pilot implementations) to demonstrate our delivery capabilities, and entering into a contract with the client. Due to the complex nature of the sales cycle, we have aligned our sales teams to our vertical business units and staffed them with “hunting” or new relationship sales professionals (“hunters”), as well as “farming” or existing client relationship professionals (“farmers”). Our hunters and farmers have specialized industry knowledge and experience, which enable them to better understand prospective and existing clients’ business needs and to offer appropriate domain-specific solutions.

Our sales and sales support professionals are based in Australia, the UAE, Eastern Europe, India, Singapore, South Africa, the UK and the US. Our sales teams work closely with our global sales support team, which provides critical analytical support throughout the sales cycle. Other key capabilities offered by our sales support team include consulting, generating leads for potential business opportunities and research support.

Our sales teams comprise highly experienced professionals, with their average tenure at WNS exceeding five years. They bring a wealth of industry knowledge and expertise, having played a key role in executing large-scale BPM deals. As at March 31, 2020, our front-line sales teams consisted of 114 members including hunters and farmers. Our teams of farmers are responsible for identifying and initiating discussions with and selling services in new areas to existing clients. We assign dedicated “client-partners” and / or account managers to our key clients. These managers work with their clients to co-create cutting-edge solutions that help our clients embrace changing business models and improve their competitive position. In addition, they are the conduit to our service delivery teams addressing clients’ needs. More importantly, by leveraging their detailed understanding of the clients’ business objectives gained through this close interaction, our farmers actively identify and target additional processes that can be managed by us to provide better efficiency, effectiveness and control. Through this methodology, we have developed a strong track record of increasing our sales year-on-year as well as growing our business from existing clients.

A key aspect of our sales growth has been the ability to quickly adapt to market changes and address compelling client needs. The growth of the digital solutions market, for instance, has been a huge game changer and we have adopted a highly focused approach, developing comprehensive digital capabilities and driving accelerated solution deployment for our clients. Our sales teams have been at the forefront, proactively gauging clients’ and market needs, and helping our solution teams come up with digital offerings and services that are responsive to clients’ needs. We are an evolved digital solutions provider in key business verticals such as manufacturing and insurance. For example, we recently deployed an “insurance-in-a-box” solution, which is a platform and business process management as-a-service target operating model, for a European specialty insurance company, which is a target operating model that is differentiated by being underpinned by digital and analytics. In addition, we managed to operationalize the solution in an efficient period of time.

We take a holistic approach towards building client relationships, leveraging our strong governance methodology to drive collaboration and communication at various levels of the engagement. While our “client-partners” and account managers are an integral element of our client relationship ecosystem, we drive focused and strategic collaboration through an integrated service-delivery structure, from our top leadership team to our frontline agents.

 

67


Table of Contents

Clients

As at March 31, 2020, we had a diverse client base of 401 clients (with each client generating more than $0.01 million in revenue in fiscal 2020) across a variety of industries and service types, including companies that we believe are among the leading players in their respective industries.

We believe the diversity in our client profile differentiates us from our competitors. See “Part I – Item 5. Operating and Financial Review and Prospects – Revenue” for additional information on our client base.

The table below sets forth the number of our clients by revenue for the periods indicated. We believe that the large number of clients who generate more than $1 million of annual revenue indicates our ability to extend the depth of our relationships with existing clients over time.

 

     Year ended March 31,  
     2020      2019  

Below $1.0 million

     261        278  

$1.0 million to $5.0 million

     107        93  

$5.0 million to $10.0 million

     14        17  

More than $10.0 million

     19        15  

Competition

Competition in the BPM services industry is intense and growing steadily. See “Part I – Item 3. Key Information – D. Risk Factors – Risks Related to Our Business – We face competition from onshore and offshore business process management companies and from information technology companies that also offer business process management services. Our clients may also choose to run their business processes themselves, either in their home countries or through captive units located offshore.”

We compete primarily with:

 

   

Focused BPM service companies with presence in offshore locations (primarily India), such as EXL Service Holdings, Inc., Firstsource Solutions Limited and Genpact Limited;

 

   

BPM divisions of numerous information technology service companies operating out of India, such as Cognizant Technology Solutions, Infosys Technologies Limited, Tata Consultancy Services Limited and Wipro Technologies Limited;

 

   

Global companies such as Accenture Limited, Capgemini, Electronic Data Systems Corporation, a division of Hewlett-Packard, and International Business Machines Corporation, which provide an array of products and services, including broad-based information technology, software, consulting and business process outsourcing services; and

 

   

Global financial services and consulting firms such as Deloitte Private Limited, industry-focused niche technology players such as InterGlobe Enterprises and Accelya, and specialty analytics service providers such as Mu Sigma Inc.

In addition, departments of certain companies may choose to perform their business processes in-house, in some cases via an owned and operated facility in an offshore location such as India. Their employees provide these services as part of their regular business operations.

Intellectual Property

We use a combination of our clients’ software systems, third party software platforms and systems, and our own proprietary software platforms and systems to provide our BPM and technology services. Our proprietary solutions, combined with licensed software (including cloud hosted software-as-a-service), allow us to position and market our services as integrated solutions under our WNS TRAC® suite. In most cases, these solutions are combined with our core BPM service offerings. Our principal proprietary software solutions include:

 

  (1)

WNS TRAC® industry-specific solutions, including the following:

 

  a)

Insurance TRACTM solutions, including digital claims platform, an “insurance-in-a-box” solution called “WNS InVog” (a platform and business process management as-a-service target operating model) and other proprietary solutions, which we use in our insurance business unit;

 

  b)

Travel TRACTM solutions, including revenue accounting platform, fare audit platform (“Verifare”), fare pro-ration solution, revenue integrity solution (“BIDT”) which we use in our travel and leisure business unit;

 

  c)

Shipping and logistics TRACTM solutions, including the WNS MalkomTM platform which is used for processing bills of lading and other shipping documents; and

 

  d)

Industry-specific point solutions, which we use in other business units.

 

  (2)

WNS auto claims software platform, which we use in our WNS Assistance business;

 

  (3)

WNS TRAC® cross-industry solutions, including the following:

 

  a)

CFO TRACTM solutions for our finance and accounting services, which combines our proprietary software as well as solutions developed on third party software;

 

  b)

Digital CIS TRACTM solutions for our customer interaction services, or CIS, practice, combining multiple solutions across the customer interaction lifecycle;

 

  c)

Other proprietary software, point solutions and platform solutions developed on third party software used for cross-industry services including our research and analytics business unit; and

 

  d)

Other proprietary software, point solutions and platform solutions developed on third party software which are used for cross-industry services, including for our research and analytics business unit.

 

  (4)

WNS TRAC® RPA and intelligent automation solutions, including our proprietary automation solutions and solutions developed on third party software like RPA software and cognitive / AI systems for delivering automation and transformation services to our clients.

 

  (5)

WNS TRAC® VeriChain platform for blockchain-based solutions in our insurance, shipping and logistics and other business units.

 

68


Table of Contents

We customarily enter into licensing and non-disclosure agreements with our clients with respect to the use of their software platforms and systems. We maintain intellectual property rights in our proprietary software platforms and systems, and license the use of third party software platforms and systems from their respective owners. Under our contracts with third-party software platform providers, any solutions developed by us on top of such third party software platforms, using our domain knowledge, are our intellectual property (unless qualified otherwise). Our client contracts usually provide that all customized intellectual property created specifically for the use of our clients will be assigned to them, unless it is clearly identified as our intellectual property.

Our employees are also required to sign confidentiality agreements as a condition to their employment. These agreements include confidentiality undertakings regarding our company’s and the clients’ intellectual property that bind our employees even after they cease to work with us. These agreements also ensure that all intellectual property created or developed by our employees in the course of their employment is assigned to us.

We have registered the trademarks “WNS,” “WNS-Extending Your Enterprise” and “WNS TRAC” in most of the countries where we have global presence.

Technology

We have a dedicated team of technology experts who support clients at every stage of their engagement with us. The team designs, implements and supports technology solutions to enable delivery of business processes for our clients.

Wide-area-network — We have designed and built a highly redundant and resilient global multi-protocol label switching (“MPLS”) network, connecting all of our delivery centers and client datacenters. We run data, voice and video services on this global MPLS network to serve our clients.

Customer interaction services technology infrastructure — We have deployed omni-channel contact center platforms with voice, web chat, e-mail, social media, and interactive voice response channels across all our delivery centers, designed to improve customer experience. These customized platforms orchestrate omni-channel customer journeys across digital channels including self-service and payment card industry data security standard compliance.

Data centers — We have built highly secure, redundant data centers for hosting our omni-channel contact center platforms, automation tools, corporate infrastructure and application services.

Cloud computing — We have adopted cloud computing services such as office productivity tools, virtual servers, virtual storage, and web and e-mail security, for some of our clients and our corporate use.

Technology service management methodology — Our technology service delivery management is based on an information technology infrastructure library framework. We assist over 200 clients with technology implementation, service delivery and support for end user computing, wide area network, local area network telecommunications, customer interaction management platform, IT security, datacenter systems and cloud computing technology platforms.

Process and Quality Assurance and Risk Management

Our process and quality assurance compliance programs are critical for the success of our operations. We have an independent quality team to monitor, analyze, provide feedback and report process performance and compliance. Our company-wide quality management system focuses on effectively managing our client processes on an ongoing basis. Our process delivery is managed by independent empowered teams and is measured regularly against pre-defined operational metrics. We have over 1,350 employees that help us meet quality assurance and ISO 9001 standards for Quality Management Systems and ensure continued compliance. We apply Lean Six Sigma methodologies, which are statistical and process-focused methodologies to improve and deliver consistent quality to customers. We apply well-defined quality management principles to improve and provide consistent levels of service quality to our clients. In fiscal 2020, more than 421 different projects were completed using Lean Six Sigma methodologies and over 447 additional projects are in progress. We have also trained over 16,500 employees in ISO 9001 and Lean Six Sigma principles in fiscal 2020.

 

69


Table of Contents

We have been honored with the following awards for our achievements in quality assurance in fiscal 2020:

 

   

Golden Peacock Innovation Management Award

 

   

CPO Innovation Award for Procurement Innovation category

 

   

Future of Sourcing Award for Innovation in Outsourcing category

 

   

Stevie International Business Awards:

a. Insurance Solution (Gold Award); and

b. Customer Service Team of the Year (Bronze Award).

 

   

Stevie Sales and Customer Service Awards:

a. Customer Service Complaints Team of The Year (Gold Award);

b. Award for Innovation in Customer Service (Silver Award);

c. Best Customer Satisfaction Strategy (Silver Award); and

d. Best Use of Customer Insight (Bronze Award).

Our Board of Directors is primarily responsible for overseeing our risk management processes. The Board of Directors receives and reviews reports from the Chief Risk Officer as considered appropriate regarding our company’s assessment of risks. The Board of Directors focuses on the most significant risks facing our company and our company’s general risk management strategy, and also ensures that risks taken by our company are consistent with the Board’s appetite for risk.

Our risk management framework also focuses on three important elements: business continuity planning, information security and operations risk management.

Our approach to business continuity planning involves implementation of an organization-wide business continuity management framework which includes continual self-assessment, strategy formulation, execution and review. Our business continuity strategy leverages our expanding network of delivery centers for operational and technological risk mitigation in the event of a disaster. To manage our business continuity planning program, we employ a dedicated team of experienced professionals. A customized business continuity strategy is developed for key clients, depending on their specific requirements. For mission-critical processes, operations are typically split across multiple delivery centers in accordance with client-approved customized business continuity plans.

 

70


Table of Contents

Our approach to information security involves implementation of an organization-wide information security management system, which complies with the ISO 27001:2013 to manage organizational information security risks. These measures seek to ensure that sensitive information pertaining to our company or our clients remains secure. Currently, information security systems at 51 delivery centers are ISO 27001:2013 certified, and we expect to seek similar certifications for our newer delivery centers. We also comply with the Payment Card Industry Data Security Standard (“PCI DSS”) which is a security standard aimed at helping companies proactively protect cardholder data and sensitive authentication data. In addition, on an annual basis, we undergo “Service Organization Controls (“SOC”) 1 Type 2” audits, pursuant to Statements on Standards for Attestation Engagement No. 18 and International Standards for Assurance Engagements No. 3402, with respect to our general control environment supporting operational delivery, and “SOC 2 Type 2” audits, with respect to the trust service categories of security, availability and confidentiality.

Our approach to operations risk management involves the implementation of a “three lines of defense” framework for our clients’ offshored business processes. Under this framework, the quality assurance teams embedded within the business units act as the first line of defense, an independent and centralized risk management team acts as the second line of defense and client-end internal audit teams act as the third line of defense. Our lines of defense are designed to identify potential risks, evaluate design efficiency and operating effectiveness of controls embedded within the outsourced business processes that we manage for our clients, and propose additional controls as appropriate for mitigation of the identified risks.

In addition, our clients may be governed by regulations specific to their industries or in the jurisdictions where they operate or where their customers are domiciled which may require them to comply with certain process-specific requirements. As we serve a large number of clients globally and across various industries, we rely on our clients to identify the process-specific compliance requirements and the measures that must be implemented in order to comply with their regulatory obligations. We assist our clients to maintain and enforce compliance in their business processes by implementing control and monitoring procedures and providing training to our employees serving specific client programs. These control and monitoring procedures are separate from and in addition to our periodic internal audits.

Human Capital

As at March 31, 2020, we had 44,292 employees, of whom 28,158 are based in India, 9,116 are based in the Philippines, 3,651 are based in South Africa, 964 are based in the US, 658 are based in Sri Lanka, 450 are based in Romania, 418 are based in China, 388 are based in the UK, 150 are based in Spain, 127 are based in Poland, 120 are based in Costa Rica, 21 are based in Australia, 21 are based in Turkey, 19 are based in Germany, 18 are based in France, seven are based in Singapore, four are based in Switzerland, and two is based in the United Arab Emirates. Most of our associates hold university degrees. As at March 31, 2019, we had 39,898 employees. Our employees are not unionized. We believe that our employee relations are good. We focus heavily on recruiting, training and retaining our employees.

Recruiting and Retention

We believe that talent acquisition is an integral part our overall organizational strategy. We have developed effective human resource strategies and demonstrated a strong track record in recruitment specific to the needs of our business units to optimize the training and development of our employees. As we continue to grow, we look to improve and enhance our candidate pool, which is sourced from recruitment agencies, job portals, advertisements, college campuses (where we focus on recruiting talented individuals) and walk-in applications. In addition, a significant number of our applicants are referred to us by existing employees. We recruit an average of 1,753 employees per month. We have also initiated a hiring program, whereby we employ apprentices under the India government scheme, National Employability Enhancement Mission, pursuant to which they undergo a three to 36-month apprenticeship to enhance their employability. There is no guarantee of employment with us following the completion of the apprenticeship.

During fiscal 2020, 2019 and 2018, the attrition rate for our employees who had completed six months of employment with us was 30%, 31% and 29% respectively.

Training and Development

We devote significant resources to the training and development of our associates. We have established the WNS Learning Academy, where we offer specialized skills development, such as leadership and management development, skills and behavioral programs for employees across all levels. The WNS Learning Academy is not only focused on developing initiatives and programs that are designed to enable high-impact leadership and potential across all employee band levels and geographies, but is also focused on building internal capability to create a digitally savvy workforce ready for the future. One of the best practices and biggest strengths of the WNS Learning Academy is its structure enables our employees to deliver relevant learning solutions that provide people with the knowledge and skills they need to enhance performance and achieve organizational goals.

 

71


Table of Contents

The training organization at WNS offers developmental programs across all levels in the organization, and across all business units and all enabling units that are support functions. It comprises:

 

   

The LA that focuses on potential development and provides leadership programs across various levels of management in the organization;

 

   

The process and domain training team that focuses on enabling and improving performance;

 

   

The education team that is a specialized arm of the LA, which focuses on building internal digital capability through structured certification courses; and

 

   

The business process excellence and transformation team that focuses on training and certifying employees, for example, on the Six Sigma belts.

The LA carries out an intensive annual training need analysis with each business unit, vertical and location to ensure that its programs are in line with our business objectives. The final development plan is reviewed by the team at a strategic level to ensure alignment with the organization’s strategy. After analyzing the training needs, trainings are conducted for all levels across business verticals and locations, and the key emerging needs and themes are consolidated and analyzed.

The following chart illustrates the structure of the LA, which is designed to facilitate effective learning solutions and focus on critical functional areas.

 

LOGO

We have established a consulting team, design team and a content delivery team. The consulting and the design teams determine the learning demands within each business unit, with each team member aligned to a specific business unit. These members are referred to as our business unit learning partners. The learning partner acts as a learning consultant for each business unit, understanding the vision and objectives of the business unit and identifying the developmental requirements for that business unit. They then create a learning strategy and develop solutions which are designed to help the business unit to achieve its goals. Once this is in place, the content delivery team takes over to create and deliver content for the respective teams. In addition, we have specific teams which focus on organization-level programs for leadership, education (comprising structured curriculum-based programs across different employee band levels in the organization) and technology (leveraging technology to complement our initiatives and create a world class learning organization).

While we continue to focus on building organization-level capability, the consulting design and delivery model allows us to proactively identify and create focused developmental strategies for each business unit. The technology function promotes the use of digital learning, manages the learning management system, strives to create a self-learning ecosystem and uplifts the digital learning quotient of the organization which helps to respond to new opportunities arising from digital technologies.

The LA has over 300 unique programs for various employee band levels within the organization and behavioral skills that are conducted across locations based on defined competency-based roadmaps.

Talent Development CoE – Flagship Programs

WNS has a CoE that focuses on nurturing and developing the future leaders of the organization. The CoE actively engages with the HR and business leadership to design business-relevant people programs that align with the strategy and vision of the organization.

 

72


Table of Contents

Some of the programs designed and implemented by this team are focused on building a strong and gender-diverse leadership pipeline. Given below are the details of three such programs:

(a) Aspire Plus – Launched in 2016, the “ASPIRE” initiative mapped critical roles and future talent needs with competencies and identified and nurtured high-potential employees in the organization to succeed. In 2017, we launched “Aspire+,” a platform where the “Aspire” participants were provided an opportunity to apply their knowledge, skills and business acumen in practical business situations. Through the Aspire+ program, we endeavor to create a consulting task force that will be responsible for strategic account management of small/mid-sized accounts with envisaged growth potential. In 2019, we launched “Aspire 2.0,” which focuses on developing leaders on client-centric competencies, and had 34 participants from India and other sites. We have also collaborated with Cornell University for academic curriculum delivered through collaborative learning tools. The curriculum focuses on client advisory, executive presence, presentation and value articulation, and consultative skills.

(b) Centurion – “Centurion” is a talent development program for future women leaders. It is an initiative to proactively identify and nurture women employees from the frontline manager level to enhance their role capabilities and create an enabling environment for career opportunities. In 2017, we selected 24 candidates for the first cohort across the following locations: India, South Africa, Sri Lanka, Romania and the Philippines. In 2020, we launched “Centurion 2.0,” which continues to focus on building a talent pipeline of women employees through a 30-month structured developmental intervention that includes an academic journey with Cornell University, experiential learning, leadership mentoring and personalized interventions.

(c) Signature Leadership Development Program – This program has been specially curated for our executive leadership. The program is a 12-month journey, designed as a combination of face-to-face residential and virtual sessions, group as well one-to-one coaching, along with corporate immersions. Considering the design and target participants, we collaborated with Korn Ferry to bring in their expertise in leadership development and with Harvard Business Publishing to impart academic knowledge. Both Korn Ferry and Harvard Business Publishing have worked closely with us to co-curate and manage this entire program.

Digital Capability Building

The learning organization spearheads the digital capability agenda across all employee band levels, from “A” to “E+”, in the enterprise, which include, but are not limited to, the following initiatives:

 

   

Bands A and B: WNS Education Program, Future Skills with NASSCOM and GLINT

 

   

Bands C and D: Aspire 2.0, the Rise of DiFU and GLINT

 

   

Band E+: Signature Leadership Development Program and GLINT

Other than what has been covered elsewhere in this annual report, below are some details on the other initiatives. First, GLINT is an AI-led digital learning and knowledge platform that was recently launched globally at WNS. It offers an immersive learning experience through tailored modules that are mapped to our specific business needs. This is one of the key solutions for us as an organization as we evolve to keep pace with digitization, creating a future-ready workforce and driving collaborative innovation. The platform also facilitates an environment of knowledge sharing and peer-to-peer learning to foster collaboration. As digitization re-wires every sphere of our lives, including learning, virtual workplaces and virtual learning environments are increasingly becoming the new normal.

Some of the other key features of GLINT include:

 

   

Aggregate: GLINT aggregates all the knowledge and learning content from the learning management system, intranet, external providers, subject matter experts, and our team’s preferred web-based content resources;

 

   

Curate and create: GLINT’s ML curation engine is designed to ensure that high-quality, relevant and contextual content is presented;

 

   

Recommend: GLINT’s AI-based targeting engine learns about its user’s preferences and makes continuous content and learning recommendations, which can be accessed directly from where they are working; and

 

   

Learn and guide: Facilitate application usage with step-by-step guides and understand application usage with analytics.

 

73


Table of Contents

Second, the WNS Education program was launched globally by our Group Chief Executive Officer in July 2018, and the curriculum was designed and vetted by seven business unit leaders across our verticals. We believe that, through the program, employees can explore new possibilities in improving the process and enhancing their horizons in making changes, as they better understand the client ecosystem, which helps them with their client engagement.

The WNS Education program is aimed at achieving the following:

 

   

Building capabilities to lead digital transformation in the BPM space;

 

   

Raising the organization’s digital quotient;

 

   

Preparing the workforce as digital natives; and

 

   

Re-purposing and re-skilling our workforce, as BPM-specific education is not readily available.

Third, the DiFu readiness framework represents a step in our journey to “go digital,” and it not only assesses, but also re-tool and upgrade the skills of our employees. To create an accurate assessment of digital readiness, we worked with Deloitte’s consulting team to create a digital competency framework that we use to assess our digital readiness as an organization. We recently launched the digital readiness assessment platform for the employees at our leadership level. We hope that, through this platform, every employee in the organization will be assessed on their digital readiness, which will then allow us to use the assessment results to further improve the solutions we provide our clients.

Finally, another key initiative was our collaboration with FutureSkills, a new-age learning experience platform from the National Association of Software and Service Companies that was created to help IT professionals build capability in digital technologies. GLINT provides our employees with access to the nine emerging channels on FutureSkills. This collaboration is another step towards empowering and engaging with in-house professionals. The platform enables continuous learning and skill upgrading in nine emerging technology areas: RPA, big data, AI, cybersecurity, IoT, virtual reality, 3D printing, social and mobile, and cloud computing. Employees also have access to content libraries, skill assessments, certification resources and more.

Culture Building and Transformation

The organization is working towards the goal of “one WNS” and “one value system.” It drives the following organization-wide initiatives to create an inclusive culture, build awareness, and create champions within operations teams to maintain the rigor:

(a) Millennial Council: The Millennial Council is an initiative where the youngest minds at WNS get the opportunity to work shoulder-to-shoulder with the most senior leaders in the company to truly make a difference. The council members are tasked to help the WNS brand stay in alignment with changing trends. They also develop action plans for the organization in their chosen fields, including employee engagement, corporate social responsibility, technology and enhancement of the company’s brand presence.

(b) Diversity and Inclusion: As an organization, we recognize the benefits to be gained from inclusivity of women and the diversity of skills, perspectives, and experiences they contribute in making WNS business practices more efficient and innovative. For us, this is a shift in culture rather than stand-alone programs. It is about feeling included and essential since productivity improves in an inclusive environment. WNS has a policy of equal opportunity for employees and candidates from varied cultures, genders, backgrounds and geographies. WNS commitment to inclusion spans the entire organization and is intertwined with our vision, values, culture and strategy. We are continuously able to attract and retain strong female talent in the industry, in all the regions in which we have delivery locations and the proportion of female employees has grown from 36% in 2015 to about 44% in 2019. Developing talented women at WNS is not just about increasing the number of women we recruit. It focuses on supporting and developing women across the entire span of their career.

(c) Respectful Workplace: Our respectful workplace program is based on the premise that all employees need to be treated fairly and differences should be acknowledged and valued. The program promotes a work environment that is collaborative with respectful relationships based on a humane and an ethical mindset. It is an initiative of the people, for the people and by the people. The premise of this module is inclusion – irrespective of gender, ethnicities, sexual orientations or any other dividing forces that may hinder the respect towards one another. It also covers in detail the various aspects of “POSH” (that is, the prevention of sexual harassment) and drives awareness of our organization’s policy and approach in the arena.

 

74


Table of Contents

Regulations

Due to the industry and geographic diversity of our operations and services, our operations are subject to a variety of rules and regulations, and several federal and state agencies in Australia, China, Costa Rica, France, Germany, India, Ireland, Mauritius, the Netherlands, New Zealand, the Philippines, Poland, Romania, Singapore, South Africa, Spain, Sri Lanka, Switzerland, Turkey, United Arab Emirates, the UK and the US that regulate various aspects of our business. See “Part I — Item 3. Key Information — D. Risk Factors — Risks Related to our Business — Our global operations expose us to numerous and sometimes conflicting legal and regulatory requirements. Failure to adhere to the laws and regulations that govern our business or our clients’ businesses that we are required to comply with in performing our services could harm our business.” We have benefitted from, and continue to benefit from, certain tax holidays and exemptions in various jurisdictions in which we have operations.

In fiscal 2020 and 2019, our tax rate in India and the Philippines impacted our effective tax rate. In fiscal 2018 our tax rate in India, the Philippines and Sri Lanka impacted our effective tax rate. We would have incurred approximately $17.7 million, $15.7 million and $9.4 million in additional income tax expense on our combined operations in our SEZ operations in India, the Philippines and Sri Lanka in fiscal 2020, 2019 and 2018, respectively, if the tax holidays or exemptions as described below had not been available for the respective periods.

We expect our tax rate in India and the Philippines to continue to impact our effective tax rate. Our tax rate in India has been impacted by the reduction in the tax exemption enjoyed by our delivery center operating under the Special Economic Zone (“SEZ”) scheme. Our effective tax rate in Sri Lanka has been impacted by the withdrawal of tax exemption on export income in Sri Lanka with effect from April 1, 2018, following which the income from export of service has been subject to tax at 14% on net basis, as more fully described below.

 

75


Table of Contents

India

In the past, the majority of our Indian operations were eligible to claim income tax exemption with respect to profits earned from export revenue from operating units registered under the STPI. The benefit was available for a period of 10 years from the date of commencement of operations, but not beyond March 31, 2011. Effective April 1, 2011, upon the expiration of this tax exemption, income derived from our operations in India became subject to the prevailing annual tax rate, which was 34.95% in fiscal 2020 and 2019, and 34.61% in fiscal 2018.

In 2005, the Government of India implemented the SEZ legislation, with the effect that taxable income of new operations established in designated SEZs may be eligible for a 15-year tax holiday scheme consisting of a complete tax holiday for the initial five years and a partial tax holiday for the subsequent ten years, subject to the satisfaction of certain capital investment conditions in the last five years. From fiscal 2012 until fiscal 2020, the Company started operations in various delivery centers in Mumbai, Pune, Chennai, Gurgaon and Noida, India that were registered under the SEZ scheme. Some of these operations are eligible for a 100.0% income tax exemption for a period of five years from the date of commencement of operations, which are set to expire between fiscal 2022 and fiscal 2024. Following the expiry of the 100.0% income tax exemption, these operations are eligible for a 50.0% income tax exemption, which are set to expire between fiscal 2026 and fiscal 2034. Such income tax exemptions are only eligible for business units and operations set up under the SEZ legislation on or before March 31, 2020.

In addition to these tax holidays, our Indian subsidiaries are also entitled to certain benefits under relevant state legislation and regulations. These benefits include rebates and waivers in relation to payment for transfer of property and registration (including for purchase or lease of premises) and commercial usage of electricity.

The Government of India may enact new tax legislation that could impact the way we are taxed in the future. For example, the change in the law in fiscal 2017 has resulted in any new business units or operations set up under the SEZ legislation after March 31, 2020 not being eligible for the same income tax holidays that our existing SEZ operations currently enjoy. See “Part I — Item 3. Key Information — D. Risk Factors — Risks Related to Key Delivery Locations — Tax legislation and the results of actions by taxing authorities may have an adverse effect on our operations and our overall tax rate.”

Philippines

From fiscal 2016 until fiscal 2020, our company started operations in various delivery centers in the Philippines which are eligible for tax exemption benefits expiring between 2020 and 2024. Following the expiry of the tax benefits, income generated by the Philippines subsidiary will be taxed at the prevailing special tax rate, which currently is 5.0% on gross profit.

Sri Lanka

Our operations in Sri Lanka were eligible to claim income tax exemption with respect to the profits earned from export revenue until fiscal 2018 and have since been taxed at 14% on net basis with effect from April 1, 2018.

Costa Rica

Our subsidiary in Costa Rica is eligible for a 50.0% income tax exemption from fiscal 2018 to fiscal 2021.

 

76


Table of Contents

See “Part I — Item 5. Operating and Financial Review and Prospects — Critical Accounting Policies — Income Taxes.”

Enforcement of Civil Liabilities

We are incorporated in Jersey, Channel Islands. Most of our directors and executive officers reside outside of the US. Substantially all of the assets of these persons and substantially all of our assets are located outside the US. As a result, it may not be possible for investors to effect service of process on these persons or us within the US, or to enforce against these persons or us, either inside or outside the US, a judgment obtained in a US court predicated upon the civil liability provisions of the federal securities or other laws of the US or any state thereof. A judgment of a US court is not directly enforceable in Jersey, but constitutes a cause of action which will be enforced by Jersey courts provided that:

 

   

the court which pronounced the judgment has jurisdiction to entertain the case according to the principles recognized by Jersey law with reference to the jurisdiction of the US courts;

 

   

the judgment is given on the merits and is final and conclusive — it cannot be altered by the courts which pronounced it;

 

   

there is payable pursuant to the judgment a sum of money, not being a sum payable in respect of tax or other charges of a like nature or in respect of a fine or other penalty;

 

   

the courts of the US have jurisdiction in the circumstances of the case;

 

   

the judgment can be enforced by execution in the jurisdiction in which the judgment is given;

 

   

the person against whom the judgment is given does not benefit from immunity under the principles of public international law;

 

   

there is no earlier judgment in another court between the same parties on the same issues as are dealt with in the judgment to be enforced;

 

   

the judgment was not obtained by fraud, duress and was not based on a clear mistake of fact; and

 

   

the recognition and enforcement of the judgment is not contrary to public policy in Jersey, including observance of the principles of natural justice which require that documents in the US proceeding were properly served on the defendant and that the defendant was given the right to be heard and represented by counsel in a free and fair trial before an impartial tribunal.

It is the policy of Jersey courts to award compensation for the loss or damage actually sustained by the person to whom the compensation is awarded. Although the award of punitive damages is generally unknown to the Jersey legal system, there is no prohibition on them either by statute or by customary law. Whether a judgment is contrary to public policy depends on the facts of each case. Exorbitant, unconscionable, or excessive awards will generally be contrary to public policy. Moreover, if a US court gives a judgment for multiple damages against a qualifying defendant, the Protection of Trading Interests Act 1980, an Act of the UK extended to Jersey by the Protection of Trading Interests Act 1980 (Jersey) Order 1983 (“the Order”), provides that such judgment would not be enforceable in Jersey and the amount which may be payable by such defendant may be limited. The Order provides, among others, that such qualifying defendant may be able to recover such amount paid by it as represents the excess of such multiple damages over the sum assessed as compensation by the court that gave the judgment. A “qualifying defendant” for these purposes is a citizen of the UK and Colonies, a body corporate incorporated in the UK, Jersey or other territory for whose international relations the UK is responsible or a person carrying on business in Jersey.

 

77


Table of Contents

Jersey courts cannot enter into the merits of the foreign judgment and cannot act as a court of appeal or review over the foreign courts. It is doubtful whether an original action based on US federal securities laws can be brought before Jersey courts. A plaintiff who is not resident in Jersey may be required to provide security for costs in the event of proceedings being initiated in Jersey. There is uncertainty as to whether the courts of Jersey would:

 

   

recognize or enforce judgments of US courts obtained against us or our directors or officers predicated upon the civil liability provisions of the securities laws of the US or any state in the US; or

 

   

entertain original actions brought in each respective jurisdiction against us or our directors or officers predicated upon the federal securities laws of the US or any state in the US.

In India, recognition and enforcement of foreign judgments is provided for under Section 13 and Section 44A of the Code of Civil Procedure, 1908 (India) (the “Civil Code”), as amended. Section 44A of the Civil Code provides that where a foreign judgment has been rendered by a superior court in any country or territory outside India which the Indian government has by notification declared to be a reciprocating territory, such foreign judgment may be enforced in India by proceedings in execution as if the judgment had been rendered by a competent court in India. However, Section 44A of the Civil Code is applicable only to monetary decrees not being in the nature of amounts payable in respect of taxes or other charges of a similar nature or in respect of fines or other penalties and does not include arbitration awards. The US has not been declared by the Indian government to be a reciprocating territory for the purposes of Section 44A of the Civil Code. Accordingly, a judgment of a foreign court, which is not a court in a reciprocating territory, may be enforced in India only by a fresh suit instituted in a court of India and not by proceedings in execution. Furthermore, the execution of the foreign decree under Section 44A of the Civil Code is also subject to the exception under Section 13 of the Civil Code, as discussed below.

Section 13 of the Civil Code, states that a foreign judgment is conclusive as to any matter directly adjudicated upon except:

 

   

where the judgment has not been pronounced by a court of competent jurisdiction;

 

   

where the judgment has not been given on the merits of the case;

 

   

where it appears on the face of the proceedings that the judgment is founded on an incorrect view of international law or a refusal to recognize the law of India in cases where such law is applicable;

 

   

where the proceedings in which the judgment was obtained were opposed to natural justice;

 

   

where the judgment has been obtained by fraud; or

 

   

where the judgment sustains a claim founded on a breach of any law in force in India.

The suit must be brought in India within three years from the date of the judgment in the same manner as any other suit filed to enforce a civil liability in India. It is unlikely that a court in India would award damages on the same basis as a foreign court if an action is brought in India. Furthermore, it is unlikely that an Indian court would enforce foreign judgments if it viewed the amount of damages awarded as excessive or inconsistent with public policy in India. A party seeking to enforce a foreign judgment in India is required to obtain prior approval from the Reserve Bank of India under the Indian Foreign Exchange Management Act, 1999, to repatriate any amount recovered pursuant to such execution and such amount may be subject to tax in accordance with applicable laws. Any judgment in a foreign currency would be converted into Indian rupees on the date of judgment and not on the date of payment. We cannot predict whether a suit brought in a court in India will be disposed of in a timely manner.

 

78


Table of Contents

C. Organizational Structure

The following diagram illustrates our company’s organizational structure and the place of organization of each of our subsidiaries as of the date hereof. Unless otherwise indicated, each of our subsidiaries is wholly owned, directly or indirectly, by WNS (Holdings) Limited. Directly owned subsidiaries of WNS are represented by shaded boxes.

 

LOGO

Notes:

 

(1) 

All the shares except one share of WNS Business Consulting Services Private Limited are held by WNS North America Inc. The remaining one share is held by a nominee shareholder on behalf of WNS North America Inc. to satisfy the regulatory requirement to have a minimum of two shareholders.

(2)

WNS Denali Sourcing Services Inc was incorporated on November 27, 2019.

(3) 

On January 9, 2020, our Netherlands subsidiary converted into a B.V. resulting in the change of name from WNS Global Services Netherlands Cooperatief U.A. to WNS Global Services Netherlands B.V.

(4) 

On January 9, 2020, WNS Global Services Netherlands Cooperatief U.A (Ireland Branch) was renamed WNS Global Services Netherlands B.V. (Ireland Branch).

(5) 

WNS Business Consulting Netherlands B.V. was incorporated on March 17, 2020, pursuant to the demerger of WNS Global Services Netherlands B.V.

(6) 

WNS Gestion des Processus d’Affaire Inc. was incorporated on April 28, 2020.

(7) 

WNS Cares Foundation is a “not for profit organization” registered under Section 8 of the Indian Companies Act, 2013, formed for the purpose of promoting corporate social responsibilities. As a result, it is not considered for the purpose of preparing our consolidated financial statements.

(8)

WNS SA Domestic (Pty) Ltd was renamed WNS South Africa (Pty) Ltd on September 25, 2019.

 

79


Table of Contents

D. Property, Plants and Equipment

As at March 31, 2020, we have an installed capacity of 34,779 production workstations, or seats, that can operate on an uninterrupted 24/7 basis and can be staffed on a three-shift per day basis. The majority of our properties are leased by us, as described in the table below, and most of our leases are renewable at our option, as described below. The following table describes each of our delivery centers and sales offices, including centers under construction, and sets forth our lease expiration dates.

 

Location   

Total Space

(square feet)

    

Total number of

work stations

     Lease Expiration Date      Extendable Until ( 1)  

India:

           

Mumbai

     421,387        3,074        

Godrej Plant 10

           February 15, 2021        N/A  

Godrej Plant 11

           February 15, 2021        N/A  

Godrej Plant 5

           February 15, 2021        N/A  

Raheja (SEZ), Airoli

           May 31, 2029        N/A  

Interface building, Malad - 4th floor

           March 31, 2025        N/A  

Gurgaon

     299,171        3,562        

World Tech park Block - B2 9th floor

           May 14, 2022        May 15, 2027  

World Tech park Block - B3 9th floor

           May 14, 2022        May 15, 2027  

World Tech Park - 8th, 9th, 10th & part 11th floor

           April 27, 2024        N/A  

World Tech Park - Remaining part of 11th floor

           April 27, 2024        N/A  

World Tech Park - Block A3, 11th floor

           April 28, 2024        N/A  

World Tech Park - Block B3 10th floor

           January 19, 2024        January 19, 2029  

World Tech Park - Block B2 10th floor

           November 28, 2024        November 28, 2029  

Pune

     736,005        8,934        

Magarpatta

           N/A        N/A  

Weikfield - Phase I

           February 14, 2023        N/A  

Weikfield - Phase II

           April 30, 2023        N/A  

Weikfield - Phase III

           June 14, 2023        N/A  

Mantri Estate - 2nd floor

           May 27, 2020        N/A  

Mantri Estate - 4th floor

           May 27, 2020        N/A  

Magarpatta (SEZ) - Level 5

           February 14, 2026        N/A  

Magarpatta (SEZ) - Level 6

           October 26, 2026        N/A  

Magarpatta (SEZ) - Level 7

           February 28, 2027        N/A  

Magarpatta - Tower 9

           April 30, 2029        N/A  

Pune Info city - 5th floor

           May 30, 2022        May 30, 2027  

Pune Info city - 4th floor

           June 14, 2023        June 14, 2027  

Pune Info city - 3rd floor

           September 30, 2023        September 30, 2033  

Nashik

     98,173        1,548        

Shreeniketan

           June 30, 2023        N/A  

Vascon

           October 13, 2023        N/A  

Ashoka Business Conclave - 6th floor

           November 19, 2024        N/A  

Bangalore

     191,890        1,981        

RMZ Centennial - Ground floor and Level 1

           June 14, 2021        June 14, 2025  

RMZ Centennial - Level 2 and 3

           October 31, 2021        October 31, 2025  

RMZ Centennial - Terrace

           July 31, 2021        July 31, 2025  

Chennai

     125,644        945        

RMZ Millenia Ground and 1st floor

           March 31, 2021        March 31, 2045  

DLF (SEZ) - Phase 1

           March 31, 2021        March 31, 2026  

DLF (SEZ) - Phase 2

           March 31, 2021        March 31, 2026  

DLF IT SEZ - 9th floor

           May 9, 2025        May 9, 2030  

Vishakhapatnam

     71,633        1,070        

MPS Plaza

           March 4, 2022        March 4, 2027  

Apeita Tech-hub

           March 31, 2026        March 31, 2029  

Noida

     22,111        265        

Brookfield

           January 22, 2023        January 22, 2033  

Hyderabad

     N/A        12        

Growork, Kapil Towers

           June 30, 2020        N/A  

 

80


Table of Contents

Sri Lanka:

     54,675        785        

Colombo (HNB) - Level 12 and 13

           July 31, 2028        N/A  

Colombo (Orion City)

           August 24, 2023        N/A  

UK:

     28,311        357        

Ipswich (Museum Street)

           May 23, 2028        N/A  

Cheadle (Hercules Office Park)

           July 21, 2020        N/A  

Piccadilly (Malta House)

           February 10, 2027        N/A  

Hayes (Hyde Park)

           February 28, 2021        N/A  

Sackville House,39-40 Piccadilly

           January 9, 2025        January 9, 2030  

US:

     125,523        837        

NJ (Exchange Place)

           July 30, 2020        N/A  

SC (The State Building)

           July 31, 2020        April 19, 2023  

Bellevue (Sterling Plaza) - 5th and 6th floors

           April 30, 2024        N/A  

Pittsburg (One Waterfront Place)

           January 31, 2022        January 31, 2027  

NY (East Greenbush)

           February 28, 2021        N/A  

Houston (Corporate Drive)

           December 31, 2020        December 31, 2025  

Houston (Northchase Drive)

           March 31, 2026        March 31, 2036  

Turkey:

     N/A        25        

Istanbul (MeydanK Plaza)(3)

           April 30, 2020        N/A  

Switzerland:

     2,077        —          

Zurich (Bahnhofstrasse)(2)

           Not specified        N/A  

Romania:

     53,201        648        

Bucharest (West Gate) - 2nd and 3rd floors

           January 19, 2023        January 19, 2026  

Constanta (Euro Construct)

           January 15, 2022        January 15, 2027  

Philippines:

           

Manila

     526,684      5,889        

Eastwood - 10th floor

           June 30, 2021        June 30, 2031  

Eastwood - 9th floor

           June 30, 2021        June 30, 2031  

Techno Plaza II

           April 30, 2026        N/A  

Zeta Tower - 10th floor

           May 14, 2024        May 14, 2029  

Exxa tower - 15th floor

           March 19, 2023        March 19, 2028  

Exxa Tower - 16th floor

           June 14, 2023        June 14, 2028  

Exxa Tower - 17th floor

           November 30, 2023        November 30, 2028  

Giga Tower - 8th floor

           October 15, 2024        October 15, 2029  

Giga Tower - 9th floor

           April 30, 2025        April 30, 2030  

Ilo Ilo

           

One Global Centre

           January 15, 2021        N/A  

Three Techno Place - 4th floor

           March 15, 2022        N/A  

Two Techno Place

           April 30, 2024        April 30, 2029  

Alabang

           

Vector 2 - 9th and 10th floors

           February 28, 2022        February 28, 2027  

Capella - 15th and 16th floors

           June 30, 2022        June 30, 2027  

FiliInvest Axis - 21st floor

           August 14, 2023        August 14, 2028  

FiliInvest Axis - 22nd floor

           November 30, 2023        November 30, 2028  

Tera Towers

           May 15, 2025        N/A  

Costa Rica:

     12,592        200        

San Jose (Forum H)

           April 30, 2025        N/A  

United Arab Emirates:

     510        N/A        

Dubai Airport Free Trade Zone

           November 22, 2020        N/A  

South Africa:

     285,747        3,779        

Cape Town

           

Knowledge Park

           March 31, 2025        March 31, 2030  

Claremont - Level 4

           June 30, 2022        June 30, 2026  

Claremont - Level 5

           June 30, 2022        June 30, 2026  

Bellavile

           

Ambition House - 4th floor

           September 30, 2022        N/A  

Johannesburg

           

DownSouth Ridge Park

           August 31, 2021        August 31, 2026  

Port Elizabeth (CoEGA)

           July 31, 2020        July 31, 2025  

Durban

           

Hippopark Avenue - Sections 1 and 2

           May 30, 2020        N/A  

Grid Eye

           June 30, 2021        June 30, 2026  

Poland:

     17,401        265        

Gdynia (Luzycka Office Park)- Buildings B, C and D

           August 31, 2022        August 31, 2027  

China:

     42,538        435        

Guangzhou (Zhongshan Street) - 30th floor

           April 30, 2021        N/A  

Dalian (Dalian Software Park) - Building 22

           May 15, 2020        N/A  

Beijing (YongAnDongLi) - 5th floor

           August 31, 2020        N/A  

Shanghai (Huangu PL)

           January 31, 2021        N/A  

Australia:

     1,216        N/A        

Sydney (Berry Street)

           March 27, 2023        N/A  

Spain:

     8,382        168        

4A, Mira II, Balear – 1st floor

           July 17, 2020        N/A  

5A, Mira II, Balear – 1st floor

           August 1, 2020        N/A  

6A, Mira II, Balear – 1st floor

           July 2, 2020        N/A  

7A, Mira II, Balear – 1st floor(4)

           December 31, 2020        N/A  

Notes:

N/A means not applicable.

 

(1) 

Reflects the expiration date if the applicable extension option is exercised.

(2)

The lease may be terminated with a three-month’s notice.

(3) 

We are in the process of renewing the lease.

(4) 

We have served a notice of termination of the lease to the lessor and the premise will be surrendered by July 2020.

Our delivery centers are equipped with fiber optic connectivity and have backups to their power supply designed to achieve uninterrupted operations. In fiscal 2021, we intend to continue to streamline our operations by further consolidating production capacities in our delivery centers.

 

ITEM 4A.

 UNRESOLVED STAFF COMMENTS

None.

 

 

81


Table of Contents
ITEM 5.

 OPERATING AND FINANCIAL REVIEW AND PROSPECTS

The following discussion on the financial condition and results of operations of our company should be read in conjunction with our consolidated financial statements and the related notes included elsewhere in this annual report. Some of the statements in the following discussion contain forward-looking statements that involve risks and uncertainties. See “Special Note Regarding Forward-Looking Statements.” Our actual results could differ materially from those anticipated in these forward-looking statements as a result of a number of factors, including, but not limited to, those described below and elsewhere in this annual report, particularly in the risk factors described in “Part I — Item 3 Key Information — D. Risk Factors.”

For a discussion of our results in fiscal 2019 compared to fiscal 2018 and certain comparative numbers in fiscal 2018, please refer to “Part I — Item 5. Operating and Financial Review and Prospects” contained in our Annual Report on Form 20-F for fiscal 2019 filed with the SEC on May 15, 2019.

Overview

We are a leading global provider of BPM services, offering comprehensive data, voice, analytical and business transformation services with a blended onshore, near shore and offshore delivery model. We transfer the business processes of our clients to our delivery centers, located in China, Costa Rica, India, the Philippines, Poland, Romania, South Africa, Spain, Sri Lanka, Turkey, the UK, and the US, with a view to offer cost savings, operational flexibility, improved quality and actionable insights to our clients. We seek to help our clients “transform” their businesses by identifying business and process optimization opportunities through technology-enabled solutions, improvements to their processes, global delivery capabilities, analytics and an understanding of their business.

We win outsourcing engagements from our clients based on our domain knowledge of their business, our experience in managing the specific processes they seek to outsource and our customer-centric approach. Our company is organized into vertical business units in order to provide more specialized focus on each of the industries that we target, to more effectively manage our sales and marketing process and to develop in-depth domain knowledge. The major industry verticals we currently target are the insurance; travel and leisure; diversified businesses including manufacturing, retail and CPG, media and entertainment, and telecom; healthcare; utilities; shipping and logistics; consulting and professional services; and banking and financial services industries.

Our portfolio of services includes vertical-specific processes that are tailored to address our clients’ specific business and industry practices. In addition, we offer a set of shared services that are common across multiple industries, including finance and accounting, customer interaction services, research and analytics, technology services, legal services, and human resources outsourcing.

Although we typically enter into long-term contractual arrangements with our clients, these contracts can usually be terminated with or without cause by our clients and often with short notice periods. Nevertheless, our client relationships tend to be long-term in nature given the scale and complexity of the services we provide coupled with risks and costs associated with switching processes in-house or to other service providers. We structure each contract to meet our clients’ specific business requirements and our target rate of return over the life of the contract. In addition, since the sales cycle for offshore business process management is long and complex, it is often difficult to predict the timing of new client engagements. As a result, we may experience fluctuations in growth rates and profitability from quarter to quarter, depending on the timing and nature of new contracts. Our operating results may also differ significantly from quarter to quarter due to seasonal changes in the operations of our clients. For example, our clients in the travel and leisure industry typically experience seasonal changes in their operations in connection with the US summer holiday season, as well as episodic factors such as adverse weather conditions. Our focus, however, is on deepening our client relationships and maximizing shareholder value over the life of a client’s relationship with us.

The following table represents our revenue (a GAAP financial measure) for the periods indicated:

 

     Year ended March 31,  
     2020      2019  
     (US dollars in millions)  

Revenue

   $ 928.3      $ 809.1  

Our revenue is generated primarily from providing business process management services. We have two reportable segments for financial statement reporting purposes — WNS Global BPM and WNS Auto Claims BPM. In our WNS Auto Claims BPM segment, we provide both “fault” and “non-fault” repairs. For “fault” repairs, we provide claims handling and repair management services, where we arrange for automobile repairs through a network of third party repair centers. In our repair management services, where we act as the principal in our dealings with the third party repair centers and our clients, the amounts which we invoice to our clients for payments made by us to third party repair centers are reported as revenue. Where we are not the principal in providing the services, we record revenue from repair services net of repair cost. See Note 2(s) to our consolidated financial statements included elsewhere in this annual report. Since we wholly subcontract the repairs to the repair centers, we evaluate the financial performance of our “fault” repair business based on revenue less repair payments to third party repair centers, which is a non-GAAP financial measure. We believe that revenue less repair payments (a non-GAAP financial measure) for “fault” repairs reflects more accurately the value addition of the business process management services that we directly provide to our clients. Management believes that revenue less repair payments (non-GAAP) may be useful to investors as a more accurate reflection of our performance and operational results.

 

82


Table of Contents

For our “non-fault” repairs business, we generally provide a consolidated suite of accident management services including credit hire and credit repair, and we believe that measurement of such business on a basis that includes repair payments in revenue is appropriate. Revenue including repair payments is therefore used as a primary measure to allocate resources and measure operating performance for accident management services provided in our “non-fault” repairs business. Our “non-fault” repairs business where we provide accident management services accounts for a relatively small portion of our revenue for our WNS Auto Claims BPM segment.

Revenue less repair payments is a non-GAAP financial measure which is calculated as (a) revenue less (b) in our auto claims business, payments to repair centers for “fault” repair cases where we act as the principal in our dealings with the third party repair centers and our clients. This non-GAAP financial information is not meant to be considered in isolation or as a substitute for our financial results prepared in accordance with GAAP. Our revenue less repair payments (non-GAAP) may not be comparable to similarly titled measures reported by other companies due to potential differences in the method of calculation.

The following table reconciles our revenue (a GAAP financial measure) to revenue less repair payments (a non-GAAP financial measure) for the periods indicated:

 

     Year ended March 31,  
     2020      2019  
     (US dollars in millions)  

Revenue

   $ 928.3      $ 809.1  

Less: Payments to repair centers(1)

     32.0        15.2  
  

 

 

    

 

 

 

Revenue less repair payments (non-GAAP)

   $ 896.2      $ 794.0  
  

 

 

    

 

 

 

Note:

 

(1) 

Consists of payments to repair centers in our auto claims business for “fault” repair cases where we act as the principal in our dealings with the third party repair centers and our clients.

The following table sets forth our constant currency revenue less repair payments (a non-GAAP financial measure) for the periods indicated. Constant currency revenue less repair payments is a non-GAAP financial measure. We present constant currency revenue less repair payments (non-GAAP) so that revenue less repair payments (non-GAAP) may be viewed without the impact of foreign currency exchange rate fluctuations, thereby facilitating period-to-period comparisons of business performance. Constant currency revenue less repair payments (non-GAAP) is presented by recalculating prior period’s revenue less repair payments (non-GAAP) denominated in currencies other than in US dollars using the foreign exchange rate used for the latest period, without taking into account the impact of hedging gains/losses. Our non-US dollar denominated revenue includes, but is not limited to, revenue denominated in pound sterling, the Australian dollar, the Euro and the South African rand. Management believes constant currency revenue less repair payments (non-GAAP) may be useful to investors in evaluating the underlying operating performance of our company. This non-GAAP financial information is not meant to be considered in isolation or as a substitute for our financial results prepared in accordance with GAAP. Our constant currency revenue less repair payments (non-GAAP) may not be comparable to similarly titled measures reported by other companies due to potential differences in the method of calculation.

 

     Year ended March 31,  
     2020      2019  
     (US dollars in millions)  

Revenue less repair payments (non-GAAP)

   $ 896.2      $ 794.0  

Exchange rate impact

     (12.7      (17.3
  

 

 

    

 

 

 

Constant currency revenue less repair payments (non-GAAP)

   $ 883.5      $ 776.7  
  

 

 

    

 

 

 

 

83


Table of Contents

Global Economic Conditions

Global economic conditions continue to show signs of turbulence. The COVID-19 pandemic is having a significant impact on the global economy, our clients’ businesses, and on our operations, financial performance and visibility, as described in further detail below, see “—Impact of COVID-19.”

The recent global outbreak and spread of the respiratory illness caused by a coronavirus strain known as COVID-19, which was reported to have surfaced in December 2019, has caused, and is likely to continue to cause, additional slowdown in the global economy, as is evidenced by the recent declines in investments, exports and industrial production. On March 27, 2020, the International Monetary Fund officially declared that the global economy has entered into a recession, as a result of the spread of COVID-19. Its global spread has created, and is likely to continue to create, significant volatility and uncertainty and economic disruption. In addition, volatility in the domestic politics of major markets may lead to changes in the institutional framework of the international economy.

The withdrawal of the UK from the EU in January 2020, commonly referred to as “Brexit,” has also created significant political and economic uncertainty regarding the future trading relationship between the UK and the EU. These developments, or the perception that any of them could occur, have had and may continue to have a material adverse effect on global economic conditions and the stability of global financial markets, and may significantly reduce global market liquidity, restrict the ability of key market participants to operate in certain financial markets or restrict our access to capital. Any of these factors could have a material adverse effect on our business, financial condition, results of operations and cash flows

In the US, there are concerns over the possibility of its economy entering into a deep recession, including on account of the COVID-19 pandemic, and there continue to be similar signs of continued economic slowdown and weakness in parts of Europe and India. Globally, countries may require additional financial support, sovereign credit ratings may continue to decline, and there may be default on sovereign debt obligations of certain countries. Any of these global economic conditions may increase the cost of borrowing and cause credit to become more limited, which could have a material adverse effect on our business, financial condition, results of operations and cash flows. For further information, see “Part I — Item 3. Key Information — D. Risk Factors — The global economic and geo-political conditions have been and continue to be challenging and have had, and may continue to have, an adverse effect on the financial markets and the economy in general, which has had, and may continue to have, a material adverse effect on our business, financial performance, results of operations and cash flows and the prices of our equity shares and ADSs.”

These economic and geo-political conditions may affect our business in a number of ways, as we have operations in 12 countries and we service clients across multiple geographic regions. The general level of economic activity, such as decreases in business and consumer spending, could result in a decrease in demand for our services, thus reducing our revenue. The cost and availability of credit has been and may continue to be adversely affected by illiquid credit markets and wider credit spreads. The current global economic slowdown and the possibility of continued turbulence or uncertainty in the European, US, Asian and international financial markets and economies, and the political climate in the US and the UK, may adversely affect our liquidity and financial condition, and the liquidity and financial condition of our clients. If these market conditions continue or worsen, they may limit our ability to access financing or increase our cost of financing to meet liquidity needs, and affect the ability of our clients to use credit to purchase our services or to make timely payments to us, resulting in adverse effects on our financial condition and results of operations. In the US, there is concern over slowing economic growth and continuing trade tensions.

Furthermore, a weakening of the rate of exchange for the pound sterling, the US dollar or, to a lesser extent, the Australian dollar or the Euro (in which our revenue is principally denominated) against the Indian rupee, or to a lesser extent, the Philippine Peso or the South African rand (in which a significant portion of our costs are denominated) would also adversely affect our results. Fluctuations between the pound sterling, the Indian rupee, the Australian dollar, the Euro, the Philippine Peso, or the South African rand, on the one hand, and the US dollar, on the other hand, also expose us to translation risk when transactions denominated in these currencies are translated into US dollars, our reporting currency. The exchange rates between each of the Indian rupee, the pound sterling, the Australian dollar, the Euro, South African rand, and the Philippine Peso, on the one hand, and the US dollar, on the other hand, have changed substantially in recent years and may fluctuate substantially in the future. For example, the Indian rupee depreciated against the US dollar by an average of 1.4%, the pound sterling depreciated against the US dollar by an average of 3.2%, the Australian dollar depreciated against the US dollar by an average of 6.5%, the Euro depreciated against the US dollar by an average of 4.1%, the South African rand depreciated against the US dollar by an average of 7.3%, and the Philippine Peso appreciated against the US dollar by an average of 2.8%, in fiscal 2020. The depreciation of the South African rand and the Indian rupee against the US dollar in fiscal 2020 positively impacted our results of operations, whereas the depreciation of the pound sterling, the Australian dollar and the Euro against the US dollar, and the appreciation of the Philippine Peso against the US dollar negatively impacted our results of operations in fiscal 2020.

The current global economic slowdown and uncertainty about the future global economic conditions could also continue to increase the volatility of our ADS price. We cannot predict the timing or duration of an economic slowdown or the timing or strength of a subsequent economic recovery generally or in our targeted industries, including the insurance and travel and leisure industries. If macroeconomic conditions worsen or the current global economic conditions continue for a prolonged period of time, we are not able to predict the impact that such conditions will have on our targeted industries, in general, and our results of operations specifically.

Uncertainty about current global economic conditions could also continue to increase the volatility of our share price. We cannot predict the timing or duration of an economic slowdown or the timing or strength of a subsequent economic recovery generally or in our targeted industries, including the insurance and travel and leisure industries. If macroeconomic conditions worsen or current global economic conditions continue for a prolonged period of time, we are not able to predict the impact that such worsening conditions will have on our targeted industries in general, and our results of operations specifically.

Impact of COVID-19

The COVID-19 pandemic is having a significant impact on the global economy, our clients’ businesses, and on our operations, financial performance and visibility of business outlook. It has required organizations around the world, including WNS, to re-think their business strategies around service delivery, workforce management, information technology, cyber security and data privacy. We expect the COVID-19 pandemic’s impact to affect the demand for our services across industries, depending on the ability of each client, and the nature of their industries, products and services, in coping with the crisis. Our business will be more significantly impacted in industry verticals where clients are directly affected by the containment measures, such as travel and leisure, diversified businesses (especially manufacturing and retail) and certain segments of banking and financial services, than clients who are able to deliver their products and services remotely, such as insurance. Further, we believe that there are industry verticals, such as healthcare and telecom, where we might see a medium- to long-term increase in the business.

We have continued to see deterioration in many of our clients’ businesses, and the outlook going forward remains uncertain and volatile. Our revenue is currently facing pressure from declining clients’ demand volumes (as their businesses continue to be negatively impacted), delays in new business ramp-ups, and lockdowns and other measures imposed by governments around the world, which may result in our temporary inability to meet the service level and performance requirements of our clients. We are also receiving client requests for lower volumes, price reductions, discounts and extended payment terms.

We have a business continuity planning mechanism in place and are actively working to understand our clients’ changing requirements, adapt delivery to a “work from home” model, ensure data security, prioritize critical processes, adjust service levels and manage costs. While travel restrictions have had a short-term impact on our ability to deliver our services, we have been working to reduce our reliance on travel by changing our business model to be able to conduct meetings using virtual conferencing and collaboration tools. Also, we are now able to deliver over 80% of our clients’ current requirements, with ongoing improvements expected over time. In addition, we are working with national, state, and local authorities, so as to comply with applicable rules and regulations related to the COVID-19 pandemic.

Due to the need to ensure the continuity of our operations, the COVID-19 pandemic has required, and will continue to require, us to increase our expenses to ensure an adequate transition. For example, we have to incur costs as we significantly shift towards a “work from home” model, where we purchase additional equipment (such as desktops and laptops) for our employees’ home use, software and internet connectivity devices, provide accommodation, meal and transportation allowances and overtime compensation to our employees and organize sanitization and cleaning of our offices and facilities. We believe that these short-to-medium term costs incurred might benefit us in the long term, as these steps have broadened our “remote working” capabilities, which we expect to become an opportunity and a permanent feature in our future delivery strategy, as well as our business continuity plans, given that the COVID-19 pandemic has caused our clients to critically evaluate their business models and potentially adopt a shift towards BPM and a greater willingness to embrace digital transformation services and technology-enabled, automated process solutions. For more details, see “Part I — Item 4. Information on the Company — Recent Developments.”

The adverse impact of the COVID-19 pandemic on the fourth quarter of fiscal 2020 was limited to a ramp-down in the second half of March 2020. As a result, in the short to medium term, we expect volatility to continue in the foreseeable future and a much greater financial and operational impact in the first quarter of fiscal 2021 and potentially in subsequent quarters. In the longer term, while we remain confident in our business and the quality of our services, the magnitude of the impact to our business and financial performance in fiscal 2021 and beyond will be a function of several factors, including, but not limited to, the following:

 

   

the level of demand for services from clients across the industries, including the demand within their own customer base that we serve;

 

   

the extent of governmental restrictions, such as lockdowns and travel restrictions, which will affect our ability to sustain the delivery of services to clients and to gain new business in a “remote working” environment;