Form 6-K
Table of Contents

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

Form 6-K

 

 

Report of Foreign Private Issuer

Pursuant to Rule 13a-16 or 15d-16 under

the Securities Exchange Act of 1934

For the quarter ended September 30, 2021

Commission File Number 001—32945

 

 

WNS (HOLDINGS) LIMITED

(WNS (Holdings) Limited)

 

 

Gate 4, Godrej & Boyce Complex

Pirojshanagar, Vikhroli (W)

Mumbai 400 079, India

+91-22 - 4095 - 2100

(Address of principal executive office)

 

 

Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F.

Form 20-F  ☒             Form 40-F  ☐

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):  ☐

Note: Regulation S-T Rule 101(b)(1) only permits the submission in paper of a Form 6-K if submitted solely to provide an attached annual report to security holders.

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):  ☐

Note: Regulation S-T Rule 101(b)(7) only permits the submission in paper of a Form 6-K if submitted to furnish a report or other document that the registrant foreign private issuer must furnish and make public under the laws of the jurisdiction in which the registrant is incorporated, domiciled or legally organized (the registrant’s “home country”), or under the rules of the home country exchange on which the registrant’s securities are traded, as long as the report or other document is not a press release, is not required to be and has not been distributed to the registrant’s security holders, and, if discussing a material event, has already been the subject of a Form 6-K submission or other Commission filing on EDGAR.

 

 

 


Table of Contents

TABLE OF CONTENTS

 

Part I — FINANCIAL INFORMATION

  

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

     3  

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME

     4  

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME/(LOSS)

     5  

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

     6  

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

     8  

NOTES TO UNAUDITED CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

     9  
Part II — MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS      40  

Part III — RISK FACTORS

     71  

Part IV — OTHER INFORMATION

     98  

SIGNATURES

     99  


Table of Contents

WNS (Holdings) Limited is incorporating by reference the information set forth in this Form 6-K into its registration statements on Form S-8 filed on July 31, 2006 (File No: 333-136168), Form S-8 filed on February 17, 2009 (File No. 333-157356), Form S-8 filed on September 15, 2011 (File No. 333-176849), Form S-8 filed on September 27, 2013 (File No. 333-191416), Form S-8 filed on October 11, 2016 (File No. 333-214042), Form S-8 filed on October 31, 2018 (File No. 333-228070) and Form S-8 filed on October 21, 2020 (File No. 333-249577).

CONVENTIONS USED IN THIS REPORT

In this 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 and references to “PHP” or “Philippine peso” are to the legal currency of the Philippines. Our financial statements are presented in US dollars and prepared in accordance with International Financial Reporting Standards and its interpretations (“IFRS”), as issued by the International Accounting Standards Board (“IASB”), as in effect as at September 30, 2021. To the extent the IASB issues any amendments or any new standards subsequent to September 30, 2021, there may be differences between IFRS applied to prepare the financial statements included in this report and those that will be applied in our annual financial statements for the year ending March 31, 2022. Unless otherwise indicated, the financial information in this interim report on Form 6-K has been prepared in accordance with IFRS, as issued by the IASB. Unless otherwise indicated, references to “GAAP” in this report are to IFRS, as issued by the IASB. References to “our ADSs” in this report are to our American Depositary Shares, each representing one of our ordinary shares.

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

In this 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,” “the Company,” “we,” “our” and “us” refer to WNS (Holdings) Limited and its subsidiaries.

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

We also refer in various places within this 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.

 

1


Table of Contents

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This 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 coronavirus disease (“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 our other filings with the SEC, including in “Risk Factors,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and elsewhere in our annual report on Form 20-F for our fiscal year ended March 31, 2021. 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.

 

2


Table of Contents

Part I — FINANCIAL INFORMATION

WNS (HOLDINGS) LIMITED

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

(Amounts in thousands, except share and per share data)

 

     Notes      As at
September 30, 2021
    As at
March 31, 2021
 

ASSETS

       

Current assets:

       

Cash and cash equivalents

     5      $ 88,916     $ 105,633  

Investments

     6        149,582       203,676  

Trade receivables, net

     7        95,471       83,118  

Unbilled revenue

     7        75,734       66,403  

Funds held for clients

        11,818       12,139  

Derivative assets

     14        8,954       7,974  

Contract assets

        9,916       7,753  

Prepayments and other current assets

     8        27,466       23,211  
     

 

 

   

 

 

 

Total current assets

        467,857       509,907  

Non-current assets:

       

Goodwill

     9        124,407       123,979  

Intangible assets

     10        66,902       65,141  

Property and equipment

     11        49,542       52,272  

Right-of-use assets

     12        157,531       166,766  

Derivative assets

     14        2,873       1,749  

Deferred tax assets

        32,983       33,022  

Investments

     6        93,726       85,875  

Trade receivables, net

     7        —         269  

Contract assets

        29,539       27,136  

Other non-current assets

     8        42,723       40,032  
     

 

 

   

 

 

 

Total non-current assets

        600,226       596,241  
     

 

 

   

 

 

 

TOTAL ASSETS

      $ 1,068,083     $ 1,106,148  
     

 

 

   

 

 

 

LIABILITIES AND EQUITY

       

Current liabilities:

       

Trade payables

      $ 24,656     $ 28,015  

Provisions and accrued expenses

     16        30,829       23,933  

Derivative liabilities

     14        5,561       4,491  

Pension and other employee obligations

     15        72,019       82,586  

Current portion of long-term debt

     13        8,383       16,748  

Contract liabilities

     17        13,772       12,685  

Current taxes payable

        1,798       1,489  

Lease liabilities

     12        26,867       26,027  

Other liabilities

     18        10,813       11,492  
     

 

 

   

 

 

 

Total current liabilities

        194,698       207,466  

Non-current liabilities:

       

Derivative liabilities

     14        1,558       2,037  

Pension and other employee obligations

     15        20,388       19,589  

Contract liabilities

     17        13,204       16,645  

Lease liabilities

     12        155,363       165,880  

Other non-current liabilities

     18        211       211  

Deferred tax liabilities

        9,972       10,228  
     

 

 

   

 

 

 

Total non-current liabilities

        200,696       214,590  
     

 

 

   

 

 

 

TOTAL LIABILITIES

      $ 395,394     $ 422,056  
     

 

 

   

 

 

 

Shareholders’ equity:

       

Share capital (ordinary shares $0.16 (£0.10) par value, authorized 60,000,000 shares; issued: 48,751,656 shares and 50,502,203 shares; each as at September 30, 2021 and March 31, 2021, respectively)

     19        7,738       7,977  

Share premium

        90,131       227,708  

Retained earnings

        746,877       688,957  

Other reserves

        975       —    

Other components of equity

        (173,032     (161,987
     

 

 

   

 

 

 

Total shareholders’ equity, including shares held in treasury

        672,689       762,655  

Less: Nil shares as at September 30, 2021 and 1,100,000 shares as at March 31, 2021, held in treasury, at cost

        —         (78,563
     

 

 

   

 

 

 

Total shareholders’ equity

        672,689       684,092  
     

 

 

   

 

 

 

TOTAL LIABILITIES AND EQUITY

      $ 1,068,083     $         1,106,148  
     

 

 

   

 

 

 

See accompanying notes.

 

3


Table of Contents

WNS (HOLDINGS) LIMITED

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(Amounts in thousands, except share and per share data)

 

            Three months ended September 30,     Six months ended September 30,  
     Notes      2021     2020     2021     2020  

Revenue

     20      $ 273,616     $ 222,580     $ 526,866     $ 430,381  

Cost of revenue

     21        180,824       137,917       350,983       278,338  
     

 

 

   

 

 

   

 

 

   

 

 

 

Gross profit

        92,792       84,663       175,883       152,043  

Operating expenses:

           

Selling and marketing expenses

     21        13,989       12,109       25,843       24,534  

General and administrative expenses

     21        36,164       28,611       72,460       60,499  

Foreign exchange (gain)/loss, net

        (1,449     1,404       (2,570     788  

Amortization of intangible assets

     10        2,823       3,329       5,696       7,049  
     

 

 

   

 

 

   

 

 

   

 

 

 

Operating profit

        41,265       39,210       74,454       59,173  

Other income, net

     23        (2,507     (3,028     (6,523     (6,235

Finance expense

     22        3,410       3,718       6,969       7,433  
     

 

 

   

 

 

   

 

 

   

 

 

 

Profit before income taxes

        40,362       38,520       74,008       57,975  

Income tax expense

     25        8,224       9,291       15,113       13,926  
     

 

 

   

 

 

   

 

 

   

 

 

 

Profit after tax

      $ 32,138     $ 29,229     $ 58,895     $ 44,049  
     

 

 

   

 

 

   

 

 

   

 

 

 

Earnings per ordinary share

     26           
     

 

 

   

 

 

   

 

 

   

 

 

 

Basic

      $ 0.66     $ 0.59     $ 1.20     $ 0.88  
     

 

 

   

 

 

   

 

 

   

 

 

 

Diluted

      $ 0.64     $ 0.56     $ 1.16     $ 0.84  
     

 

 

   

 

 

   

 

 

   

 

 

 

See accompanying notes.

 

4


Table of Contents

WNS (HOLDINGS) LIMITED

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME/(LOSS)

(Amounts in thousands)

 

     Three months ended September 30,     Six months ended September 30,  
     2021     2020     2021     2020  

Profit after tax

   $ 32,138     $ 29,229     $ 58,895     $ 44,049  

Other comprehensive income/(loss), net of taxes

        

Items that will not be reclassified to profit or loss:

        

Pension adjustment, net of tax

     475       (102     134       (650

Items that will be reclassified subsequently to profit or loss:

        

Changes in fair value of cash flow hedges:

        

Current period gain

     12,996       5,337       5,859       6,072  

Net change in time value of option contracts designated as cash flow hedges

     (7,045     (616     (289     (1,042

Reclassification to profit or loss

     (522     (882     (682     (2,221

Foreign currency translation (loss)/gain

     (9,980     17,655       (13,765     20,787  

Income tax expense relating to above

     (2,335     (1,061     (2,302     (1,278
  

 

 

   

 

 

   

 

 

   

 

 

 
   $ (6,886   $ 20,433     $ (11,179   $ 22,318  
  

 

 

   

 

 

   

 

 

   

 

 

 

Total other comprehensive (loss)/income, net of taxes

   $ (6,411   $ 20,331     $ (11,045   $ 21,668  
  

 

 

   

 

 

   

 

 

   

 

 

 

Total comprehensive income/(loss)

   $ 25,727     $ 49,560     $ 47,850     $ 65,717  
  

 

 

   

 

 

   

 

 

   

 

 

 

See accompanying notes.

 

5


Table of Contents

WNS (HOLDINGS) LIMITED

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

(Amounts in thousands, except share and per share data)

 

                            Other components of equity                    
                           

Foreign

currency

    Cash
flow
                      Total  
    Share capital     Share     Retained     translation     hedging     Pension     Treasury shares     shareholders’  
    Number     Par value     premium     earnings     reserve     reserve     adjustments     Number     Amount     equity  

Balance as at April 1, 2020

    49,733,640     $ 7,874     $ 187,268     $ 586,340     $ (197,391   $ 1,282     $ 1,737       —       $ —     $ 587,110  

Shares issued for exercised options and restricted share units (“RSUs”)

    256,972       33       (33     —         —         —         —         —         —         —    

Transaction charges on cancellation of treasury shares (Refer Note 19)

    —         —         (55     —         —         —         —         —         —         (55

Share-based compensation expense (Refer Note 24)

    —         —         19,268       —         —         —         —         —         —         19,268  

Excess tax benefits relating to share-based options and RSUs

    —         —         1,403       —         —         —         —         —         —         1,403  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Transactions with owners

    256,972       33       20,583       —         —         —         —         —         —         20,616  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Profit after tax

    —         —         —         44,049       —         —         —         —         —         44,049  

Other comprehensive income/(loss), net of taxes

    —         —         —         —         20,787       1,531       (650     —         —         21,668  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total comprehensive income/(loss) for the period

    —         —         —         44,049       20,787       1,531       (650     —         —         65,717  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Balance as at September 30, 2020

    49,990,612     $ 7,907     $ 207,851     $ 630,389     $ (176,604   $ 2,813     $ 1,087       —       $ —     $ 673,443  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

See accompanying notes.

 

6


Table of Contents

WNS (HOLDINGS) LIMITED

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

(Amounts in thousands, except share and per share data)

 

                                  Other components of equity                    
                                  Foreign
currency
    Cash
flow
                      Total  
    Share capital     Share     Retained     Other     translation     hedging     Pension     Treasury shares     shareholders’  
    Number     Par value     premium     earnings     reserves*     reserve     reserve     adjustments     Number     Amount     equity  

Balance as at April 1, 2021

    50,502,203       7,977       227,708     $ 688,957       —       $ (160,678   $ (1,882   $ 573       1,100,000     $ (78,563   $ 684,092  

Shares issued for exercised options and RSUs (Refer Note 24)

    449,453       63       (63     —         —         —         —         —         —         —         —    

Purchase of treasury shares (Refer Note 19)

    —         —         —         —         —         —         —         —         1,100,000       (85,038     (85,038

Cancellation of treasury shares (Refer Note 19)

    (2,200,000     (302     (163,299     —         —         —         —         —         (2,200,000     163,601       —    

Share-based compensation expense (Refer Note 24)

    —         —         24,501       —         —         —         —         —         —         —         24,501  

Excess tax benefits relating to share-based options and RSUs

    —         —         1,284       —         —         —         —         —         —         —         1,284  

Transfer to other reserves

    —         —         —         (2,804     2,804       —         —         —         —         —         —    

Transfer from other reserves on utilization

    —         —         —         1,829       (1,829     —         —         —         —         —         —    
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Transactions with owners

    (1,750,547     (239     (137,577     (975     975       —         —         —         (1,100,000     78,563       (59,253
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Profit after tax

    —         —         —         58,895       —         —         —         —         —         —         58,895  

Other comprehensive income/(loss), net of taxes

    —         —         —         —         —         (13,765     2,586       134       —         —         (11,045
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total comprehensive income/(loss) for the period

    —         —         —         58,895       —         (13,765     2,586       134       —         —         47,850  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Balance as at September 30, 2021

    48,751,656       7,738       90,131     $ 746,877     $  975     $ (174,443   $ 704     $ 707       —       $ —     $ 672,689  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

*

Other reserves include the Special Economic Zone Re-Investment Reserve created out of the profits of eligible Special Economic Zones (“SEZ”) units in terms of the provisions of the Indian Income-tax Act, 1961. Further, these provisions require the reserve to be utilized by the Company for acquiring new plant and machinery for the purpose of its business (Refer Note 25).

See accompanying notes.

 

7


Table of Contents

WNS (HOLDINGS) LIMITED

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Amounts in thousands)

 

     Notes     Six months ended September 30,  
           2021     2020  

Cash flows from operating activities:

      

Cash generated from operations

     $ 83,918     $ 99,794  

Income taxes paid, net

       (15,976     (13,379

Interest paid

       (7,103     (6,814

Interest received

       1,794       2,257  
    

 

 

   

 

 

 

Net cash provided by operating activities

       62,633       81,858  
    

 

 

   

 

 

 
      

Cash flows from investing activities:

      

Acquisition of MOL IPS, net of cash acquired

       (1,877     —    

Payment for property and equipment and intangible assets

       (14,767     (12,925

Investment in fixed deposits

       (46,560     (23,572

Proceeds from maturity of fixed deposits

       37,100       34,772  

Proceeds from sale of property and equipment

       50       28  

Profit on sale of marketable securities

       1,932       1,232  

Marketable securities (purchased)/sold, net (short-term)

       53,239       (26,481
    

 

 

   

 

 

 

Net cash provided by/(used in) investing activities

       29,117       (26,946
    

 

 

   

 

 

 
      

Cash flows from financing activities:

      

Payment for repurchase of shares

       (85,038     —    

Transaction charges paid on cancellation of treasury shares

       —         (55

Repayment of long-term debt

       (8,400     (8,400

Principal payment of lease liabilities

       (12,543     (9,559

Excess tax benefit from share-based compensation expense

       658       326  
    

 

 

   

 

 

 

Net cash used in financing activities

       (105,323     (17,688
    

 

 

   

 

 

 

Exchange difference on cash and cash equivalents

       (3,144     3,007  

Net change in cash and cash equivalents

       (16,717     40,231  

Cash and cash equivalents at the beginning of the period

       105,633       96,929  
    

 

 

   

 

 

 

Cash and cash equivalents at the end of the period

     $ 88,916     $ 137,160  
    

 

 

   

 

 

 

Non-cash transactions:

      

Investing activities

      

(i)Liability towards property and equipment and intangible assets purchased on credit

     $ 6,441     $ 6,320  

(ii)Deferred consideration payable towards acquisition

     4 (a)      910       —    

See accompanying notes.

Reconciliation of liabilities arising from financing activities as at September 30, 2021 and September 30, 2020 is as follows*:

 

     Opening balance
April 1, 2021
     Cash flows      Non-cash changes      Closing balance
September 30, 2021
 
     Amortization of
debt issuance cost
 

Long-term debt (including current portion)

   $ 16,748      $ 8,400      $ 35      $ 8,383  

 

     Opening balance
April 1, 2020
     Cash flows      Non-cash changes      Closing balance
September 30, 2020
 
     Amortization of
debt issuance cost
 

Long-term debt (including current portion)

   $ 33,422      $ 8,400      $ 72      $ 25,094  

 

*For

reconciliation of lease liabilities refer note 12.

 

8


Table of Contents

WNS (HOLDINGS) LIMITED

NOTES TO UNAUDITED CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

(Amounts in thousands, except share and per share data)

 

1.

Company overview

WNS (Holdings) Limited (“WNS Holdings”), along with its subsidiaries (collectively, “the Company”), is a global business process management (“BPM”) company with client service offices in Sydney (Australia), Canada, Dubai (United Arab Emirates), London (UK), New Jersey (US), New Zealand, Singapore and Switzerland and delivery centers in the People’s Republic of China (“China”), Costa Rica, India, the Philippines, Poland, Romania, Republic of South Africa (“South Africa”), Sri Lanka, Spain, Turkey, the United Kingdom (“UK”) and the United States (“US”). The Company’s clients are primarily in the travel, shipping and logistics services, utilities, retail and consumer products group, banking and financial and consulting and professional services, insurance services, healthcare, auto claims and others. During the six months ended September 30, 2021, the Company completed an acquisition (Refer Note 4(a)).

WNS Holdings is incorporated in Jersey, Channel Islands and maintains a registered office in Jersey at 22, Grenville Street, St Helier, Jersey JE4 8PX.

These unaudited condensed interim consolidated financial statements were authorized for issue by the Board of Directors on November 1, 2021.

 

2.

Summary of significant accounting policies

Basis of preparation

These condensed interim consolidated financial statements are prepared in compliance with International Accounting Standard (IAS) 34, “Interim financial reporting” as issued by the IASB. They do not include all of the information required in the annual financial statements in accordance with IFRS, as issued by the IASB and should be read in conjunction with the audited consolidated financial statements and related notes included in the Company’s annual report on Form 20-F for the fiscal year ended March 31, 2021.

Accounting policies applied are consistent with the policies that were applied for the preparation of the consolidated financial statements for the year ended March 31, 2021.

Estimation uncertainty relating to COVID-19 pandemic

In evaluating the recoverability of trade receivables including unbilled revenue, contract assets, goodwill, long lived assets and investments, the Company has considered all internal and external information in the preparation of the consolidated financial statements including credit reports and economic outlook. The Company has performed sensitivity analysis on the assumptions used and based on current indicators of future economic conditions, the Company expects to recover the carrying amount of these assets. The impact of COVID-19 may be different from that estimated on preparation of these consolidated financial statements and the Company will continue to closely monitor any material changes to future economic conditions.

 

9


Table of Contents

WNS (HOLDINGS) LIMITED

NOTES TO UNAUDITED CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

(Amounts in thousands, except share and per share data)

 

3.

New accounting pronouncements not yet adopted by the Company

Certain new standards, interpretations and amendments to existing standards have been published that are mandatory for the Company’s accounting periods beginning on or after April 1, 2021 or later periods. Those which are considered to be relevant to the Company’s operations are set out below.

 

i.

In January 2020, the IASB issued amendments to IAS 1 “Presentation of Financial Statements” regarding the ‘Classification of Liabilities as Current or Non-current’. The amendments in Classification of Liabilities as Current or Non-current (Amendments to IAS 1) affect only the presentation of liabilities in the statement of financial position, and not the amount or timing of recognition of any asset, liability, income or expenses, or the information that entities disclose about those items. The amendments:

 

   

clarify that the classification of liabilities as current or non-current should be based on rights that are in existence at the end of the reporting period and align the wording in all affected paragraphs to refer to the “right” to defer settlement by at least twelve months and make explicit that only rights in place “at the end of the reporting period” should affect the classification of a liability;

 

   

clarify that classification is unaffected by expectations about whether an entity will exercise its right to defer settlement of a liability; and

 

   

make clear that settlement refers to the transfer to the counterparty of cash, equity instruments, other assets or services.

The above amendments are effective for annual reporting periods beginning on or after January 1, 2023 and are to be applied retrospectively. Early application is permitted.

The Company is currently evaluating the impact of these amendments on its consolidated financial statements.

 

ii.

In January 2020, the IASB issued amendments to IAS 16 “Property, Plant and Equipment” regarding proceeds from selling items produced while bringing an asset into the location and condition necessary for it to be capable of operating in the manner intended by management. These amendments:

 

   

prohibit deducting from the cost of an item of property, plant and equipment any proceeds from selling items produced while bringing that asset to the location and condition necessary for it to be capable of operating in the manner intended by management; and

 

   

require an entity to recognize the proceeds from selling such items, and the cost of producing those items, in profit or loss.

An entity is required to apply the amendments retrospectively only to items of property, plant and equipment that are brought to the location and condition necessary for them to be capable of operating in the manner intended by management on or after the beginning of the earliest period presented in the financial statements in which the entity first applies the amendments. The amendments are effective for annual periods beginning on or after January 1, 2022. Early application is permitted.

The Company is currently evaluating the impact of these amendments on its consolidated financial statements.

 

iii.

In May 2020, the IASB issued amendments to IAS 37 “Provisions, Contingent Liabilities and Contingent Assets” regarding costs a company should include as the cost of fulfilling a contract when assessing whether a contract is onerous. These amendments:

 

   

specify that the ‘cost of fulfilling’ a contract comprises the ‘costs that relate directly to the contract’; and

 

   

state that costs that relate directly to a contract can either be incremental costs of fulfilling that contract (examples would be direct labour or materials) or an allocation of other costs that relate directly to fulfilling contracts (an example would be the allocation of the depreciation charge for an item of property, plant and equipment used in fulfilling the contract).

An entity is required to apply the amendments to contracts for which the entity has not yet fulfilled all its obligations at the beginning of the annual reporting period in which the entity first applies the amendments. Comparatives are not required to be restated. The amendments are effective for annual periods beginning on or after January 1, 2022. Early application is permitted.

The Company is currently evaluating the impact of these amendments on its consolidated financial statements.

 

iv.

In February 2021, the IASB issued “Disclosure of Accounting Policies (Amendments to IAS 1 and IFRS Practice Statement 2) in relation to determining which accounting policies are to be disclosed in the financial statements. These amendments:

 

   

require an entity to disclose its material accounting policy information instead of its significant accounting policies;

 

   

clarify that accounting policy information may be material because of its nature, even if the related amounts are immaterial; and also clarifies if users of an entity’s financial statements would need it to understand other material information in the financial statements;

 

   

clarify that accounting policy information is material; and

 

   

clarify that if an entity discloses immaterial accounting policy information, such information shall not obscure material accounting policy information.

The amendments are effective for annual periods beginning on or after January 1, 2023 and are to be applied prospectively. Early application is permitted.

The Company is currently evaluating the impact of these amendments on its consolidated financial statements.

 

v.

In February 2021, the IASB issued ‘Disclosure of Accounting Estimates (Amendments to IAS 8)’ in relation to distinction between accounting policies and accounting estimates. These amendments:

 

   

replace the definition of change in accounting estimates with a definition of accounting estimate as “monetary amounts in financial statements that are subject to measurement uncertainty;

 

   

clarify that a change in accounting estimate that results from new information or new developments is not the correction of an error. In addition, the effects of a change in an input or a measurement technique used to develop an accounting estimate are changes in accounting estimates if they do not result from the correction of prior period errors;

 

   

states that a change in an accounting estimate may affect only the current period’s profit or loss, or the profit or loss of both the current period and future periods. It also requires that the effect of the change relating to the current period is recognized as income or expense in the current period and the effect, if any, on future periods is recognized as income or expense in those future periods.

The amendments are effective for annual periods beginning on or after January 1, 2023 and are to be applied prospectively. Early application is permitted.

The Company is currently evaluating the impact of these amendments on its consolidated financial statements.

 

vi.

In May 2021, the IASB issued ‘Deferred Tax related to Assets and Liabilities arising from a Single Transaction (Amendments to IAS 12)’ in relation to clarify the accounting for deferred tax on transactions such as leases and decommissioning obligations. These amendments:

 

   

clarify that the initial recognition exemption does not apply to transactions in which equal amounts of deductible and taxable temporary differences arise on initial recognition.

The Company shall apply the amendments to transactions that occur on or after the beginning of the earliest comparative period presented. The Company shall, at the beginning of the earliest comparative period presented, recognize deferred tax for all temporary differences related to leases and decommissioning obligations and recognize the cumulative effect of initially applying the amendments as an adjustment to the opening balance of retained earnings at that date.

The amendments are effective for annual reporting periods beginning on or after January 1, 2023. Early adoption is permitted.

The Company is currently evaluating the impact of these amendments on its consolidated financial statements.

 

10


Table of Contents

WNS (HOLDINGS) LIMITED

NOTES TO UNAUDITED CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

(Amounts in thousands, except share and per share data)

 

4.

Business Combinations

 

  a)

MOL Information Processing Services (I) Private Limited (“MOL IPS”)

On August 1, 2021, the Company acquired all outstanding equity shares of MOL IPS from the shareholders of MOL IPS (“MOL Hong Kong Limited” or the “seller”), for a total purchase consideration of $2,942 including deferred consideration of $1,038, payable upon realization of receivables by MOL IPS, subject to adjustments for working capital, if any. MOL IPS is engaged in the business of performing back-office activities and data entry including information technology enabled services.

The Company paid $1,877 to the seller (net of cash) as part of purchase consideration during the six months ended September 30, 2021, including $128 of deferred consideration. The Company has recognized an amount of $1,298 as goodwill in the books as a result of this acquisition.

The Company incurred acquisition related costs of $69, which have been included in “General and administrative expenses” in the consolidated statement of income for the six months ended September 30, 2021.

The purchase price has been allocated on a provisional basis, as set out below, to the assets acquired and liabilities assumed in the

business combination.

 

     Amount  

Total assets

   $ 3,965  

Less: Total liabilities

     (2,321
  

 

 

 

Net assets acquired

     1,644  

Less: Purchase consideration

     (2,942
  

 

 

 

Goodwill on acquisition

   $ 1,298  
  

 

 

 

Goodwill arising on acquisition is not expected to be tax deductible. Goodwill is attributable mainly to assembled workforce arising from the acquisition.

 

  b)

Denali Sourcing Services Inc. (“Denali”)

On January 20, 2017 (“Acquisition Date”), the Company acquired all outstanding shares of Denali, a provider of strategic procurement BPM solutions for a purchase consideration of $38,668 (including the contingent consideration of $6,277, dependent on the achievement of revenue targets over a period of three years and deferred consideration of $522 payable in the first quarter of the year ended March 31, 2018), including adjustments for working capital.

The Company made payment of $522 towards deferred consideration and reduced the purchase consideration by $968 towards working capital adjustments during the year ended March 31, 2018. During the year ended March 31, 2020, 2019 and 2018, contingent consideration of $1,745, $2,484 and $2,351, respectively, was paid by the Company to the sellers on achievement of the revenue target related to the respective measurement period.

 

  c)

Value Edge Research Services Private Limited (“Value Edge”)

On June 14, 2016 (“Acquisition Date”), the Company acquired all outstanding equity shares of Value Edge which provides business research and analytics reports and databases across the domains of pharmaceutical, biotech and medical devices, for a total consideration of $18,265 including working capital adjustments of $765 and contingent consideration of $5,112 (held in escrow), subject to compliance with certain conditions, payable over a period of three years.

During the year ended March 31, 2020, 2019 and 2018, the Company released from escrow an amount of $1,535 each towards contingent consideration payable to the sellers.

 

11


Table of Contents

WNS (HOLDINGS) LIMITED

NOTES TO UNAUDITED CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

(Amounts in thousands, except share and per share data)

 

5.

Cash and cash equivalents

The Company considers all highly liquid investments with an initial maturity of up to three months to be cash equivalents. Cash and cash equivalents consist of the following:

 

     As at  
     September 30,
2021
     March 31,
2021
 

Cash and bank balances

   $ 69,506      $ 73,398  

Short-term deposits with banks*

     19,410        32,235  
  

 

 

    

 

 

 

Total

   $ 88,916      $ 105,633  
  

 

 

    

 

 

 

 

*

Short-term deposits can be withdrawn by the Company at any time without prior notice and are readily convertible into known amounts of cash with an insignificant risk of changes in value.

 

6.

Investments

Investments consist of the following:

 

     As at  
     September 30,
2021
     March 31,
2021
 

Investments in marketable securities and mutual funds

   $ 195,575      $ 250,852  

Investment in fixed deposits

     47,733        38,699  
  

 

 

    

 

 

 

Total

   $ 243,308      $ 289,551  
  

 

 

    

 

 

 

 

     As at  
     September 30,
2021
     March 31,
2021
 

Current investments

   $ 149,582      $ 203,676  

Non-current investments

     93,726        85,875  
  

 

 

    

 

 

 

Total

   $ 243,308      $ 289,551  
  

 

 

    

 

 

 

 

12


Table of Contents

WNS (HOLDINGS) LIMITED

NOTES TO UNAUDITED CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

(Amounts in thousands, except share and per share data)

 

7.

Trade receivables and unbilled revenue, net

Trade receivables and unbilled revenue consist of the following:

 

     As at  
     September 30,
2021
     March 31,
2021
 

Trade receivables and unbilled revenue*

   $ 173,768      $ 152,414  

Less: Allowances for ECL

     (2,563      (2,624
  

 

 

    

 

 

 

Total

   $ 171,205      $ 149,790  
  

 

 

    

 

 

 

Non-current trade receivables

     —          269  

Current trade receivables and unbilled revenue*

   $ 171,205      $ 149,521  

 

*

As at September 30, 2021 and March 31, 2021, unbilled revenue includes contract assets amounting to $424 and $191, respectively.

The movement in the ECL is as follows:

 

     Three months ended September 30,      Six months ended September 30,  
     2021      2020      2021      2020  

Balance at the beginning of the period

     2,792        2,117        2,624        1,590  

Charged to consolidated statement of income

     444        433        950        1,054  

Write-offs, net of collections

     (641      (190      (760      (337

Reversals

     33        (202      (193      (203

Translation adjustment

     (65      89        (58      143  
  

 

 

    

 

 

    

 

 

    

 

 

 

Balance at the end of the period

   $ 2,563      $ 2,247      $ 2,563      $ 2,247  
  

 

 

    

 

 

    

 

 

    

 

 

 

 

13


Table of Contents

WNS (HOLDINGS) LIMITED

NOTES TO UNAUDITED CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

(Amounts in thousands, except share and per share data)

 

8.

Prepayment and other assets

Prepayment and other assets consist of the following:

 

     As at  
     September 30,
2021
     March 31,
2021
 

Current:

     

Service tax and other tax receivables

   $ 4,747      $ 5,997  

Employee receivables

     1,167        1,044  

Advances to suppliers

     3,133        2,667  

Prepaid expenses

     12,249        9,261  

Other assets

     6,170        4,242  
  

 

 

    

 

 

 

Total

   $ 27,466      $ 23,211  
  

 

 

    

 

 

 

Non-current:

     

Deposits

   $ 11,414      $ 10,508  

Income tax assets

     11,882        12,151  

Service tax and other tax receivables

     15,223        12,786  

Other assets

     4,204        4,587  
  

 

 

    

 

 

 

Total

   $   42,723      $   40,032  
  

 

 

    

 

 

 

 

9.

Goodwill

A summary of the carrying value of goodwill is as follows:

 

     As at  
     September 30,      March 31,  
     2021      2021  

Gross carrying amount

   $ 152,250      $ 152,459  

Accumulated impairment of goodwill

     (27,843      (28,480
  

 

 

    

 

 

 

Total

   $   124,407      $   123,979  
  

 

 

    

 

 

 

The movement in goodwill balance by reportable segment as at September 30, 2021 and March 31, 2021 is as follows:

Gross carrying amount

 

     WNS
Global BPM
     WNS Auto
Claims BPM
     Total  

Balance as at April 1, 2020

   $ 121,304      $ 25,520      $ 146,824  

Foreign currency translation adjustment

     2,675        2,960        5,635  
  

 

 

    

 

 

    

 

 

 

Balance as at March 31, 2021

   $ 123,979      $ 28,480      $ 152,459  
  

 

 

    

 

 

    

 

 

 

Goodwill arising on acquisition (Refer Note 4(a))

     1,298        —          1,298  

Foreign currency translation adjustment

     (870      (637      (1,507
  

 

 

    

 

 

    

 

 

 

Balance as at September 30, 2021

   $ 124,407      $ 27,843      $   152,250  
  

 

 

    

 

 

    

 

 

 

Accumulated impairment losses

 

     WNS
Global BPM
     WNS Auto
Claims BPM
     Total  

Balance as at April 1, 2020

   $ —      $ 25,520      $ 25,520  

Impairment of goodwill recognized during the year

     —          —          —    

Foreign currency translation adjustment

     —          2,960        2,960  
  

 

 

    

 

 

    

 

 

 

Balance as at March 31, 2021

   $ —      $ 28,480      $ 28,480  

Foreign currency translation adjustment

     —          (637      (637
  

 

 

    

 

 

    

 

 

 

Balance as at September 30, 2021

   $ —      $ 27,843      $   27,843  
  

 

 

    

 

 

    

 

 

 

 

14


Table of Contents

WNS (HOLDINGS) LIMITED

NOTES TO UNAUDITED CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

(Amounts in thousands, except share and per share data)

 

10.

Intangible assets

The changes in the carrying value of intangible assets for the six months ended September 30, 2021 are as follows:

 

Gross carrying value

   Customer
contracts
    Customer
relationships
    Intellectual
Property and
other rights
    Trade
names
    Technology     Leasehold
Benefits
     Covenant
not-to-
compete
    Service
mark
     Software     Total  

Balance as at April 1, 2021

   $ 158,014     $ 121,622     $ 4,511     $ 641     $ 5,987     $ 1,835      $ 9,161     $ 400      $   53,152     $ 355,323  

Additions

     —         —         —         —         —         —          —         —          7,591       7,591  

On acquisition (Refer Note 4(a))

     —         —         —         —         —         —          —         —          146       146  

Translation adjustments

     (1,098     (293     (95     (1     (17     —          (41     —          (818     (2,363
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

 

Balance as at September 30, 2021

   $ 156,916     $ 121,329     $ 4,416     $ 640     $ 5,970     $ 1,835      $ 9,120     $ 400      $ 60,071     $ 360,697  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

 

Accumulated amortization

                      

Balance as at April 1, 2021

   $ 158,014     $ 76,739     $ 4,511     $ 641     $ 3,230     $ 1,835      $ 9,161     $ —        $ 36,051     $ 290,182  

Amortization

     —         1,825       —         —         383       —          —         —          3,488       5,696  

Translation adjustments

     (1,098     (284     (95     (1     (12     —          (41     —          (552     (2,083
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

 

Balance as at September 30, 2021

   $ 156,916     $ 78,280     $ 4,416     $ 640     $ 3,601     $ 1,835      $ 9,120     $ —        $ 38,987     $ 293,795  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

 

Net carrying value as at September 30, 2021

   $ —       $ 43,049     $ —       $ —       $ 2,369     $ —        $ —       $ 400      $ 21,084     $ 66,902  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

 

The changes in the carrying value of intangible assets for the year ended March 31, 2021 are as follows:

 

Gross carrying value

   Customer
Contracts
     Customer
Relationships
     Intellectual
Property and
Other rights
     Trade
names
     Technology      Leasehold
Benefits
     Covenant
not-to-
compete
     Service
mark
     Software      Total  

Balance as at April 1, 2020

   $ 155,214      $ 120,427      $ 4,068      $ 638      $ 5,950      $ 1,835      $ 9,060      $ 400      $   43,615      $ 341,207  

Additions

     —          —          —          —          —          —          —          —          7,544        7,544  

Translation adjustments

     2,800        1,195        443        3        37        —          101        —          1,993        6,572  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Balance as at March 31, 2021

   $ 158,014      $ 121,622      $ 4,511      $ 641      $ 5,987      $ 1,835      $ 9,161      $ 400      $ 53,152      $ 355,323  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Accumulated amortization

                             

Balance as at April 1, 2020

   $ 154,093      $ 71,965      $ 4,068      $ 638      $ 2,440      $ 1,835      $ 7,474      $ —        $ 28,594      $ 271,107  

Amortization

     1,123        3,631        —          —          765        —          1,587        —          6,616        13,722  

Translation adjustments

     2,798        1,143        443        3        25        —          100        —          841        5,353  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Balance as at March 31, 2021

   $ 158,014      $ 76,739      $ 4,511      $ 641      $ 3,230      $ 1,835      $ 9,161      $ —        $ 36,051      $ 290,182  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Net carrying value as at March 31, 2021

   $ —        $ 44,883      $ —        $ —        $ 2,757      $ —        $ —        $ 400      $ 17,101      $ 65,141  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

 

15


Table of Contents

WNS (HOLDINGS) LIMITED

NOTES TO UNAUDITED CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

(Amounts in thousands, except share and per share data)

 

11.

Property and equipment

The changes in the carrying value of property and equipment for the six months ended September 30, 2021 are as follows:

 

Gross carrying value

   Building     Computers
and
software
    Furniture,
fixtures and
office equipment
    Vehicles     Leasehold
improvements
    Total  

Balance as at April 1, 2021

   $ 9,733     $ 78,850     $ 84,335     $ 876     $ 76,043     $ 249,837  

Additions

     —         5,635       1,497       —         2,076       9,208  

On acquisition (Refer Note 4(a))

     —         204       102       10       116       432  

Disposals/retirements

     —         (1,416     (445     —         (653     (2,514

Translation adjustments

     (60     (1,528     (1,775     (15     (1,872     (5,250
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Balance as at September 30, 2021

   $ 9,673     $ 81,745     $ 83,714     $ 871     $ 75,710     $ 251,713  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Accumulated depreciation

            

Balance as at April 1, 2021

   $ 5,945     $ 65,421     $ 68,141     $ 737     $ 58,568     $ 198,812  

Depreciation

     242       4,039       3,300       75       3,182       10,838  

Disposals/retirements

     —         (1,391     (402     —         (616     (2,409

Translation adjustments

     (37     (1,230     (1,390     (12     (1,368     (4,037
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Balance as at September 30, 2021

   $ 6,150     $ 66,839     $ 69,649     $ 800     $ 59,766     $ 203,204  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Capital work-in-progress

               1,033  
            

 

 

 

Net carrying value as at September 30, 2021

             $ 49,542  
            

 

 

 

The changes in the carrying value of property and equipment for the year ended March 31, 2021 are as follows:

 

Gross carrying value

   Building      Computers
and
software
    Furniture,
fixtures and

office equipment
    Vehicles      Leasehold
improvements
    Total  

Balance as at April 1, 2020

   $ 9,602      $ 74,388     $ 78,403     $ 838      $ 70,928     $ 234,159  

Additions

     —          9,618       4,096       —          2,591       16,305  

Disposals/retirements

     —          (9,044     (1,988     —          (1,293     (12,325

Translation adjustments

     131        3,888       3,824       38        3,817       11,698  
  

 

 

    

 

 

   

 

 

   

 

 

    

 

 

   

 

 

 

Balance as at March 31, 2021

   $ 9,733      $ 78,850     $ 84,335     $ 876      $ 76,043     $ 249,837  
  

 

 

    

 

 

   

 

 

   

 

 

    

 

 

   

 

 

 

Accumulated depreciation

              

Balance as at April 1, 2020

   $ 5,385      $ 63,896     $ 60,044     $ 514      $ 50,287     $ 180,126  

Depreciation

     484        7,203       6,995       193        6,605       21,480  

Disposals/retirements

     —          (9,003     (1,855     —          (1,038     (11,896

Translation adjustments

     76        3,325       2,957       30        2,714       9,102  
  

 

 

    

 

 

   

 

 

   

 

 

    

 

 

   

 

 

 

Balance as at March 31, 2021

   $ 5,945      $ 65,421     $ 68,141     $ 737      $ 58,568     $ 198,812  
  

 

 

    

 

 

   

 

 

   

 

 

    

 

 

   

 

 

 

Capital work-in-progress

                 1,247  
              

 

 

 

Net carrying value as at March 31, 2021

               $ 52,272  
              

 

 

 

 

16


Table of Contents

WNS (HOLDINGS) LIMITED

NOTES TO UNAUDITED CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

(Amounts in thousands, except share and per share data)

 

12.

Leases

The changes in the carrying value of ROU assets for the six months ended September 30, 2021 are as follows:

 

Gross carrying value

   Premises     Computers      Equipment      Motor vehicles     Total  

Balance as at April 1, 2021

   $   219,078     $ 39      $ 25      $ 639     $   219,781  

Additions

     1,854       —          —          59       1,913  

On acquisition (Refer Note 4(a))

     1,528       —          —          —         1,528  

Terminations/modifications

     4,890       —          —          —         4,890  

Translation adjustments

     (4,953     —          —          (14     (4,967
  

 

 

   

 

 

    

 

 

    

 

 

   

 

 

 

Balance as at September 30, 2021

   $ 222,397     $ 39      $ 25      $ 684     $ 223,145  
  

 

 

   

 

 

    

 

 

    

 

 

   

 

 

 

Accumulated depreciation

            

Balance as at April 1, 2021

   $ 52,497     $ 35      $ 17      $ 466     $ 53,015  

Depreciation

     13,955       3        2        60       14,020  

Terminations/modifications

     (47     —          —          —         (47

Translation adjustments

     (1,364     —          —          (10     (1,374
  

 

 

   

 

 

    

 

 

    

 

 

   

 

 

 

Balance as at September 30, 2021

   $ 65,041     $ 38      $ 19      $ 516     $ 65,614  
  

 

 

   

 

 

    

 

 

    

 

 

   

 

 

 

Net carrying value as at September 30, 2021

   $ 157,356     $ 1      $ 6      $ 168     $ 157,531  
  

 

 

   

 

 

    

 

 

    

 

 

   

 

 

 

The following are the changes in the carrying value of ROU assets for the year ended March 31, 2021:

 

Gross carrying value

   Premises     Computers      Equipment     Motor vehicles     Total  

Balance as at April 1, 2020

   $   183,839     $ 34      $ 32     $ 515     $   184,420  

Additions

     26,336       —          —         118       26,454  

Terminations/modifications

     (985     —          (8     (22     (1,015

Translation adjustments

     9,888       5        1       28       9,922  
  

 

 

   

 

 

    

 

 

   

 

 

   

 

 

 

Balance as at March 31, 2021

   $ 219,078     $ 39      $ 25     $ 639     $ 219,781  
  

 

 

   

 

 

    

 

 

   

 

 

   

 

 

 

Accumulated depreciation

           

Balance as at April 1, 2020

   $ 25,015     $ 16      $ 12     $ 279     $ 25,322  

Depreciation

     27,236       16        10       181       27,443  

Terminations/modifications

     (1,503     —          (5     (9     (1,517

Translation adjustments

     1,749       3        —         15       1,767  
  

 

 

   

 

 

    

 

 

   

 

 

   

 

 

 

Balance as at March 31, 2021

   $ 52,497     $ 35      $ 17     $ 466     $ 53,015  
  

 

 

   

 

 

    

 

 

   

 

 

   

 

 

 

Net carrying value as at March 31, 2021

   $ 166,581     $ 4      $ 8     $ 173     $ 166,766  
  

 

 

   

 

 

    

 

 

   

 

 

   

 

 

 

 

17


Table of Contents

WNS (HOLDINGS) LIMITED

NOTES TO UNAUDITED CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

(Amounts in thousands, except share and per share data)

 

The following is the movement in lease liabilities for the six months ended September 30, 2021 and for the year ended March 31, 2021 is as follows:

 

Lease liabilities

   September 30, 2021      March 31, 2021  

Opening balance

   $ 191,907      $ 178,892  

Cash outflows

     

Principal payment of lease liabilities

     (12,543      (23,073

Interest payment on lease liabilities

     (6,721      (13,442

Non-cash adjustments

     

Additions

     1,697        25,506  

On acquisition (Refer Note 4(a))

     1,529        —    

Terminations/modifications

     3,997        1,313  

Interest accrued

     6,516        13,689  

Rent concessions

     (24      (416

Translation adjustments

     (4,128      9,438  
  

 

 

    

 

 

 

Closing balance

   $ 182,230      $ 191,907  
  

 

 

    

 

 

 

Rental expense charged for short-term leases was $108 and $263, rental expense charged for low value leases was $17 and $35 and variable lease payments was $351 and $843, respectively, for the three and six months ended September 30, 2021, respectively.

Rental expense charged for short-term leases was $99 and $195, rental expense charged for low value leases was $271 and $567 and variable lease payments was $409 and $790, respectively, for the three and six months ended September 30, 2020, respectively.

The Company has applied practical expedient for rent concessions as a direct consequence of the COVID-19 pandemic and recognized $5 and $24 in its consolidated income statement for the three and six months ended September 30, 2021, respectively.

The Company has applied practical expedient for rent concessions as a direct consequence of the COVID-19 pandemic and recognized $110 and $301 in its consolidated income statement for the three and six months ended September 30, 2020, respectively.

The table below provides details regarding the contractual maturities of lease liabilities on an undiscounted basis:

 

     As at  

Tenure

   September 30,
2021
     March 31, 2021  

Less than 1 year

   $ 38,710      $ 39,591  

1-3 years

     70,689        73,833  

3-5 years

     56,874        63,462  

More than 5 years

     71,971        79,419  
  

 

 

    

 

 

 

Total

   $ 238,244      $ 256,305  
  

 

 

    

 

 

 

 

18


Table of Contents

WNS (HOLDINGS) LIMITED

NOTES TO UNAUDITED CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

(Amounts in thousands, except share and per share data)

 

13.

Loans and borrowings

Long-term debt

The long-term loans and borrowings consist of the following:

 

Currency

   Interest rate     Final maturity
(fiscal year)
     As at  
   September 30, 2021     March 31, 2021  

US dollars

     3M USD LIBOR+0.95     2022        8,400       16,800  
       

 

 

   

 

 

 

Total

            16,800  

Less: Debt issuance cost

          (17     (52
       

 

 

   

 

 

 

Total

          8,383       16,748  
       

 

 

   

 

 

 

Current portion of long-term debt

        $ 8,383     $ 16,748  

The Company has entered into a floating to fixed interest rate swap in relation to this debt.

In March 2017, WNS (Mauritius) Limited obtained from HSBC Bank (Mauritius) Ltd. and Standard Chartered Bank, UK a five-year term loan facility of $84,000 at an interest rate equal to the three-month US dollar LIBOR plus a margin of 0.95% per annum to finance the acquisition of HealthHelp. The Company has pledged its shares of WNS (Mauritius) Limited as security for the loan. In connection with the term loan, the Company has entered into interest rate swaps with banks to swap the variable portion of the interest based on the three-month US dollar LIBOR to a fixed rate of 1.9635%. The facility agreement for the term loan contains certain financial covenants as defined in the facility agreement. This term loan is repayable in ten semi-annual installments of $8,400 each. On September 14, 2017, March 14, 2018, September 17, 2018, March 14, 2019, September 16, 2019, March 16, 2020, September 14, 2020, March 15, 2021 and September 14, 2021, the Company made scheduled repayments of $8,400 each. As at September 30, 2021, the Company has complied with the financial covenants in all material respects in relation to this loan facility.

Short-term lines of credit

The Company’s Indian subsidiary, WNS Global Services Private Limited (“WNS Global”), has unsecured lines of credit with banks amounting to $72,612 (based on the exchange rate on September 30, 2021). The Company has also established a line of credit in the UK amounting to $13,313 (based on the exchange rate on September 30, 2021). The Company has also established a line of credit in North America amounting to $10,000. In addition, the Company has also established a line of credit in South Africa amounting to $1,987 (based on the exchange rate on September 30, 2021).

As at September 30, 2021, no amounts were drawn under these lines of credit.

 

19


Table of Contents

WNS (HOLDINGS) LIMITED

NOTES TO UNAUDITED CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

(Amounts in thousands, except share and per share data)

 

14.

Financial instruments

Financial instruments by category

The carrying value and fair value of financial instruments by class as at September 30, 2021 are as follows:

Financial assets

 

     Financial
assets at
amortized

cost
     Financial
assets at
FVTPL
     Financial
assets at
FVOCI
     Total
carrying
value
     Total fair
value
 

Cash and cash equivalents

   $ 88,916      $ —        $ —        $ 88,916      $ 88,916  

Investment in fixed deposits

     47,733        —          —          47,733        47,733  

Investments in marketable securities and mutual funds

     —          195,575        —          195,575        195,575  

Trade receivables

     95,471        —          —          95,471        95,471  

Unbilled revenue (1)

     75,310        —          —          75,310        75,310  

Funds held for clients

     11,818        —          —          11,818        11,818  

Prepayments and other assets (2)

     6,925        —          —          6,925        6,925  

Other non-current assets (3)

     13,247        —          —          13,247        13,247  

Derivative assets

     —          393        11,434        11,827        11,827  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total carrying value

   $ 339,420      $ 195,968      $ 11,434      $ 546,822      $ 546,822  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Financial liabilities

 

     Financial
liabilities at
amortized

cost
     Financial
liabilities
at FVTPL
     Financial
liabilities

at FVOCI
     Total
carrying
value
     Total fair
Value
 

Trade payables

   $ 24,656      $ —        $ —        $ 24,656      $ 24,656  

Long-term debt (current portion) (4)

     8,400        —          —          8,400        8,400  

Other employee obligations (5)

     63,931        —          —          63,931        63,931  

Provisions and accrued expenses

     30,829        —          —          30,829        30,829  

Lease liabilities

     182,230        —          —          182,230        182,230  

Other liabilities (6)

     2,055        —          —          2,055        2,055  

Derivative liabilities

     —          2,583        4,536        7,119        7,119  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total carrying value

   $ 312,101      $ 2,583      $ 4,536      $ 319,220      $ 319,220  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Notes:

 

(1)

Excluding non-financial assets $424.

(2)

Excluding non-financial assets $20,541.

(3)

Excluding non-financial assets $29,476.

(4)

Excluding non-financial asset (unamortized debt issuance cost) $17.

(5)

Excluding non-financial liabilities $28,476.

(6)

Excluding non-financial liabilities $8,969.

 

20


Table of Contents

WNS (HOLDINGS) LIMITED

NOTES TO UNAUDITED CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

(Amounts in thousands, except share and per share data)

 

The carrying value and fair value of financial instruments by class as at March 31, 2021 are as follows:

Financial assets

 

     Financial
assets at
amortized

cost
     Financial
assets at
FVTPL
     Financial
assets at
FVOCI
     Total
carrying
value
     Total fair
value
 

Cash and cash equivalents

   $ 105,633      $ —        $ —        $ 105,633      $ 105,633  

Investment in fixed deposits

     38,699        —          —          38,699        38,699  

Investments in marketable securities and mutual funds

     —          250,852        —          250,852        250,852  

Trade receivables

     83,387        —          —          83,387        83,387  

Unbilled revenue (1)

     66,212        —          —          66,212        66,212  

Funds held for clients

     12,139        —          —          12,139        12,139  

Prepayments and other assets (2)

     4,757        —          —          4,757        4,757  

Other non-current assets (3)

     13,790        —          —          13,790        13,790  

Derivative assets

     —          2,619        7,104        9,723        9,723  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total carrying value

   $ 324,617      $ 253,471      $ 7,104      $ 585,192      $ 585,192  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Financial liabilities

 

     Financial
liabilities at
amortized

cost
     Financial
liabilities

at FVTPL
     Financial
liabilities

at FVOCI
     Total
carrying
value
     Total fair
Value
 

Trade payables

   $ 28,015      $ —        $ —        $ 28,015      $ 28,015  

Long-term debt (includes current portion) (4)

     16,800        —          —          16,800        16,800  

Other employee obligations (5)

     74,511        —          —          74,511        74,511  

Provisions and accrued expenses

     23,933        —          —          23,933        23,933  

Lease liabilities

     191,907        —          —          191,907        191,907  

Other liabilities (6)

     1,803        —          —          1,803        1,803  

Derivative liabilities

     —          1,068        5,460        6,528        6,528  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total carrying value

   $ 336,969      $ 1,068      $ 5,460      $ 343,497      $ 343,497  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Notes:

 

(1)

Excluding non-financial assets $191.

(2)

Excluding non-financial assets $18,454.

(3)

Excluding non-financial assets $26,241.

(4)

Excluding non-financial asset (unamortized debt issuance cost) $52.

(5)

Excluding non-financial liabilities $27,664.

(6)

Excluding non-financial liabilities $9,900.

 

21


Table of Contents

WNS (HOLDINGS) LIMITED

NOTES TO UNAUDITED CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

(Amounts in thousands, except share and per share data)

 

For the financial assets and liabilities subject to offsetting or similar arrangements, each agreement between the Company and the counterparty allows for net settlement of the relevant financial assets and liabilities when both elect to settle on a net basis. In the absence of such an election, financial assets and liabilities will be settled on a gross basis.

Financial assets and liabilities subject to offsetting, enforceable master netting arrangements or similar agreements as at September 30, 2021 are as follows:

 

Description of types of financial assets

   Gross
amounts of
recognized
financial
assets
     Gross amounts
of recognized
financial
liabilities offset

in the
statement  of

financial
position
     Net amounts
of financial
assets
presented in

the statement
of financial
position
    

 

Related amount not set off in

financial instruments

     Net
Amount
 
   Financial
instruments
    Cash
collateral
received
 

Derivative assets

   $ 11,827      $ —        $ 11,827      $ (586   $ —        $ 11,241  
  

 

 

    

 

 

    

 

 

    

 

 

   

 

 

    

 

 

 

Total

   $ 11,827      $ —        $ 11,827      $ (586   $ —        $ 11,241  
  

 

 

    

 

 

    

 

 

    

 

 

   

 

 

    

 

 

 

 

Description of types of financial liabilities

   Gross
amounts of
recognized
financial

liabilities
     Gross amounts
of recognized
financial assets
offset in the
statement of

financial
position
     Net amounts
of financial
liabilities
presented in
the statement
of financial
position
    

 

Related amount not set off in

financial instruments

     Net
Amount
 
   Financial
Instruments
    Cash
collateral
pledged
 

Derivative liabilities

   $ 7,119      $ —        $ 7,119      $ (586   $ —        $ 6,533  
  

 

 

    

 

 

    

 

 

    

 

 

   

 

 

    

 

 

 

Total

   $ 7,119      $ —        $ 7,119      $ (586   $ —        $ 6,533  
  

 

 

    

 

 

    

 

 

    

 

 

   

 

 

    

 

 

 

Financial assets and liabilities subject to offsetting, enforceable master netting arrangements or similar agreements as at March 31, 2021 are as follows:

 

Description of types of financial assets

   Gross
amounts of
recognized
financial
assets
     Gross amounts
of recognized
financial
liabilities offset

in the
statement  of

financial
position
     Net amounts
of financial
assets
presented in
the statement
of  financial
position
    

 

Related amount not set off in

financial instruments

     Net
Amount
 
   Financial
Instruments
    Cash
collateral
received
 

Derivative assets

   $ 9,723      $ —        $ 9,723      $ (4,392   $ —        $ 5,331  
  

 

 

    

 

 

    

 

 

    

 

 

   

 

 

    

 

 

 

Total

   $ 9,723      $ —        $ 9,723      $ (4,392   $ —        $ 5,331  
  

 

 

    

 

 

    

 

 

    

 

 

   

 

 

    

 

 

 

 

Description of types of financial liabilities

   Gross
amounts of
recognized
financial
liabilities
     Gross amounts
of recognized
financial assets
offset in the
statement  of

financial
position
     Net amounts
of financial
liabilities
presented in
the statement
of financial
position
    

 

Related amount not set off in

financial instruments

     Net
Amount
 
   Financial
instruments
    Cash
collateral
pledged
 

Derivative liabilities

   $ 6,528      $ —        $ 6,528      $ (4,392   $ —        $ 2,136  
  

 

 

    

 

 

    

 

 

    

 

 

   

 

 

    

 

 

 

Total

   $ 6,528      $ —        $ 6,528      $ (4,392   $ —        $ 2,136  
  

 

 

    

 

 

    

 

 

    

 

 

   

 

 

    

 

 

 

Fair value hierarchy

The following is the hierarchy for determining and disclosing the fair value of financial instruments by valuation technique:

Level 1 — quoted prices (unadjusted) in active markets for identical assets or liabilities.

Level 2 — other techniques for which all inputs have a significant effect on the recorded fair value are observable, either directly or indirectly.

Level 3 — techniques which use inputs that have a significant effect on the recorded fair value that are not based on observable market data.

 

22


Table of Contents

WNS (HOLDINGS) LIMITED

NOTES TO UNAUDITED CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

(Amounts in thousands, except share and per share data)

 

The assets and liabilities measured at fair value on a recurring basis as at September 30, 2021 are as follows:

 

            Fair value measurement at reporting date using  

Description

   September 30,
2021
     Quoted
prices in
active
markets
for identical
assets
(Level 1)
     Significant
other
observable
inputs
(Level 2)
     Significant
unobservable
inputs
(Level 3)
 

Assets

           

Financial assets at FVTPL

           

Foreign exchange contracts

   $ 393      $ —        $ 393      $ —    

Investments in marketable securities and mutual funds

     195,575        195,177        398        —    

Financial assets at FVOCI

           

Foreign exchange contracts

     11,434        —          11,434        —    
  

 

 

    

 

 

    

 

 

    

 

 

 

Total assets

   $ 207,402      $ 195,177      $ 12,225      $ —    
  

 

 

    

 

 

    

 

 

    

 

 

 

Liabilities

           

Financial liabilities at FVTPL

           

Foreign exchange contracts

   $ 2,583      $ —        $ 2,583      $ —    

Financial liabilities at FVOCI

           

Foreign exchange contracts

     4,459        —          4,459        —    

Interest rate swaps

     77        —          77        —    
  

 

 

    

 

 

    

 

 

    

 

 

 

Total liabilities

   $ 7,119      $ —        $ 7,119      $ —    
  

 

 

    

 

 

    

 

 

    

 

 

 

 

23


Table of Contents

WNS (HOLDINGS) LIMITED

NOTES TO UNAUDITED CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

(Amounts in thousands, except share and per share data)

 

The assets and liabilities measured at fair value on a recurring basis as at March 31, 2021 are as follows:

 

            Fair value measurement at reporting date using  

Description

   March 31,
2021
     Quoted
prices in
active
markets
for identical
assets
(Level 1)
     Significant
other
observable
inputs
(Level 2)
     Significant
unobservable
inputs
(Level 3)
 

Assets

           

Financial assets at FVTPL

           

Foreign exchange contracts

   $ 2,619      $ —        $ 2,619      $ —    

Investments in marketable securities and mutual funds

     250,852        250,439        413        —    

Financial assets at FVOCI

           

Foreign exchange contracts

     7,104        —          7,104        —    
  

 

 

    

 

 

    

 

 

    

 

 

 

Total assets

   $ 260,575      $ 250,439      $ 10,136      $ —    
  

 

 

    

 

 

    

 

 

    

 

 

 

Liabilities

           

Financial liabilities at FVTPL

           

Foreign exchange contracts

   $ 1,068      $ —        $ 1,068      $ —    

Financial liabilities at FVOCI

           

Foreign exchange contracts

     5,234        —          5,234        —    

Interest rate swaps

     226        —          226        —    
  

 

 

    

 

 

    

 

 

    

 

 

 

Total liabilities

   $ 6,528      $ —        $ 6,528      $ —    
  

 

 

    

 

 

    

 

 

    

 

 

 

During the six months ended September 30, 2021 and the year ended March 31, 2021, there were no transfers between Level 1 and Level 2 fair value measurements, and no transfers into and out of Level 3 fair value measurements.

Derivative financial instruments

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

 

24


Table of Contents

WNS (HOLDINGS) LIMITED

NOTES TO UNAUDITED CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

(Amounts in thousands, except share and per share data)

 

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

 

     As at  
     September 30,
2021
     March 31,
2021
 

Forward contracts (Sell)

     

In US dollars

   $ 324,945      $ 260,999  

In Pound Sterling

     126,080        104,638  

In Euro

     24,788        26,395  

In Australian dollars

     25,454        29,076  

Others

     21,041        21,017  
  

 

 

    

 

 

 
   $ 522,308      $ 442,125  
  

 

 

    

 

 

 

Option contracts (Sell)

     

In US dollars

   $ 195,844      $ 137,687  

In Pound Sterling

     71,967        92,159  

In Euro

     30,127        33,202  

In Australian dollars

     38,761        45,022  
  

 

 

    

 

 

 
   $ 336,699      $ 308,070  

Interest rate swap contracts

     

In US dollars

     8,400        16,800  

The amount of gain/(loss) reclassified from other comprehensive income into consolidated statement of income in respective line items for the three and six months ended September 30, 2021 and 2020 are as follows:

 

     Three months ended September 30,      Six months ended September 30,  
     2021      2020      2021      2020  

Revenue

   $ 554      $ 1,304      $ 737      $ 2,699  

Foreign exchange gain/(loss), net

     40        (285      93        (231

Finance expense

     (72      (136      (148      (246

Income tax related to amounts reclassified into consolidated statement of income

     (211      175        (108      188  
  

 

 

    

 

 

    

 

 

    

 

 

 

Total

   $ 311      $ 1,058      $ 574      $ 2,410  
  

 

 

    

 

 

    

 

 

    

 

 

 

As at September 30, 2021, a gain amounting to $774 on account of cash flow hedges in relation to forward and option contracts entered is expected to be reclassified from other comprehensive income into the consolidated statement of income over a period of 24 months and a loss amounting to $70 on account of cash flow hedges in relation to interest rate swaps is expected to be reclassified from other comprehensive income into the consolidated statement of income over a period of 6 months.

Due to the discontinuation of cash flow hedge accounting on account of non-occurrence of original forecasted transactions by the end of the originally specified time period, the Company recognized in the consolidated statement of income for the three months ended September 30, 2021 and 2020 a gain of $40 and a loss of $285, respectively, and for the six months ended September 30, 2021 and 2020 a gain of $93 and a loss of $231, respectively.

 

25


Table of Contents

WNS (HOLDINGS) LIMITED

NOTES TO UNAUDITED CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

(Amounts in thousands, except share and per share data)

 

15.

Pension and other employee obligations

Pension and other employee obligations consist of the following:

 

     As at  
     September 30,
2021
     March 31,
2021
 

Current:

     

Salaries and bonus

   $ 61,702      $ 72,314  

Pension

     125        115  

Withholding taxes on salary and statutory payables

     10,192        10,157  
  

 

 

    

 

 

 

Total

   $ 72,019      $ 82,586  
  

 

 

    

 

 

 

Non-current:

     

Pension and other obligations

   $ 20,388      $ 19,589  
  

 

 

    

 

 

 

Total

   $ 20,388      $ 19,589  
  

 

 

    

 

 

 

 

16.

Provisions and accrued expenses

Provisions and accrued expenses consist of the following:

 

     As at  
     September 30,
2021
     March 31,
2021
 

Accrued expenses

     30,829        23,933  
  

 

 

    

 

 

 

Total

   $ 30,829      $ 23,933  
  

 

 

    

 

 

 

 

26


Table of Contents

WNS (HOLDINGS) LIMITED

NOTES TO UNAUDITED CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

(Amounts in thousands, except share and per share data)

 

17.

Contract liabilities

Contract liabilities consists of the following:

 

     As at  
     September 30,
2021
     March 31,
2021
 

Current:

     

Payments in advance of services

   $ 9,342      $ 8,998  

Advance billings

     4,249        3,489  

Others

     181        198  
  

 

 

    

 

 

 

Total

   $ 13,772      $ 12,685  
  

 

 

    

 

 

 

 

     As at  
     September 30,
2021
     March 31,
2021
 

Non-current:

     

Payments in advance of services

   $ 12,397      $ 15,876  

Advance billings

     791        752  

Others

     16        17  
  

 

 

    

 

 

 

Total

   $ 13,204      $ 16,645  
  

 

 

    

 

 

 

 

18.

Other liabilities

Other liabilities consist of the following:

 

     As at  
     September 30,
2021
     March 31,
2021
 

Current:

     

Withholding taxes and value added tax payables

   $ 7,427      $ 9,288  

Other liabilities

     3,386        2,204  
  

 

 

    

 

 

 

Total

   $ 10,813      $ 11,492  
  

 

 

    

 

 

 

Non-current:

     

Other liabilities

     211        211  
  

 

 

    

 

 

 

Total

   $ 211      $ 211  
  

 

 

    

 

 

 

 

27


Table of Contents

WNS (HOLDINGS) LIMITED

NOTES TO UNAUDITED CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

(Amounts in thousands, except share and per share data)

 

19.

Share capital

As at September 30, 2021, the authorized share capital was £6,100 divided into 60,000,000 ordinary shares of 10 pence each and 1,000,000 preferred shares of 10 pence each. The Company had 48,751,656 ordinary shares outstanding as at September 30, 2021. There were no preferred shares outstanding as at September 30, 2021.

As at March 31, 2021, the authorized share capital was £6,100 divided into 60,000,000 ordinary shares of 10 pence each and 1,000,000 preferred shares of 10 pence each. The Company had 49,402,203 ordinary shares (excluding 1,100,000 treasury shares) outstanding as at March 31, 2021. There were no preferred shares outstanding as at March 31, 2021.

Treasury shares

In March 2018, the shareholders of the Company authorized the repurchase of up to 3,300,000 of the Company’s ADSs, at a price range of $10 to $100 per ADS. Pursuant to the terms of the repurchase program, the Company’s ADSs may be purchased in the open market from time to time for 36 months from March 30, 2018, the date of shareholders’ approval.

During the year ended March 31, 2019, the Company purchased 1,101,300 ADSs in the open market for a total consideration of $56,362 (including transactions costs of $11) under the above-mentioned share repurchase program. During the year ended March 31, 2020, the Company purchased 1,098,700 ADSs, in the open market for a total consideration of $63,737 (including transaction costs of $11) under the above-mentioned share repurchase program.

During the year ended March 31, 2020, the Company received authorization from the Board of Directors to cancel, and cancelled, 2,200,000 ADSs that were held as treasury shares for an aggregate cost of $120,154. The effect of the cancellation of these treasury shares was recognized in share capital amounting to $281 and in share premium amounting to $119,873, in compliance with Jersey law. There was no effect on the total shareholders’ equity as a result of this cancellation.

During the year ended March 31, 2021, the Company paid $55 towards cancellation fees for ADSs in relation to the repurchase of 1,100,000 ADSs. During the year ended March 31, 2021, the Company purchased the balance 1,100,000 ADSs in the open market for a total consideration of $78,563 (including transaction costs $11) and completed the authorized repurchases under the above-mentioned share repurchase program. The Company funded the repurchases under the repurchase program with cash on hand.

During the year ended March 31, 2021, the shareholders of the Company authorized a new share repurchase program for the repurchase of up to 3,300,000 of the Company’s ADSs, each representing one ordinary share, at a price range of $10 to $110 per ADS. Pursuant to the terms of the repurchase program, the Company’s ADSs may be purchased in the open market from time to time for 36 months from April 1, 2021 to March 31,2024. The Company is not obligated under the repurchase program to repurchase a specific number of ADSs, and the repurchase program may be suspended at any time at the Company’s discretion. The Company intends to fund the repurchase with cash on hand.

During the six months ended September 30, 2021, the Company purchased 1,100,000 ADSs in the open market for a total consideration of $85,038 (including transaction costs $11) under the above-mentioned share repurchase program.

During the six months ended September 30, 2021, the Company received authorization from the Board of Directors to cancel, and cancelled, 2,200,000 ADSs that were held as treasury shares for an aggregate cost of $163,601. The effect of the cancellation of these treasury shares was recognized in share capital amounting to $302 and in share premium amounting to $163,299, in compliance with Jersey law. There was no effect on the total shareholders’ equity as a result of this cancellation.

 

28


Table of Contents

WNS (HOLDINGS) LIMITED

NOTES TO UNAUDITED CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

(Amounts in thousands, except share and per share data)

 

20.

Revenue

Disaggregation of revenue

In the following tables, revenue is disaggregated by service type, major industries serviced, contract type and geography.

Revenue by service type

 

     Three months ended September 30,      Six months ended September 30,  
     2021      2020      2021      2020  

Industry-specific

   $ 107,606      $ 91,108      $ 209,979      $ 175,271  

Finance and accounting

     60,189        51,498        118,244        100,497  

Customer experience services

     47,763        40,054        88,754        76,485  

Research and analytics

     28,113        23,783        53,397        46,608  

Auto claims

     22,850        11,048        43,136        19,526  

Others

     7,095        5,089        13,356        11,994  
  

 

 

    

 

 

    

 

 

    

 

 

 

Total

   $ 273,616      $ 222,580      $ 526,866      $ 430,381  
  

 

 

    

 

 

    

 

 

    

 

 

 

Revenue by industry

 

     Three months ended September 30,      Six months ended September 30,  
     2021      2020      2021      2020  

Insurance*

   $ 80,555      $ 62,406      $ 156,891      $ 122,489  

Healthcare

     48,532        42,844        95,464        81,781  

Diversified businesses including manufacturing, retail, CPG, media and entertainment, and telecom

     37,492        34,099        74,310        67,470  

Travel and leisure

     39,994        31,934        72,832        64,350  

Shipping and logistics

     22,259        16,139        39,963        30,657  

Consulting and professional services

     17,218        13,553        33,677        26,054  

Banking and financial services

     15,979        9,573        30,915        17,751  

Utilities

     11,587        12,032        22,814        19,829  
  

 

 

    

 

 

    

 

 

    

 

 

 

Total

   $ 273,616      $ 222,580      $ 526,866      $ 430,381  
  

 

 

    

 

 

    

 

 

    

 

 

 

 

*

Includes revenue disclosed under the Auto Claims BPM segment in Note 28.

Revenue by contract type

 

     Three months ended September 30,      Six months ended September 30,  
     2021      2020      2021      2020  

Full-time-equivalent

   $ 172,766      $ 143,123      $ 335,277      $ 279,132  

Transaction*

     46,401        33,141        87,330        59,966  

Subscription

     25,557        24,667        51,566        47,196  

Fixed price

     14,928        10,505        26,862        19,800  

Others

     13,964        11,144        25,831        24,287  
  

 

 

    

 

 

    

 

 

    

 

 

 

Total

   $ 273,616      $ 222,580      $ 526,866      $ 430,381  
  

 

 

    

 

 

    

 

 

    

 

 

 

 

*

Includes revenue disclosed under the Auto Claims BPM segment in Note 28.

Revenue by geography

Refer Note 28 Operating segments External revenue.

Revenue by delivery location

 

     Three months ended September 30,      Six months ended September 30,  
     2021      2020      2021      2020  

India

   $ 137,246      $ 113,677      $ 263,380      $ 221,314  

United States

     41,231        37,699        80,572        72,709  

Philippines

     34,736        29,395        66,579        58,191  

UK*

     31,313        15,069        57,971        27,602  

South Africa

     15,201        13,052        30,548        23,313  

Sri Lanka

     3,990        3,909        8,018        7,480  

China

     3,597        3,195        6,969        6,258  

Romania

     2,914        3,512        5,871        7,094  

Spain

     1,374        1,032        2,822        2,467  

Poland

     1,207        1,273        2,528        2,397  

Costa Rica

     807        767        1,608        1,556  
  

 

 

    

 

 

    

 

 

    

 

 

 

Total

   $ 273,616      $ 222,580      $ 526,866      $ 430,381  
  

 

 

    

 

 

    

 

 

    

 

 

 

 

*

Includes revenue disclosed under the Auto Claims BPM segment in Note 28. Also includes revenue derived from Turkey and Germany, which was not significant.

 

29


Table of Contents

WNS (HOLDINGS) LIMITED

NOTES TO UNAUDITED CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

(Amounts in thousands, except share and per share data)

 

21.

Expenses by nature

Expenses by nature consist of the following:

 

     Three months ended September 30,      Six months ended September 30,  
     2021      2020      2021      2020  

Employee cost

   $ 166,717      $ 130,587      $ 326,326      $ 266,293  

Repair payments

     19,207        8,176        36,196        14,556  

Facilities cost

     15,176        12,815        29,551        27,230  

Depreciation

     12,461        12,159        24,858        23,780  

Legal and professional expenses

     5,155        4,676        9,735        12,589  

Travel expenses

     790        448        1,308        761  

Others

     11,471        9,776        21,312        18,162  
  

 

 

    

 

 

    

 

 

    

 

 

 

Total cost of revenue, selling and marketing and general and administrative expenses

   $ 230,977      $ 178,637      $ 449,286      $ 363,371  
  

 

 

    

 

 

    

 

 

    

 

 

 

 

22.

Finance expense

Finance expense consists of the following:

 

     Three months ended September 30,      Six months ended September 30,  
     2021      2020      2021      2020  

Interest expense on lease liability

   $ 3,168      $ 3,390      $ 6,516      $ 6,742  

Interest expense

     153        157        269        373  

(Gain)/loss on interest rate swaps

     72        136        148        246  

Debt issue cost

     17        35        36        72  
  

 

 

    

 

 

    

 

 

    

 

 

 

Total

   $ 3,410      $ 3,718      $ 6,969      $ 7,433  
  

 

 

    

 

 

    

 

 

    

 

 

 

 

30


Table of Contents

WNS (HOLDINGS) LIMITED

NOTES TO UNAUDITED CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

(Amounts in thousands, except share and per share data)

 

23.

Other income, net

Other income, net consists of the following:

 

     Three months ended September 30,      Six months ended September 30,  
     2021      2020      2021      2020  

Net gain arising on financial assets designated as FVTPL

   $ 1,434      $ 1,402      $ 3,240      $ 3,010  

Interest income

     441        925        2,061        1,919  

Others, net

     632        701        1,222        1,306  
  

 

 

    

 

 

    

 

 

    

 

 

 

Total

   $ 2,507      $ 3,028      $ 6,523      $ 6,235  
  

 

 

    

 

 

    

 

 

    

 

 

 

 

24.

Share-based payments

The Company has three share-based incentive plans: the 2002 Stock Incentive Plan adopted on July 1, 2002 (which has expired), the 2006 Incentive Award Plan adopted on June 1, 2006, as amended and restated in February 2009, September 2011 and September 2013 (which has expired) the “2006 Incentive Award Plan”, and the 2016 Incentive Award Plan effective from September 27, 2016, as amended and restated in September 2018 (the “2016 Incentive Award Plan”) (collectively referred to as the “Plans”). All the Plans are equity settled. Under the Plans, share-based options and RSUs may be granted to eligible participants. Options are generally granted for a term of ten years. Options and RSUs have a graded vesting period of up to four years. The Company settles employee share-based options and RSU exercises with newly issued ordinary shares. As at September 30, 2021, the Company had 3,281,472 ordinary shares available for future grants under the 2016 Incentive Award Plan.

Share-based compensation expense during the three and six months ended September 30, 2021 and 2020 is as follows:

 

     Three months ended September 30,      Six months ended September 30,  
     2021      2020      2021      2020  

Share-based compensation expense recorded in

           

Cost of revenue

   $ 1,459      $ 789      $ 3,134      $ 2,223  

Selling and marketing expenses

     1,291        791        2,773        2,658  

General and administrative expenses

     8,659        6,035        18,594        14,387  
  

 

 

    

 

 

    

 

 

    

 

 

 

Total share-based compensation expense

   $ 11,409      $ 7,615      $ 24,501      $ 19,268  
  

 

 

    

 

 

    

 

 

    

 

 

 

Upon the exercise of share-based options and RSUs, the Company issued 136,546 and 181,299 shares for the three months ended September 30, 2021 and 2020, respectively, and 449,453 and 256,972 shares for the six months ended September 30, 2021 and 2020, respectively.

BBBEE program in South Africa

The Company’s South African subsidiary has issued share appreciation rights to certain employees to be settled with the Company’s shares. As part of the settlement, the Company granted 11,400 and 1,850 RSUs during the year ended March 31, 2021, which shall vest on nine months and third anniversary, respectively, from the grant date. During the years ended March 31, 2020, 2019 and 2018, the Company granted 3,365, 14,250 and 32,050 RSUs, which shall vest on the fourth, third and fourth anniversaries, respectively, from the grant date, subject to such grantee’s continued employment with the Company through the applicable vesting date. The grant date fair value was estimated using a binomial lattice model.

The total stock compensation expense in relation to these RSUs was $3,483 to be amortized over the vesting period of four years. The stock compensation expense charged during the three and six months ended September 30, 2021 was $50 and $268, respectively (three and six months ended September 30, 2020: $218 and $435, respectively).

RSUs related to Total Shareholder’s Return (“TSR”)

During the six months ended September 30, 2021, the Company issued 154,110 RSUs (six months ended September 30, 2020: 312,000 RSUs) to certain employees. The conditions for the vesting of these RSUs are linked to the TSR of the Company in addition to the condition of continued employment with the Company through the applicable vesting period.

The performance of these RSUs shall be assessed based on the TSR of the custom peer group (based on percentile rank) and the industry index (based on outperformance rank). The RSUs granted with the TSR condition shall vest on the third anniversary of the grant date, subject to the participant’s continued employment with the Company through the applicable vesting date and achievement of the specified conditions of stock performance and TSR parameters.

The fair value of these RSUs is determined using the Monte-Carlo simulation. The weighted average grant date fair value of RSUs granted during the six months ended September 30, 2021 and 2020 was $78.80 and $34.90, per ADS, respectively. The stock compensation expense charged during the three and six months ended September 30, 2021 was $1,487 and $2,944, respectively (three and six months ended September 30, 2020: $1,338 and $2,665, respectively). As at September 30, 2021, there was $9,370 of unrecognized compensation cost related to these RSUs.

 

31


Table of Contents

WNS (HOLDINGS) LIMITED

NOTES TO UNAUDITED CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

(Amounts in thousands, except share and per share data)

 

25.

Income taxes

The domestic and foreign source component of profit/ (loss) before income taxes is as follows:

 

     Three months ended September 30,      Six months ended September 30,  
     2021      2020      2021      2020  

Domestic

   $ (2,784    $ (1,612      (5,346    $ (3,790

Foreign

     43,146        40,132        79,354        61,765  
  

 

 

    

 

 

    

 

 

    

 

 

 

Profit before income taxes

   $ 40,362      $ 38,520      $ 74,008      $ 57,975  
  

 

 

    

 

 

    

 

 

    

 

 

 

The Company’s income tax expense consists of the following:

 

     Three months ended September 30,      Six months ended September 30,  
     2021      2020      2021      2020  

Current taxes

           

Domestic taxes

   $ —        $ —        $ —        $ —    

Foreign taxes

     8,348        9,315        17,159        16,917  
  

 

 

    

 

 

    

 

 

    

 

 

 
   $ 8,348      $ 9,315      $ 17,159      $ 16,917  
  

 

 

    

 

 

    

 

 

    

 

 

 

Deferred taxes

           

Domestic taxes

     —          —          —          —    

Foreign taxes

     (124      (24      (2,046      (2,991
  

 

 

    

 

 

    

 

 

    

 

 

 
     (124      (24      (2,046      (2,991
  

 

 

    

 

 

    

 

 

    

 

 

 

Income tax expense

   $ 8,224      $ 9,291      $ 15,113      $ 13,926  
  

 

 

    

 

 

    

 

 

    

 

 

 

Domestic taxes are nil as the corporate rate of tax applicable to companies in Jersey, Channel Islands is 0%. Foreign taxes are based on applicable tax rates in each subsidiary’s jurisdiction.

Income tax expense/(benefit) has been allocated as follows:

 

     Three months ended September 30,      Six months ended September 30,  
     2021      2020      2021      2020  

Income taxes on profit

   $ 8,224      $ 9,291      $ 15,113      $ 13,296  

Income taxes on other comprehensive income/(loss):

           

Unrealized gain on cash flow hedging derivatives

     2,335        1,061        2,302        1,278  

Pension liability

     13        37        15        (60

Income taxes recognized in equity:

           

Excess tax deductions related to share-based options and RSUs

     42        (641      (627      (1,076
  

 

 

    

 

 

    

 

 

    

 

 

 

Total income taxes

   $ 10,614      $ 9,748      $ 16,803      $ 13,438  
  

 

 

    

 

 

    

 

 

    

 

 

 

 

32


Table of Contents

WNS (HOLDINGS) LIMITED

NOTES TO UNAUDITED CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

(Amounts in thousands, except share and per share data)

 

From fiscal 2012 until the six months ended September 30, 2021, the Company started operations in various delivery centers in Mumbai, Pune, Chennai, Gurgaon, Noida, India registered under the Special Economic Zone (“SEZ”) scheme. Some of these operations are eligible for a 100% income tax exemption for a period of five years from the date of commencement of operations expiring between fiscal 2022 and fiscal 2024. Following the expiry of the 100% income tax exemption, these operations are eligible for a 50% income tax exemption expiring between fiscal 2026 and fiscal 2034. Some of these operations which have completed a period of ten years from the date of commencement are eligible for a 50% income tax exemption for a further period of five years subject to creation of a Special Economic Zone Re-investment Reserve out of the profits of the eligible SEZ units and utilization of such reserve by the Company for acquiring new plant and machinery for the purpose of its business as per the provisions of the Indian Income Tax Act, 1961. The Company’s operations in Costa Rica are eligible for a 50% income tax exemption from fiscal 2018 to October 2021. Thereafter, unless the exemption is extended, the Company would be liable to pay tax at the rate of 30%. Between fiscal 2016 and fiscal 2021, the Company commenced operations in delivery centers in the Philippines that are eligible for various tax exemption benefits expiring between fiscal 2020 and fiscal 2024. Following the expiry of the tax benefits, income generated by the Philippines subsidiary, WNS Global Services Philippines Inc., will be taxed at the prevailing special tax rate, which is currently 5% on gross profit. The Company’s 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 been taxed at 14% on a net basis with effect from April 1, 2018 until December 31, 2019. From January 1, 2020, the Company’s operations in Sri Lanka are eligible to claim income tax exemption with respect to the profits earned from export revenue.

From time to time, the Company receives orders of assessment from the Indian tax authorities assessing additional taxable income on the Company in connection with their review of the Company’s tax returns. The Company currently has orders of assessment outstanding for various years through fiscal 2018, which assess additional taxable income that could in the aggregate give rise to an estimated $28,690 in additional taxes, including interest of $8,400. These orders of assessment allege that the transfer prices the Company applied to certain international transactions between WNS Global Services Private Limited and its other wholly-owned subsidiaries were not on arm’s length terms, disallow a tax holiday benefit claimed by the Company, deny the set off of brought forward business losses and unabsorbed depreciation and disallow certain expenses claimed as tax deductible by the Company. The Company has appealed against these orders of assessment before higher appellate authorities.

In addition, the Company has orders of assessment pertaining to similar issues that have been decided in favor of the Company by appellate authorities, vacating the tax demands of $67,462 in additional taxes, including interest of $23,962. The income tax authorities have filed or may file appeals against these orders at higher appellate authorities.

Uncertain tax positions are reflected at the amount likely to be paid to the tax authorities. A liability is recognized in connection with each item that is not probable of being sustained on examination by tax authority. The liability is measured using single best estimate of the most likely outcome for each position taken in the tax return. Thus, the provision is the aggregate liability in connection with all uncertain tax positions. As of September 30, 2021, the Company has provided a tax reserve of $10,431 primarily on account of the Indian tax authorities’ denying the set off of brought forward business losses and unabsorbed depreciation.

As at September 30, 2021, corporate tax returns for years ended March 31, 2019 and onwards remain subject to examination by tax authorities in India.

Based on the facts of these cases, the nature of the tax authorities’ disallowances and the orders from appellate authorities deciding similar issues in favor of the Company in respect of assessment orders for earlier fiscal years and after consultation with the Company’s external tax advisors, the Company believes these orders are unlikely to be sustained at the higher appellate authorities. The Company has deposited $12,099 of the disputed amounts with the tax authorities and may be required to deposit the remaining portion of the disputed amounts with the tax authorities pending final resolution of the respective matters.

Others

In fiscal 2021, the Company received an assessment order from the Indian service tax authority, demanding payment of  148.9 million ($2.0 million based on the exchange rate on September 30, 2021) towards service tax for the period April 1, 2014 to June 30, 2017. The tax authorities have rejected input service tax credit on certain types of input services. The Company has orders of assessment pertaining to similar issues for earlier fiscal years that have been decided in favor of the Company by appellate authorities. The Company intends to dispute the order of assessment.

 

33


Table of Contents

WNS (HOLDINGS) LIMITED

NOTES TO UNAUDITED CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

(Amounts in thousands, except share and per share data)

 

26.

Earnings per share

The following table sets forth the computation of basic and diluted earnings per share:

 

    Three months ended September 30,     Six months ended September 30,  
    2021     2020     2021     2020  

Numerator:

       

Profit

  $ 32,138     $ 29,229     $ 58,895     $ 44,049  

Denominator:

       

Basic weighted average ordinary shares outstanding

    48,683,955       49,906,110       48,971,246       49,837,948  

Dilutive impact of equivalent stock options and RSUs

    1,737,982       2,206,348       1,980,931       2,325,345  

Diluted weighted average ordinary shares outstanding

    50,421,937       52,112,459       50,952,177       52,163,293  

The computation of earnings per ordinary share was determined by dividing profit by the weighted average ordinary shares outstanding during the respective periods.

 

34


Table of Contents

WNS (HOLDINGS) LIMITED

NOTES TO UNAUDITED CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

(Amounts in thousands, except share and per share data)

 

27.

Subsidiaries

The following is a list of the Company’s subsidiaries as at September 30, 2021:

 

Direct subsidiaries

  

Step subsidiaries

   Place of incorporation
WNS Global Services Netherlands B.V. (1)       The Netherlands
  

WNS Global Services (Romania) S.R.L.

   Romania

WNS North America Inc.

      Delaware, USA
  

WNS Business Consulting Services Private Limited

   India
  

WNS Global Services Inc.

   Delaware, USA
  

WNS BPO Services Costa Rica, S.R.L

   Costa Rica
  

Denali Sourcing Services Inc.

   Delaware, USA
  

- WNS Denali Sourcing Services Inc.(2)

   Delaware, USA

WNS Assistance Limited (previously WNS Workflow Technologies Limited)

      United Kingdom
  

WNS Assistance (Legal) Limited

   United Kingdom
  

Accidents Happen Assistance Limited

   United Kingdom
  

WNS Legal Assistance LLP

   United Kingdom

WNS (Mauritius) Limited

      Mauritius
  

WNS Capital Investment Limited

   Mauritius
  

- WNS Customer Solutions (Singapore) Private Limited

   Singapore
  

-WNS Global Services (Australia) Pty Ltd

   Australia
  

- WNS New Zealand Limited

   New Zealand
  

- Business Applications Associates Beijing Ltd

   China
  

WNS Global Services Private Limited (3)

   India
  

- WNS Global Services (UK) Limited (4)

   United Kingdom
  

- WNS Global Services SA (Pty) Limited

   South Africa
  

- WNS B-BBEE Staff Share Trust (5)

   South Africa
  

- Ucademy (Pty) Limited

   South Africa
  

- WNS South Africa (Pty) Limited (6)

   South Africa
  

- MTS HealthHelp Inc.

   Delaware, USA
  

- HealthHelp Holdings LLC

   Delaware, USA
  

- HealthHelp LLC

   Delaware, USA
  

- WNS-HealthHelp Philippines Inc.(7)

   The Philippines
  

- Value Edge Inc.

   Delaware, USA
  

- Value Edge AG.

   Switzerland
  

-VE Value Edge GmbH

   Germany
  

WNS Global Services (Private) Limited

   Sri Lanka
  

WNS Global Services (Dalian) Co. Ltd.

   China
  

WNS Global Services (UK) International Limited (8)

   United Kingdom
  

- WNS Global Services North Americas Inc (9)

   Delaware, USA
  

- WNS Global Services AG (10)

   Switzerland
  

- WNS Global Services Lisbon Unipessoal LDA (11)

   Portugal
  

MOL Information Processing Services (I) Private Limited(12)

   India

WNS Business Consulting Netherlands B.V.(13)(14)

      The Netherlands
  

WNS Global Services Philippines Inc.(13)

   The Philippines

WNS Gestion des Processus d’Affaire Inc.(15)

      Canada

Notes:

 

(1)

WNS Global Services Netherlands Cooperatief U.A. was converted into a BV entity with effect from January 9, 2020. As a consequence, the name of WNS Global Services Netherlands Cooperatief U.A. was changed to WNS Global Services Netherlands B.V. with effect from January 9, 2020.

(2)

WNS Denali Sourcing Services Inc., a wholly-owned subsidiary of Denali Sourcing Services Inc., was incorporated on November 27, 2019.

(3)

WNS Global Services Private Limited is held jointly by WNS (Mauritius) Limited, WNS Global Services Netherlands B.V. and WNS Customer Solutions (Singapore) Private Limited. The percentage of holding of WNS (Mauritius) Limited is 63.18%, of WNS Global Services Netherlands B.V. is 20.84%, and of WNS Customer Solutions (Singapore) Private Limited is 15.98%.

(4)

WNS Global Services (UK) Limited is jointly held by WNS Global Services Private Limited and WNS (Holdings) Limited. The percentage of holding of WNS Global Services Private Limited is 94.9% and of WNS (Holdings) Limited is 5.1%.

(5)

The WNS B-BBEE Staff Share Trust (the “trust”) was registered on April 26, 2017 in relation to the grant of share appreciation rights by WNS Global Services SA (Pty) Limited. The trust holds 10% of the equity capital of WNS Global Services SA (Pty) Limited and the balance 90% is held by WNS Global Services (UK) Limited. During the year ended March 31, 2020, the trust subscribed to one participating preference share issued by WNS Global Services SA (Pty) Limited, which entitles the trust to 45.56% voting rights in WNS South Africa (Pty) Limited.

(6)

WNS South Africa (Pty) Limited was incorporated as a subsidiary of WNS Global Services SA (Pty) Limited on December 19, 2018. The name of the entity was changed to WNS South Africa (Pty) Ltd with effect from September 25, 2019.

(7)

WNS-HealthHelp Philippines Inc., a wholly-owned subsidiary of HealthHelp LLC, was incorporated on December 21, 2018.

(8)

WNS Global Services (UK) International Limited, a wholly-owned subsidiary of WNS (Mauritius) Limited, was incorporated on September 17, 2018.

(9)

WNS Global Services North Americas Inc, a wholly-owned subsidiary of WNS Global Services (UK) International Limited, was incorporated on October 4, 2018.

(10)

WNS Global Services AG, a wholly-owned subsidiary of WNS Global Services (UK) International Limited, was incorporated on July 16, 2021.

(11)

WNS Global Services Lisbon Unipessoal LDA, a wholly-owned subsidiary of WNS Global Services (UK) International Limited, was incorporated on August 13, 2021.

(12)

On August 1, 2021, the Company acquired all outstanding shares of MOL Information Processing Services (I) Private Limited.

(13)

WNS Business Consulting Netherlands B.V., a wholly-owned subsidiary of WNS (Holdings) Limited, was incorporated on March 17, 2020 pursuant to the execution of deed of demerger on March 16, 2020. The shares of WNS Global Services Philippines Inc. were transferred from WNS Global Services Netherlands B.V. to WNS Business Consulting Netherlands B.V. pursuant to the demerger.

(14)

During the six months ended September 30, 2021, WNS Global Services Private Limited acquired the equity shares of WNS Business Consulting Netherlands B.V to the extent of 28.17% with its parent WNS (Holdings) Limited.

(15)

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

 

35


Table of Contents

WNS (HOLDINGS) LIMITED

NOTES TO UNAUDITED CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

(Amounts in thousands, except share and per share data)

 

28. Operating segments

The Company has several operating segments based on a mix of industry and the types of services. The composition and organization of these operating segments currently is designed in such a way that the back office shared processes, i.e. the horizontal structure, delivers service to industry specific back office and front office processes i.e. the vertical structure. These structures represent a matrix form of organization structure, accordingly operating segments have been determined based on the core principle of segment reporting in accordance with IFRS 8 “Operating segments” (“IFRS 8”). Segment managers are responsible for the performance of the operating segments on a combined vertical structure which includes travel, shipping and logistics services, utilities, retail and consumer products group; banking and financial and consulting and professional services; insurance services; healthcare; auto claims and others. The segment managers’ performance is reviewed by the Group Chief Executive Officer, who has been identified as the Chief Operating Decision Maker (“CODM”). The CODM evaluates the Company’s performance and allocates resources based on revenue growth of combined vertical structure.

The Company believes that the business process management services that it provides to customers in industries other than auto claims such as travel, shipping and logistics services; utilities, retail and consumer products group; banking and financial, healthcare and insurance; consulting and professional services; and others are similar in terms of services, service delivery methods, use of technology, and average long-term gross profit and hence meet the aggregation criteria in accordance with IFRS 8. WNS Assistance Limited and Accidents Happen Assistance Limited (which provide automobile repair through a network of third party repair centers), and WNS Assistance (Legal) Limited and WNS Legal Assistance LLP (which provide legal services in relation to personal injury claims), constitute WNS Auto Claims BPM, the performance of which is evaluated by the CODM separately. The WNS Auto Claims BPM segment does not meet the aggregation criteria. Accordingly, the Company has determined that it has two reportable segments, “WNS Global BPM” and “WNS Auto Claims BPM.”

In order to provide accident management services, the Company arranges for the repair through a network of repair centers. Repair costs paid to automobile repair centers are invoiced to customers and recognized as revenue except in cases where the Company has concluded that it is not the principal in providing claims handling services and hence it would be appropriate to record revenue from repair services on a net basis, i.e. net of repair cost. The Company uses revenue less repair payments (non-GAAP) for “Fault” repairs as a primary measure to allocate resources and measure segment performance. Revenue less repair payments is a non-GAAP measure which is calculated as (a) revenue less (b) in the Company’s auto claims business, payments to repair centers for “Fault” repair cases where the Company acts as the principal in its dealings with the third party repair centers and its clients. For “Non-fault repairs,” revenue including repair payments is used as a primary measure. As the Company provides a consolidated suite of accident management services including credit hire and credit repair for its “Non-fault” repairs business, the Company believes that measurement of that line of business has to be on a basis that includes repair payments in revenue.

 

36


Table of Contents

WNS (HOLDINGS) LIMITED

NOTES TO UNAUDITED CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

(Amounts in thousands, except share and per share data)

 

The segment results for the three months ended September 30, 2021 are as follows:

 

     Three months ended September 30, 2021  
     WNS
Global BPM
     WNS Auto
Claims BPM
     Inter
segments(1)
     Total  

Revenue from external customers

   $ 250,766      $ 22,850      $ —        $ 273,616  

Segment revenue

   $ 251,015      $ 22,850      $ (249    $ 273,616  

Payments to repair centers

     —          19,207        —          19,207  
  

 

 

    

 

 

    

 

 

    

 

 

 

Revenue less repair payments (non-GAAP)

     251,015        3,643        (249      254,409  

Depreciation

     12,281        180        —          12,461  

Other costs

     182,523        4,177        (249      186,451  
  

 

 

    

 

 

    

 

 

    

 

 

 

Segment operating profit/(loss)

     56,211        (714      —          55,497  

Other income, net

     (2,437      (70      —          (2,507

Finance expense

     3,393        17        —          3,410  
  

 

 

    

 

 

    

 

 

    

 

 

 

Segment profit/(loss) before income taxes

     55,255        (661      —          54,594  

Income tax expense

     8,503        (279      —          8,224  
  

 

 

    

 

 

    

 

 

    

 

 

 

Segment profit/(loss)

     46,752        (382      —          46,370  

Amortization of intangible assets

              2,823  

Share-based compensation expense

              11,409  
           

 

 

 

Profit after tax

            $ 32,138  
           

 

 

 

Addition to non-current assets(2)

   $ 7,968      $ 535      $ —      $ 8,503  

Total assets, net of elimination

     946,507        121,576        —          1,068,083  

Total liabilities, net of elimination

   $ 305,669      $ 89,725      $ —      $ 395,394  

 

(1) 

Transactions between inter segments represent business process management services rendered by WNS Global BPM to WNS Auto Claims BPM.

(2) 

Addition to non-current assets include additions made to property and equipment, right-of-use assets and intangible assets.

The segment results for the three months ended September 30, 2020 are as follows:

 

     Three months ended September 30, 2020  
     WNS
Global BPM
     WNS Auto
Claims BPM
     Inter
segments(1)
     Total  

Revenue from external customers

   $ 211,532      $ 11,048      $ —        $ 222,580  

Segment revenue

   $ 211,662      $ 11,048      $ (130    $ 222,580  

Payments to repair centers

     —          8,176        —          8,176  
  

 

 

    

 

 

    

 

 

    

 

 

 

Revenue less repair payments (non-GAAP)

     211,662        2,872        (130      214,404  

Depreciation

     12,016        143        —          12,159  

Other costs

     148,739        3,482        (130      152,091  
  

 

 

    

 

 

    

 

 

    

 

 

 

Segment operating profit/(loss)

     50,907        (753      —          50,154  

Other income, net

     (2,877      (151      —          (3,028

Finance expense

     3,701        17        —          3,718  
  

 

 

    

 

 

    

 

 

    

 

 

 

Segment profit/(loss) before income taxes

     50,083        (619      —          49,464  

Income tax expense

     9,443        (152      —          9,291  
  

 

 

    

 

 

    

 

 

    

 

 

 

Segment profit/(loss)

     40,640        (467      —          40,173  

Amortization of int