SEC Filing | WNS Holdings Ltd.

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Form 6-K

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


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

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.

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.

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.

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.

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.

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.

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.

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
	Opening balance April 1, 2021		Cash flows		Amortization of debt issuance cost		Closing balance September 30, 2021
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
	Opening balance April 1, 2020		Cash flows		Amortization of debt issuance cost		Closing balance September 30, 2020
Long-term debt (including current portion)	$	33,422	$	8,400	$	72	$	25,094

*For	reconciliation of lease liabilities refer note 12.

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.

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.

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.

WNS (HOLDINGS) LIMITED

NOTES TO UNAUDITED CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

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

4.	Business Combinations

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.

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.

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.

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

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

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

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

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

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

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

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
Currency	Interest rate			Final maturity (fiscal year)		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.

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.

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.

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
Description of types of financial assets	Gross amounts of recognized financial assets						Financial instruments			Cash collateral received		Net Amount
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
Description of types of financial liabilities	Gross amounts of recognized financial liabilities						Financial Instruments			Cash collateral pledged		Net Amount
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
Description of types of financial assets							Financial Instruments			Cash collateral received		Net Amount
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
Description of types of financial liabilities							Financial instruments			Cash collateral pledged		Net Amount
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.

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	$	—

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).

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.

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

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

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.

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.

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

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.

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

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.

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.

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.

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.

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 propert

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