Form 6-K
Table of Contents

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

Form 6-K

 

 

Report of Foreign Private Issuer

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

the Securities Exchange Act of 1934

For the quarter ended June 30, 2022

Commission File Number 001—32945

 

 

WNS (HOLDINGS) LIMITED

(WNS (Holdings) Limited)

 

 

Gate 4, Godrej & Boyce Complex

Pirojshanagar, Vikhroli (W)

Mumbai 400 079, India

+91-22 - 4095 - 2100

(Address of principal executive office)

 

 

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

Form 20-F  ☒            Form 40-F  ☐

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

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

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

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

 

 

 


Table of Contents

TABLE OF CONTENTS

 

Part I — FINANCIAL INFORMATION

  

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

     3  

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME

     4  

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME/(LOSS)

     5  

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

     6  

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

     8  

NOTES TO UNAUDITED CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

     9  

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

     44  

Part III — RISK FACTORS

     75  

Part IV — OTHER INFORMATION

     107  

SIGNATURES

     108  


Table of Contents

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

CONVENTIONS USED IN THIS REPORT

In this report, references to “US” are to the United States of America, its territories and its possessions. References to “UK” are to the United Kingdom. References to “EU” are to the European Union. References to “India” are to the Republic of India. References to “China” are to the People’s Republic of China. References to “South Africa” are to the Republic of South Africa. References to “$” or “dollars” or “US dollars” are to the legal currency of the US, references to “” or “Indian rupees” are to the legal currency of India, references to “pound sterling” or “£” are to the legal currency of the UK, references to “pence” are to the legal currency of Jersey, Channel Islands, references to “Euro” are to the legal currency of the European Monetary Union, references to “South African rand” or “R” or “ZAR” are to the legal currency of South Africa, references to “A$” or “AUD” or “Australian dollars” are to the legal currency of Australia, references to “CHF” or “Swiss Franc” are to the legal currency of Switzerland, references to “RMB” are to the legal currency of China, references to “LKR” or “Sri Lankan rupees” are to the legal currency of Sri Lanka and references to “PHP” or “Philippine peso” are to the legal currency of the Philippines. Our financial statements are presented in US dollars and prepared in accordance with International Financial Reporting Standards and its interpretations (“IFRS”), as issued by the International Accounting Standards Board (“IASB”), as in effect as at June 30, 2022. To the extent the IASB issues any amendments or any new standards subsequent to June 30, 2022, there may be differences between IFRS applied to prepare the financial statements included in this report and those that will be applied in our annual financial statements for the year ending March 31, 2022. Unless otherwise indicated, the financial information in this interim report on Form 6-K has been prepared in accordance with IFRS, as issued by the IASB. Unless otherwise indicated, references to “GAAP” in this report are to IFRS, as issued by the IASB. References to “our ADSs” in this report are to our American Depositary Shares, each representing one of our ordinary shares.

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

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

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

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

 

1


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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 2019 (“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 cybersecurity attacks, 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;

 

   

our ability to manage the impact of climate change on our business; 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, 2022. 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.

 

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Table of Contents

Part I — FINANCIAL INFORMATION

WNS (HOLDINGS) LIMITED

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

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

 

     Notes      As at
June 30, 2022
    As at
March 31, 2022
 

ASSETS

       

Current assets:

       

Cash and cash equivalents

     5      $ 225,502     $ 108,153  

Investments

     6        72,432       211,398  

Trade receivables, net

     7        98,193       100,522  

Unbilled revenue

     7        88,559       87,032  

Funds held for clients

        9,726       11,643  

Derivative assets

     14        11,111       10,351  

Contract assets

        9,861       10,169  

Prepayments and other current assets

     8        28,154       28,822  
     

 

 

   

 

 

 

Total current assets

        543,538       568,090  

Non-current assets:

       

Goodwill

     9        121,017       123,537  

Intangible assets

     10        64,007       65,421  

Property and equipment

     11        44,925       49,257  

Right-of-use assets

     12        159,220       142,623  

Derivative assets

     14        3,312       3,249  

Deferred tax assets

        36,451       34,765  

Investments

     6        75,522       93,442  

Contract assets

        41,378       39,833  

Other non-current assets

     8        39,468       44,275  
     

 

 

   

 

 

 

Total non-current assets

        585,300       596,402  
     

 

 

   

 

 

 

TOTAL ASSETS

      $ 1,128,838     $ 1,164,492  
     

 

 

   

 

 

 

LIABILITIES AND EQUITY

       

Current liabilities:

       

Trade payables

      $ 24,009     $ 27,829  

Provisions and accrued expenses

     16        33,719       36,752  

Derivative liabilities

     14        14,884       6,042  

Pension and other employee obligations

     15        67,390       105,768  

Short term line of credit

     13        31,697       —  

Contract liabilities

     17        15,773       13,723  

Current taxes payable

        3,658       2,279  

Lease liabilities

     12        24,500       26,954  

Other liabilities

     18        12,890       11,351  
     

 

 

   

 

 

 

Total current liabilities

        228,520       230,698  

Non-current liabilities:

       

Derivative liabilities

     14        1,808       831  

Pension and other employee obligations

     15        15,784       16,238  

Contract liabilities

     17        11,348       13,314  

Lease liabilities

     12        157,469       140,040  

Other non-current liabilities

     18        77       78  

Deferred tax liabilities

        9,194       9,290  
     

 

 

   

 

 

 

Total non-current liabilities

        195,680       179,791  
     

 

 

   

 

 

 

TOTAL LIABILITIES

      $ 424,200     $ 410,489  
     

 

 

   

 

 

 

Shareholders’ equity:

       

Share capital (ordinary shares $0.16 (£0.10) par value, authorized 60,000,000 shares; issued: 48,897,099 shares and 48,849,907 shares; each as at June 30, 2022 and March 31, 2022, respectively)

     19        7,757       7,751  

Share premium

        123,645       110,327  

Retained earnings

        850,338       818,402  

Other reserves

        3,783       2,656  

Other components of equity

        (227,129     (185,133 )
     

 

 

   

 

 

 

Total shareholders’ equity, including shares held in treasury

        758,394       754,003  

Less: 741,618 shares as at June 30, 2022 and Nil shares as at March 31, 2022, held in treasury, at cost

        (53,756     —  
     

 

 

   

 

 

 

Total shareholders’ equity

        704,638       754,003  
     

 

 

   

 

 

 

TOTAL LIABILITIES AND EQUITY

      $ 1,128,838     $ 1,164,492  
     

 

 

   

 

 

 

See accompanying notes.

 

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WNS (HOLDINGS) LIMITED

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME

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

 

            Three months ended June 30,  
     Notes      2022     2021  

Revenue

     20      $ 295,348     $ 253,250  

Cost of revenue

     21        198,396       170,159  
     

 

 

   

 

 

 

Gross profit

        96,952       83,091  

Operating expenses:

       

Selling and marketing expenses

     21        14,238       11,854  

General and administrative expenses

     21        40,380       36,296  

Foreign exchange gain, net

        (1,921 )     (1,121 )

Amortization of intangible assets

     10        2,986       2,873  
     

 

 

   

 

 

 

Operating profit

        41,269       33,189  

Other income, net

     23        (3,412 )     (4,016 )

Finance expense

     22        3,246       3,559  
     

 

 

   

 

 

 

Profit before income taxes

        41,435       33,646  

Income tax expense

     25        8,372       6,889  
     

 

 

   

 

 

 

Profit after tax

      $ 33,063     $ 26,757  
     

 

 

   

 

 

 

Earnings per ordinary share

     26       
     

 

 

   

 

 

 

Basic

      $ 0.68     $ 0.54  
     

 

 

   

 

 

 

Diluted

      $ 0.65     $ 0.52  
     

 

 

   

 

 

 

See accompanying notes.

 

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WNS (HOLDINGS) LIMITED

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME/(LOSS)

(Amounts in thousands)

 

     Three months ended June 30,  
     2022     2021  

Profit after tax

   $ 33,063     $ 26,757  

Other comprehensive income/(loss), net of taxes

    

Items that will not be reclassified to profit or loss:

    

Pension adjustment, net of tax

     (192 )     (341 )

Items that will be reclassified subsequently to profit or loss:

    

Changes in fair value of cash flow hedges:

    

Current period loss

     (2,162 )     (7,137 )

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

     (404     6,756  

Reclassification to profit or loss

     (1,301 )     (160

Foreign currency translation loss

     (37,993 )     (3,784

Income tax benefit relating to above

     56       33  
  

 

 

   

 

 

 
   $ (41,804   $ (4,292
  

 

 

   

 

 

 

Total other comprehensive loss, net of taxes

   $ (41,996   $ (4,633
  

 

 

   

 

 

 

Total comprehensive (loss)/income

   $ (8,933   $ 22,124  
  

 

 

   

 

 

 

See accompanying notes.

 

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WNS (HOLDINGS) LIMITED

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

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

 

            Other components of equity        
     Share capital      Share     Retained     Other      Foreign
currency
translation
    Cash flow
hedging
    Pension     Treasury shares    

Total

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)

     312,907        44        (44     —       —        —       —       —       —        —       —  

Purchase of treasury shares (Refer Note 19)

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

Share-based compensation expense (Refer Note 24)

     —        —        13,092       —       —        —       —       —       —        —       13,092  

Excess tax benefits relating to share-based options and RSUs

     —        —        851       —       —        —       —       —       —        —       851  

Transfer to other reserves

     —        —        —       (1,405     1,405        —       —       —       —        —       —  

Transfer from other reserves on utilization

     —        —        —       1,110       (1,110)        —       —       —       —        —       —  

Transactions with owners

     312,907        44        13,899       (295)     295        —       —       —       1,100,000        (85,038)       (71,095)  

Profit after tax

     —        —        —       26,757       —        —       —       —       —        —       26,757  

Other comprehensive income/(loss), net of taxes

     —        —        —       —       —        (3,784)       (508)     (341)       —        —       (4,633)  

Total comprehensive income/(loss) for the period

     —        —        —       26,757       —        (3,784     (508 )     (341     —        —       22,124  
  

 

 

    

 

 

    

 

 

   

 

 

   

 

 

    

 

 

   

 

 

   

 

 

   

 

 

    

 

 

   

 

 

 

Balance as at June 30, 2021

     50,815,110      $ 8,021      $ 241,607     $ 715,419     $ 295      $ (164,462   $ (2,390   $ 232       2,200,000      $ (163,601 )   $ 635,121  
  

 

 

    

 

 

    

 

 

   

 

 

   

 

 

    

 

 

   

 

 

   

 

 

   

 

 

    

 

 

   

 

 

 

See accompanying notes.

 

 

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WNS (HOLDINGS) LIMITED

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

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

 

            Other components of equity               
     Share capital      Share     Retained     Other      Foreign
currency
translation
    Cash flow
hedging
    Pension      Treasury shares    

Total

share holders’

 
     Number      Par value      Premium     earnings     reserves*      reserve     reserve     adjustments      Number     Amount     equity  

Balance as at April 1, 2022

     48,849,907      $ 7,751      $ 110,327     $ 818,402     $ 2,656      $ (188,987   $ 2,135     $ 1,719          $   $ 754,003  

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

     47,192        6        (6     —       —        —       —       —        —       —       —  

Purchase of treasury shares (Refer Note 19)

     —        —        —       —       —        —       —       —        (741,618     (53,756     (53,756

Share-based compensation expense (Refer Note 24)

     —        —        13,693       —       —        —       —       —        —       —       13,693  

Excess tax benefits relating to share-based options and RSUs

     —        —        (369     —       —        —       —       —        —       —       (369

Transfer to other reserves

     —        —        —       (1,221     1,221        —       —       —        —       —       —  

Transfer from other reserves on utilization

     —        —        —       94       (94)        —       —       —        —       —       —  

Transactions with owners

     47,192        6        13,318       (1,127)       1,127     

 

 

   

 

 

   

 

 

       (741,618)       (53,756)       (40,432)  

Profit after tax

     —        —        —       33,063       —        —       —       —        —       —       33,063  

Other comprehensive income/(loss), net of taxes

     —        —        —       —       —        (37,993)       (3,811)     (192)        —       —       (41,996)  

Total comprehensive income/(loss) for the period

     —        —        —       33,063       —        (37,993)       (3,811)     (192)        —       —       (8,933)  

Balance as at June 30, 2022

     48,897,099      $ 7,757      $ 123,645     $ 850,338     $ 3,783      $ (226,980   $ (1,676   $ 1,527        (741,618   $ (53,756 )   $ 704,638  

 

*

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.

 

 

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WNS (HOLDINGS) LIMITED

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Amounts in thousands)

 

     Notes     Three months ended June 30,  
           2022     2021  

Cash flows from operating activities:

      

Cash generated from operations

     $ 22,300     $ 17,434  

Income taxes paid, net

       (4,269     (31

Interest paid

       (2,837     (3,551

Interest received

       645       1,469  

Net cash provided by operating activities

       15,839       15,321  

Cash flows from investing activities:

      

Acquisition of MOL IPS, net

     4(b)       (17     —  

Payment for property and equipment and intangible assets

       (10,905     (7,692

Investment in fixed deposits

       (39,544     (14,454

Proceeds from maturity of fixed deposits

       28,947       18,468  

Proceeds from sale of property and equipment

       48       11  

Profit on sale of marketable securities

       6,706       1,293  

Marketable securities sold, net (short-term)

       139,832       69,501  

Proceeds from sale of marketable securities (long-term)

       12,272       —  

Net cash provided by investing activities

       137,339       67,127  

Cash flows from financing activities:

      

Payment for repurchase of shares

       (51,210     (85,038

Proceeds from short term line of credit

       31,708       —  

Principal payment of lease liabilities

       (6,428     (6,397

Excess tax benefit from share-based compensation expense

       122       182  

Net cash used in financing activities

       (25,808)       (91,253)  

Exchange difference on cash and cash equivalents

       (10,021     (208

Net change in cash and cash equivalents

       117,349       (9,013

Cash and cash equivalents at the beginning of the period

       108,153       105,633  

Cash and cash equivalents at the end of the period

     $ 225,502     $ 96,620  

Non-cash transactions:

      

Investing activities

      

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

     $ 4,815     $ 7,462  

See accompanying notes.

Reconciliation of liabilities arising from financing activities as at June 30, 2022 and June 30, 2021 is as follows*:

 

                   Non-cash changes         
     Opening balance
April 1, 2022
     Cash flows      Amortization of debt
issuance cost
     Closing balance
June 30, 2022
 

Long-term debt (including current portion)

   $ —      $ —        $ —      $ —  

 

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

Long-term debt (including current portion)

   $ 16,748      $ —        $ 18      $ 16,766  

 

*

For reconciliation of lease liabilities refer Note 12.

 

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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), Germany, 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, Turkey, Spain, 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 hi-tech and professional services, insurance services, healthcare, auto claims and others.

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 August 8, 2022.

 

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, 2022.

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, 2022.

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 these condensed interim 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 condensed interim consolidated financial statements and the Company will continue to closely monitor any material changes to future economic conditions.

 

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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, 2023 or later periods. Those which are considered to be relevant to the Company’s operations are set out below.

 

i.

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

 

   

clarify that the classification of liabilities as current or non-current should be based on rights that are in existence at the end of the reporting period and align the wording in all affected paragraphs to refer to the “right” to defer settlement by at least 12 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 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.

 

iii.

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; and

 

10


Table of Contents
   

state 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

 

iv.

In May 2021, the IASB issued ‘Deferred Tax related to Assets and Liabilities arising from a Single Transaction (Amendments to IAS 12)’ 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.

 

 

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WNS (HOLDINGS) LIMITED

NOTES TO UNAUDITED CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

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

 

4.

Business Combinations

 

  a)

Payment for business transfer (‘CEPROCS’)

On December 31, 2021, the Company entered into an agreement with CEPROCS S.R.L. (“CEPROCS”), a provider of global sourcing and procurement services across multiple industries, including automotive, manufacturing, and retail/consumer packaged goods (“CPG”), pursuant to which the Company agreed to acquire its customer contract, skilled workforce and related assets, effective December 31, 2021 (“Acquisition Date”). The purchase price of the transaction, which was paid in cash, was $566. The excess of purchase price over the assets acquired amounted to $14, which has been recognized as goodwill.

The Company incurred acquisition related costs of $78, which have been included in “General and administrative expenses” in the consolidated statement of income for the year ended March 31, 2022.

Goodwill is attributable mainly to the benefits expected from the acquired assembled workforce and is not expected to be deductible for tax purposes.

 

  b)

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 shareholder of MOL IPS, MOL Hong Kong Limited (the “seller”), for a total purchase consideration of $2,958 including deferred consideration of $1,054, 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.

During the three months ended June 30, 2022, the Company paid $17 to the seller as part of the purchase consideration.

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

   $ 3,981  

Less: Total liabilities

     (2,321
  

 

 

 

Net assets acquired

     1,660  

Less: Purchase consideration

     (2,958
  

 

 

 

Goodwill on acquisition

   $ 1,298  
  

 

 

 

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

 

 

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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  
     June 30,
2022
     March 31,
2022
 

Cash and bank balances

   $ 214,482      $ 78,578  

Short-term deposits with banks*

     11,020        29,575  
  

 

 

    

 

 

 

Total

   $ 225,502      $ 108,153  
  

 

 

    

 

 

 

 

*

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  
     June 30,
2022
     March 31,
2022
 

Investments in marketable securities and mutual funds

   $ 99,730      $ 263,013  

Investment in fixed deposits

     48,224        41,827  
  

 

 

    

 

 

 

Total

   $ 147,954      $ 304,840  
  

 

 

    

 

 

 

 

     As at  
     June 30,
2022
     March 31,
2022
 

Current investments

   $ 72,432      $ 211,398  

Non-current investments

     75,522        93,442  
  

 

 

    

 

 

 

Total

   $ 147,954      $ 304,840  
  

 

 

    

 

 

 

 

 

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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  
     June 30,
2022
     March 31,
2022
 

Trade receivables and unbilled revenue*

   $ 188,864      $ 189,952  

Less: Allowances for ECL

     (2,112      (2,398 )
  

 

 

    

 

 

 

Total

   $ 186,752      $ 187,554  
  

 

 

    

 

 

 

 

*

As at June 30, 2022 and March 31, 2022, unbilled revenue includes contract assets amounting to $216 and $246, respectively.

The movement in the ECL is as follows:

 

     Three months ended June 30,  
     2022      2021  

Balance at the beginning of the period

   $ 2,398      $ 2,624  

Charged to consolidated statement of income

     72        506  

Write-offs, net of collections

     (6      (119 )

Reversals

     (214      (226 )

Translation adjustments

     (138      7  
  

 

 

    

 

 

 

Balance at the end of the period

   $ 2,112      $ 2,792  
  

 

 

    

 

 

 

 

 

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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  
     June 30,
2022
     March 31,
2022
 

Current:

     

Service tax and other tax receivables

   $ 5,513      $ 8,833  

Employee receivables

     1,614        1,045  

Advances to suppliers

     1,870        2,987  

Prepaid expenses

     14,538        10,169  

Other assets

     4,619        5,788  
  

 

 

    

 

 

 

Total

   $ 28,154      $ 28,822  
  

 

 

    

 

 

 

Non-current:

     

Deposits

   $ 10,711      $ 11,263  

Income tax assets

     8,105        15,068  

Service tax and other tax receivables

     14,840        13,079  

Other assets

     5,812        4,865  
  

 

 

    

 

 

 

Total

   $ 39,468      $ 44,275  
  

 

 

    

 

 

 

 

9.

Goodwill

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

 

     As at  
     June 30,
2022
     March 31,
2022
 

Gross carrying amount

   $ 146,179      $ 150,684  

Accumulated impairment of goodwill

     (25,162      (27,147
  

 

 

    

 

 

 

Total

   $ 121,017      $ 123,537  
  

 

 

    

 

 

 

The movement in goodwill balance by reportable segment as at June 30, 2022 and March 31, 2022 is as follows:

Gross carrying amount

 

     WNS
Global BPM
     WNS Auto
Claims BPM
     Total  

Balance as at April 1, 2021

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

Goodwill arising on acquisitions (Refer Note 4(a),4(b))

     1,312        —        1,312  

Translation adjustment

     (1,754      (1,333      (3,087
  

 

 

    

 

 

    

 

 

 

Balance as at March 31, 2022

   $ 123,537      $ 27,147      $ 150,684  
  

 

 

    

 

 

    

 

 

 

Translation adjustment

     (2,520      (1,985      (4,505
  

 

 

    

 

 

    

 

 

 

Balance as at June 30, 2022

   $ 121,017      $ 25,162      $ 146,179  
  

 

 

    

 

 

    

 

 

 

Accumulated impairment losses

 

     WNS
Global BPM
     WNS Auto
Claims BPM
     Total  

Balance as at April 1, 2021

   $ —      $ 28,480      $ 28,480  

Translation adjustment

     —        (1,333      (1,333
  

 

 

    

 

 

    

 

 

 

Balance as at March 31, 2022

   $ —      $ 27,147      $ 27,147  
  

 

 

    

 

 

    

 

 

 

Translation adjustment

     —        (1,985      (1,985
  

 

 

    

 

 

    

 

 

 

Balance as at June 30, 2022

   $ —      $ 25,162      $ 25,162  
  

 

 

    

 

 

    

 

 

 

 

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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 three months ended June 30, 2022 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, 2022

   $ 156,163     $ 121,052     $ 4,312     $ 638     $ 5,947     $ 1,835      $ 9,065     $ 400      $ 63,219     $ 362,631  

Additions

     —         —         —         —         —         —          —       —          2,464       2,464  

Translation adjustments

     (3,019     (899     (297     (4     (44     —          (110     —          (4,376     (8,749 )

Balance as at June 30, 2022

   $ 153,144     $ 120,153     $ 4,015     $ 634     $ 5,903     $ 1,835      $ 8,955     $ 400      $ 61,307     $ 356,346  

Accumulated amortization

                      

Balance as at April 1, 2022

   $ 155,770     $ 79,830     $ 4,312     $ 638     $ 3,965     $ 1,835      $ 9,065     $ —      $ 41,795     $ 297,210  

Amortization

     126       885       —         —         190       —          —         —          1,785       2,986  

Translation adjustments

     (3,000     (888     (297     (4     (37     —          (110     —          (3,521     (7,857 )

Balance as at June 30, 2022

   $ 152,896     $ 79,827     $ 4,015     $ 634     $ 4,118     $ 1,835      $ 8,955     $ —        $ 40,059     $ 292,339  

Net carrying value as at June 30, 2022

   $ 248     $ 40,326     $ —     $ —       $ 1,785     $ —        $ —       $ 400      $ 21,248     $ 64,007  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

 

The changes in the carrying value of intangible assets for the year ended March 31, 2022 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

     —       —       —       —       —       —        —       —        12,246       12,246  

On acquisitions (Refer Note 4(a), 4(b))

     536       —       —       —       —       —        —       —        146       682  

Translation adjustments

     (2,387 )     (570 )     (199 )     (3     (40 )     —        (96 )     —        (2,325     (5,620 )
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

 

Balance as at March 31, 2022

   $ 156,163     $ 121,052     $ 4,312     $ 638     $ 5,947     $ 1,835      $ 9,065     $ 400      $ 63,219     $ 362,631  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

 

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

     133       3,645       —       —       766       —        —       —        7,006       11,550  

Translation adjustments

     (2,377     (554 )     (199     (3     (31 )     —        (96 )     —        (1,262 )     (4,522 )
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

 

Balance as at March 31, 2022

   $ 155,770     $ 79,830     $ 4,312     $ 638     $ 3,965     $ 1,835      $ 9,065     $ —      $ 41,795     $ 297,210  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

 

Net carrying value as at March 31, 2022

   $ 393   $ 41,222     $ —     $ —     $ 1,982     $ —      $ —     $ 400      $ 21,424     $ 65,421  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

 

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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 three months ended June 30, 2022 are as follows:

 

Gross carrying value

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

Balance as at April 1, 2022

   $ 9,591     $ 87,574     $ 82,642     $ 784     $ 72,704     $ 253,295  

Additions

     —       1,516       597       —       6       2,119  

Disposals/retirements

     —       (1,346     (497     —       (1     (1,844

Translation adjustments

     (157     (4,320     (4,033     (37     (3,838     (12,385
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Balance as at June 30, 2022

   $ 9,434     $ 83,424     $ 78,709     $ 747     $ 68,871     $ 241,185  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Accumulated depreciation

            

Balance as at April 1, 2022

   $ 6,338     $ 69,574     $ 70,966     $ 764     $ 59,469     $ 207,111  

Depreciation

     119       2,488       1,388       18       1,344       5,357  

Disposals/retirements

     —       (1,333     (496     —       (1     (1,830

Translation adjustments

     (105     (3,417     (3,460     (36     (3,242     (10,260
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Balance as at June 30, 2022

   $ 6,352     $ 67,312     $ 68,398     $ 746     $ 57,570     $ 200,378  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Capital work-in-progress

               4,118  
            

 

 

 

Net carrying value as at June 30, 2022

             $ 44,925  
            

 

 

 

The changes in the carrying value of property and equipment for the year ended March 31, 2022 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

     —       13,966       2,449       —       2,348       18,763  

On acquisitions (Refer Note 4(a), 4(b))

     —       217       102       10       116       445  

Disposals/retirements

     —       (1,901     (1,016     (74     (2,765     (5,756

Translation adjustments

     (142     (3,558     (3,228     (28     (3,038     (9,994
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Balance as at March 31, 2022

   $ 9,591     $ 87,574     $ 82,642     $ 784     $ 72,704     $ 253,295  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Accumulated depreciation

            

Balance as at April 1, 2021

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

Depreciation

     483       8,771       6,412       120       6,004       21,790  

Disposals/retirements

     —       (1,864     (988     (70     (2,727     (5,649

Translation adjustments

     (90     (2,754     (2,599     (23     (2,376     (7,842
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Balance as at March 31, 2022

   $ 6,338     $ 69,574     $ 70,966     $ 764     $ 59,469     $ 207,111  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Capital work-in-progress

               3,073  
            

 

 

 

Net carrying value as at March 31, 2022

             $ 49,257  
            

 

 

 

 

 

17


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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 three months ended June 30, 2022 are as follows:

 

Gross carrying value

   Premises     Computers     Equipment     Motor vehicles     Total  

Balance as at April 1, 2022

   $   220,185     $ 40     $ 24     $ 813     $ 221,062  

Additions

     14,874       —       —       —       14,874  

Terminations/modifications

     16,345       (40     —       (11     16,294  

Translation adjustments

     (11,797     —       (1     (43     (11,841
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Balance as at June 30, 2022

   $ 239,607     $ —     $ 23     $ 759     $ 240,389  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Accumulated depreciation

          

Balance as at April 1, 2022

   $ 77,834     $ 40     $ 19     $ 546     $ 78,439  

Depreciation

     7,079       —       2       23       7,104  

Terminations/modifications

     (168     (40 )     —       (11     (219

Translation adjustments

     (4,127     —       —       (28     (4,155
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Balance as at June 30, 2022

   $ 80,618     $ —     $ 21     $ 530     $ 81,169  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net carrying value as at June 30, 2022

   $ 158,989     $ —     $ 2     $ 229     $ 159,220  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

The following are the changes in the carrying value of ROU assets for the year ended March 31, 2022:

 

Gross carrying value

   Premises     Computers      Equipment     Motor vehicles     Total  

Balance as at April 1, 2021

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

Additions

     5,620       —        —       216       5,836  

On acquisition (Refer Note 4(b))

     1,528       —        —       —       1,528  

Terminations/modifications

     3,174       —        —       —       3,174  

Translation adjustments

     (9,215     1        (1     (42     (9,257
  

 

 

   

 

 

    

 

 

   

 

 

   

 

 

 

Balance as at March 31, 2022

   $ 220,185     $ 40      $ 24     $ 813     $ 221,062  
  

 

 

   

 

 

    

 

 

   

 

 

   

 

 

 

Accumulated depreciation

           

Balance as at April 1, 2021

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

Depreciation

     28,100       4        3       106       28,213  

Terminations/modifications

     (47     —        —       —       (47

Translation adjustments

     (2,716     1        (1 )     (26     (2,742
  

 

 

   

 

 

    

 

 

   

 

 

   

 

 

 

Balance as at March 31, 2022

   $ 77,834     $ 40      $ 19     $ 546     $ 78,439  
  

 

 

   

 

 

    

 

 

   

 

 

   

 

 

 

Net carrying value as at March 31, 2022

   $ 142,351     $       $ 5     $ 267     $ 142,623  
  

 

 

   

 

 

    

 

 

   

 

 

   

 

 

 

 

 

18


Table of Contents

WNS (HOLDINGS) LIMITED

NOTES TO UNAUDITED CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

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

 

The following is the movement in lease liabilities for the three months ended June 30, 2022 and for the year ended March 31, 2022 is as follows:

 

Lease liabilities

   June 30, 2022      March 31, 2022  

Opening balance

   $ 166,994      $ 191,907  

Cash outflows

     

Principal payment of lease liabilities

     (6,428      (26,235

Interest payment on lease liabilities

     (2,790      (12,826

Non-cash adjustments

     

Additions

     13,762        1,521  

On acquisition (Refer Note 4(b))

     —        5,403  

Terminations/modifications

     16,173        2,282  

Interest accrued

     3,149        12,657  

Rent concessions

     —        (21

Translation adjustments

     (8,891      (7,694
  

 

 

    

 

 

 

Closing balance

   $ 181,969      $ 166,994  
  

 

 

    

 

 

 

Rental expense charged for short-term leases was $69 and $155, rental expense charged for low value leases was $15 and $18 and variable lease payments was $509 and $492, respectively, for the three months ended June 30, 2022 and 2021, respectively.

The Company has applied practical expedient for rent concessions as a direct consequence of the COVID-19 pandemic and recognized Nil and $19 in its consolidated income statement for the three months ended June 30, 2022 and 2021, respectively.

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

 

     As at  

Tenure

   June 30, 2022      March 31, 2022  

Less than 1 year

   $ 36,201      $ 37,330  

1-3 years

     66,717        67,177  

3-5 years

     51,016        49,449  

More than 5 years

     88,915        62,234  
  

 

 

    

 

 

 

Total

   $ 242,849      $ 216,190  
  

 

 

    

 

 

 

 

 

19


Table of Contents

WNS (HOLDINGS) LIMITED

NOTES TO UNAUDITED CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

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

 

13.

Loans and borrowings

Long-term debt

As at June 30, 2022, there are no long-term debts outstanding.

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 $68,252 (based on the exchange rate on June 30, 2022). The Company has also established a line of credit in the UK amounting to $12,031 (based on the exchange rate on June 30, 2022). 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 $1,843 (based on the exchange rate on June 30, 2022).

As at June 30, 2022, WNS Global Services Private Limited (“WNS Global”) has utilized $21,697 (based on the exchange rate on June 30, 2022) of its lines of credit. The Company has also utilized its line of credit in North America amounting to $10,000.

 

 

20


Table of Contents

WNS (HOLDINGS) LIMITED

NOTES TO UNAUDITED CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

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

 

14. Financial instruments

Financial instruments by category

The carrying value and fair value of financial instruments by class as at June 30, 2022 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

   $ 225,502      $ —        $ —        $ 225,502      $ 225,502  

Investment in fixed deposits

     48,224        —          —          48,224        48,224  

Investments in marketable securities and mutual funds

     —          99,730        —          99,730        99,730  

Trade receivables

     98,193        —          —          98,193        98,193  

Unbilled revenue(1)

     88,343        —          —          88,343        88,343  

Funds held for clients

     9,726        —          —          9,726        9,726  

Prepayments and other assets(2)

     5,676        —          —          5,676        5,676  

Other non-current assets(3)

     13,750        —          —          13,750        13,750  

Derivative assets

     —          75        14,348        14,423        14,423  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total carrying value

   $ 489,414      $ 99,805      $ 14,348      $ 603,567      $ 603,567  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Financial liabilities

 

     Financial
liabilities at
amortized cost
     Financial
liabilities at
FVTPL
     Financial
liabilities at
FVOCI
     Total
carrying
value
     Total fair
Value
 

Trade payables

   $ 24,009      $ —        $ —        $ 24,009      $ 24,009  

Short term line of credit

     31,697        —          —          31,697        31,697  

Other employee obligations(4)

     54,588        —          —          54,588        54,588  

Provisions and accrued expenses

     33,719        —          —          33,719        33,719  

Lease liabilities

     181,969        —          —          181,969        181,969  

Other liabilities(5)

     4,870        —          —          4,870        4,870  

Derivative liabilities

     —          6,753        9,939        16,692        16,692  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total carrying value

   $ 330,852      $ 6,753      $ 9,939      $ 347,544      $ 347,544  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Notes:

 

(1)

Excluding non-financial assets $216

(2)

Excluding non-financial assets $22,478

(3)

Excluding non-financial assets $25,718

(4)

Excluding non-financial liabilities $28,586

(5)

Excluding non-financial liabilities $8,097

21


Table of Contents

WNS (HOLDINGS) LIMITED

NOTES TO UNAUDITED CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

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

 

The carrying value and fair value of financial instruments by class as at March 31, 2022 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

   $ 108,153      $ —      $ —      $ 108,153      $ 108,153  

Investment in fixed deposits

     41,827        —        —        41,827        41,827  

Investments in marketable securities and mutual funds

     —        263,013        —        263,013        263,013  

Trade receivables

     100,522        —        —        100,522        100,522  

Unbilled revenue (1)

     86,786        —        —        86,786        86,786  

Funds held for clients

     11,643        —        —        11,643        11,643  

Prepayments and other assets (2)

     6,283        —        —        6,283        6,283  

Other non-current assets (3)

     13,509        —        —        13,509        13,509  

Derivative assets

     —        556        13,044        13,600        13,600  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total carrying value

   $ 368,723      $ 263,569      $ 13,044      $ 645,336      $ 645,336  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Financial liabilities

 

     Financial
liabilities at
amortized cost
     Financial
liabilities at
FVTPL
     Financial
liabilities at
FVOCI
     Total
carrying
value
     Total fair
Value
 

Trade payables

   $ 27,829      $ —      $ —      $ 27,829      $ 27,829  

Other employee obligations (4)

     95,098        —        —        95,098        95,098  

Provisions and accrued expenses

     36,752        —        —        36,752        36,752  

Lease liabilities

     166,994        —        —        166,994        166,994  

Other liabilities (5)

     2,015        —        —        2,015        2,015  

Derivative liabilities

     —        2,295        4,578        6,873        6,873  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total carrying value

   $ 328,688      $ 2,295      $ 4,578      $ 335,561      $ 335,561  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Notes:

 

(1)

Excluding non-financial assets $246.

(2)

Excluding non-financial assets $22,539.

(3)

Excluding non-financial assets $30,766.

(4)

Excluding non-financial liabilities $26,908.

(5)

Excluding non-financial liabilities $9,414.

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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 June 30, 2022 are as follows:

 

Description of types of financial assets

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

offset in the
statement  of
financial position
     Net amounts of
financial assets
presented in the
statement  of
financial position
     Related amount not set off in
financial instruments
     Net
Amount
 
   Financial
Instruments
    Cash
collateral
received
 

Derivative assets

   $ 14,423      $ —      $ 14,423      $ (2,790   $ —      $ 11,633  
  

 

 

    

 

 

    

 

 

    

 

 

   

 

 

    

 

 

 

Total

   $ 14,423      $ —      $ 14,423      $ (2,790 )   $ —      $ 11,633  
  

 

 

    

 

 

    

 

 

    

 

 

   

 

 

    

 

 

 

 

Description of types of financial liabilities

   Gross
amounts of
recognized
financial

liabilities
     Gross amounts
of recognized
financial assets
offset in the
statement of
financial position
     Net amounts of
financial liabilities
presented in the
statement of
financial position
     Related amount not set off in
financial instruments
     Net
Amount
 
   Financial
instruments
    Cash
collateral

pledged
 

Derivative liabilities

   $ 16,692      $ —      $ 16,692      $ (2,790   $ —      $ 13,902  
  

 

 

    

 

 

    

 

 

    

 

 

   

 

 

    

 

 

 

Total

   $ 16,692      $ —      $ 16,692      $ (2,790   $ —      $ 13,902  
  

 

 

    

 

 

    

 

 

    

 

 

   

 

 

    

 

 

 

Financial assets and liabilities subject to offsetting, enforceable master netting arrangements or similar agreements as at March 31, 2022 are as follows:

 

Description of types of financial assets

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

offset in the
statement  of
financial position
     Net amounts of
financial assets
presented in the
statement  of
financial position
     Related amount not set off in
financial instruments
     Net
Amount
 
   Financial
Instruments
    Cash
collateral
received
 

Derivative assets

   $ 13,600      $ —      $ 13,600      $ (646   $ —      $ 12,954  
  

 

 

    

 

 

    

 

 

    

 

 

   

 

 

    

 

 

 

Total

   $ 13,600      $ —      $ 13,600      $ (646 )   $ —      $ 12,954  
  

 

 

    

 

 

    

 

 

    

 

 

   

 

 

    

 

 

 

 

Description of types of financial liabilities

   Gross
amounts of
recognized
financial
liabilities
     Gross amounts
of recognized
financial assets
offset in the
statement of
financial position
     Net amounts of
financial liabilities
presented in the
statement  of
financial position
     Related amount not set off in
financial instruments
     Net
Amount
 
   Financial
instruments
    Cash
collateral
pledged
 

Derivative liabilities

   $ 6,873      $ —      $ 6,873      $ (646 )   $ —      $ 6,227  
  

 

 

    

 

 

    

 

 

    

 

 

   

 

 

    

 

 

 

Total

   $ 6,873      $ —      $ 6,873      $ (646 )   $ —      $ 6,227  
  

 

 

    

 

 

    

 

 

    

 

 

   

 

 

    

 

 

 

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.

 

23


Table of Contents

WNS (HOLDINGS) LIMITED

NOTES TO UNAUDITED CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

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

 

The assets and liabilities measured at fair value on a recurring basis as at June 30, 2022 are as follows:

 

            Fair value measurement at reporting date using  

Description

   June 30,
2022
     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

   $ 75      $ —      $ 75      $ —  

Investments in marketable securities and mutual funds

     99,730        99,364        366        —  

Financial assets at FVOCI

           

Foreign exchange contracts

     14,348        —        14,348        —  
  

 

 

    

 

 

    

 

 

    

 

 

 

Total assets

   $ 114,153      $ 99,364      $ 14,789      $    
  

 

 

    

 

 

    

 

 

    

 

 

 

Liabilities

           

Financial liabilities at FVTPL

           

Foreign exchange contracts

   $ 6,753      $ —      $ 6,753      $ —  

Financial liabilities at FVOCI

           

Foreign exchange contracts

     9,939        —        9,939        —  
  

 

 

    

 

 

    

 

 

    

 

 

 

Total liabilities

   $ 16,692      $ —      $ 16,692      $ —  
  

 

 

    

 

 

    

 

 

    

 

 

 
           

 

 

24


Table of Contents

WNS (HOLDINGS) LIMITED

NOTES TO UNAUDITED CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

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

 

The assets and liabilities measured at fair value on a recurring basis as at March 31, 2022 are as follows:

 

            Fair value measurement at reporting date using  

Description

   March 31,
2022
     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

   $ 556      $ —      $ 556      $ —  

Investments in marketable securities and mutual funds

     263,013        262,602        411        —  

Financial assets at FVOCI

           

Foreign exchange contracts

     13,044        —        13,044        —  
  

 

 

    

 

 

    

 

 

    

 

 

 

Total assets

   $  276,613      $  262,602      $  14,011      $  —  
  

 

 

    

 

 

    

 

 

    

 

 

 

Liabilities

           

Financial liabilities at FVTPL

           

Foreign exchange contracts

   $ 2,295      $ —      $ 2,295      $ —  

Financial liabilities at FVOCI

           

Foreign exchange contracts

     4,578        —        4,578        —  
  

 

 

    

 

 

    

 

 

    

 

 

 

Total liabilities

   $ 6,873      $ —      $ 6,873      $ —  
  

 

 

    

 

 

    

 

 

    

 

 

 

During the three months ended June 30, 2022 and the year ended March 31, 2022, 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).

 

 

25


Table of Contents

WNS (HOLDINGS) LIMITED

NOTES TO UNAUDITED CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

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

 

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

 

     As at  
     June 30,
2022
     March 31,
2022
 

Forward contracts (Sell)

     

In US dollars

   $ 340,424      $ 316,651  

In Pound Sterling

     99,316        99,006  

In Euro

     26,080        21,811  

In Australian dollars

     21,864        27,290  

Others

     21,735        20,406  
  

 

 

    

 

 

 
   $ 509,419      $ 485,164  
  

 

 

    

 

 

 

Option contracts (Sell)

     

In US dollars

   $ 222,395      $ 204,773  

In Pound Sterling

     86,346        88,899  

In Euro

     29,361        26,147  

In Australian dollars

     33,599        38,004  
  

 

 

    

 

 

 
   $ 371,701      $ 357,823  
  

 

 

    

 

 

 

The amount of gain reclassified from other comprehensive income into consolidated statement of income in respective line items for the three months ended June 30, 2022 and 2021 are as follows:

 

     Three months ended June 30,  
     2022      2021  

Revenue

   $ 1,301      $ 183  

Foreign exchange gain, net

     —          53  

Finance expense

     —          (76

Income tax related to amounts reclassified into consolidated statement of income

     (745 )      103  
  

 

 

    

 

 

 

Total

   $ 556      $ 263  
  

 

 

    

 

 

 

As at June 30, 2022, a loss amounting to $1,676 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.

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, a gain of Nil and $53 for the three months ended June 30, 2022 and 2021, respectively.

 

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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  
     June 30,
2022
     March 31,
2022
 

Current:

     

Salaries and bonus

   $ 52,600      $ 93,210  

Pension

     1,430        1,365  

Withholding taxes on salary and statutory payables

     13,360        11,193  
  

 

 

    

 

 

 

Total

   $ 67,390      $ 105,768  
  

 

 

    

 

 

 

Non-current:

     

Pension and other obligations

   $ 15,784      $ 16,238  
  

 

 

    

 

 

 

Total

   $ 15,784      $ 16,238  
  

 

 

    

 

 

 

 

16.

Provisions and accrued expenses

Provisions and accrued expenses consist of the following:

 

     As at  
     June 30,
2022
     March 31,
2022
 

Accrued expenses

   $ 33,719      $ 36,752  
  

 

 

    

 

 

 

Total

   $ 33,719      $ 36,752  
  

 

 

    

 

 

 

 

 

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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  
     June 30,
2022
     March 31,
2022
 

Current:

     

Payments in advance of services

   $ 8,911      $ 8,344  

Advance billings

     6,691        5,081  

Others

     171        298  
  

 

 

    

 

 

 

Total

   $ 15,773      $ 13,723  
  

 

 

    

 

 

 

 

     As at  
     June 30,
2022
     March 31,
2022
 

Non-current:

     

Payments in advance of services

   $ 10,549      $ 12,072  

Advance billings

     784        1,226  

Others

     15        16  
  

 

 

    

 

 

 

Total

   $ 11,348      $ 13,314  
  

 

 

    

 

 

 

 

18.

Other liabilities

Other liabilities consist of the following:

 

     As at  
     June 30,
2022
     March 31,
2022
 

Current:

     

Withholding taxes and value added tax payables

   $ 6,825      $ 8,164  

Other liabilities

     6,065        3,187  
  

 

 

    

 

 

 

Total

   $ 12,890      $ 11,351  
  

 

 

    

 

 

 

Non-current:

     

Other liabilities

     77        78  
  

 

 

    

 

 

 

Total

   $ 77      $ 78  
  

 

 

    

 

 

 

 

 

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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 June 30, 2022, 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 48,155,481 ordinary shares (excluding 741,618 treasury shares) outstanding as at June 30, 2022. There were no preferred shares outstanding as at June 30, 2022.

As at March 31, 2022, 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 48,849,907 ordinary shares outstanding as at March 31, 2022. There were no preferred shares outstanding as at March 31, 2022.

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, 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 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 paid $55 towards cancellation fees for ADSs in relation to the repurchase of 1,100,000 ADSs. 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 year ended March 31, 2022, 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. The Company funded the repurchases under the repurchase program with cash on hand.

During the year ended March 31, 2022, 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 $163,711 (including share cancellation charges $110). The effect of the cancellation of these treasury shares was recognized in share capital amounting to $302 and in share premium amounting to $163,409, in compliance with Jersey law. There was no effect on the total shareholders’ equity as a result of this cancellation.

During the three months ended June 30, 2022, the Company purchased 741,618 ADSs in the open market for a total consideration of $53,756 (including transaction costs $7) under the above-mentioned share repurchase program. The Company funded the repurchases under the repurchase program with cash on hand.

 

 

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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 June 30,  
     2022      2021  

Industry-specific

   $ 110,994      $ 102,373  

Finance and accounting

     66,829        58,055  

Customer experience services

     54,207        40,991  

Research and analytics

     33,387        25,284  

Auto claims

     23,177        20,286  

Others

     6,754        6,261  
  

 

 

    

 

 

 

Total

   $ 295,348      $ 253,250  
  

 

 

    

 

 

 

Revenue by industry

 

     Three months ended June 30,  
     2022      2021  

Insurance*

   $ 83,642      $ 76,336  

Healthcare

     50,222        46,932  

Travel and leisure

     48,188        32,838  

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

     40,866        36,818  

Shipping and logistics

     23,548        17,704  

Hi-tech and professional services

     18,404        16,459  

Banking and financial services

     17,227        14,936  

Utilities

     13,251        11,227  
  

 

 

    

 

 

 

Total

   $ 295,348      $ 253,250  
  

 

 

    

 

 

 

 

*

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

Revenue by contract type

 

     Three months ended June 30,  
     2022      2021  

Full-time-equivalent

   $ 191,093      $ 162,511  

Transaction*

     48,917        40,929  

Subscription

     24,810        26,009  

Fixed price

     16,297        11,934  

Others

     14,231        11,867  
  

 

 

    

 

 

 

Total

   $ 295,348      $ 253,250  
  

 

 

    

 

 

 

 

*

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

 

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WNS (HOLDINGS) LIMITED

NOTES TO UNAUDITED CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

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

 

Revenue by geography

Refer Note 28 Operating segments External revenue.

Revenue by delivery location

 

     Three months ended June 30,  
     2022      2021  

India

   $ 149,401      $ 126,134  

United States

     45,795        39,341  

Philippines

     38,880        31,843  

UK*

     30,974        26,658  

South Africa

     14,736        15,347  

Romania

     4,162        2,957  

Sri Lanka

     3,807        4,028  

China

     3,370        3,372  

Poland

     1,266        1,321  

Costa Rica

     1,147        801  

Spain

     920        1,448  

Australia

     890        —  
  

 

 

    

 

 

 

Total

   $ 295,348      $ 253,250  
  

 

 

    

 

 

 

 

*

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

 

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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 June 30,  
     2022      2021  

Employee cost

   $ 181,337      $ 159,609  

Repair payments

     20,529        16,989  

Facilities cost

     17,042        14,375  

Depreciation

     12,461        12,397  

Legal and professional expenses

     7,147        4,580  

Travel expenses

     3,469        518  

Others

     11,029        9,841  
  

 

 

    

 

 

 

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

   $ 253,014      $ 218,309  
  

 

 

    

 

 

 

 

22.

Finance expense

Finance expense consists of the following:

 

     Three months ended June 30,  
     2022      2021  

Interest expense on lease liabilities

   $ 3,149      $ 3,348  

Interest expense

     97        116  

Loss on interest rate swaps

     —          76  

Debt issue cost

     —          19  
  

 

 

    

 

 

 

Total

   $ 3,246      $ 3,559  
  

 

 

    

 

 

 

 

 

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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 June 30,  
     2022      2021  

Net gain arising on financial assets designated as FVTPL

   $ 2,266      $ 1,806  

Interest income

     599        1,620  

Others, net

     547        590  
  

 

 

    

 

 

 

Total

   $ 3,412      $ 4,016  
  

 

 

    

 

 

 

 

24.

Share-based payments

The Company has two share-based incentive plans: 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 restricted share units “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 June 30, 2022, the Company had 2,651,518 ordinary shares available for future grants.

Share-based compensation expense during the three months ended June 30, 2022 and 2021 is as follows:

 

     Three months ended June 30,  
     2022      2021  

Share-based compensation expense recorded in

     

Cost of revenue

   $ 2,102      $ 1,675  

Selling and marketing expenses

     1,695        1,482  

General and administrative expenses

     9,896        9,935  
  

 

 

    

 

 

 

Total share-based compensation expense

   $ 13,693      $ 13,092  
  

 

 

    

 

 

 

Upon the exercise of share-based options and RSUs, the Company issued 47,192 and 312,907 shares, respectively, for the three months ended June 30, 2022 and 2021, 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 1,135 RSUs during the year ended March 31, 2022 and 11,400 and 1,850 RSUs during the year ended March 31, 2021, which shall vest on the second anniversary, 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 months ended June 30, 2022 and 2021 was $28 and $218, respectively.

RSUs related to Total Shareholders’ Return (“TSR”)

During the three months ended June 30, 2022, the Company issued 104,975 RSUs (three months ended June 30, 2021: 154,110 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.

 

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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 three months ended June 30, 2022 and 2021 was $79 and $78.80, per RSU, respectively. The stock compensation expense charged during the three months ended June 30, 2022 was $1,398 (three months ended June 30, 2021: $1,456). As at June 30, 2022, there was $9,285 of unrecognized compensation cost related to these RSUs.

 

 

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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 June 30,  
     2022      2021  

Domestic

   $ (2,713 )    $ (2,562 )

Foreign

     44,148        36,208  
  

 

 

    

 

 

 

Profit before income taxes

   $ 41,435      $ 33,646  
  

 

 

    

 

 

 

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

 

     Three months ended June 30,  
     2022      2021  

Current taxes

     

Domestic taxes

   $ —        $ —  

Foreign taxes

     12,224        8,810  
  

 

 

    

 

 

 
   $ 12,224      $ 8,810  
  

 

 

    

 

 

 

Deferred taxes

  

Domestic taxes

     —          —  

Foreign taxes

     (3,852      (1,921 )
  

 

 

    

 

 

 
     (3,852 )      (1,921
  

 

 

    

 

 

 

Income tax expense

   $ 8,372      $ 6,889  
  

 

 

    

 

 

 

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 June 30,  
     2022      2021  

Income taxes on profit

   $ 8,372      $ 6,889  

Income taxes on other comprehensive income/(loss):

     

Unrealized gain on cash flow hedging derivatives

     (56      (33

Pension liability

     95        2  

Income taxes recognized in equity:

     

Excess tax deductions related to share-based options and RSUs

     492        (669
  

 

 

    

 

 

 

Total income taxes

   $ 8,903      $ 6,189  
  

 

 

    

 

 

 

 

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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 three months ended June 30, 2022, 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 2023 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. Between fiscal 2016 until the three months ended June 30 2022, the Company commenced operations in delivery centers in the Philippines that are eligible for various tax exemption benefits expiring between fiscal 2020 and fiscal 2027. 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. 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 $23,711 in additional taxes, including interest of $5,967. 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 $68,824 in additional taxes, including interest of $24,451. 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 June 30, 2022, the Company has provided a tax reserve of $9,805 primarily on account of the Indian tax authorities’ denying the set off of brought forward business losses and unabsorbed depreciation.

As at June 30, 2022, 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 $11,372 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

From time to time, the Company receives orders of assessment from the service tax and from Goods and Service Tax (‘GST’) authorities, demanding payment of $1,987 towards service tax and GST for the period April 1, 2014 to March 31, 2018. The tax authorities have rejected input tax credit on certain types of input services. Based on consultations with the Company’s tax advisors, the Company believes these orders of assessments are more likely than not to be upheld in the Company’s favor. The Company intends to continue to dispute the assessment.

 

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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 June 30,  
     2022      2021  

Numerator:

     

Profit

   $ 33,063      $ 26,757  

Denominator:

     

Basic weighted average ordinary shares outstanding

     48,707,982        49,261,695  

Dilutive impact of equivalent share-based options and RSUs

     2,277,432        1,960,637  

Diluted weighted average ordinary shares outstanding

     50,985,414        51,222,332  

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

 

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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 June 30, 2022:

 

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 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(2)

   India
  

- WNS Global Services (UK) Limited(3)

   United Kingdom
  

- WNS Global Services SA (Pty) Limited

   South Africa
  

- WNS B-BBEE Staff Share Trust (4)

   South Africa
  

- Ucademy (Pty) Limited

   South Africa
  

- WNS South Africa (Pty) Limited (5)

   South Africa
  

- MTS HealthHelp Inc.

   Delaware, USA
  

- HealthHelp Holdings LLC

   Delaware, USA
  

- HealthHelp LLC

   Delaware, USA
  

- WNS-HealthHelp Philippines Inc.

   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

   United Kingdom
  

- WNS Global Services North Americas Inc.

   Delaware, USA
  

- WNS Global Services AG(6)

   Switzerland
  

- WNS Global Services Lisbon Unipessoal LDA(7)

   Portugal
  

WNS Information Services (India) Private Limited(8)

   India

WNS Business Consulting Netherlands B.V.(9)

      The Netherlands
  

WNS Global Services Philippines Inc.

   The Philippines

WNS Gestion des Processus d’Affaire Inc.(10)

      Canada

 

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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 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%.

 

(3)

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%.

 

(4)

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. 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.

 

(5)

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.

 

(6)

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

 

(7)

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

 

(9)

On August 1, 2021, the Company acquired all outstanding shares of MOL Information Processing Services (I) Private Limited. The name of the entity was changed to WNS Information Services (India) Private Limited with effect from December 1, 2021.

 

(9)

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 proposal of demerger. As at June 30, 2022, the entity is jointly held by WNS (Holdings) Limited and WNS Global Services Private Limited. The percentage of holding of WNS (Holdings) Limited is 65.34% and of WNS Global Services Private Limited is 34.66%.

 

(10)

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

 

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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 hi-tech 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.

 

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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 June 30, 2022 are as follows:

 

    Three months ended June 30, 2022  
    WNS
Global BPM
    WNS Auto
Claims BPM
    Inter
segments(1)
    Total  

Revenue from external customers

  $ 272,171     $ 23,177     $ —     $ 295,348  

Segment revenue

  $ 272,403     $ 23,177     $ (232   $ 295,348  

Payments to repair centers

    —         20,529       —       20,529  
 

 

 

   

 

 

   

 

 

   

 

 

 

Revenue less repair payments (non-GAAP)

    272,403       2,648       (232     274,819  

Depreciation

    12,294       167       —         12,461  

Other costs

    201,678       2,964       (232     204,410  
 

 

 

   

 

 

   

 

 

   

 

 

 

Segment operating profit/(loss)

    58,431       (483     —       57,948  

Other income, net

    (3,353     (59     —       (3,412

Finance expense

    3,232       14       —       3,246  
 

 

 

   

 

 

   

 

 

   

 

 

 

Segment profit/(loss) before income taxes

    58,552       (438     —       58,114  

Income tax expense

    8,502       (130     —       8,372  
 

 

 

   

 

 

   

 

 

   

 

 

 

Segment profit/(loss)

    50,050       (308     —       49,742  

Amortization of intangible assets

          2,986  

Share-based compensation expense

          13,693  
       

 

 

 

Profit after tax

        $ 33,063  
       

 

 

 

Addition to non-current assets(2)

  $ 23,923     $ 386     $ (3,809   $ 20,500  

Total assets, net of elimination

    1,020,724       108,114       —       1,128,838  

Total liabilities, net of elimination

  $ 342,464     $ 81,736     $ —     $ 424,200  

 

(1) 

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

(2) 

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

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

 

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

Revenue from external customers

   $ 232,964      $ 20,286      $ —        $ 253,250  

Segment revenue

   $ 233,115      $ 20,286      $ (151    $ 253,250  

Payments to repair centers

     —        16,989        —          16,989  
  

 

 

    

 

 

    

 

 

    

 

 

 

Revenue less repair payments (non-GAAP)

     233,115        3,297        (151      236,261  

Depreciation

     12,210        187        —        12,397  

Other costs

     171,146        3,715        (151      174,710  
  

 

 

    

 

 

    

 

 

    

 

 

 

Segment operating profit/(loss)

     49,759        (605 )      —        49,154  

Other income, net

     (3,832 )      (184 )      —        (4,016 )

Finance expense

     3,542        17        —        3,559  
  

 

 

    

 

 

    

 

 

    

 

 

 

Segment profit/(loss) before income taxes

     50,049        (438 )      —        49,611  

Income tax expense

     6,969        (80 )      —        6,889  
  

 

 

    

 

 

    

 

 

    

 

 

 

Segment profit/(loss)

     43,080        (358 )      —        42,722  

Amortization of intangible assets

              2,873  

Share-based compensation expense

              13,092  
           

 

 

 

Profit after tax

            $ 26,757  
           

 

 

 

Addition to non-current assets(2)

   $ 11,571      $ 529      $ —      $ 12,100  

Total assets, net of elimination

     898,532        126,823        —        1,025,355  

Total liabilities, net of elimination

   $ 296,792      $ 93,442      $ —      $ 390,234  

 

(1) 

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

(2) 

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

 

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WNS (HOLDINGS) LIMITED

NOTES TO UNAUDITED CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

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

 

External revenue

Revenues from the geographic segments are based on the domicile of the customer. The Company’s external revenue by geographic area is as follows:

 

     Three months ended June 30,  
     2022      2021  

Jersey, Channel Islands

   $ —      $ —  

North America (primarily the US)

     141,170        112,288  

UK

     92,992        82,439  

Europe (excluding the UK)

     19,101        16,068  

Australia

     17,131        17,384  

South Africa

     3,270        7,596  

Rest of the world

     21,684        17,475  
  

 

 

    

 

 

 

Total

   $ 295,348      $ 253,250  
  

 

 

    

 

 

 

 

29.

Commitment and contingencies

Capital commitments

As at June 30, 2022 and March 31, 2022, the Company had committed to spend approximately $7,600 and $9,522, respectively, under agreements to purchase property and equipment. These amounts are net of capital advances paid in respect of these purchases.

Bank guarantees and others

Certain subsidiaries of the Company hold bank guarantees aggregating $928 and $868 as at June 30, 2022 and March 31, 2022, respectively. These guarantees have a remaining expiry term ranging from one to five years.

Restricted time deposits placed with bankers as security for guarantees given by them to regulatory authorities and other third parties aggregating $641 and $666 as at June 30, 2022 and March 31, 2022, respectively, are included in other assets. These deposits represent cash collateral against bank guarantees issued by the banks on behalf of the Company to third parties.

Contingencies

In the ordinary course of business, the Company is involved in lawsuits, claims and administrative proceedings. While uncertainties are inherent in the final outcome of these matters, the Company believes, after consultation with counsel, that the disposition of these proceedings will not have a material adverse effect on the Company’s financial position, results of operations or cash flows.

 

 

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WNS (HOLDINGS) LIMITED

NOTES TO UNAUDITED CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

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

 

30.

Subsequent events

 

  (a)

Vuram Technology Solutions Private Limited (“Vuram”)

Vuram is a hyper automation services company that specializes in low-code enterprise automation and provides custom, scalable BPM solutions including industry-specific solutions for the banking/financial services, insurance, and healthcare verticals.

On July 1, 2022, the Company entered into a definitive agreement to acquire Vuram, for a total consideration of $165,000 (including a contingent earn-out component of up to $22,300, dependent on the achievement of financial targets over a period of 18 months and being in employment) plus adjustments for working capital and cash. On July 1, 2022, the Company paid $148,818 and obtained control over Vuram. The up-front payment for the acquisition was funded with cash on hand. A portion of liquid mutual funds, which was designated as non-current in the nature, has been redeemed and utilized towards acquiring the shares of Vuram.

 

  (b)

Long term debt

In July 2022, the Company obtained a term loan facility of $80,000 from The Hongkong and Shanghai Banking Corporation Limited, Hongkong and Citibank N.A., Hongkong for general corporate purpose. The loan bears interest at a rate equivalent to the secured overnight financing rate (“SOFR”) plus a margin of 1.20% per annum. The loan matures in July 2027 and the principal is repayable in 10 semi-annual instalments of $8,000 each, commencing in January 2023.

 

 

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Part II — MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS

You should read the following discussion in conjunction with our unaudited condensed consolidated financial statements and the related notes included elsewhere in this report. We urge you to carefully review and consider the various disclosures made by us in this report and in our other SEC filings, including our annual report on Form 20-F for our fiscal year ended March 31, 2022. Some of the statements in the following discussion are forward-looking statements. See “Special note regarding forward-looking statements.”

Overview

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

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

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

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

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

 

     Three months ended June 30,  
     2022      2021  
     (US dollars in millions)  

Revenue

   $ 295.3      $ 253.2  

 

 

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Our revenue is generated primarily from providing BPM services. We have two reportable segments for financial statement reporting purposes — WNS Global BPM and WNS Auto Claims BPM. In our WNS Auto Claims BPM segment, we provide both “fault” and “non-fault” repairs. For “fault” repairs, we provide claims handling and repair management services, where we arrange for automobile repairs through a network of third party repair centers. In our repair management services, where we act as the principal in our dealings with the third party repair centers and our clients, the amounts which we invoice to our clients for payments made by us to third party repair centers are reported as revenue. Where we are not the principal in providing the services, we record revenue from repair services net of repair cost. See Note 2(s) of the consolidated financial statements included in our annual report on Form 20-F for our fiscal year ended March 31, 2022. Since we wholly subcontract the repairs to the repair centers, we evaluate the financial performance of our “fault” repair business based on revenue less repair payments to third party repair centers, which is a non-GAAP financial measure. We believe that revenue less repair payments (a non-GAAP financial measure) for “fault” repairs reflects more accurately the value addition of the BPM services that we directly provide to our clients. Management believes that revenue less repair payments (non-GAAP) may be useful to investors as a more accurate reflection of our performance and operational results.

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

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

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

 

     Three months ended June 30,  
     2022      2021  
     (US dollars in millions)  

Revenue

   $ 295.3      $ 253.2  

Less: Payments to repair centers(1)

     20.5        17.0  
  

 

 

    

 

 

 

Revenue less repair payments (non-GAAP)

   $ 274.8      $ 236.3  
  

 

 

    

 

 

 

Note:

 

(1)

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

 

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

 

     Three months ended June 30,  
     2022      2021  
     (US dollars in millions)  

Revenue less repair payments (non-GAAP)

   $ 274.8      $ 236.3  

Exchange rate impact

     (1.3      (9.8
  

 

 

    

 

 

 

Constant currency revenue less repair payments (non-GAAP)

   $ 273.5      $ 226.5  
  

 

 

    

 

 

 

Global Economic Conditions

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

The recent global outbreak and spread of the COVID-19 disease caused by the severe acute respiratory syndrome coronavirus 2, which was reported to have surfaced in December 2019, has caused a slowdown in the growth of the global economy. The global economy is entering a pronounced slowdown in 2022 after having shown some momentums of growth in 2021. The global spread of COVID-19 has created, and is likely to continue to create, significant volatility and uncertainty and economic disruption. Global prospects remain highly uncertain as the COVID-19 pandemic continues and economic recoveries diverge across countries and sectors, reflecting variation in pandemic-induced disruptions and the extent of policy support. In addition, volatility in the domestic politics of major markets may lead to changes in the institutional framework of the international economy.

In February 2022, a military conflict arose between Russia and Ukraine, with the latter being supported by countries in the NATO alliance as well as others around the globe, including imposition of financial and trade sanctions against Russia. Although the length, impact and outcome of the ongoing military conflict in Ukraine is highly unpredictable, this conflict could lead to significant market and other disruptions, including significant volatility in commodity prices, supply of energy resources, instability in financial markets, supply chain interruptions, political and social instability, changes in consumer or purchaser preferences as well as increase in cyberattacks and espionage. In the event the conflict continues or extends beyond Ukraine, together with reduction or stoppage of energy exports from Russia, the global economy could face a recessionary downturn. We have operations in Poland and Romania, which border Ukraine and are partly dependent on gas supplies from Russia for their energy needs. The economies of Poland and Romania may be materially and adversely affected in the event of any disruption of gas supplies or extension of the conflict beyond Ukraine. In addition, as a result of the ongoing military conflict, there is an increasing number of migrants in Poland and Romania. Such an influx of migrants could lead to rising inflations in these two countries, thereby resulting in an upward pressure on wages, which could have a material adverse effect on our operations in these two countries.

The withdrawal of the UK from the EU in January 2020, commonly referred to as “Brexit,” has also created significant political and economic uncertainty regarding the future trading relationship between the UK and the EU as well as other countries, such as the United States, Australia and New Zealand. In particular, the UK and the EU have ratified a trade and cooperation agreement governing their future relationship and the UK continues to negotiate agreements on specific areas of trade and economic arrangements with other countries. The UK-EU trade and cooperation agreement addresses trade, economic arrangements, law enforcement, judicial cooperation and a governance framework including procedures for dispute resolution, among other things. Because the agreement merely sets forth a framework in many respects and will require complex additional bilateral negotiations between the UK and the EU as both parties continue to work on the rules for implementation, significant political and economic uncertainty remains about how the precise terms of the relationship between the parties will differ from the terms before withdrawal. These developments, or the perception that any of them could occur, have had and may continue to have a material adverse effect on global economic conditions and financial markets, and may significantly reduce global market liquidity, restrict the ability of key market participants to operate in certain financial markets or restrict our access to capital. Any of these factors could have a material adverse effect on our business, financial condition, results of operations and cash flows.

 

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In many countries globally there are concerns over rising inflation and potential economic recession, including due to the impacts of the COVID-19 pandemic. In particular, any worsening of the ongoing labor shortage and ongoing rise in inflation could significantly weaken the economies. In parts of Europe and India where we operate, there are similar signs of continued economic slowdown and weakness. Sri Lanka, where we have operations, is facing a significant economic crisis resulting from rapidly depleting foreign reserves, a depreciating local currency and rising prices. Globally, countries have required and may continue to require additional financial support, sovereign credit ratings have declined and may continue to decline, and there may be default on sovereign debt obligations of certain countries. In addition, the U.S. Federal Reserve System and other regulatory bodies around the world may raise, or may announce intentions to raise, interest rates. Any of these global economic conditions may increase the cost of borrowing and cause credit to become more limited, which could have a material adverse effect on our business, financial condition, results of operations and cash flows. The global economic slowdown may be further prolonged by subsequent outbreaks of COVID-19 in countries which are taking, or which have taken, steps to ease lockdown measures; such outbreaks may require those countries to extend their lockdown measures or roll-back previous measures taken to facilitate the re-opening of their economies. For further information, see “Part III — Risk Factors — The global economic and geo-political conditions have been and continue to be challenging and have had, and may continue to have, an adverse effect on the financial markets and the economy in general, which has had, and may continue to have, a material adverse effect on our business, financial performance, results of operations and cash flows and the prices of our equity shares and ADSs.”

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

Furthermore, a weakening of the rate of exchange for the pound sterling, the US dollar or, to a lesser extent, the Australian dollar or the Euro (in which our revenue is principally denominated) against the Indian rupee, or to a lesser extent, the Philippine peso or the South African rand (in which a significant portion of our costs are denominated) would also adversely affect our results.

Fluctuations between the Indian rupee, the Philippine peso, the pound sterling, the South African rand, the Euro, or the Australian dollar, on the one hand, and the US dollar, on the other hand, also expose us to translation risk when transactions denominated in these currencies are translated into US dollars, our reporting currency. The exchange rates between each of the Indian rupee, the Philippine peso, the pound sterling, the South African rand, the Euro, and the Australian dollar, on the one hand, and the US dollar, on the other hand, have changed substantially in recent years and may fluctuate substantially in the future.

For example, the pound sterling depreciated against the US dollar by an average of 9.9%, the Australian dollar depreciated against the US dollar by an average of 7.1%, the Euro depreciated against the US dollar by an average of 11.5%, the Indian rupee depreciated against the US dollar by an average of 4.6%, the South African rand depreciated against the US dollar by an average of 9.9%, and the Philippine peso depreciated against the US dollar by an average of 9.3% for the three months ended June 30, 2022 as compared to the average exchange rates for the three months ended June 30, 2021.

The depreciation of the pound sterling, the Australian dollar, and the Euro, in each case against the US dollar for the three months ended June 30, 2022 as compared to the average exchange rates for the three months ended June 30, 2021 negatively impacted our results of operations during that period whereas the depreciation of the Philippine peso, the Indian rupee and the South African rand, in each case against the US dollar for the three months ended June 30, 2022 as compared to the average exchange rates for the three months ended June 30, 2021 positively impacted our results of operations during that period.

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

 

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Impact of COVID-19

The COVID-19 pandemic has had and is likely to continue to have a significant impact on the global economy, our clients’ businesses, and on our operations, financial performance and visibility of business outlook. It has required organizations around the world, including WNS, to re-think their business strategies around service delivery, workforce management, information technology, cyber security and data privacy. Despite recent progress in the administration of vaccines, the outbreak of recent variants, including Delta and Omicron, and the related mitigation measures that have been put into place across the globe, have had and are likely to continue to have a significant impact on the global economy and demand for our services from a number of our clients across industries, depending on the ability of each client, and the nature of their industries, products and services, in coping with the crisis. While our revenues have increased in first quarter of fiscal 2023, as compared to first quarter of fiscal 2022, our business has been, and we expect will continue to be, impacted across industry verticals as the COVID-19 pandemic continues to affect the global economy across industries.

We have seen, and we continue to see, deterioration in many of our clients’ businesses, and the outlook going forward remains uncertain and volatile. Our revenue has faced, and continues to face, pressure from declining clients’ demand volumes (as their businesses continue to be negatively impacted), delays in new business ramp-ups, and lockdowns and other measures imposed by governments around the world, which has resulted and continues to result in our temporary inability to meet the service level and performance requirements of our clients. We have also received, and continue to receive, client requests price reductions and discounts. However, for fiscal 2022 and the three months ended June 30, 2022, we experienced revenue improvement on a year-on-year basis. Such improvement was driven by broad-based revenue growth across verticals and service offerings and reduced COVID-19 headwinds. These benefits more than offset the impact of wage increases, increased facility-related and business continuity costs.

We have a business continuity planning mechanism in place and are actively working to understand our clients’ changing requirements, adapt delivery to a “work from home” model, ensure data security, prioritize critical processes, adjust service levels and manage discretionary costs (such as travel costs) and fixed costs (such as personnel costs). While travel restrictions have had a short-term impact on our ability to deliver our services, we have been working to reduce our reliance on travel by changing our business model to be able to conduct meetings using virtual conferencing and collaboration tools. Our “work from home” delivery capability steadily improved throughout fiscal 2021 and the first quarter of fiscal 2023, from delivering over 80% of our clients’ requirements in April 2020 to almost 100% of our clients’ requirements in the second, third and fourth quarters of fiscal 2022 and in the first quarter of fiscal 2023. In addition, we have also worked, and continue to work with national, state, and local authorities, so as to comply with applicable rules and regulations related to the COVID-19 pandemic.

Due to the need to ensure the continuity of our operations, the COVID-19 pandemic has required us to increase our expenses to ensure an adequate transition. For example, we have incurred costs as we significantly shifted towards a “work from home” model, where we purchased additional equipment (such as desktops and laptops) for our employees’ home use, software and internet connectivity devices, productivity enhancement technology tools, provided accommodation, meal and transportation allowances and overtime compensation to our employees and organized sanitization and cleaning of our offices and facilities. As a result of these early investments, we are now able to execute a “work from home” model for both existing and new clients. We expect that we will continue to require additional expenditures to meet evolving client requirements for flexible work arrangements and expanded services to support areas outside of their traditional business focus. We also expect that we will continue to incur additional costs to monitor and improve operational efficiency of our “work from home” model, invest in information technology solutions and security measures to safeguard against information security risks and incrementally transition to a hybrid “work from home” and office model on a limited basis as local restrictions ease and circumstances permit, including costs to implement safeguards to protect the health and safety of our employees as they gradually return to the office. We believe that these short-to-medium term costs incurred might benefit us in the long term, as these steps have broadened our “remote working” capabilities, which we expect to become an opportunity and a permanent feature in our future delivery strategy, as well as our business continuity plans, given that the COVID-19 pandemic has caused our clients to critically evaluate their business models and potentially adopt a shift towards BPM and a greater willingness to embrace digital transformation services and technology-enabled, automated process solutions.

In the short to medium term, we expect volatility to continue in the foreseeable future. We have observed demand reductions from a number of clients in a range of verticals, particularly travel and leisure, diversified businesses (especially manufacturing and retail) and utilities in fiscal 2021 and fiscal 2022, as compared to demand levels prior to the COVID-19 pandemic. However, beginning in June of fiscal 2021, we have observed a gradual resurgence of client engagement, particularly in the areas of competitive positioning and cost reduction, accelerating digital transformation and improving operational flexibility. In addition, we have experienced an increase in the number of clients, resulting in an increase in revenue in fiscal 2022, as compared to fiscal 2021.

 

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In the longer term, while we remain confident in our business and the quality of our services, the magnitude of the impact to our business and financial performance in fiscal 2023 and beyond will be a function of several factors, including, but not limited to, the following:

 

   

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

 

   

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

 

   

our ability to implement policies and measures to ensure the health and safety of our employees, such as conducting temperature screening for all personnel and visitors, ensuring adequate cleaning of our offices and facilities and having adequately aware and trained medical staff;

 

   

the impact and challenge of managing “remote working” arrangements on the effectiveness of our productivity or operating capability, especially for our employees working in India, the Philippines, South Africa and Sri Lanka, due to varying local governmental regulations, client requirements, size and scale of operations and technology or infrastructure issues, such as hardware access, software compatibility and internet connectivity;

 

   

the volatility in exchange rate movements; and

 

   

the duration of the COVID-19 pandemic globally and the duration that it will take for our clients’ businesses to stabilize and recover.

We continue to work closely with our clients to maximize our ability to service their rapidly changing business requirements.

We are continually evaluating the impact of the COVID-19 pandemic on our liquidity and financial position. As at June 30, 2022, we have cash and cash equivalents and investments of $373.5 million, unutilized lines of credit amounting to $60.5 million and short-term debt amounting to $31.7 million. Based on our current level of operations, we expect that our anticipated cash generated from operating activities, cash and cash equivalents on hand, and use of existing credit facilities will be sufficient to fund our debt repayment obligations, estimated capital expenditures, share repurchases and working capital needs for the next 12 months. However, under the current challenging economic and business conditions as discussed under “— Global Economic Conditions,” there can be no assurance that our business activity would be maintained at the expected level to generate the anticipated cash flows from operations. Also, see “— Liquidity and Capital Resources” for more information.

Further, in evaluating the recoverability of our trade receivables, including unbilled revenue, contract assets, goodwill, long lived assets and investments, we have considered the available internal and external information in the preparation of our consolidated financial statements. Having performed a sensitivity analysis based on the current assumptions and indicators of future economic conditions, we expect to recover the carrying amount of these assets. However; the impact of the COVID-19 pandemic may be different from the assumptions and estimates which we used and the scale and duration of COVID-19 related developments are unknown and could have macro and micro negative effects on the financial markets and global economy, which could in turn have a material adverse effect on our operations and financial results, earnings, cash flow and financial condition.

Following the COVID-19 pandemic, there is a possibility that more businesses globally will adopt delivery models with improved technology infrastructure, and incorporate elements of the “work from home” model. Countries may enact more flexible labor laws, which may potentially expand a company’s employee base to include a higher number of part-time and gig workers, such as independent contractors, online platform workers, contract firm workers and on-call workers. This may allow businesses such as ours to expand delivery models beyond the larger cities and into the smaller ones, for example, Tier 2 and Tier 3 cities in India.

For further information, see “Part III — Risk Factors — Our business operations and future growth have been, and may continue to be, negatively impacted on account of the COVID-19 pandemic.”

 

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Revenue

We generate revenue by providing BPM services to our clients. The following table shows our revenue (a GAAP financial measure) and revenue less repair payments (a non-GAAP financial measure) for the periods indicated:

 

     Three months ended
June 30,
     Change  
     (US dollars in millions)                
     2022      2021      $      %  

Revenue

   $ 295.3      $ 253.2        42.1        16.6 %

Revenue less repair payments (non-GAAP)

   $ 274.8      $ 236.3        38.6        16.3 %

Our revenue is characterized by client, industry, service type, geographic and contract type diversity, as the analysis below indicates.

Revenue by Top Clients

For the three months ended June 30, 2022 and 2021, the percentage of revenue and revenue less repair payments (non-GAAP) that we derived from our largest clients were in the proportions set forth in the following table:

 

     As a percentage of revenue     As a percentage of revenue less
repair payments (non-GAAP)
 
     Three months ended June 30,     Three months ended June 30,  
     2022     2021     2022     2021  

Top client

     7.3 %     7.6 %     7.8 %     8.1 %

Top five clients

     26.3 %     27.9 %     26.7 %     26.4 %

Top ten clients

     41.0 %     42.4 %     40.9 %     41.1 %

Top twenty clients

     55.0 %     58.9 %     54.4 %     56.1 %

 

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Revenue by Industry

For financial statement reporting purposes, we aggregate our operating segments, except for the WNS Auto Claims BPM (which we market under the WNS Assistance brand) as it does not meet the aggregation criteria under IFRS. See “Part I – Item 5. Operating and Financial Review and Prospects — Results by Reportable Segment” of our annual report on Form 20-F for our fiscal year ended March 31, 2022.

We organize our company into the following industry-focused business units to provide more specialized focus on each of these industries: insurance; healthcare; travel and leisure; diversified businesses (including manufacturing, retail, CPG, media and entertainment, and telecom); shipping and logistics; hi-tech and professional services; banking and financial services; and utilities.

For the three months ended June 30, 2022 and 2021, our revenue and revenue less repair payments (non-GAAP) were diversified across our industry-focused business units in the proportions set forth in the following table:

 

     As a percentage of revenue     As a percentage of revenue less
repair payments (non-GAAP)
 
     Three months ended June 30,     Three months ended June 30,  

Business Unit

   2022     2021     2022     2021  

Insurance

     28.3 %     30.1 %     23.0 %     25.1 %

Healthcare

     17.0 %     18.5 %     18.3 %     19.9 %

Travel and leisure

     16.3 %     13.0 %     17.5 %     13.9 %

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

     13.8 %     14.5 %     14.9 %     15.6 %

Shipping and logistics

     8.0 %     7.0 %     8.6 %     7.5 %

Hi-tech and professional services

     6.2 %     6.5 %     6.7 %     7.0 %

Banking and financial services

     5.8 %     5.9 %     6.3 %     6.3 %

Utilities

     4.6 %     4.5 %     4.7 %     4.7 %
  

 

 

   

 

 

   

 

 

   

 

 

 

Total

     100.0 %     100.0 %     100.0 %     100.0 %
  

 

 

   

 

 

   

 

 

   

 

 

 

 

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Certain services that we provide to our clients are subject to the seasonality of our clients’ business. Accordingly, we typically see an increase in transaction related services within the travel and leisure industry during holiday seasons, such as during the US summer holidays (our fiscal second quarter); an increase in business in the insurance industry during the beginning and end of the fiscal year (our fiscal first and last quarters) and during the US peak winter season (our fiscal third quarter); and an increase in business in the consumer product industry during the US festive season towards the end of the calendar year when new product launches and campaigns typically happen (our fiscal third quarter).

The impact of the COVID-19 pandemic has affected, and we expect it to continue to affect, the demand for our services across industries from a number of our clients, depending on the ability of each client, and the nature of their industries, products and services, in coping with the crisis. Our business has been, and we expect will be, impacted across industry verticals as the COVID-19 pandemic continues to affect the global economy across industries. For further information, see “— Global Economic Conditions — Impact of COVID-19.”

Revenue by Service Type

For the three months ended June 30, 2022 and 2021, our revenue and revenue less repair payments (non-GAAP) were diversified across service types in the proportions set forth in the following table:

 

     As a percentage of revenue     As a percentage of revenue less
repair payments (non-GAAP)
 
     Three months ended June 30,     Three months ended June 30,  

Service Type

   2022     2021     2022     2021  

Industry-specific

     37.6 %     40.4 %     40.4 %     43.3 %

Finance and accounting

     22.6 %     22.9 %     24.3 %     24.6 %

Customer experience services

     18.4 %     16.2 %     19.7 %     17.3 %

Research and analytics

     11.3 %     10.0 %     12.1 %     10.7 %

Auto claims

     7.8 %     8.0 %     1.0 %     1.4 %

Others (1)

     2.3 %     2.5 %     2.5 %     2.7 %
  

 

 

   

 

 

   

 

 

   

 

 

 

Total

     100.0 %     100.0 %     100.0 %     100.0 %