SEC Filing | WNS Holdings Ltd.

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Form 6-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 6-K

Report of Foreign Private Issuer

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

the Securities Exchange Act of 1934

For the quarter ended December 31, 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


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			43

Part III — RISK FACTORS			76

Part IV — OTHER INFORMATION			103

SIGNATURES			104

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 December 31, 2022. To the extent the IASB issues any amendments or any new standards subsequent to December 31, 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.

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.

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 December 31, 2022			As at March 31, 2022
ASSETS
Current assets:
Cash and cash equivalents		5	$	102,418		$	108,153
Investments		6		73,135			211,398
Trade receivables, net		7		119,961			100,522
Unbilled revenue		7		90,539			87,032
Funds held for clients				8,560			11,643
Derivative assets		14		11,119			10,351
Contract assets				11,629			10,169
Prepayments and other current assets		8		30,776			28,822

Total current assets				448,137			568,090
Non-current assets:
Goodwill		9		376,883			123,537
Intangible assets		10		149,373			65,421
Property and equipment		11		49,896			49,257
Right-of-use assets		12		161,100			142,623
Derivative assets		14		2,494			3,249
Deferred tax assets				44,218			34,765
Investments		6		74,200			93,442
Contract assets				48,507			39,833
Other non-current assets		8		52,036			44,275

Total non-current assets				958,707			596,402

TOTAL ASSETS			$	1,406,844		$	1,164,492

LIABILITIES AND EQUITY
Current liabilities:
Trade payables			$	23,280		$	27,829
Provisions and accrued expenses		16		37,901			36,752
Derivative liabilities		14		11,313			6,042
Pension and other employee obligations		15		93,413			105,768
Current portion of long-term debt		13		35,713			—
Contract liabilities		17		13,272			13,723
Current taxes payable				5,745			2,279
Lease liabilities		12		24,477			26,954
Other liabilities		18		27,703			11,351

Total current liabilities				272,817			230,698
Non-current liabilities:
Derivative liabilities		14		2,859			831
Pension and other employee obligations		15		19,131			16,238
Long-term debt		13		143,650			—
Contract liabilities		17		8,990			13,314
Lease liabilities		12		160,043			140,040
Other non-current liabilities		18		26,906			78
Deferred tax liabilities				30,054			9,290

Total non-current liabilities				391,633			179,791

TOTAL LIABILITIES			$	664,450		$	410,489

Shareholders’ equity:
Share capital (ordinary shares $0.16 (£0.10) par value, authorized 60,000,000 shares; issued: 48,138,073 shares and 48,849,907 shares; each as at December 31, 2022 and March 31, 2022, respectively)		19		7,663			7,751
Share premium				67,068			110,327
Retained earnings				917,078			818,402
Other reserves				4,884			2,656
Other components of equity				(254,299	)		(185,133	)

Total shareholders’ equity				742,394			754,003

TOTAL LIABILITIES AND EQUITY			$	1,406,844		$	1,164,492

See accompanying notes.

WNS (HOLDINGS) LIMITED

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME

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


			Three months ended December 31,						Nine months ended December 31,
	Notes		2022			2021			2022			2021
Revenue		20	$	306,927		$	284,113		$	909,374		$	810,979
Cost of revenue		21		198,059			187,498			599,471			538,481

Gross profit				108,868			96,615			309,903			272,498
Operating expenses:
Selling and marketing expenses		21		16,165			14,220			46,356			40,063
General and administrative expenses		21		42,150			37,100			125,676			109,560
Foreign exchange loss/(gain), net				128			(767	)		(3,358	)		(3,337	)
Amortization of intangible assets				6,482			2,898			14,741			8,594

Operating profit				43,943			43,164			126,488			117,618
Other income, net		23		(3,605	)		(3,283	)		(10,155	)		(9,806	)
Finance expense		22		4,973			3,293			12,219			10,262

Profit before income taxes				42,575			43,154			124,424			117,162
Income tax expense		25		7,900			8,823			23,520			23,936

Profit after tax			$	34,675		$	34,331		$	100,904		$	93,226

Earnings per ordinary share		26

Basic			$	0.72		$	0.70		$	2.09		$	1.91

Diluted			$	0.69		$	0.68		$	1.99		$	1.83

See accompanying notes.

WNS (HOLDINGS) LIMITED

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME/(LOSS)

(Amounts in thousands)


	Three months ended December 31,						Nine months ended December 31,
	2022			2021			2022			2021
Profit after tax	$	34,675		$	34,331		$	100,904		$	93,226
Other comprehensive (loss)/income, net of taxes
Items that will not be reclassified to profit or loss:
Pension adjustment, net of tax		(239	)		321			(481	)		455
Items that will be reclassified subsequently to profit or loss:
Changes in fair value of cash flow hedges:
Current period gain/(loss)		(12,640	)		2,767			(13,579	)		8,626
Net change in time value of option contracts designated as cash flow hedges		(196	)		649			(317	)		360
Reclassification to profit or loss		2,085			(1,049	)		790			(1,731	)
Foreign currency translation (loss)/gain		14,920			(3,475	)		(59,664	)		(17,240	)
Income tax (expense)/benefit relating to above		5,226			(94	)		4,085			(2,396	)

	$	9,395		$	(1,202	)	$	(68,685	)	$	(12,381	)

Total other comprehensive (loss)/income net of taxes	$	9,156		$	(881	)	$	(69,166	)	$	(11,926	)

Total comprehensive income	$	43,831		$	33,450		$	31,738		$	81,300

See accompanying notes.

WNS (HOLDINGS) LIMITED

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

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


																Other components of equity
	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)		519,261			72			(72	)		—			—			—			—			—		—			—			—
Purchase of treasury shares (Refer Note 19)		—			—			—			—			—			—			—			—		1,100,000			(85,148	)		(85,148	)
Cancellation of treasury shares (Refer Note 19)		(2,200,000	)		(302	)		(163,409	)		—			—			—			—			—		(2,200,000	)		163,711			—
Share-based compensation expense (Refer Note 24)		—			—			34,345			—			—			—			—			—		—			—			34,345
Excess tax benefits relating to share-based options and RSUs		—			—			2,023			—			—			—			—			—		—			—			2,023
Transfer to other reserves		—			—			—			(4,187	)		4,187			—			—			—		—			—			—
Transfer from other reserves on utilization		—			—			—			2,333			(2,333	)		—			—			—		—			—			—

Transactions with owners		(1,680,739	)		(230	)		(127,113	)		(1,854	)		1,854			—			—			—		(1,100,000	)		78,563			(48,780	)

Profit after tax		—			—			—			93,226			—			—			—			—		—			—			93,226
Other comprehensive income/(loss), net of taxes		—			—			—			—			—			(17,240	)		4,859			455		—			—			(11,926	)

Total comprehensive income/(loss) for the period		—			—			—			93,226			—			(17,240	)		4,859			455		—			—			81,300

Balance as at December 31, 2021		48,821,464		$	7,747		$	100,595		$	780,329		$	1,854		$	(177,918	)	$	2,977		$	1,028		—		$	—		$	716,612

See accompanying notes.

WNS (HOLDINGS) LIMITED

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

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


																Other components of equity
	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, 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)		388,166			47			(79	)		—			—			—			—			—			—			—			(32	)
Purchase of treasury shares (Refer Note 19)		—			—			—			—			—			—			—			—			1,100,000			(81,631	)		(81,631	)
Cancellation of treasury shares (Refer Note 19)		(1,100,000	)		(135	)		(81,496	)		—			—			—			—			—			(1,100,000	)		81,631			—
Transaction charges on cancellation of treasury shares (Refer Note 19)		—			—			(55	)		—			—			—			—			—			—			—			(55	)
Share-based compensation expense (Refer Note 24)		—			—			37,953			—			—			—			—			—			—			—			37,953
Excess tax benefits relating to share-based options and RSUs		—			—			418			—			—			—			—			—			—			—			418
Transfer to other reserves		—			—			—			(3,478	)		3,478			—			—			—			—			—			—
Transfer from other reserves on utilization		—			—			—			1,250			(1,250	)		—			—			—			—			—			—

Transactions with owners		(711,834	)		(88	)		(43,259	)		(2,228	)		2,228			—			—			—			—			—			(43,347	)

Profit after tax		—			—			—			100,904			—			—			—			—			—			—			100,904
Other comprehensive income/(loss), net of taxes		—			—			—			—			—			(59,664	)		(9,021	)		(481	)		—			—			(69,166	)

Total comprehensive income/(loss) for the period		—			—			—			100,904			—			(59,664	)		(9,021	)		(481	)		—			—			31,738

Balance as at December 31, 2022		48,138,073		$	7,663		$	67,068		$	917,078		$	4,884		$	(248,651	)	$	(6,886	)	$	1,238			—		$	—		$	742,394

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

See accompanying notes.

WNS (HOLDINGS) LIMITED

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Amounts in thousands)


	Notes			Nine months ended December 31,
				2022			2021
Cash flows from operating activities:
Cash generated from operations				$	157,591		$	154,231
Income taxes paid, net					(29,037	)		(26,612	)
Interest paid					(10,137	)		(10,323	)
Interest received					2,215			2,237

Net cash provided by operating activities					120,632			119,533

Cash flows from investing activities:
Acquisition of The Smart Cube, net of cash acquired		4	(a)		(99,684	)		—
Acquisition of Optibuy, net of cash acquired		4	(b)		(25,046	)		—
Payment for business transfer (from a large insurance company)		4	(c)		(44,000	)		—
Acquisition of Vuram, net of cash acquired		4	(d)		(144,173	)		—
Acquisition of MOL IPS, net of cash acquired		4	(f)		(17	)		(2,310	)
Payment for business transfer (CEPROCS)		4	(e)		—			(566	)
Payment for property and equipment and intangible assets					(30,236	)		(20,890	)
Investment in fixed deposits					(72,553	)		(68,827	)
Proceeds from maturity of fixed deposits					93,641			55,016
Proceeds from sale of property and equipment					507			308
Profit on sale of marketable securities					7,279			2,022
Marketable securities sold, net (short-term)					112,087			11,598
Proceeds from sale of marketable securities (long-term)					12,272			—

Net cash used in investing activities					(189,923	)		(23,649	)

Cash flows from financing activities:
Payment for repurchase of shares					(81,631	)		(85,038	)
Payment of transaction charges towards exercise of RSUs					(32	)		—
Transaction charges on cancellation of treasury shares					(55	)		(110	)
Proceeds from short-term line of credit					31,708			—
Repayment of short-term line of credit					(31,418	)		—
Proceeds from long-term debt					180,936			—
Payment of debt issuance cost					(508	)		—
Repayment of long-term debt					—			(8,400	)
Principal payment of lease liabilities					(19,238	)		(20,378	)
Excess tax benefit from share-based compensation expense					606			953

Net cash provided by/(used in) financing activities					80,368			(112,973	)

Exchange difference on cash and cash equivalents					(16,812	)		(5,107	)
Net change in cash and cash equivalents					(5,735	)		(22,196	)
Cash and cash equivalents at the beginning of the period					108,153			105,633

Cash and cash equivalents at the end of the period				$	102,418		$	83,437

Non-cash transactions:
Investing activities
(i) Liability towards property and equipment and intangible assets purchased on credit				$	6,627		$	5,513
(ii) Contingent consideration payable towards acquisition		18			43,540			—
(iii) Deferred consideration payable towards acquisition of MOL IPS		4(f)			476			493

See accompanying notes.

Reconciliation of liabilities arising from financing activities as at December 31, 2022 and December 31, 2021 is as follows:


					Non-cash changes
	Opening balance April 1, 2022		Cash flows, net of debt issuance cost		Debt issuance cost accrued, net of amortization			Translation			Closing balance December 31, 2022
Long-term debt (including current portion)	$	—	$	180,428	$	(551	)	$	(514	)	$	179,363


						Non-cash changes
	Opening balance April 1, 2021		Cash flows			Amortization of debt issuance cost		Closing balance December 31, 2021
Long-term debt (including current portion)	$	16,748	$	(8,400	)	$	45	$	8,393

*	For reconciliation of lease liabilities, refer Note 12.

WNS (HOLDINGS) LIMITED

NOTES TO UNAUDITED CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

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

1.	Company overview

WNS (Holdings) Limited (“WNS Holdings”), along with its subsidiaries (collectively, “the Company”), is a global business process management (“BPM”) company with client service offices in Sydney (Australia), Canada, Dubai (United Arab Emirates), Germany, London (UK), New Jersey (US), Mexico, Netherlands, New Zealand, Singapore, and Switzerland and delivery centers in Canada, 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 February 9, 2023.

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.

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.

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, 2024 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.

WNS (HOLDINGS) LIMITED

NOTES TO UNAUDITED CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

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

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

•

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.

WNS (HOLDINGS) LIMITED

NOTES TO UNAUDITED CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

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

4.	Business Combinations

The Smart Cube Limited (UK) (“The Smart Cube”)

On December 16, 2022 (“Acquisition date”), the Company acquired all ownership interests of The Smart Cube Limited (UK) and its subsidiaries (“The Smart Cube”), which provide digitally led market intelligence and analytics solutions in four key areas including procurement and supply chain, commercial sales and marketing, digital and analytics, and strategy and investment research. The acquisition was for a total consideration of $121,883, subject to adjustments for cash and working capital, including a contingent consideration of $15,494, payable over a period of 2 years and 5 months linked to The Smart Cube’s target revenues and adjusted EBITDA (with certain adjustments) as specified in the acquisition agreement. The fair value of the contingent consideration liability was estimated using Level 3 inputs which included an assumption for discount rate of 5.50%. The potential undiscounted amount for all future payments that the Company could be required to make under the contingent consideration arrangement is between $0 and $17,286. Further, deferred earn out of $4,913 is payable over a period of 2 years and 5 months commencing from the Acquisition date, subject to continued employment. The Company has funded the acquisition primarily with a five year secured term loan.

The Company incurred acquisition related costs of $1,227, which have been included in “General and administrative expenses” in the consolidated statement of income.

The provisional accounting pending allocation under IFRS 3, “Business Combinations” is as follows:


	Amount
Net assets acquired	$	13,393
Less: Purchase consideration		(121,883	)

Goodwill on acquisition	$	108,490

Impact of acquisition on the results of the Company:

The acquisition of The Smart Cube contributed $1,670 to the Company’s revenue for the three months ended December 31, 2022, and $372 to the Company’s profit after tax for the three months ended December 31, 2022.

Optibuy sp. z.o.o. (“Optibuy”)

On December 14, 2022 (“Acquisition date”), the Company acquired all ownership interests of Optibuy sp. z.o.o. and its subsidiaries (“Optibuy”), which helps clients leverage the capabilities of leading third-party procurement and supply chain platforms and also provides consulting, optimization, outsourcing, training services and implementation solutions to their clients. The acquisition was for a total consideration of Euro 30,307 ($31,890, based on the exchange rate on December 14, 2022), subject to adjustments for cash and working capital, including a contingent consideration of Euro 5,635 ($5,929), payable over a period of 2 years 3 months commencing from the Acquisition date linked to target adjusted EBITDA (with certain adjustments) as specified in the acquisition agreement. The fair value of the contingent consideration liability was estimated using Level 3 inputs which included an assumption for discount rate of 5.50%. The potential undiscounted amount for all future payments that the Company could be required to make under the contingent consideration arrangement and deferred consideration is between Euro 0 and Euro 6,000 ($0 and $6,313, based on the exchange rate on December 14, 2022). Further, deferred earn out of Euro 1,000 ($1,052) is payable over a period of 2 years and 3 months commencing from the Acquisition date, subject to continued employment. The Company has funded the acquisition with cash on hand.

The Company incurred acquisition related costs of $325, which have been included in “General and administrative expenses” in the consolidated statement of income.

The provisional accounting pending allocation under IFRS 3, “Business Combinations” is as follows:


	Amount
Net assets acquired	$	3,043
Less: Purchase consideration		(31,890	)

Goodwill on acquisition	$	28,847

Impact of acquisition on the results of the Company:

The acquisition of Optibuy contributed $293 to the Company’s revenue for the three months ended December 31, 2022, and $92 to the Company’s profit after tax for the three months ended December 31, 2022.

Payment for business transfer (from a large insurance company)

The Company entered into an agreement with a large insurance company, effective October 18, 2022 (“Acquisition Date”) under which the Company has acquired the contract and capabilities in the form of licensed resources (organized workforce) including the underlying operational process manuals. The purchase price of the transaction, which was paid with cash on hand, was $44,000.

The purchase price has been allocated on a provisional basis, as set out below:


	Amount
Intangible assets
- Customer contracts	$	37,890
Deferred tax liabilities		(9,300	)

Net assets acquired		28,590
Less: Purchase consideration		(44,000	)

Goodwill on acquisition	$	15,410

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

WNS (HOLDINGS) LIMITED

NOTES TO UNAUDITED CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

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

Vuram Technology Solutions Private Limited (“Vuram”)

On July 1, 2022 (“Acquisition date”), the Company acquired all ownership interests of Vuram, which 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 and financial services, insurance, and healthcare verticals. The Company is expected to leverage Vuram’s capability to accelerate new client transformation programs and enhance ongoing productivity improvements for existing engagements.

The Company paid a total consideration of $170,347, including cash and working capital adjustments of $(141) and a contingent consideration of $21,670, payable over a period of 18 months commencing from the Acquisition date linked to Vuram’s target revenues and adjusted EBITDA (with certain adjustments) as specified in the acquisition agreement, for the acquisition. The fair value of the contingent consideration liability was estimated using Level 3 inputs which included an assumption for discount rate of 2.75%. The potential undiscounted amount for all future payments that the Company could be required to make under the contingent consideration arrangement is between $0 and $22,300. Further, deferred earn out of $2,700 is payable over a period of 18 months commencing from the Acquisition date, subject to continued employment. The Company has funded the acquisition with cash on hand.

The Company incurred acquisition related costs of $143, which have been included in “General and administrative expenses” in the consolidated statement of income.

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
Cash	$	4,670
Investments		11,235
Trade receivables		6,738
Unbilled revenue		705
Prepayment and other current assets		1,633
Property and equipment		707
Right-of-use assets		1,498
Intangible assets
- Customer relationships		45,331
- Customer contracts		5,267
- Covenant not-to-compete		5,001
- Software & Trade name		92
Non-current assets		375
Deferred tax assets		632
Current liabilities		(7,799	)
Non-current liabilities		(1,265	)
Lease liabilities		(1,470	)
Deferred tax liabilities		(13,717	)

Net assets acquired		59,633
Less: Purchase consideration		(170,347	)

Goodwill on acquisition	$	110,714

Goodwill is attributable mainly to expected synergies and assembled workforce arising from the acquisition. Goodwill arising from this acquisition is not expected to be deductible for tax purposes.

The purchase consideration has been allocated on a provisional basis based on management’s estimates. The Company is in the process of making a final determination of the fair value of assets and liabilities. Finalization of the purchase price allocation may result in certain adjustments to the above allocation and revision of amounts recorded as of December 31, 2022 to reflect the final valuation of assets acquired or liabilities assumed.

WNS (HOLDINGS) LIMITED

NOTES TO UNAUDITED CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

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

Impact of acquisition on the results of the Company:

The acquisition of Vuram contributed $7,772 to the Company’s revenue for the three months ended December 31, 2022, and $1,959 to the Company’s profit for the three months ended December 31, 2022.

Impact of all acquisitions on the results of the Company:

Had the acquisitions occurred on April 1, 2022, the Company’s revenue and profit after tax for the nine months ended December 31, 2022 would have been $947,724 (unaudited) and $108,901 (unaudited), respectively.

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 with cash on hand, 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.

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 nine months ended December 31, 2022, the Company paid $17 to the seller as part of the purchase consideration.

The Company has completed the accounting of the assets acquired and liabilities assumed on acquisition. The purchase price has been allocated, 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.

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
	December 31,		March 31,
	2022		2022
Cash and bank balances	$	71,714	$	78,578
Short-term deposits with banks*		30,704		29,575

Total	$	102,418	$	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
	December 31,		March 31,
	2022		2022
Investments in marketable securities and mutual funds	$	121,390	$	263,013
Investment in fixed deposits		25,945		41,827

Total	$	147,335	$	304,840


	As at
	December 31, 2022		March 31, 2022
Current investments	$	73,135	$	211,398
Non-current investments		74,200		93,442

Total	$	147,335	$	304,840

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
	December 31,			March 31,
	2022			2022
Trade receivables and unbilled revenue*	$	212,729		$	189,952
Less: Allowances for expected credit losses (“ECL”)		(2,229	)		(2,398	)

Total	$	210,500		$	187,554

*	As at December 31, 2022 and March 31, 2022, unbilled revenue included contract assets amounting to $924 and $246, respectively.

The movement in the ECL is as follows:


	Three months ended December 31,						Nine months ended December 31,
	2022			2021			2022			2021
Balance at the beginning of the period		2,043			2,247			2,398			1,590
Charged to consolidated statement of income		108			195			278			1,249
Write-offs, net of collections		(7	)		(43	)		(15	)		(380	)
Reversals		(15	)		(25	)		(247	)		(228	)
Translation adjustment		100			135			(185	)		278

Balance at the end of the period	$	2,229		$	2,509		$	2,229		$	2,509

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
	December 31, 2022		March 31, 2022
Current:
Service tax and other tax receivables	$	7,377	$	8,833
Employee receivables		1,456		1,045
Advances to suppliers		1,608		2,987
Prepaid expenses		14,190		10,169
Other assets		6,145		5,788

Total	$	30,776	$	28,822


Non-current:
Deposits	$	11,412	$	11,263
Income tax assets		16,822		15,068
Service tax and other tax receivables		16,432		13,079
Other assets		7,370		4,865

Total	$	52,036	$	44,275

9.	Goodwill

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


	As at
	December 31,			March 31,
	2022			2022
Gross carrying amount	$	401,884		$	150,684
Accumulated impairment of goodwill		(25,001	)		(27,147	)

Total	$	376,883		$	123,537

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

Gross carrying amount


	WNS			WNS Auto
	Global BPM			Claims BPM			Total
Balance as at April 1, 2021	$	123,979		$	28,480		$	152,459
Goodwill arising on acquisitions (Refer Note 4(e), 4(f))		1,312			—			1,312
Translation adjustment		(1,754	)		(1,333	)		(3,087	)

Balance as at March 31, 2022	$	123,537		$	27,147		$	150,684

Goodwill arising on acquisitions (Refer Note 4(a), 4(b), 4(c), 4(d))		263,461			—			263,461
Translation adjustment		(10,115	)		(2,146	)		(12,261	)

Balance as at December 31, 2022	$	376,883		$	25,001		$	401,884

Accumulated impairment losses


	WNS		WNS Auto
	Global BPM		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		—		(2,146	)		(2,146	)

Balance as at December 31, 2022	$	—	$	25,001		$	25,001

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 nine months ended December 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, 2022	$	156,163		$	121,052		$	4,312		$	638		$	5,947		$	1,835	$	9,065		$	400	$	63,219		$	362,631
Additions		—			—			—			—			—			—		—			—		7,890			7,890
On acquisitions (Refer Note 4(a), 4(b), 4(c), and 4(d))		43,157			45,331			—			8			—			—		5,001			—		1,488			94,985
Translation adjustments		(6,249	)		(3,509	)		(321	)		(8	)		(92	)		—		(460	)		—		(6,272	)		(16,911	)

Balance as at December 31, 2022	$	193,071		$	162,874		$	3,991		$	638		$	5,855		$	1,835	$	13,606		$	400	$	66,325		$	448,595

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		3,361			4,835			—			—			567			—		808			—		5,170			14,741
Translation adjustments		(5,998	)		(1,291	)		(321	)		(8	)		(80	)		—		(229	)		—		(4,802	)		(12,729	)

Balance as at December 31, 2022	$	153,133		$	83,374		$	3,991		$	630		$	4,452		$	1,835	$	9,644		$	—	$	42,163		$	299,222

Net carrying value as at December 31, 2022	$	39,938		$	79,500		$	—		$	8		$	1,403		$	—	$	3,962		$	400	$	24,162		$	149,373

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(e), 4(f))		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

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 nine months ended December 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, 2022	$	9,591		$	87,574		$	82,642		$	784		$	72,704		$	253,295
Additions		—			6,716			4,824			—			5,313			16,853
On acquisitions (Refer Note 4(a), 4(b), 4(d))		8			448			342			104			298			1,200
Disposals/retirements		—			(3,618	)		(1,696	)		—			(441	)		(5,755	)
Translation adjustments		(327	)		(7,112	)		(6,460	)		(74	)		(5,982	)		(19,955	)

Balance as at December 31, 2022	$	9,272		$	84,008		$	79,652		$	814		$	71,892		$	245,638

Accumulated depreciation
Balance as at April 1, 2022	$	6,338		$	69,574		$	70,966		$	764		$	59,469		$	207,111
Depreciation		353			7,256			3,951			37			4,087			15,684
Disposals/retirements		—			(3,561	)		(1,684	)		—			(431	)		(5,676	)
Translation adjustments		(221	)		(5,652	)		(5,539	)		(68	)		(5,055	)		(16,535	)

Balance as at December 31, 2022	$	6,470		$	67,617		$	67,694		$	733		$	58,070		$	200,584

Capital work-in-progress																	4,842

Net carrying value as at December 31, 2022																$	49,896

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(e), 4(f))		—			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

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 nine months ended December 31, 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		31,452			—			—			90			31,542
On acquisition (Refer Note 4(a), 4(b), 4(d))		3,468			—			—			—			3,468
Terminations/modifications		16,614			(35	)		—			(11	)		16,568
Translation adjustments		(18,651	)		(5	)		(1	)		(44	)		(18,701	)

Balance as at December 31, 2022	$	253,068		$	—		$	23		$	848		$	253,939

Accumulated depreciation
Balance as at April 1, 2022	$	77,834		$	40		$	19		$	546		$	78,439
Depreciation		21,130			—			1			79			21,210
Terminations/modifications		(160	)		(35	)		—			(11	)		(206	)
Translation adjustments		(6,565	)		(5	)		(1	)		(33	)		(6,604	)

Balance as at December 31, 2022	$	92,239		$	—		$	19		$	581		$	92,839

Net carrying value as at December 31, 2022	$	160,829		$	—		$	4		$	267		$	161,100

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(f))		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

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 nine months ended December 31, 2022 and for the year ended March 31, 2022 is as follows:


Lease liabilities	December 31, 2022			March 31, 2022
Opening balance	$	166,994		$	191,907
Cash outflows
Principal payment of lease liabilities		(19,238	)		(26,235	)
Interest payment on lease liabilities		(9,130	)		(12,826	)
Non-cash adjustments
Additions		30,100			5,403
On acquisition (Refer Note 4(a), 4(b), 4(d), 4(f))		3,392			1,521
Terminations/modifications		16,913			2,282
Interest accrued		9,582			12,657
Rent concessions		—			(21	)
Translation adjustments		(14,093	)		(7,694	)

Closing balance	$	184,520		$	166,994

Rental expense charged for short-term leases was $186 and $579, rental expense charged for low value leases was $26 and $44 and variable lease payments was $722 and $1,565, for the three and nine months ended December 31, 2022, respectively.

Rental expense charged for short-term leases was $487 and $750, rental expense charged for low value leases was $4 and $39 and variable lease payments was $472 and $1,315, for the three and nine months ended December 31, 2021, respectively.

The Company has applied practical expedient for rent concessions as a direct consequence of the COVID-19 pandemic and recognized Nil in its consolidated income statement for the three and nine months ended December 31, 2022, respectively, and $5 and $24 in its consolidated income statement for the three and nine months ended December 31, 2021, respectively.

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


	As at
Tenure	December 31, 2022		March 31, 2022
Less than 1 year	$	36,971	$	37,330
1-3 years		70,667		67,177
3-5 years		51,221		49,449
More than 5 years		90,214		62,234

Total	$	249,073	$	216,190

WNS (HOLDINGS) LIMITED

NOTES TO UNAUDITED CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

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

13.

Loans and borrowings

Long-term debt

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


	Interest rate			Final maturity (fiscal year)		As at
Currency	Interest rate			Final maturity (fiscal year)		December 31, 2022			March 31, 2022
US dollars		SOFR + 1.20	%		2028		80,000			—
Sterling Pound		SONIA + 1.25	%		2028		100,422

Total							180,422			—
Less: Debt issuance cost							(1,059	)		—

Total							179,363			—

Current portion of long-term debt						$	35,713		$	—
Long-term debt						$	143,650		$	—

In July 2022, the Company obtained a term loan facility of $80,000 from The Hongkong and Shanghai Banking Corporation Limited, Hong Kong and Citibank N.A., Hong Kong Branch 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 Company has pledged its shares of WNS (Mauritius) Limited as security for the loan. The facility agreement for the term loan contains certain financial covenants as defined in the facility agreement.

This term loan is repayable in 10 semi-annual instalments of $8,000 each. On January 9, 2023, the Company made the first scheduled repayment of $8,000. As at December 31, 2022, the Company has complied with the financial covenants in all material respects in relation to this loan facility.

In December 2022, the Company obtained a term loan facility of £83,000 ($100,422 based on the exchange rate on December 31, 2022) from The Hongkong and Shanghai Banking Corporation Limited, Hong Kong and Citibank N.A., UK Branch to acquire The Smart Cube. The loan bears interest at a rate equivalent to the Sterling overnight index average (“SONIA”) plus a margin of 1.25% per annum. The Company has pledged its shares of WNS (Mauritius) Limited as security for the loan. The facility agreement for the term loan contains certain financial covenants as defined in the facility agreement. This term loan is repayable in 10 semi-annual instalments of £8,300 each. The first scheduled repayment is in June 2023. As at December 31, 2022, the Company has complied with the financial covenants in all material respects in relation to this loan facility.

Short-term lines of credit

The Company has unsecured lines of credit with banks in India amounting to $65,156 (based on the exchange rate on December 31, 2022). The Company has also established a line of credit in the UK amounting to $16,939 (based on the exchange rate on December 31, 2022). The Company has also established a line of credit in North America amounting to $40,000. The Company has also established a line of credit in the Philippines amounting to $15,000. In addition, the Company has also established a line of credit in South Africa amounting to $1,763 (based on the exchange rate on December 31, 2022).

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 December 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	$	102,418	$	—	$	—	$	102,418	$	102,418
Investment in fixed deposits		25,945		—		—		25,945		25,945
Investments in marketable securities and mutual funds		—		121,390		—		121,390		121,390
Trade receivables		119,961		—		—		119,961		119,961
Unbilled revenue⁽¹⁾		89,615		—		—		89,615		89,615
Funds held for clients		8,560		—		—		8,560		8,560
Prepayments and other assets⁽²⁾		6,869		—		—		6,869		6,869
Other non-current assets⁽³⁾		15,593		—		—		15,593		15,593
Derivative assets		—		5,653		7,960		13,613		13,613

Total carrying value	$	368,961	$	127,043	$	7,960	$	503,964	$	503,964

Financial liabilities


	Financial liabilities at amortized cost		Financial liabilities at FVTPL		Financial liabilities at FVOCI		Total carrying value		Total fair Value
Trade payables	$	23,280	$	—	$	—	$	23,280	$	23,280
Long-term debt (includes current portion)⁽⁴⁾		180,422		—		—		180,422		180,422
Other employee obligations⁽⁵⁾		85,312		—		—		85,312		85,312
Provisions and accrued expenses		37,901		—		—		37,901		37,901
Lease liabilities		184,520		—		—		184,520		184,520
Other liabilities⁽⁶⁾		2,235		43,540		—		45,775		45,775
Derivative liabilities		—		1,389		12,783		14,172		14,172

Total carrying value	$	513,670	$	44,929	$	12,783	$	571,382	$	571,382

Notes:

(1)	Excluding non-financial assets $924.

(2)	Excluding non-financial assets $23,907.

(3)	Excluding non-financial assets $36,443.

(4)	Excluding non-financial asset (unamortized debt issuance cost) of $1,059.

(5)	Excluding non-financial liabilities $27,232.

(6)	Excluding non-financial liabilities $8,834.

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.

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 December 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
Description of types of financial assets	Gross amounts of recognized financial assets						Financial Instruments			Cash collateral received		Net Amount
Derivative assets	$	13,613	$	—	$	13,613	$	(6,643	)	$	—	$	6,970

Total	$	13,613	$	—	$	13,613	$	(6,643	)	$	—	$	6,970


Description of types of financial liabilities	Gross amounts of recognized financial liabilities		Gross amounts of recognized financial assets offset in the statement of financial position		Net amounts of financial liabilities presented in the statement of financial position		Related amount not set off in financial instruments					Net Amount
Description of types of financial liabilities	Gross amounts of recognized financial liabilities						Financial instruments			Cash collateral pledged		Net Amount
Derivative liabilities	$	14,172	$	—	$	14,172	$	(6,643	)	$	—	$	7,529

Total	$	14,172	$	—	$	14,172	$	(6,643	)	$	—	$	7,529

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

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 December 31, 2022 are as follows:


			Fair value measurement at reporting date using
Description	December 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	$	5,653	$	—	$	5,653	$	—
Investments in marketable securities and mutual funds		121,390		121,039		351		—
Financial assets at FVOCI
Foreign exchange contracts		7,960		—		7,960		—

Total assets	$	135,003	$	121,039	$	13,964	$	—

Liabilities
Financial liabilities at FVTPL
Foreign exchange contracts	$	1,389	$	—	$	1,389	$	—
Contingent consideration		43,540		—		—		43,540
Financial liabilities at FVOCI
Foreign exchange contracts		12,783		—		12,783		—

Total liabilities	$	57,712	$	—	$	14,172	$	43,540

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 nine months ended December 31, 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).

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 and foreign exchange option contracts:


	As at
	December 31, 2022		March 31, 2022
Forward contracts (Sell)
In US dollars	$	340,688	$	316,651
In Pound Sterling		116,735		99,006
In Euro		30,228		21,811
In Australian dollars		24,635		27,290
Others		20,224		20,406

	$	532,510	$	485,164

Option contracts (Sell)
In US dollars	$	239,109	$	204,773
In Pound Sterling		99,453		88,899
In Euro		35,302		26,147
In Australian dollars		33,742		38,004

	$	407,606	$	357,823

The amount of gain/(loss) reclassified from other comprehensive income into consolidated statement of income in respective line items for the three and nine months ended December 31, 2022 and 2021 are as follows:


	Three months ended December 31,						Nine months ended December 31,
	2022			2021			2022			2021
Revenue	$	(2,085	)	$	1,088		$	(790	)	$	1,825
Foreign exchange gain/(loss), net		—			—			—			93
Finance expense		—			(39	)		—			(187	)
Income tax related to amounts reclassified into consolidated statement of income		(50	)		(388	)		(1,602	)		(496	)

Total	$	(2,135	)	$	661		$	(2,392	)	$	1,235

As at December 31, 2022, a loss amounting to $6,886 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 for the three months ended December 31, 2022 and 2021 a gain of Nil and Nil, respectively, and for the nine months ended December 31, 2022 and 2021 a gain of Nil and $93, respectively.

WNS (HOLDINGS) LIMITED

NOTES TO UNAUDITED CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

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

15.

Pension and other employee obligations

Pension and other employee obligations consist of the following:


	As at
	December 31, 2022		March 31, 2022
Current:
Salaries and bonus	$	81,562	$	93,210
Pension		906		1,365
Withholding taxes on salary and statutory payables		10,945		11,193

Total	$	93,413	$	105,768

Non-current:
Pension and other obligations	$	19,131	$	16,238

Total	$	19,131	$	16,238

16.

Provisions and accrued expenses

Provisions and accrued expenses consist of the following:


	As at
	December 31, 2022		March 31, 2022
Accrued expenses		37,901		36,752

Total	$	37,901	$	36,752

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
	December 31, 2022		March 31, 2022
Current:
Payments in advance of services	$	8,702	$	8,344
Advance billings		4,370		5,081
Others		200		298

Total	$	13,272	$	13,723


	As at
	December 31, 2022		March 31, 2022
Non-current:
Payments in advance of services	$	7,795	$	12,072
Advance billings		1,181		1,226
Others		14		16

Total	$	8,990	$	13,314

18.

Other liabilities

Other liabilities consist of the following:


	As at
	December 31, 2022		March 31, 2022
Current:
Withholding taxes and value added tax payables	$	7,405	$	8,164
Contingent consideration (Refer Note 4(a), 4(b), 4(d))		16,785		—
Other liabilities		3,513		3,187

Total	$	27,703	$	11,351

Non-current:
Contingent consideration (Refer Note 4(a), 4(b), 4(d))		26,755		—
Other liabilities		151		78

Total	$	26,906	$	78

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 December 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 48,138,073 ordinary shares (excluding Nil treasury shares) outstanding as at December 31, 2022. There were no preferred shares outstanding as at December 31, 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 nine months ended December 31, 2022, the Company purchased 1,100,000 ADSs in the open market for a total consideration of $81,631 (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 nine months ended December 31, 2022, the Company received authorization from the Board of Directors to cancel, and cancelled, 1,100,000 ADSs that were held as treasury shares for an aggregate cost of $81,686 (including share cancellation charges $55). The effect of the cancellation of these treasury shares was recognized in share capital amounting to $135 and in share premium amounting to $81,551, in compliance with Jersey law. There was no effect on the total shareholders’ equity as a result of this cancellation.

WNS (HOLDINGS) LIMITED

NOTES TO UNAUDITED CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

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

20.

Revenue

Disaggregation of revenue

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

Revenue by service type


	Three months ended December 31,				Nine months ended December 31,
	2022		2021		2022		2021
Industry-specific	$	113,913	$	109,495	$	337,659	$	319,474
Finance and accounting		71,361		63,097		209,008		181,341
Customer experience services		60,337		47,232		174,773		135,986
Research and analytics		31,433		30,602		94,464		83,999
Auto claims		15,976		26,554		59,158		69,690
Others		13,907		7,133		34,312		20,489

Total	$	306,927	$	284,113	$	909,374	$	810,979

Revenue by industry


	Three months ended December 31,				Nine months ended December 31,
	2022		2021		2022		2021
Insurance*	$	79,260	$	86,875	$	245,409	$	243,766
Travel and leisure		52,109		42,969		154,640		115,801
Healthcare		50,051		51,017		149,366		146,481
Diversified businesses including manufacturing, retail, CPG, media and entertainment, and telecom		44,125		35,802		128,764		110,112
Shipping and logistics		23,145		22,407		68,464		62,370
Banking and financial services		21,714		15,561		60,016		46,476
Hi-tech and professional services		20,586		17,082		59,281		50,759
Utilities		15,937		12,400		43,434		35,214

Total	$	306,927	$	284,113	$	909,374	$	810,979

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

Revenue by contract type


	Three months ended December 31,				Nine months ended December 31,
	2022		2021		2022		2021
Full-time-equivalent	$	207,495	$	177,702	$	607,254	$	512,979
Transaction*		42,506		49,406		136,693		136,736
Subscription		25,670		26,190		75,798		77,756
Fixed price		17,655		17,766		50,448		44,628
Others		13,601		13,049		39,181		38,880

Total	$	306,927	$	284,113	$	909,374	$	810,979

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

Revenue by geography

Refer Note 28 — Operating segments — External revenue.

Revenue by delivery location


	Three months ended December 31,				Nine months ended December 31,
	2022		2021		2022		2021
India	$	160,225	$	143,250	$	467,009	$	406,630
United States		47,704		42,996		140,830		123,568
Philippines		40,252		36,731		121,411		103,310
UK*		24,312		34,070		83,031		92,041
South Africa		16,142		12,481		45,941		43,029
Romania		5,703		3,181		14,499		9,052
Sri Lanka		4,052		3,977		12,086		11,995
China		3,468		3,551		10,425		10,520
Poland		1,451		1,225		3,943		3,753
Costa Rica		1,369		899		3,835		2,507
Australia		1,262		516		3,500		516
Spain		987		1,236		2,864		4,058

Total	$	306,927	$	284,113	$	909,374	$	810,979

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

21.

Expenses by nature

Expenses by nature consist of the following:


	Three months ended December 31,				Nine months ended December 31,
	2022		2021		2022		2021
Employee cost	$	188,350	$	168,712	$	560,191	$	495,038
Facilities cost		18,884		16,080		54,922		59,158
Repair payments		13,987		22,962		52,319		45,631
Depreciation		12,309		12,442		36,894		37,300
Legal and professional expenses		6,240		5,122		21,262		14,857
Travel expenses		3,992		1,629		11,348		2,937
Others		12,612		11,871		34,567		33,183

Total cost of revenue, selling and marketing and general and administrative expenses	$	256,374	$	238,818	$	771,503	$	688,104

WNS (HOLDINGS) LIMITED

NOTES TO UNAUDITED CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

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

22.

Finance expense

Finance expense consists of the following:


	Three months ended December 31,				Nine months ended December 31,
	2022		2021		2022		2021
Interest expense on lease liability	$	3,284	$	3,136	$	9,582	$	9,652
Interest expense		1,633		108		2,539		378
(Gain)/loss on interest rate swaps		—		39		—		187
Debt issue cost		56		10		98		45

Total	$	4,973	$	3,293	$	12,219	$	10,262

23.

Other income, net

Other income, net consists of the following:


	Three months ended December 31,				Nine months ended December 31,
	2022		2021		2022		2021
Net gain arising on financial assets designated as FVTPL	$	1,934	$	1,748	$	5,752	$	4,988
Interest income		864		507		2,276		2,568
Others, net		807		1,028		2,127		2,250

Total	$	3,605	$	3,283	$	10,155	$	9,806

WNS (HOLDINGS) LIMITED

NOTES TO UNAUDITED CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

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

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 December 31, 2022, the Company had 1,875,307 ordinary shares available for future grants.

Share-based compensation expense during the three and nine months ended December 31, 2022 and 2021 is as follows:


	Three months ended December 31,				Nine months ended December 31,
	2022		2021		2022		2021
Share-based compensation expense recorded in
Cost of revenue	$	1,857	$	1,177	$	5,982	$	4,311
Selling and marketing expenses		1,658		1,243		4,948		4,016
General and administrative expenses		8,180		7,424		27,023		26,018

Total share-based compensation expense	$	11,695	$	9,844	$	37,953	$	34,345

Upon the exercise of share-based options and RSUs, the Company issued 128,365 and 69,808 shares for the three months ended December 31, 2022 and 2021, respectively, and 388,166 and 519,261 shares for the nine months ended December 31, 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 and nine months ended December 31, 2022 was $28 and $83, respectively (three and nine months ended December 31, 2021: $28 and $296, respectively).

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

During the nine months ended December 31, 2022, the Company issued 104,975 RSUs (nine months ended December 31, 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.

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 nine months ended December 31, 2022 and 2021 was $79 and $78.80, per RSU, respectively. The stock compensation expense charged during the three and nine months ended December 31, 2022 was $1,366 and $4,131, respectively (three and nine months ended December 31, 2021: $1,487 and $4,431, respectively). As at December 31, 2022, there was $7,903 of unrecognized compensation cost related to these RSUs.

RSUs to drive higher growth

During the nine months ended December 31, 2022, the Company granted 705,090 RSUs to drive higher growth, based on performance and market conditions along with service conditions. The RSUs under this grant will vest upon the Company achieving the market capitalization target along with net revenue targets (together referred as the “vesting conditions”). The vesting period ranges from 2 years and 9 months to 4 years and 9 months from the grant date dependent on achievement of respective vesting conditions at each evaluation period. The vesting of RSUs will happen only on achievement of both the vesting conditions. Any unvested RSUs due to non-achievement of vesting conditions at the end of vesting period will lapse.

The fair value of these RSUs is determined using the Monte-Carlo simulation. The grant date fair value of RSUs granted was $28, per RSU.

During the quarter ended December 31, 2022, the Company modified the terms of the original grant to increase the vesting period. The revised vesting period ranges from 3 years 3 months to 4 years and 9 months from the grant date dependent on achievement of respective vesting conditions at each evaluation period. The incremental fair value of these RSUs was $1.6 determined using the Monte-Carlo simulation as at the date of modification.

The Company has not recognized any charge for the nine months ended December 31, 2022 considering the net revenue target is not expected to be met, based on the current projections. As at December 31, 2022, there was $20,871 of unrecognized compensation cost related to these RSUs.

WNS (HOLDINGS) LIMITED

NOTES TO UNAUDITED CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

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

25.

Income taxes

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


	Three months ended December 31,						Nine months ended December 31,
	2022			2021			2022			2021
Domestic	$	(3,478	)	$	(2,735	)	$	(9,432	)	$	(8,080	)
Foreign		46,051			45,889			133,854			125,242

Profit before income taxes	$	42,573		$	43,154		$	124,422		$	117,162

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


	Three months ended December 31,						Nine months ended December 31,
	2022			2021			2022			2021
Current taxes
Domestic taxes	$	—		$	—		$	—		$	—
Foreign taxes		10,165			9,255			31,226			26,414

	$	10,165		$	9,255		$	31,226		$	26,414

Deferred taxes
Domestic taxes		—			—			—			—
Foreign taxes		(2,265	)		(432	)		(7,706	)		(2,478	)

		(2,265	)		(432	)		(7,706	)		(2,478	)

Income tax expense	$	7,900		$	8,823		$	23,520		$	23,936

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 December 31,						Nine months ended December 31,
	2022			2021			2022			2021
Income taxes on profit	$	7,900		$	8,823		$	23,520		$	23,936
Income taxes on other comprehensive income/(loss):
Unrealized gain on cash flow hedging derivatives		(5,226	)		93			(4,085	)		2,396
Pension liability		(58	)		70			(27	)		85
Income taxes recognized in equity:
Excess tax deductions related to share-based options and RSUs		385			(443	)		189			(1,070	)

Total income taxes	$	3,001		$	8,543		$	19,597		$	25,347

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 nine months ended December 31, 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 nine months ended December 31 2022, the Company commenced operations in delivery centers in the Philippines that are eligible for various tax exemption benefits expiring between fiscal 2023 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 $17,283 in additional taxes, including interest of $5,806. 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 $68,828 in additional taxes, including interest of $24,490. 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 December 31, 2022, the Company has provided a tax reserve of $9,360 primarily on account of the Indian tax authorities’ denying the set off of brought forward business losses and unabsorbed depreciation.

As at December 31, 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 $10,929 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 $1,926 towards VAT, 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.

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 December 31,				Nine months ended December 31,
	2022		2021		2022		2021
Numerator:
Profit	$	34,675	$	34,331	$	100,904	$	93,226
Denominator:
Basic weighted average ordinary shares outstanding		48,080,159		48,787,253		48,251,559		48,909,692
Dilutive impact of equivalent stock options and RSUs		2,216,712		1,845,142		2,456,507		2,063,341
Diluted weighted average ordinary shares outstanding		50,296,871		50,632,395		50,708,066		50,973,033

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

WNS (HOLDINGS) LIMITED

NOTES TO UNAUDITED CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

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

27.

Subsidiaries

The following is a list of the Company’s subsidiaries as at December 31, 2022:


Direct subsidiaries	Step subsidiaries	Place of incorporation
WNS Global Services Netherlands B.V.		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 Malaysia Sdn. Bhd.⁽¹⁾	Malaysia
	WNS Global Services Private Limited ^{(2) (3) (4)}	India
	- Vuram Technology Solutions Private Limited ⁽⁴⁾	India
	- Vuram Australia Pty Ltd ⁽⁴⁾	Australia
	- Vuram Canada Inc.⁽⁴⁾	Canada
	- Vuram Technologies B.V.⁽⁴⁾	The Netherlands
	- Vuram, Inc.⁽⁴⁾⁽⁵⁾	USA
	- Solucionesen Tecnologia Vuram Mexico, S De R.L. de C.V.⁽⁴⁾⁽⁵⁾	Mexico
	- Vuram UK Private Limited ⁽⁴⁾	United Kingdom
	- WNS Global Services (UK) Limited ^{(6) (9) (10)}	United Kingdom
	- WNS Global Services SA (Pty) Limited	South Africa

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