Form 6-K
Table of Contents

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

Form 6-K

 

 

Report of Foreign Private Issuer

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

the Securities Exchange Act of 1934

For the quarter ended 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

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  


Table of Contents

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

CONVENTIONS USED IN THIS REPORT

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

 

1


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SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

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

 

   

worldwide economic and business conditions;

 

   

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

 

   

the impact of the ongoing coronavirus disease 2019 (“COVID-19”) pandemic on our and our clients’ business, financial condition, results of operations and cash flows;

 

   

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

 

   

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

 

   

regulatory, legislative and judicial developments;

 

   

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

 

   

technological innovation;

 

   

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

 

   

telecommunications or technology disruptions;

 

   

our ability to attract and retain clients;

 

   

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

 

   

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

 

   

our ability to expand our business or effectively manage growth;

 

   

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

 

   

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

 

   

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

 

   

future regulatory actions and conditions in our operating areas;

 

   

our ability to manage the impact of climate change on our business; and

 

   

volatility of our ADS price.

These and other factors are more fully discussed in our other filings with the SEC, including in “Risk Factors,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and elsewhere in our annual report on Form 20-F for our fiscal year ended March 31, 2022. In light of these and other uncertainties, you should not conclude that we will necessarily achieve any plans, objectives or projected financial results referred to in any of the forward-looking statements. Except as required by law, we do not undertake to release revisions of any of these forward-looking statements to reflect future events or circumstances.

 

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Table of Contents

Part I — FINANCIAL INFORMATION

WNS (HOLDINGS) LIMITED

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

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

 

     Notes      As at
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.

 

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WNS (HOLDINGS) LIMITED

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME

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

 

            Three months ended 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.

 

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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.

 

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WNS (HOLDINGS) LIMITED

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

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

 

           Other components of equity         
     Share capital     Share     Retained     Other    

Foreign
currency

translation

   

Cash flow

hedging

    Pension      Treasury shares    

Total

shareholders’

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

Balance as at April 1, 2021

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

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

     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.

 

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Table of Contents

WNS (HOLDINGS) LIMITED

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

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

 

           Other components of equity              
     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.

 

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Table of Contents

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.

 

8


Table of Contents

WNS (HOLDINGS) LIMITED

NOTES TO UNAUDITED CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

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

 

1.

Company overview

WNS (Holdings) Limited (“WNS Holdings”), along with its subsidiaries (collectively, “the Company”), is a global business process management (“BPM”) company with client service offices in Sydney (Australia), Canada, Dubai (United Arab Emirates), 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.

 

 

9


Table of Contents

WNS (HOLDINGS) LIMITED

NOTES TO UNAUDITED CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

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

 

3.

New accounting pronouncements not yet adopted by the Company

Certain new standards, interpretations and amendments to existing standards have been published that are mandatory for the Company’s accounting periods beginning on or after April 1, 2023 or later periods. Those which are considered to be relevant to the Company’s operations are set out below.

 

i.

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

 

   

clarify that the classification of liabilities as current or non-current should be based on rights that are in existence at the end of the reporting period and align the wording in all affected paragraphs to refer to the “right” to defer settlement by at least 12 months and make explicit that only rights in place “at the end of the reporting period” should affect the classification of a liability;

 

   

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

 

   

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

The above amendments are effective for annual reporting periods beginning on or after January 1, 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.

 

 

10


Table of Contents

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.

 

 

11


Table of Contents

WNS (HOLDINGS) LIMITED

NOTES TO UNAUDITED CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

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

 

4.

Business Combinations

 

  a)

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.

 

  b)

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.

 

  c)

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.

 

 

12


Table of Contents

WNS (HOLDINGS) LIMITED

NOTES TO UNAUDITED CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

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

 

 

  d)

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.

 

13


Table of Contents

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.

 

  e)

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.

 

  f)

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.

 

 

14


Table of Contents

WNS (HOLDINGS) LIMITED

NOTES TO UNAUDITED CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

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

 

 

5.

Cash and cash equivalents

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

 

     As at  
     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  
  

 

 

    

 

 

 

 

15


Table of Contents

WNS (HOLDINGS) LIMITED

NOTES TO UNAUDITED CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

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

 

7.

Trade receivables and unbilled revenue, net

Trade receivables and unbilled revenue consist of the following:

 

     As at  
     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  
  

 

 

    

 

 

    

 

 

    

 

 

 

 

16


Table of Contents

WNS (HOLDINGS) LIMITED

NOTES TO UNAUDITED CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

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

 

8.

Prepayment and other assets

Prepayment and other assets consist of the following:

 

     As at  
     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  
  

 

 

    

 

 

    

 

 

 

 

17


Table of Contents

WNS (HOLDINGS) LIMITED

NOTES TO UNAUDITED CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

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

 

10.

Intangible assets

The changes in the carrying value of intangible assets for the 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  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

 

 

 

18


Table of Contents

WNS (HOLDINGS) LIMITED

NOTES TO UNAUDITED CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

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

 

11.

Property and equipment

The changes in the carrying value of property and equipment for the 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  
            

 

 

 

 

19


Table of Contents

WNS (HOLDINGS) LIMITED

NOTES TO UNAUDITED CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

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

 

12.

Leases

The changes in the carrying value of ROU assets for the 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  
  

 

 

   

 

 

    

 

 

   

 

 

   

 

 

 

 

 

20


Table of Contents

WNS (HOLDINGS) LIMITED

NOTES TO UNAUDITED CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

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

 

The 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  
  

 

 

    

 

 

 

 

 

21


Table of Contents

WNS (HOLDINGS) LIMITED

NOTES TO UNAUDITED CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

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

 

13.

Loans and borrowings

Long-term debt

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

 

     Interest rate     Final maturity
(fiscal year)
     As at  

Currency

   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).

 

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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.

 

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WNS (HOLDINGS) LIMITED

NOTES TO UNAUDITED CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

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

 

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

Financial assets

 

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

Cash and cash equivalents

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

Investment in fixed deposits

     41,827        —        —        41,827        41,827  

Investments in marketable securities and mutual funds

     —        263,013        —        263,013        263,013  

Trade receivables

     100,522        —        —        100,522        100,522  

Unbilled revenue (1)

     86,786        —        —        86,786        86,786  

Funds held for clients

     11,643        —        —        11,643        11,643  

Prepayments and other assets (2)

     6,283        —        —        6,283        6,283  

Other non-current assets (3)

     13,509        —        —        13,509        13,509  

Derivative assets

     —        556        13,044        13,600        13,600  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total carrying value

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

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Financial liabilities

 

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

Trade payables

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

Other employee obligations (4)

     95,098        —        —        95,098        95,098  

Provisions and accrued expenses

     36,752        —        —        36,752        36,752  

Lease liabilities

     166,994        —        —        166,994        166,994  

Other liabilities (5)

     2,015        —        —        2,015        2,015  

Derivative liabilities

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

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total carrying value

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

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Notes:

 

(1)

Excluding non-financial assets $246.

(2)

Excluding non-financial assets $22,539.

(3)

Excluding non-financial assets $30,766.

(4)

Excluding non-financial liabilities $26,908.

(5)

Excluding non-financial liabilities $9,414.

 

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Table of Contents

WNS (HOLDINGS) LIMITED

NOTES TO UNAUDITED CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

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

 

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

Financial assets and liabilities subject to offsetting, enforceable master netting arrangements or similar agreements as at 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
 
   Financial
Instruments
    Cash
collateral
received
 

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
 
   Financial
instruments
    Cash
collateral

pledged
 

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
 
   Financial
Instruments
    Cash
collateral
received
 

Derivative assets

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

 

 

    

 

 

    

 

 

    

 

 

   

 

 

    

 

 

 

Total

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

 

 

    

 

 

    

 

 

    

 

 

   

 

 

    

 

 

 

 

Description of types of financial liabilities

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

Derivative liabilities

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

 

 

    

 

 

    

 

 

    

 

 

   

 

 

    

 

 

 

Total

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

 

 

    

 

 

    

 

 

    

 

 

   

 

 

    

 

 

 

Fair value hierarchy

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

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

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

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

 

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Table of Contents

WNS (HOLDINGS) LIMITED

NOTES TO UNAUDITED CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

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

 

The assets and liabilities measured at fair value on a recurring basis as at 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  
  

 

 

    

 

 

    

 

 

    

 

 

 

 

 

26


Table of Contents

WNS (HOLDINGS) LIMITED

NOTES TO UNAUDITED CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

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

 

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

 

            Fair value measurement at reporting date using  

Description

   March 31,
2022
     Quoted
prices in
active
markets
for identical
assets

(Level 1)
     Significant
Other
observable
inputs

(Level 2)
     Significant
unobservable
inputs
(Level 3)
 

Assets

           

Financial assets at FVTPL

           

Foreign exchange contracts

   $ 556      $ —      $ 556      $ —  

Investments in marketable securities and mutual funds

     263,013        262,602        411        —  

Financial assets at FVOCI

           

Foreign exchange contracts

     13,044        —        13,044        —  
  

 

 

    

 

 

    

 

 

    

 

 

 

Total assets

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

 

 

    

 

 

    

 

 

    

 

 

 

Liabilities

           

Financial liabilities at FVTPL

           

Foreign exchange contracts

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

Financial liabilities at FVOCI

           

Foreign exchange contracts

     4,578        —        4,578        —  
  

 

 

    

 

 

    

 

 

    

 

 

 

Total liabilities

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

 

 

    

 

 

    

 

 

    

 

 

 

During the 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).

 

27


Table of Contents

WNS (HOLDINGS) LIMITED

NOTES TO UNAUDITED CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

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

 

The following table presents the notional values of outstanding foreign exchange forward contracts 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.

 

28


Table of Contents

WNS (HOLDINGS) LIMITED

NOTES TO UNAUDITED CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

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

 

15.

Pension and other employee obligations

Pension and other employee obligations consist of the following:

 

     As at  
     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  
  

 

 

    

 

 

 

 

29


Table of Contents

WNS (HOLDINGS) LIMITED

NOTES TO UNAUDITED CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

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

 

17.

Contract liabilities

Contract liabilities consists of the following:

 

     As at  
     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  
  

 

 

    

 

 

 

 

30


Table of Contents

WNS (HOLDINGS) LIMITED

NOTES TO UNAUDITED CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

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

 

19.

Share capital

As at 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.

 

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WNS (HOLDINGS) LIMITED

NOTES TO UNAUDITED CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

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

 

20.

Revenue

Disaggregation of revenue

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

Revenue by service type

 

     Three months ended 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  
  

 

 

    

 

 

    

 

 

    

 

 

 

 

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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  
  

 

 

    

 

 

    

 

 

    

 

 

 

 

33


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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.

 

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WNS (HOLDINGS) LIMITED

NOTES TO UNAUDITED CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

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

 

25.

Income taxes

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

 

     Three months ended 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  
  

 

 

    

 

 

    

 

 

    

 

 

 

 

35


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WNS (HOLDINGS) LIMITED

NOTES TO UNAUDITED CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

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

 

From fiscal 2012 until the 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.

 

36


Table of Contents

WNS (HOLDINGS) LIMITED

NOTES TO UNAUDITED CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

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

 

26.

Earnings per share

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

 

     Three months ended 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.

 

37


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WNS (HOLDINGS) LIMITED

NOTES TO UNAUDITED CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

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

 

27.

Subsidiaries

The following is a list of the Company’s subsidiaries as at 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