Form 6-K
Table of Contents

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

Form 6-K

 

 

Report of Foreign Private Issuer

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

the Securities Exchange Act of 1934

For the quarter ended September 30, 2023

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

     49  

Part III — RISK FACTORS

     86  

Part IV — OTHER INFORMATION

     117  

SIGNATURES

     118  


Table of Contents

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

CONVENTIONS USED IN THIS REPORT

In this report, references to “US” are to the United States of America, its territories and its possessions. References to “UK” are to the United Kingdom. References to “EU” are to the European Union. References to “India” are to the Republic of India. References to “China” are to the People’s Republic of China. References to “South Africa” are to the Republic of South Africa. References to “$” or “dollars” or “US dollars” are to the legal currency of the US, references to “  ” or “Indian rupees” are to the legal currency of India, references to “pound sterling” or “£” are to the legal currency of the UK, references to “pence” are to the legal currency of Jersey, Channel Islands, references to “Euro” are to the legal currency of the European Monetary Union, references to “South African rand” or “R” or “ZAR” are to the legal currency of South Africa, references to “A$” or “AUD” or “Australian dollars” are to the legal currency of Australia, references to “CHF” or “Swiss Franc” are to the legal currency of Switzerland, references to “RMB” are to the legal currency of China, references to “LKR” or “Sri Lankan rupees” are to the legal currency of Sri Lanka and references to “PHP” or “Philippine peso” are to the legal currency of the Philippines. Our financial statements are presented in US dollars and prepared in accordance with International Financial Reporting Standards and its interpretations (“IFRS”), as issued by the International Accounting Standards Board (“IASB”), as in effect as at September 30, 2023. To the extent the IASB issues any amendments or any new standards subsequent to September 30, 2023, 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, 2024. 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) 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 in our BFSI SBU. This non-GAAP financial information is not meant to be considered in isolation or as a substitute for our financial results prepared in accordance with GAAP.

 

1


Table of Contents

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

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

 

   

worldwide economic and business conditions;

 

   

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

 

   

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;

 

   

volatility of our ADS price; and

 

   

the possibility of a resurgence of coronavirus disease 2019 (“COVID-19”) pandemic and related impact on our and our clients’ business, financial condition, results of operations and cash flows.

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, 2023. 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
September 30, 2023
    As at
March 31, 2023
 

ASSETS

       

Current assets:

       

Cash and cash equivalents

     5      $ 91,750     $ 127,898  

Investments

     6        156,006       101,092  

Trade receivables, net

     7        129,616       113,107  

Unbilled revenue

     7        105,233       99,785  

Funds held for clients

        6,913       9,411  

Derivative assets

     14        6,159       6,373  

Contract assets

        14,665       12,572  

Prepayments and other current assets

     8        31,358       33,851  
     

 

 

   

 

 

 

Total current assets

        541,700       504,089  

Non-current assets:

       

Goodwill

     9        351,536       353,645  

Intangible assets

     10        165,753       179,220  

Property and equipment

     11        68,917       62,437  

Right-of-use assets

     12        164,209       175,474  

Derivative assets

     14        2,992       2,681  

Deferred tax assets

        46,437       46,675  

Investments

     6        314       75,948  

Contract assets

        53,051       54,670  

Other non-current assets

     8        53,569       49,609  
     

 

 

   

 

 

 

Total non-current assets

        906,778       1,000,359  
     

 

 

   

 

 

 

TOTAL ASSETS

      $ 1,448,478     $ 1,504,448  
     

 

 

   

 

 

 

LIABILITIES AND EQUITY

       

Current liabilities:

       

Trade payables

      $ 19,076     $ 25,397  

Provisions and accrued expenses

     16        33,165       41,761  

Derivative liabilities

     14        8,588       7,505  

Pension and other employee obligations

     15        86,654       107,881  

Short-term line of credit

     13        9,760       —   

Current portion of long-term debt

     13        35,934       36,118  

Contract liabilities

     17        15,875       15,705  

Current taxes payable

        11,241       2,178  

Lease liabilities

     12        26,556       26,635  

Other liabilities

     18        27,334       40,662  
     

 

 

   

 

 

 

Total current liabilities

        274,183       303,842  

Non-current liabilities:

       

Derivative liabilities

     14        499       2,413  

Pension and other employee obligations

     15        21,317       19,504  

Long-term debt

     13        118,416       137,288  

Contract liabilities

     17        11,093       9,748  

Lease liabilities

     12        162,075       172,347  

Other non-current liabilities

     18        10,167       20,844  

Deferred tax liabilities

        34,402       37,326  
     

 

 

   

 

 

 

Total non-current liabilities

        357,969       399,470  
     

 

 

   

 

 

 

TOTAL LIABILITIES

      $ 632,152     $ 703,312  
     

 

 

   

 

 

 

Shareholders’ equity:

       

Share capital (ordinary shares $0.16 (£0.10) par value, authorized 60,000,000 shares; issued: 47,518,520 shares and 48,360,817 shares; each as at September 30, 2023 and March 31, 2023, respectively)

     19        7,582       7,690  

Share premium

        22,122       81,110  

Retained earnings

        1,039,782       951,601  

Other reserves

        6,533       6,765  

Other components of equity

        (259,693     (246,030
     

 

 

   

 

 

 

Total shareholders’ equity

        816,326       801,136  
     

 

 

   

 

 

 

TOTAL LIABILITIES AND EQUITY

      $ 1,448,478     $ 1,504,448  
     

 

 

   

 

 

 

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 September 30,     Six months ended September 30,  
     Notes        2023         2022         2023         2022    

Revenue

     20      $ 333,890     $ 307,099     $ 660,391     $ 602,447  

Cost of revenue

     21        210,217       203,016       421,182       401,412  
     

 

 

   

 

 

   

 

 

   

 

 

 

Gross profit

        123,673       104,083       239,209       201,035  

Operating expenses:

           

Selling and marketing expenses

     21        18,754       15,953       38,724       30,191  

General and administrative expenses

     21        46,502       43,146       93,467       83,526  

Foreign exchange gain, net

        (17     (1,565     (922     (3,486

Amortization of intangible assets

     10        8,688       5,273       17,413       8,259  
     

 

 

   

 

 

   

 

 

   

 

 

 

Operating profit

        49,746       41,276       90,527       82,545  

Other income, net

     23        (25,613     (3,138     (30,404     (6,550

Finance expense

     22        7,504       4,000       14,638       7,246  
     

 

 

   

 

 

   

 

 

   

 

 

 

Profit before income taxes

        67,855       40,414       106,293       81,849  

Income tax expense

     25        10,042       7,248       18,344       15,620  
     

 

 

   

 

 

   

 

 

   

 

 

 

Profit after tax

      $ 57,813     $ 33,166     $ 87,949     $ 66,229  
     

 

 

   

 

 

   

 

 

   

 

 

 

Earnings per ordinary share

     26           
     

 

 

   

 

 

   

 

 

   

 

 

 

Basic

      $ 1.22     $ 0.69     $ 1.84     $ 1.37  
     

 

 

   

 

 

   

 

 

   

 

 

 

Diluted

      $ 1.16     $ 0.66     $ 1.76     $ 1.30  
     

 

 

   

 

 

   

 

 

   

 

 

 

See accompanying notes.

 

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WNS (HOLDINGS) LIMITED

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME/(LOSS)

(Amounts in thousands)

 

     Three months ended September 30,     Six months ended September 30,  
       2023         2022         2023         2022    

Profit after tax

   $ 57,813     $ 33,166     $ 87,949     $ 66,229  

Other comprehensive income/(loss), net of taxes

        

Items that will not be reclassified to profit or loss:

        

Pension adjustment, net of tax

     (26     (50     (905     (242

Items that will be reclassified subsequently to profit or loss:

        

Changes in fair value of cash flow hedges:

        

Current period gain/(loss)

     759       1,223       3,582       (939

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

     (922     283       (2,165     (121

Reclassification to profit or loss

     1,369       6       3,062       (1,295

Foreign currency translation income/(loss)

     (15,589     (36,591     (15,654     (74,584

Income tax expense relating to above

     (756     (1,197     (1,583     (1,141
  

 

 

   

 

 

   

 

 

   

 

 

 
   $ (15,139   $ (36,276   $ (12,758   $ (78,080
  

 

 

   

 

 

   

 

 

   

 

 

 

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

   $ (15,165   $ (36,326   $ (13,663   $ (78,322
  

 

 

   

 

 

   

 

 

   

 

 

 

Total comprehensive income/(loss)

   $ 42,648     $ (3,160   $ 74,286     $ (12,093
  

 

 

   

 

 

   

 

 

   

 

 

 

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)

     259,801        32        (64     —        —        —        —        —        —        —        (32

Purchase of treasury shares (Refer Note 19)

     —         —         —        —        —        —        —        —        (1,100,000     (81,631     (81,631

Share-based compensation expense (Refer Note 24)

     —         —         26,258       —        —        —        —        —        —        —        26,258  

Excess tax benefits relating to share-based options and RSUs

     —         —         628       —        —        —        —        —        —        —        628  

Transfer to other reserves

     —         —         —        (2,401     2,401       —        —        —        —        —        —   

Transfer from other reserves on utilization

     —         —         —        493       (493     —        —        —        —        —        —   
  

 

 

    

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Transactions with owners

     2,59,801        32        26,822       (1,908     1,908       —        —        —        (1,100,000     (81,631     (54,777
  

 

 

    

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Profit after tax

     —         —         —        66,229       —        —        —        —        —        —        66,229  

Other comprehensive income/(loss), net of taxes

     —         —         —        —        —        (74,584     (3,496     (242     —        —        (78,322
  

 

 

    

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total comprehensive income/(loss) for the period

     —         —         —        66,229       —        (74,584     (3,496     (242     —        —        (12,093
  

 

 

    

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Balance as at September 30, 2022

     49,109,708      $ 7,783      $ 137,149     $ 882,723     $ 4,564     $ (263,571   $ (1,361   $ 1,477       (1,100,000   $ (81,631   $ 687,133  
  

 

 

    

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

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, 2023

     48,360,817     $ 7,690     $ 81,110     $ 951,601      $ 6,765     $ (243,414   $ (3,721   $ 1,105       —      $  —      $ 801,136  

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

     257,703       32       (32     —         —        —        —        —        —        —        —   

Purchase of treasury shares (Refer Note 19)

     —        —        —        —         —        —        —        —        1,100,000       (85,677     (85,677

Cancellation of treasury shares (Refer Note 19)

     (1,100,000     (140     (85,537     —         —        —        —        —        (1,100,000     85,677       —   

Share-based compensation expense (Refer Note 24)

     —        —        29,589       —         —        —        —        —        —        —        29,589  

Excess tax benefits relating to share-based options and RSUs

     —        —        (3,008     —         —        —        —        —        —        —        (3,008

Transfer to other reserves

     —        —        —        —         —        —        —        —        —        —        —   

Transfer from other reserves on utilization

     —        —        —        232        (232     —        —        —        —        —        —   
  

 

 

   

 

 

   

 

 

   

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Transactions with owners

     (842,297     (108     (58,988     232        (232     —        —        —        —        —        (59,096
  

 

 

   

 

 

   

 

 

   

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Profit after tax

     —        —        —        87,949        —        —        —        —        —        —        87,949  

Other comprehensive income/(loss), net of taxes

     —        —        —        —         —        (15,654     2,896       (905     —        —        (13,663
  

 

 

   

 

 

   

 

 

   

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total comprehensive income/(loss) for the period

     —        —        —        87,949        —        (15,654     2,896       (905     —        —        74,286  
  

 

 

   

 

 

   

 

 

   

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Balance as at September 30, 2023

     47,518,520     $ 7,582     $ 22,122     $ 1,039,782      $ 6,533     $ (259,068   $ (825   $ 200       —      $ —      $ 816,326  
  

 

 

   

 

 

   

 

 

   

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

*

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      Six months ended September 30,  
              2023         2022    

Cash flows from operating activities:

       

Cash generated from operations

      $ 114,348     $ 74,374  

Income taxes refunded/(paid), net

        (14,786     (18,801

Interest paid

        (14,212     (6,320

Interest received

        2,606       1,085  
     

 

 

   

 

 

 

Net cash provided by operating activities

        87,956       50,338  
     

 

 

   

 

 

 

Cash flows from investing activities:

       

Deferred consideration paid for acquisition of MOL IPS

     4(f)        —        (17

Acquisition of Vuram, net

     4(d)        —        (144,172

Proceeds from working capital adjustment on acquisition of Vuram

     4(d)        141       —   

Proceeds from working capital adjustment on acquisition of The Smart Cube

     4(a)        584       —   

Deferred consideration paid towards acquisition of OptiBuy

     4(b)        (2,192     —   

Payment for property and equipment and intangible assets

        (33,573     (18,814

Investment in fixed deposits

        (28,986     (64,619

Proceeds from maturity of fixed deposits

        28,739       53,800  

Proceeds from sale of property and equipment

        275       426  

Profit on sale of marketable securities

        1,690       6,949  

Marketable securities sold, net (short-term)

        22,187       102,914  

Proceeds from sale of marketable securities (long-term)

        —        12,272  
     

 

 

   

 

 

 

Net cash used in investing activities

        (11,135     (51,261
     

 

 

   

 

 

 

Cash flows from financing activities:

       

Payment for repurchase of shares

        (85,622     (81,631

Payment towards cancellation of treasury shares

        (55     —   

Repayment of long-term debt

        (18,604     —   

Proceeds from long-term debt

        —        80,000  

Proceeds from short term line of credit

        39,896       31,708  

Repayment of short-term line of credit

        (30,000     (31,418

Payment of transaction charges towards exercise of RSUs

        —        (32

Principal payment of lease liabilities

        (13,516     (13,347

Excess tax benefit from share-based compensation expense

        320       431  
     

 

 

   

 

 

 

Net cash used in financing activities

        (107,581     (14,289
     

 

 

   

 

 

 

Exchange difference on cash and cash equivalents

        (5,388     (14,560

Net change in cash and cash equivalents

        (36,148     (29,772

Cash and cash equivalents at the beginning of the period

        127,898       108,153  
     

 

 

   

 

 

 

Cash and cash equivalents at the end of the period

      $ 91,750     $ 78,381  
     

 

 

   

 

 

 

Non-cash transactions:

       

Investing activities

       

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

      $ 4,237     $ 5,312  

See accompanying notes.

Reconciliation of liabilities arising from financing activities as at September 30, 2023 and September 30, 2022 is as follows*:

 

                  Non-cash changes         
     Opening balance
April 1, 2023
     Cash flows     Amortization of debt
issuance cost
     Translation      Closing balance
September 30, 2023
 

Long-term debt (including current portion)

   $ 173,406    $ (18,604   $ 191      $ 643      $ 154,350  

 

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

Long-term debt (including current portion)

   $ —       $ 79,492      $ 42      $ 79,534  

 

*

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 York (US), Mexico, and Switzerland and delivery centers in Canada, the People’s Republic of China (“China”), Costa Rica, India, Malaysia, the Philippines, Poland, Romania, Republic of South Africa (“South Africa”), Sri Lanka, Turkey, the United Kingdom (“UK”) and the United States (“US”).

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

These unaudited condensed interim consolidated financial statements were authorized for issue by the Board of Directors on November 2, 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, 2023.

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, 2023.

Effective April 1, 2023, the Company has adopted a new organizational structure featuring four strategic business units (SBUs), each headed by a Chief Business Officer. Under the new organizational structure, the Company has combined its prior verticals into the four SBUs. The Company believes that the new organizational structure will help derive improved outcomes for its global clients and enable the Company to better drive business synergies, enhance scalability, generate operating leverage and create organizational depth.

Based on the change in the organizational structure, the Company revised its segment disclosure accordingly. For further details on segment reporting refer Note 28 – Operating Segments.

 

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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)

 

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, 2024, 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 September 2022, the IASB issued ‘Lease Liability in a Sale and Leaseback (Amendments to IFRS 16)’ with amendments to clarify:

 

   

the requirements that a seller-lessee uses in subsequently measuring sale and leaseback transactions that satisfy the requirements in IFRS 15 to be accounted for as a sale.

The amendments are effective for annual periods beginning on or after January 1, 2024. These amendments will not have a material impact on the Company’s consolidated financial statements.

 

iii.

In October 2022, the IASB issued “Non-current Liabilities with Covenants (Amendments to IAS 1)” to clarify the conditions with which an entity must comply within twelve months after the reporting period affect the classification of a liability.

The amendments are effective for annual periods beginning on or after January 1, 2024. The Company is currently evaluating the impact of these amendments on its consolidated financial statements.

 

iv.

In August 2023, the IASB issued ‘Lack of Exchangeability (Amendments to IAS 21)’ that contains guidance to specify when a currency is exchangeable and how to determine the exchange rate when it is not.

The amendments in ‘Lack of Exchangeability (Amendments to IAS 21)’ amend IAS 21 to:

 

   

specify when a currency is exchangeable into another currency and when it is not;

 

   

specify how an entity determines the exchange rate to apply when a currency is not exchangeable;

 

   

require the disclosure of additional information when a currency is not exchangeable.

The amendments also extend to conforming amendments to IFRS 1 which previously referred to, but did not define, exchangeability. An entity applies the amendments for annual reporting periods beginning on or after 1 January 2025. Earlier 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)

 

4.

Business Combinations

 

  a)

The Smart Cube Limited

On December 16, 2022 (“Acquisition date”), the Company acquired all ownership interests of The Smart Cube Limited 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 Smart Cube is expected to complement the Company’s existing offerings and strengthen the Company’s capabilities in high-end procurement and advanced analytics.

The acquisition was for a total consideration of $121,643, including working capital adjustments of $(507) and a contingent consideration of $15,761, payable over a period of 2 years and 5 months linked to The Smart Cube’s target revenues and adjusted earnings before interest, taxes, depreciation, and amortization (“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 4.93%. 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.

During the year ended March 31, 2023, the Company incurred acquisition related costs of $2,130, which had 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  

Cash

   $ 6,777  

Trade receivables

     6,672  

Unbilled revenue

     1,775  

Prepayment and other current assets

     961  

Property and equipment

     320  

Right-of-use assets

     1,781  

Intangible assets

  

- Customer relationships

     26,679  

- Customer contracts

     1,958  

- Covenant not-to-compete

     1,305  

- Software

     1,305  

Non-current assets

     1,284  

Deferred tax assets

     1,358  

Current liabilities

     (6,241

Non-current liabilities

     (1,353

Lease liabilities

     (1,736

Deferred tax liabilities

     (7,738
  

 

 

 

Net assets acquired

     35,107  

Less: Purchase consideration

     (121,643
  

 

 

 

Goodwill on acquisition

   $ 86,536  
  

 

 

 

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 September 30, 2023 to reflect the final valuation of assets acquired or liabilities assumed.

 

11


Table of Contents

WNS (HOLDINGS) LIMITED

NOTES TO UNAUDITED CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

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

 

  b)

OptiBuy sp. z.o.o.

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. OptiBuy is expected to complement the Company’s existing offerings and strengthen the Company’s capabilities in high-end procurement services.

The acquisition was for a total consideration of Euro 30,472 ($32,064, based on the exchange rate on December 14, 2022), subject to adjustments for cash and working capital, including a contingent consideration of Euro 5,800 ($6,103), 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 2.90%. 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.

During the six months ended September 30, 2023, a contingent consideration of Euro 2,000 ($2,192, based on the exchange rate on April 20, 2023) was paid by the Company to the sellers upon achievement of the target adjusted EBITDA (with certain adjustments) as specified in the acquisition agreement related to the first measurement period.

During the year ended March 31, 2023, the Company incurred acquisition related costs of $518, which had 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  

Cash

   $ 1,081  

Trade receivables

     1,936  

Prepayment and other current assets

     294  

Property and equipment

     366  

Right-of-use assets

     45  

Intangible assets

     238  

- Customer relationships

     3,442  

- Customer contracts

     934  

- Covenant not-to-compete

     956  

- Software

     122  

Non-current assets

     592  

Deferred tax assets

     17  

Current liabilities

     (2,537

Non-current liabilities

     (6

Lease liabilities

     (234

Deferred tax liabilities

     (1,038
  

 

 

 

Net assets acquired

     6,208  

Less: Purchase consideration

     (32,064
  

 

 

 

Goodwill on acquisition

   $ 25,856  
  

 

 

 

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 September 30, 2023 to reflect the final valuation of assets acquired or liabilities assumed.

 

12


Table of Contents

WNS (HOLDINGS) LIMITED

NOTES TO UNAUDITED CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

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

 

  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, 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, 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.

 

  d)

Vuram Technology Solutions Private Limited

On July 1, 2022 (“Acquisition date”), the Company acquired all ownership interests of Vuram Technology Solutions Private Limited and its subsidiaries (“Vuram”), which is a hyper automation services company that specializes in low-code enterprise automation and provides custom, scalable BPM solutions, including specific solutions for the banking and financial services, insurance, and healthcare industries. 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.

During the year ended March 31, 2023, the Company incurred acquisition related costs of $1,209, which had been included in “general and administrative expenses” in the consolidated statement of income.

During the six months ended September 30, 2023, the Company received $141 towards working capital adjustments. The contingent consideration had an estimated fair value of Nil, as at September 30, 2023. The change in the fair value of contingent consideration amounting to $21,932 was credited to consolidated income statement during the six months ended September 30, 2023 and the same is not expected to be taxable.

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.

 

13


Table of Contents

WNS (HOLDINGS) LIMITED

NOTES TO UNAUDITED CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

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

 

     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.

During the six months ended September 30, 2023, the Company has completed the accounting of the assets acquired and liabilities assumed on acquisition. There is no change on finalization of purchase price allocation to the Company’s statement of financial position or statement of income.

 

  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.

 

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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)

 

  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 year ended March 31, 2023, 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.

 

15


Table of Contents

WNS (HOLDINGS) LIMITED

NOTES TO UNAUDITED CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

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

 

5.

Cash and cash equivalents

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

 

     As at  
     September 30,      March 31,  
     2023      2023  

Cash and bank balances

   $ 69,520      $ 80,162  

Short-term deposits with banks*

     22,230        47,736  
  

 

 

    

 

 

 

Total

   $ 91,750      $ 127,898  
  

 

 

    

 

 

 

 

*

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

 

6.

Investments

Investments consist of the following:

 

     As at  
     September 30,      March 31,  
     2023      2023  

Investments in marketable securities and mutual funds

   $ 147,647      $ 167,844  

Investment in fixed deposits

     8,673        9,196  
  

 

 

    

 

 

 

Total

   $ 156,320      $ 177,040  
  

 

 

    

 

 

 

 

     As at  
     September 30,
2023
     March 31,
2023
 

Current investments

   $ 156,006      $ 101,092  

Non-current investments

     314        75,948  
  

 

 

    

 

 

 

Total

   $ 156,320      $ 177,040  
  

 

 

    

 

 

 

 

16


Table of Contents

WNS (HOLDINGS) LIMITED

NOTES TO UNAUDITED CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

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

 

7.

Trade receivables and unbilled revenue, net

Trade receivables and unbilled revenue consist of the following:

 

     As at  
     September 30,      March 31,  
     2023      2023  

Trade receivables and unbilled revenue*

   $ 236,830      $ 214,837  

Less: Allowances for ECL

     (1,981      (1,945
  

 

 

    

 

 

 

Total

   $ 234,849      $ 212,892  
  

 

 

    

 

 

 

 

*

As at September 30, 2023 and March 31, 2023, unbilled revenue includes contract assets amounting to $382 and $593, respectively.

The movement in the ECL is as follows:

 

     Three months ended September 30,      Six months ended September 30,  
       2023          2022          2023          2022    

Balance at the beginning of the period

   $ 2,391      $ 2,112      $ 1,945      $ 2,398  

On acquisition (Refer note 4(a))

     —         215        —         215  

Charged to consolidated statement of income

     103        98        567        170  

Write-offs, net of collections

     (200      (2      (202      (8

Reversals

     (250      (18      (283      (232

Translation adjustment

     (63      (147      (46      (285
  

 

 

    

 

 

    

 

 

    

 

 

 

Balance at the end of the period

   $ 1,981      $ 2,258      $ 1,981      $ 2,258  
  

 

 

    

 

 

    

 

 

    

 

 

 

 

17


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WNS (HOLDINGS) LIMITED

NOTES TO UNAUDITED CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

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

 

8.

Prepayment and other assets

Prepayment and other assets consist of the following:

 

     As at  
     September 30,
2023
     March 31,
2023
 

Current:

     

Service tax and other tax receivables

   $ 1,887      $ 11,815  

Employee receivables

     1,641        2,184  

Advances to suppliers

     2,431        1,765  

Prepaid expenses

     15,860        13,209  

Other assets

     9,539        4,878  
  

 

 

    

 

 

 

Total

   $ 31,358      $ 33,851  
  

 

 

    

 

 

 

Non-current:

     

Deposits

   $ 11,716      $ 11,423  

Income tax assets

     12,440        15,102  

Service tax and other tax receivables

     22,496        15,255  

Other assets

     6,917        7,829  
  

 

 

    

 

 

 

Total

   $ 53,569      $ 49,609  
  

 

 

    

 

 

 

 

9.

Goodwill

The movement in goodwill balance as at September 30, 2023 and March 31, 2023 is as follows:

 

     Total  

Balance as at April 1, 2022

   $ 123,537  

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

     238,725  

Translation adjustment

     (8,617
  

 

 

 

Balance as at March 31, 2023

   $ 353,645  
  

 

 

 

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

     (208

Translation adjustment

     (1,901
  

 

 

 

Balance as at September 30, 2023

   $ 351,536  
  

 

 

 

 

18


Table of Contents

WNS (HOLDINGS) LIMITED

NOTES TO UNAUDITED CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

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

 

10.

Intangible assets

The changes in the carrying value of intangible assets for the six months ended September 30, 2023 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, 2023

   $ 196,339     $ 193,883     $ 4,064     $ 640     $ 5,862     $ 1,835      $ 15,959     $ 400      $ 69,149     $ 488,131  

Additions

     —        —        —        —        —        —         —        —         4,805       4,805  

On acquisitions (Refer note 4(a))

       (14     —        —        —        —         —        —         —        (14

Translation adjustments

     (906     (997     (42     (1     (11     —         (103     —         (672     (2,732
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

 

Balance as at September 30, 2023

   $ 195,433     $ 192,872     $ 4,022     $ 639     $ 5,851     $ 1,835      $ 15,856     $ 400      $ 73,282     $ 490,190  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

 

Accumulated amortization

                      

Balance as at April 1, 2023

   $ 156,803     $ 86,515     $ 4,064     $ 631     $ 4,646     $ 1,835      $ 10,253     $  —       $ 44,164     $ 308,911  

Amortization

     6,446       5,694       —        —        332       —         1,126       —         3,815       17,413  

Translation adjustments

     (919     (325     (42     (1     (10     —         (58     —         (532     (1,887
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

 

Balance as at September 30, 2023

   $ 162,330     $ 91,884     $ 4,022     $ 630     $ 4,968     $ 1,835      $ 11,321     $ —       $ 47,447     $ 324,437  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

 

Net carrying value as at September 30, 2023

   $ 33,103     $ 100,988     $  —      $ 9     $ 883     $ —       $ 4,535     $ 400      $ 25,835     $ 165,753  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

 

The changes in the carrying value of intangible assets for the year ended March 31, 2023 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

     —        —        —        —        —        —         —        —         10,149       10,149  

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

     46,050       75,465       —        8     —        —         7,262       —         1,511       130,296  

Translation adjustments

     (5,874     (2,634     (248     (6     (85     —         (368     —         (5,730     (14,945
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

 

Balance as at March 31, 2023

   $ 196,339     $ 193,883     $ 4,064     $ 640     $ 5,862     $ 1,835      $ 15,959     $ 400      $ 69,149     $ 488,131  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

 

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

     6,505       7,826       —        —        754       —         1,600       —         6,961       23,646  

Translation adjustments

     (5,472     (1,141     (248     (7     (73     —         (412     —         (4,592     (11,945
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

 

Balance as at March 31, 2023

   $ 156,803     $ 86,515     $ 4,064     $ 631     $ 4,646     $ 1,835      $ 10,253     $  —       $ 44,164     $ 308,911  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

 

Net carrying value as at March 31, 2023

   $ 39,536     $ 107,368     $  —      $ 9   $ 1,216     $  —       $ 5,706     $ 400      $ 24,985     $ 179,220  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

 

 

19


Table of Contents

WNS (HOLDINGS) LIMITED

NOTES TO UNAUDITED CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

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

 

11.

Property and equipment

The changes in the carrying value of property and equipment for the six months ended September 30, 2023, are as follows:

 

Gross carrying value

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

Balance as at April 1, 2023

   $ 9,289     $ 87,222     $ 80,586     $ 817     $ 72,995     $ 250,909  

Additions

     —        5,383       10,142       —        12,090       27,615  

On acquisition (Refer Note 4(a))

       1       (69     —        (39     (107

Disposals/retirements

     —        (1,645     (1,183     —        (2,402     (5,230

Translation adjustments

     (38     (1,607     (1,914     (13     (2,100     (5,672
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Balance as at September 30, 2023

   $ 9,251     $ 89,354     $ 87,562     $ 804     $ 80,544     $ 267,515  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Accumulated depreciation

            

Balance as at April 1, 2023

   $ 6,603     $ 69,089     $ 67,938     $ 744     $ 60,063     $ 204,437  

Depreciation

     232       5,455       2,868       17       3,260       11,832  

Disposals/retirements

     —        (1,589     (1,093     —        (2,402     (5,084

Translation adjustments

     (27     (1,232     (1,505     (12     (1,600     (4,376
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Balance as at September 30, 2023

   $ 6,808     $ 71,723     $ 68,208     $ 749     $ 59,321     $ 206,809  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net carrying value as at September 30, 2023

   $ 2,443     $ 17,631     $ 19,354     $ 55     $ 21,223     $ 60,706  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Capital work-in-progress

               8,211  
            

 

 

 

Net carrying value as at September 30, 2023

             $ 68,917  
            

 

 

 

The changes in the carrying value of property and equipment for the year ended March 31, 2023 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

     —        10,902       6,736       —        5,738       23,376  

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

     —        517       261       104       298       1,180  

Disposals/retirements

     —        (5,417     (3,265     —        (476     (9,158

Translation adjustments

     (302     (6,354     (5,788     (71     (5,269     (17,784
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Balance as at March 31, 2023

   $ 9,289     $ 87,222     $ 80,586     $ 817     $ 72,995     $ 250,909  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Accumulated depreciation

            

Balance as at April 1, 2022

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

Depreciation

     469       9,915       5,246       46       5,611       21,287  

Disposals/retirements

     —        (5,322     (3,252     —        (476     (9,050

Translation adjustments

     (204     (5,078     (5,022     (66     (4,541     (14,911
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Balance as at March 31, 2023

   $ 6,603     $ 69,089     $ 67,938     $ 744     $ 60,063     $ 204,437  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net carrying value as at March 31, 2023

   $ 2,686     $ 18,133     $  12,648       73     $ 12,932     $ 46,472  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Capital work-in-progress

               15,965  
            

 

 

 

Net carrying value as at March 31, 2023

             $ 62,437  
            

 

 

 

 

20


Table of Contents

WNS (HOLDINGS) LIMITED

NOTES TO UNAUDITED CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

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

 

12.

Leases

The changes in the carrying value of ROU assets for the six months ended September 30, 2023 are as follows:

 

Gross carrying value

   Premises     Computers      Equipment      Motor vehicles     Total  

Balance as at April 1, 2023

   $  275,796     $ —     $ 23      $ 721     $ 276,540  

Additions

     5,710       —         —         —        5,710  

Terminations/modifications

     160       —         —         —        160  

Translation adjustments

     (6,313     —         —         (17     (6,330
  

 

 

   

 

 

    

 

 

    

 

 

   

 

 

 

Balance as at September 30, 2023

   $ 275,353     $ —     $ 23      $ 704     $ 276,080  
  

 

 

   

 

 

    

 

 

    

 

 

   

 

 

 

Accumulated depreciation

            

Balance as at April 1, 2023

   $ 100,648     $ —     $ 19      $ 399     $ 101,066  

Depreciation

     15,809       —         1        55       15,865  

Terminations/modifications

     (2,580     —         —         —        (2,580

Translation adjustments

     (2,468     —         —         (12     (2,480
  

 

 

   

 

 

    

 

 

    

 

 

   

 

 

 

Balance as at September 30, 2023

   $ 111,409     $ —     $ 20      $ 442     $ 111,871  
  

 

 

   

 

 

    

 

 

    

 

 

   

 

 

 

Net carrying value as at September 30, 2023

   $ 163,944     $ —     $ 3      $ 262     $ 164,209  
  

 

 

   

 

 

    

 

 

    

 

 

   

 

 

 

The following are the changes in the carrying value of ROU assets for the year ended March 31, 2023:

 

Gross carrying value

   Premises     Computers     Equipment     Motor vehicles     Total  

Balance as at April 1, 2022

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

Additions

     43,017       —        —        92       43,109  

On acquisition (Refer Note 4(a), 4(b), 4(d))

     3,443       —        —        74     3,517  

Terminations/modifications

     26,140       (35     —        (230     25,875  

Translation adjustments

     (16,989     (5     (1     (28     (17,023
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Balance as at March 31, 2023

   $ 275,796     $ —      $ 23     $ 721     $ 276,540  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Accumulated depreciation

          

Balance as at April 1, 2022

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

Depreciation

     28,733       —        1       104       28,838  

Terminations/modifications

     (154     (35     —        (229     (418

Translation adjustments

     (5,765     (5     (1     (22     (5,793
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Balance as at March 31, 2023

   $ 100,648     $ —      $ 19     $ 399     $ 101,066  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net carrying value as at March 31, 2023

   $ 175,148     $ —      $ 4     $ 322     $ 175,474  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

21


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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 following is the movement in lease liabilities for the six months ended September 30, 2023 and for the year ended March 31, 2023 is as follows:

 

Lease liabilities

   September 30, 2023      March 31, 2023  

Opening balance

   $ 198,982      $ 166,994  

Cash outflows

     

Principal payment of lease liabilities

     (13,516      (28,125

Interest payment on lease liabilities

     (7,988      (12,749

Non-cash adjustments

     

Additions

     5,227        40,293  

On acquisition (Refer Note 4(b))

     —         3,440  

Terminations/modifications

     2,606        25,013  

Interest accrued

     7,583        13,307  

Translation adjustments

     (4,263      (9,191
  

 

 

    

 

 

 

Closing balance

   $ 188,631      $ 198,982  
  

 

 

    

 

 

 

Rental expense charged for short-term leases was $113 and $188, rental expense charged for low value leases was $14 and $28 and variable lease payments was $762 and $1,385, for the three and six months ended September 30, 2023, respectively.

Rental expense charged for short-term leases was $324 and $393, rental expense charged for low value leases was $3 and $18 and variable lease payments was $493 and $1,002, for the three and six months ended September 30, 2022, respectively.

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

 

     As at  

Tenure

   September 30, 2023      March 31, 2023  

Less than 1 year

   $ 40,320      $ 40,726  

1-3 years

     76,381        79,085  

3-5 years

     58,821        60,372  

More than 5 years

     70,987        81,851  
  

 

 

    

 

 

 

Total

   $ 246,509      $ 262,034  
  

 

 

    

 

 

 

 

22


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:

 

               As at  

Currency

  

Interest rate

   Final maturity
(financial year)
   September 30, 2023      March 31, 2023  

US dollars

   SOFR + 1.20%    2028      64,000        72,000  

Sterling Pound

   SONIA + 1.25%    2028      91,130        102,381  
        

 

 

    

 

 

 

Total

           155,130        174,381  

Less: Debt issuance cost

           (780      (975

Total

           154,350        173,406  
        

 

 

    

 

 

 

Current portion of long-term debt

         $ 35,934      $ 36,118  

Long-term debt

         $ 118,416      $ 137,288  

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 purposes. 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 and on July 11, 2023 the Company made scheduled repayments of $8,000 each. As at September 30, 2023, the Company had 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 ($101,256 based on the exchange rate on September 30, 2023) 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. On June 16, 2023, the Company made the first scheduled repayment of £8,300 ($10,604). As at September 30, 2023, the Company had complied with the financial covenants in all material respects in relation to this loan facility.

Short-term lines of credit

The Company’s Indian subsidiary, WNS Global Services Private Limited (“WNS Global”), has unsecured lines of credit with banks amounting to $64,905 (based on the exchange rate on September 30, 2023). The Company has established a line of credit in the UK amounting to $17,079 (based on the exchange rate on September 30, 2023). The Company has 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. Further, the Company has also established a line of credit in South Africa amounting to $1,585 (based on the exchange rate September 30, 2023).

As at September 30, 2023, WNS Global has utilized $9,760 (based on the exchange rate on September 30, 2023) of its lines of credit.

 

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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 September 30, 2023 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

   $ 91,750      $ —       $ —       $ 91,750      $ 91,750  

Investment in fixed deposits

     8,673        —         —         8,673        8,673  

Investments in marketable securities and mutual funds

     —         147,647        —         147,647        147,647  

Trade receivables

     129,616        —         —         129,616        129,616  

Unbilled revenue(1)

     104,851        —         —         104,851        104,851  

Funds held for clients

     6,913        —         —         6,913        6,913  

Prepayments and other assets(2)

     10,151        —         —         10,151        10,151  

Other non-current assets(3)

     14,975        —         —         14,975        14,975  

Derivative assets

     —         611        8,540        9,151        9,151  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total carrying value

   $ 366,929      $ 148,258      $ 8,540      $ 523,727      $ 523,727  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Financial liabilities

 

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

Trade payables

   $ 19,076      $ —       $ —       $ 19,076      $ 19,076  

Short term line of credit

     9,760        —         —         9,760        9,760  

Long-term debt(4)

     155,130        —         —         155,130        155,130  

Other employee obligations(5)

     79,234        —         —         79,234        79,234  

Provisions and accrued expenses

     33,165        —         —         33,165        33,165  

Lease liabilities

     188,631        —         —         188,631        188,631  

Other liabilities(6)

     6,120        20,495        —         26,615        26,615  

Derivative liabilities

     —         3,663        5,424        9,087        9,087  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total carrying value

   $ 491,116      $ 24,158      $ 5,424      $ 520,698      $ 520,698  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 
              

Notes:

 

(1)

Excluding non-financial assets $382

(2)

Excluding non-financial assets $21,207

(3)

Excluding non-financial assets $38,594

(4)

Excluding non-financial assets (unamortized debt issuance cost) $780.

(5)

Excluding non-financial liabilities $28,737

(6)

Excluding non-financial liabilities $10,886

 

24


Table of Contents

WNS (HOLDINGS) LIMITED

NOTES TO UNAUDITED CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

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

 

The carrying value and fair value of financial instruments by class as at March 31, 2023 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

   $ 127,898      $  —       $  —       $ 127,898      $ 127,898  

Investment in fixed deposits

     9,196        —         —         9,196        9,196  

Investments in marketable securities and mutual funds

     —         167,844        —         167,844        167,844  

Trade receivables

     113,107        —         —         113,107        113,107  

Unbilled revenue (1)

     99,192        —         —         99,192        99,192  

Funds held for clients

     9,411        —         —         9,411        9,411  

Prepayments and other assets (2)

     6,357        —         —         6,357        6,357  

Other non-current assets (3)

     15,920        —         —         15,920        15,920  

Derivative assets

     —         1,424        7,630        9,054        9,054  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total carrying value

   $ 381,081      $ 169,268      $ 7,630      $ 557,979      $ 557,979  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Financial liabilities

 

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

Trade payables

   $ 25,397      $  —       $  —       $ 25,397      $ 25,397  

Long-term debt (4)

     174,381        —         —         174,381        174,381  

Other employee obligations (5)

     100,148        —         —         100,148        100,148  

Provisions and accrued expenses

     41,761        —         —         41,761        41,761  

Lease liabilities

     198,982        —         —         198,982        198,982  

Other liabilities (6)

     6,347        42,256        —         48,603        48,603  

Derivative liabilities

     —         409        9,509        9,918        9,918  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total carrying value

   $ 547,016      $ 42,665      $ 9,509      $ 599,190      $ 599,190  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Notes:

 

(1)

Excluding non-financial assets $593.

(2)

Excluding non-financial assets $27,494.

(3)

Excluding non-financial assets $33,689.

(4)

Excluding non-financial asset (unamortized debt issuance cost) $975.

(5)

Excluding non-financial liabilities $27,237.

(6)

Excluding non-financial liabilities $12,903.

 

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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 September 30, 2023 are as follows:

 

Description of types of financial assets

   Gross amounts
of recognized

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

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

Derivative assets

   $ 9,151      $ —       $ 9,151      $ (5,312   $ —       $ 3,839  
  

 

 

    

 

 

    

 

 

    

 

 

   

 

 

    

 

 

 

Total

   $ 9,151      $ —       $ 9,151      $ (5,312   $ —       $ 3,839  
  

 

 

    

 

 

    

 

 

    

 

 

   

 

 

    

 

 

 

 

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

   $ 9,087      $ —       $ 9,087      $ (5,312   $ —       $ 3,775  
  

 

 

    

 

 

    

 

 

    

 

 

   

 

 

    

 

 

 

Total

   $ 9,087      $ —       $ 9,087      $ (5,312   $ —       $ 3,775  
  

 

 

    

 

 

    

 

 

    

 

 

   

 

 

    

 

 

 

Financial assets and liabilities subject to offsetting, enforceable master netting arrangements or similar agreements as at March 31, 2023 are as follows:

 

Description of types of financial assets

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

 

 

Derivative assets

   $ 9,054      $ —       $ 9,054      $ (4,325   $ —       $ 4,729  
  

 

 

    

 

 

    

 

 

    

 

 

   

 

 

    

 

 

 

Total

   $ 9,054      $ —       $ 9,054      $ (4,325   $ —       $ 4,729  
  

 

 

    

 

 

    

 

 

    

 

 

   

 

 

    

 

 

 

 

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

   $ 9,917      $  —       $ 9,917      $ (4,325   $  —       $ 5,592  
  

 

 

    

 

 

    

 

 

    

 

 

   

 

 

    

 

 

 

Total

   $ 9,917      $ —     $ 9,917      $ (4,325   $ —     $ 5,592  
  

 

 

    

 

 

    

 

 

    

 

 

   

 

 

    

 

 

 

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 September 30, 2023 are as follows:

 

            Fair value measurement at reporting date using  

Description

   September 30,
2023
     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

   $ 611      $ —     $ 611      $ — 

Investments in marketable securities and mutual funds

     147,647        147,333        314        —   

Financial assets at FVOCI

           

Foreign exchange contracts

     8,540        —         8,540        —   
  

 

 

    

 

 

    

 

 

    

 

 

 

Total assets

   $ 156,798      $ 147,333      $ 9,465      $ —   
  

 

 

    

 

 

    

 

 

    

 

 

 

Liabilities

           

Financial liabilities at FVTPL

           

Foreign exchange contracts

   $ 3,663      $ —     $ 3,663      $ — 

Contingent consideration

   $ 20,495        —         —         20,495  

Financial liabilities at FVOCI

           

Foreign exchange contracts

     5,424        —         5,424         
  

 

 

    

 

 

    

 

 

    

 

 

 

Total liabilities

   $ 29,582      $ —     $ 9,087      $  20,495
  

 

 

    

 

 

    

 

 

    

 

 

 

 

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 assets and liabilities measured at fair value on a recurring basis as at March 31, 2023 are as follows:

 

            Fair value measurement at reporting date using  

Description

   March 31,
2023
     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

   $ 1,424      $ —     $ 1,424      $ — 

Investments in marketable securities and mutual funds

     167,844        167,509        335        —   

Financial assets at FVOCI

           

Foreign exchange contracts

     7,630        —         7,630        —   
  

 

 

    

 

 

    

 

 

    

 

 

 

Total assets

   $ 176,898      $ 167,509      $ 9,389      $ — 
  

 

 

    

 

 

    

 

 

    

 

 

 

Liabilities

           

Financial liabilities at FVTPL

           

Foreign exchange contracts

   $ 409      $ —     $ 409      $ — 

Contingent consideration

     42,256        —         —         42,256  

Financial liabilities at FVOCI

           

Foreign exchange contracts

     9,508        —         9,508        —   
  

 

 

    

 

 

    

 

 

    

 

 

 

Total liabilities

   $ 52,173      $ —     $ 9,917      $  42,256
  

 

 

    

 

 

    

 

 

    

 

 

 

During the six months ended September 30, 2023 and the year ended March 31, 2023, 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).

 

28


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  
     September 30,
2023
     March 31,
2023
 

Forward contracts (Sell)

     

In US dollars

   $ 433,602      $ 346,081  

In Pound Sterling

     120,681        113,398  

In Euro

     38,663        30,125  

In Australian dollars

     35,982        25,123  

Others

     20,587        19,641  
  

 

 

    

 

 

 
   $ 649,515      $ 534,368  
  

 

 

    

 

 

 

Option contracts (Sell)

     

In US dollars

   $ 299,566      $ 239,747  

In Pound Sterling

     112,418        101,737  

In Euro

     45,120        35,690  

In Australian dollars

     40,972        32,825  
  

 

 

    

 

 

 
   $ 498,076      $ 409,999  
  

 

 

    

 

 

 

The amount of gain reclassified from other comprehensive income into consolidated statement of income in respective line items for the three and six months ended September 30, 2023 and 2022 are as follows:

 

     Three months ended September 30,      Six months ended September 30,  
     2023      2022      2023      2022  

Revenue

   $ (1,369    $ (6    $ (3,062    $ 1,295  

Income tax related to amounts reclassified into consolidated statement of income

     319        (807      599        (1,552
  

 

 

    

 

 

    

 

 

    

 

 

 

Total

   $ (1,050    $ (813    $ (2,463    $ (257
  

 

 

    

 

 

    

 

 

    

 

 

 
           

As at September 30, 2023, a loss amounting to $825 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.

 

15.

Pension and other employee obligations

Pension and other employee obligations consist of the following:

 

     As at  
     September 30,
2023
     March 31,
2023
 

Current:

     

Salaries and bonus

   $ 74,838      $ 95,893  

Pension

     1,682        1,473  

Withholding taxes on salary and statutory payables

     10,134        10,515  
  

 

 

    

 

 

 

Total

   $ 86,654      $ 107,881  
  

 

 

    

 

 

 

Non-current:

     

Pension and other obligations

   $ 21,317      $ 19,504  
  

 

 

    

 

 

 

Total

   $ 21,317      $ 19,504  
  

 

 

    

 

 

 

 

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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)

 

16.

Provisions and accrued expenses

Provisions and accrued expenses consist of the following:

 

     As at  
     September 30,
2023
     March 31,
2023
 

Accrued expenses

   $ 33,165      $ 41,761  
  

 

 

    

 

 

 

Total

   $ 33,165      $ 41,761  
  

 

 

    

 

 

 

 

30


Table of Contents

WNS (HOLDINGS) LIMITED

NOTES TO UNAUDITED CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

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

 

17.

Contract liabilities

Contract liabilities consists of the following:

 

     As at  
     September 30,
2023
     March 31,
2023
 

Current:

     

Payments in advance of services

   $ 9,275      $ 9,820  

Advance billings

     6,554        5,552  

Others

     46        333  
  

 

 

    

 

 

 

Total

   $ 15,875      $ 15,705  
  

 

 

    

 

 

 

 

     As at  
     September 30,
2023
     March 31,
2023
 

Non-current:

     

Payments in advance of services

   $ 10,112      $ 8,714  

Advance billings

     955        1,008  

Others

     26        26  
  

 

 

    

 

 

 

Total

   $ 11,093      $ 9,748  
  

 

 

    

 

 

 

 

18.

Other liabilities

Other liabilities consist of the following:

 

     As at  
     September 30,
2023
     March 31,
2023
 

Current:

     

Withholding taxes and value added tax payables

   $ 8,410      $  11,425  

Contingent consideration (Refer Note 4(a), 4(b) & 4(d))

     10,758        22,121  

Other liabilities

     8,166        7,116  
  

 

 

    

 

 

 

Total

   $ 27,334      $ 40,662  
  

 

 

    

 

 

 

Non-current:

     

Contingent consideration (Refer Note 4(a), 4(b) & 4(d))

     9,737        20,135  

Other liabilities

     430        709  
  

 

 

    

 

 

 

Total

   $ 10,167      $ 20,844  
  

 

 

    

 

 

 

 

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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)

 

19.

Share capital

As at September 30, 2023, 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 47,518,520 ordinary shares outstanding as at September 30, 2023. There were no preferred shares outstanding as at September 30, 2023.

As at March 31, 2023, 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 48,360,817 ordinary shares outstanding as at March 31, 2023. There were no preferred shares outstanding as at March 31, 2023.

Treasury shares

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 year ended March 31, 2023, 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 year ended March 31, 2023, 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 $134 and in share premium amounting to $81,552, in compliance with Jersey law. There was no effect on the total shareholders’ equity as a result of this cancellation.

During the six months ended September 30, 2023, the Company purchased 1,100,000 ADSs in the open market for a total consideration of $85,622 (including transaction costs $11) under the above-mentioned share repurchase program and concluded the program. The Company funded the repurchases under the repurchase program with cash on hand. During the six months ended September 30, 2023, 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 $85,677 (including share cancellation charges $55). The effect of the cancellation of these treasury shares was recognized in share capital amounting to $140 and in share premium amounting to $85,537, in compliance with Jersey law. There was no effect on the total shareholders’ equity as a result of this cancellation.

During the six months ended September 30, 2023, 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 $180 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 42 months from October 1, 2023 to March 31, 2027. 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 may fund the repurchases with internal or external sources.

 

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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 September 30,      Six months ended September 30,  
     2023      2022      2023      2022  

Industry-specific

   $ 133,439      $  132,757      $ 264,902      $  266,928  

Finance and accounting

     72,997        70,818        146,636        137,647  

Customer experience services

     68,218        60,229        134,247        114,436  

Research and analytics

     41,127        29,644        80,585        63,031  

Others

     18,109        13,651        34,021        20,405  
  

 

 

    

 

 

    

 

 

    

 

 

 

Total

   $ 333,890      $ 307,099      $ 660,391      $ 602,447  
  

 

 

    

 

 

    

 

 

    

 

 

 

Revenue by industry

 

     Three months ended September 30,      Six months ended September 30,  
     2023      2022      2023      2022  

Insurance*

   $ 89,530      $ 82,507      $ 177,322      $  166,149  

Travel and leisure

     55,299        54,343        112,056        102,531  

Healthcare

     46,043        49,093        90,351        99,315  

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

     47,715        43,773        97,120        84,639  

Shipping and logistics

     25,404        21,771        50,030        45,319  

Banking and financial services

     26,095        21,075        50,026        38,302  

Hi-tech and professional services

     25,266        20,291        48,261        38,695  

Utilities

     18,538        14,246        35,225        27,497  
  

 

 

    

 

 

    

 

 

    

 

 

 

Total

   $ 333,890      $ 307,099      $ 660,391      $ 602,447  
  

 

 

    

 

 

    

 

 

    

 

 

 

Revenue by contract type

 

     Three months ended September 30,      Six months ended September 30,  
     2023      2022      2023      2022  

Full-time-equivalent

   $ 235,406      $  208,666      $ 466,288      $  399,759  

Transaction*

     46,150        45,270        92,515        94,187  

Subscription

     17,973        25,318        35,319        50,128  

Fixed price

     18,533        16,496        34,821        32,793  

Others

     15,828        11,349        31,448        25,580  
  

 

 

    

 

 

    

 

 

    

 

 

 

Total

   $ 333,890      $ 307,099      $ 660,391      $ 602,447  
  

 

 

    

 

 

    

 

 

    

 

 

 

Revenue by geography

Refer Note 28 Operating segments External revenue.

 

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WNS (HOLDINGS) LIMITED

NOTES TO UNAUDITED CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

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

 

Revenue by delivery location

 

     Three months ended September 30,      Six months ended September 30,  
     2023      2022      2023      2022  

India

   $ 183,510      $ 157,383      $ 358,021      $ 306,784  

United States

     40,372        47,331        83,394        93,126  

Philippines

     48,028        42,279        95,264        81,159  

UK*

     18,974        27,745        39,336        58,719  

South Africa

     20,080        15,063        37,928        29,799  

Romania

     6,562        4,634        13,850        8,796  

Sri Lanka

     4,181        4,227        8,831        8,034  

China

     4,050        3,587        7,930        6,957  

Australia

     1,585        1,348        3,034        2,238  

Costa Rica

     2,529        1,319        4,413        2,466  

Poland

     2,972        1,226        6,391        2,492  

Spain

     814        957        1,686        1,877  

Malaysia

     233        —         313        —   
  

 

 

    

 

 

    

 

 

    

 

 

 

Total

   $ 333,890      $ 307,099      $ 660,391      $ 602,447  
  

 

 

    

 

 

    

 

 

    

 

 

 

 

*

Includes revenue earned in Germany, which is not significant.

 

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WNS (HOLDINGS) LIMITED

NOTES TO UNAUDITED CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

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

 

21.

Expenses by nature

Expenses by nature consist of the following:

 

     Three months ended September 30,      Six months ended September 30,  
     2023      2022      2023      2022  

Employee cost

   $ 209,097      $ 190,504      $ 420,589      $ 371,841  

Facilities cost

     21,764        18,996        43,118        36,038  

Repair payments

     8,914        17,803        17,927        38,332  

Depreciation

     14,038        12,124        27,697        24,585  

Legal and professional expenses

     5,477        7,875        12,217        15,022  

Travel expenses

     4,799        3,887        9,458        7,356  

Others

     11,384        10,926        22,367        21,955  
  

 

 

    

 

 

    

 

 

    

 

 

 

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

   $ 275,473      $ 262,115      $ 553,373      $ 515,129  
  

 

 

    

 

 

    

 

 

    

 

 

 

 

22.

Finance expense

Finance expense consists of the following:

 

     Three months ended September 30,      Six months ended September 30,  
     2023      2022      2023      2022  

Interest expense on lease liability

   $ 3,753      $ 3,149      $ 7,583      $ 6,298  

Interest expense

     3,751        851        7,055        948  
  

 

 

    

 

 

    

 

 

    

 

 

 

Total

   $ 7,504      $ 4,000      $ 14,638      $ 7,246  
  

 

 

    

 

 

    

 

 

    

 

 

 

 

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WNS (HOLDINGS) LIMITED

NOTES TO UNAUDITED CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

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

 

23.

Other income, net

Other income, net consists of the following:

 

     Three months ended September 30,      Six months ended September 30,  
     2023      2022      2023      2022  

Net gain arising on financial assets designated as FVTPL

   $ 2,376      $ 1,552      $ 4,967      $ 3,818  

Interest income

     762        813        2,339        1,412  

Changes in fair value of contingent consideration

     21,932        —         21,932        —   

Others, net

     543        773        1,166        1,320  
  

 

 

    

 

 

    

 

 

    

 

 

 

Total

   $ 25,613      $ 3,138      $ 30,404      $ 6,550  
  

 

 

    

 

 

    

 

 

    

 

 

 

 

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 September 30, 2023, the Company had 1,163,414 ordinary shares available for future grants.

Share-based compensation expense during the three and six months ended September 30, 2023 and 2022 is as follows:

 

     Three months ended September 30,      Six months ended September 30,  
     2023      2022      2023      2022  

Share-based compensation expense recorded in

           

Cost of revenue

   $ 1,464      $ 2,023      $ 5,616      $ 4,125  

Selling and marketing expenses

     994        1,595        4,121        3,290  

General and administrative expenses

     10,915        8,947        19,852        18,843  
  

 

 

    

 

 

    

 

 

    

 

 

 

Total share-based compensation expense

   $ 13,373      $ 12,565      $ 29,589      $ 26,258  
  

 

 

    

 

 

    

 

 

    

 

 

 

Upon the exercise of share-based options and RSUs, the Company issued 160,231 and 212,609 shares for the three months ended September 30, 2023 and 2022, respectively, and 257,703 and 259,801 shares for the six months ended September 30, 2023 and 2022, 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 2,495 RSUs during the six months ended September 30, 2023, 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 nine months anniversary, 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 six months ended September 30, 2023 was $28 and $55, respectively (three and six months ended September 30, 2022: $28 and $55, respectively).

 

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WNS (HOLDINGS) LIMITED

NOTES TO UNAUDITED CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

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

 

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

During the six months ended September 30, 2023, the Company issued 113,701 RSUs (six months ended September 30, 2022: 104,975 RSUs) to certain employees. The conditions for the vesting of these RSUs are linked to the TSR of the Company in addition to the condition of continued employment with the Company through the applicable vesting period.

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

The fair value of these RSUs is determined using the Monte-Carlo simulation. The weighted average grant date fair value of RSUs granted during the six months ended September 30, 2023 and 2022 was $88.3 and $79, per RSU, respectively. The stock compensation expense charged during the three and six months ended September 30, 2023 was $1,306 and $2,599, respectively (three and six months ended September 30, 2022: $1,367 and $2,765, respectively). As at September 30, 2023, there was $7,692 of unrecognized compensation cost related to these RSUs.

RSUs to drive higher growth

During the year ended March 31, 2023, 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 $28.00 per RSU.

During the year ended March 31, 2023, 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 $1.60 determined using the Monte-Carlo simulation as at the date of modification.

The Company has not recognized any charge for the six months ended September 30, 2023 considering the net revenue target is not expected to be met, based on the current projections. As at September 30, 2023, there was $19,518 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 September 30,      Six months ended September 30,  
      2023        2022        2023        2022   

Domestic

   $ (4,266    $ (3,241    $ (7,863    $ (5,954

Foreign

     72,120        43,655        114,155        87,803  
  

 

 

    

 

 

    

 

 

    

 

 

 

Profit before income taxes

   $ 67,854      $ 40,414      $ 106,292      $ 81,849  
  

 

 

    

 

 

    

 

 

    

 

 

 
           

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

 

     Three months ended September 30,      Six months ended September 30,  
      2023        2022        2023        2022   

Current taxes

           

Domestic taxes

   $ —       $ —       $ —       $ —   

Foreign taxes

     13,406        8,837        26,656        21,061  
  

 

 

    

 

 

    

 

 

    

 

 

 
   $ 13,406      $ 8,837      $ 26,656      $ 21,061  
  

 

 

    

 

 

    

 

 

    

 

 

 
           

Deferred taxes

           

Domestic taxes

     —         —         —         —   

Foreign taxes

     (3,364      (1,589      (8,312      (5,441
  

 

 

    

 

 

    

 

 

    

 

 

 
     (3,364      (1,589      (8,312      (5,441
  

 

 

    

 

 

    

 

 

    

 

 

 

Income tax expense

   $ 10,042      $ 7,248      $ 18,344      $ 15,620  
  

 

 

    

 

 

    

 

 

    

 

 

 

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

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

 

     Three months ended September 30,      Six months ended September 30,  
      2023        2022        2023        2022   

Income taxes on profit

   $ 10,042      $ 7,248      $ 18,344      $ 15,620  

Income taxes on other comprehensive income/(loss):

           

Unrealized gain on cash flow hedging derivatives

     756        1,197        1,583        1,141  

Pension liability

     (28      (65      (264      30  

Income taxes recognized in equity:

           

Excess tax deductions related to share-based options and RSUs

     454        (687      3,399        (195
  

 

 

    

 

 

    

 

 

    

 

 

 

Total income taxes

   $ 11,224      $ 7,693      $ 23,062      $ 16,596  
  

 

 

    

 

 

    

 

 

    

 

 

 

 

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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 six months ended September 30, 2023, one of the Company’s Indian subsidiary 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 in 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. Upon the complete expiration of this tax exemption, income derived by this subsidiary shall become subject to the prevailing annual tax rate of 34.95%. The Government of India enacted the India Tax Law effective April 1, 2019, which enables Indian companies to elect to be taxed at a lower income tax rate of 25.17% as compared to the current rate of 34.95%. Once a company elects into the lower income tax rate, a company may not benefit from any tax holidays associated with SEZ and certain other tax incentives and may not reverse its election. Our intent is to move to the new tax regime as and when it becomes more beneficial to this subsidiary. In the quarter ended June 2023, this subsidiary has elected to apply the lower income tax rate of 25.17% - we will continue to evaluate the application of the same for the remaining quarters of fiscal 2024. Between fiscal 2016 until the six months ended September 30 2023, the Company commenced operations in delivery centers in the Philippines that are eligible for various tax exemption benefits expiring between fiscal 2020 and fiscal 2027. Following the expiry of the tax benefits, income generated by the Philippines subsidiary, WNS Global Services Philippines Inc., will be taxed at the prevailing special tax rate, which is currently 5% on gross profit. From January 1, 2020, the Company’s operations in Sri Lanka are eligible to claim income tax exemption with respect to the profits earned from export revenue.

From time to time, the Company receives orders of assessment from the Indian tax authorities assessing additional taxable income on the Company in connection with their review of the Company’s tax returns. The Company currently has orders of assessment outstanding for various years through fiscal 2020, which assess additional taxable income that could in the aggregate give rise to an estimated $4,140 in additional taxes, including interest of $591. These orders of assessment allege that the transfer prices the Company applied to certain international transactions between WNS Global 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, disallow certain expenses and payments 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 $83,171 in additional taxes, including interest of $29,588. The income tax authorities have filed or may file appeals against these orders at higher appellate authorities.

Uncertain tax positions are reflected at the amount likely to be paid to the tax authorities. A liability is recognized in connection with each item that is not probable of being sustained on examination by tax authority. The liability is measured using single best estimate of the most likely outcome for each position taken in the tax return. Thus, the provision is the aggregate liability in connection with all uncertain tax positions. As of September 30, 2023, the Company has provided a tax reserve of $9,837 primarily on account of the Indian tax authorities’ denying the set off of brought forward business losses and unabsorbed depreciation.

As at September 30, 2023, corporate tax returns for years ended March 31, 2021 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 $10,906 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.

 

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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 $2,899 towards service tax and GST for the period April 1, 2014 to March 31, 2020. 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.

In 2016, we also received an assessment order from the Sri Lankan Tax Authority, demanding payment of LKR 25.2 million ($0.1 million based on the exchange rate on September 30, 2023) in connection with the review of our tax return for fiscal year 2012. The assessment order challenges the tax exemption that we have claimed for export business. We have filed an appeal against the assessment order with the Sri Lankan Court of Appeal in this regard. Based on consultations with our tax advisors, we believe this order of assessment will more likely than not be vacated by the higher appellate authorities and we intend to dispute the order of assessment.

 

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WNS (HOLDINGS) LIMITED

NOTES TO UNAUDITED CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

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

 

26.

Earnings per share

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

 

     Three months ended September 30,      Six months ended September 30,  
     2023      2022      2023      2022  

Numerator:

           

Profit

   $ 57,813      $ 33,166      $ 87,949      $ 66,229  

Denominator:

           

Basic weighted average ordinary shares outstanding

     47,413,342        47,971,498        47,703,818        48,337,728  

Dilutive impact of equivalent stock options and RSUs

     2,236,811        2,235,874        2,306,026        2,444,434  

Diluted weighted average ordinary shares outstanding

     49,650,152        50,207,372        50,009,844        50,782,162  

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

 

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WNS (HOLDINGS) LIMITED

NOTES TO UNAUDITED CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

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

 

27.

Subsidiaries

The following is a list of the Company’s subsidiaries as at September 30, 2023:

 

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, LLC(1)

   Delaware, USA
  

WNS BPO Services Costa Rica, S.R.L.

   Costa Rica
  

Denali Sourcing Services, LLC(1)

   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.(2)

   Malaysia
  

WNS Global Services Private Limited (3) (4) (5)

   India
  

- Vuram Technology Solutions Private Limited (5)

   India
  

- Vuram Australia Pty Ltd (5)

   Australia
  

- Vuram Canada Inc.(5)

   Canada
  

- Vuram Technologies B.V.(5)

   The Netherlands
  

- Vuram, Inc.(5)(6)

   USA