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, 2020

Commission File Number 001—32945

 

 

WNS (HOLDINGS) LIMITED

(WNS (Holdings) Limited)

 

 

Gate 4, Godrej & Boyce Complex

Pirojshanagar, Vikhroli (W)

Mumbai 400 079, India

+91-22-4095-2100

(Address of principal executive office)

 

 

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

Form 20-F  ☒             Form 40-F  ☐

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

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

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

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

 

 

 

TABLE OF CONTENTS

 

Part I — FINANCIAL INFORMATION
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION			3
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME			4
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME/(LOSS)			5
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY			6
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS			8
NOTES TO UNAUDITED CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS			9
Part  II — MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS			44
Part III — RISK FACTORS			82
Part IV — OTHER INFORMATION			111
SIGNATURES			112

 

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 “$” or “dollars” or “US dollars” are to the legal currency of the US, references to “ ₹ ” or “Indian rupee” or “Indian rupees” are to the legal currency of India, references to “pound sterling” or “£” are to the legal currency of the UK, references to “pence” are to the legal currency of Jersey, Channel Islands, references to “Euro” or “€” are to the legal currency of the European Monetary Union, references to “South African rand” or “R” or “ZAR” are to the legal currency of South Africa, references to “A$” 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, references to “PHP” or “Philippine peso” are to the legal currency of the Philippines and references to “NZD” or “New Zealand dollar” are to the legal currency of New Zealand. 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, 2020. To the extent the IASB issues any amendments or any new standards subsequent to September 30, 2020, 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, 2021. Unless otherwise indicated, the financial information in this interim report on Form 6-K has been prepared in accordance with IFRS, as issued by the IASB. Unless otherwise indicated, references to “GAAP” in this report are to IFRS, as issued by the IASB. References to “our ADSs” in this report are to our American Depositary Shares, each representing one of our ordinary shares.

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

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

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

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

 

1

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

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

 

•

worldwide economic and business conditions;

 

•

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

 

•

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

 

•

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

 

•

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

 

•

regulatory, legislative and judicial developments;

 

•

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

 

•

technological innovation;

 

•

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

 

•

telecommunications or technology disruptions;

 

•

our ability to attract and retain clients;

 

•

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

 

•

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

 

•

our ability to expand our business or effectively manage growth;

 

•

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

 

•

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

 

•

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

 

•

future regulatory actions and conditions in our operating areas; and

 

•

volatility of our ADS price.

These and other factors are more fully discussed in our other filings with the SEC, including in “Risk Factors,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and elsewhere in our annual report on Form 20-F for our fiscal year ended March 31, 2020. 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.

 

2

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, 2020				As at March 31, 2020
ASSETS
Current assets:
Cash and cash equivalents			5			$	137,160			$	96,929
Investments			6				145,568				125,641
Trade receivables, net			7				86,778				89,772
Unbilled revenue			7				60,069				57,983
Funds held for clients							7,454				15,833
Derivative assets			14				9,464				13,198
Contract assets							7,472				7,479
Prepayments and other current assets			8				21,358				21,999
Total current assets							475,323				428,834
Non-current assets:
Goodwill			9				122,811				121,304
Intangible assets			10				67,893				70,100
Property and equipment			11				56,855				56,984
Right-of-use assets			12				156,785				159,098
Derivative assets			14				2,393				2,095
Deferred tax assets							32,236				28,942
Investments			6				83,736				80,135
Trade receivables, net			7				504				—
Contract assets							26,047				28,885
Other non-current assets			8				34,784				35,952
Total non-current assets							584,044				583,495
TOTAL ASSETS						$	1,059,367			$	1,012,329
LIABILITIES AND EQUITY
Current liabilities:
Trade payables						$	24,453			$	29,333
Provisions and accrued expenses			16				25,882				28,983
Derivative liabilities			14				2,589				9,575
Pension and other employee obligations			15				59,456				76,857
Current portion of long-term debt			13				16,711				16,674
Contract liabilities			17				11,562				10,281
Current taxes payable							3,160				3,312
Lease liabilities			12				25,425				23,431
Other liabilities			18				7,407				7,393
Total current liabilities							176,645				205,839
Non-current liabilities:
Derivative liabilities			14				700				3,880
Pension and other employee obligations			15				17,325				12,999
Long-term debt			13				8,383				16,748
Contract liabilities			17				16,920				20,073
Lease liabilities			12				156,262				155,461
Other non-current liabilities			18				166				164
Deferred tax liabilities							9,523				10,055
Total non-current liabilities							209,279				219,380
TOTAL LIABILITIES						$	385,924			$	425,219
Shareholders’ equity:
Share capital (ordinary shares $0.16 (10 pence) par value, authorized 60,000,000 shares; issued: 49,990,612 shares and 49,733,640 shares; each as at September 30, 2020 and March 31, 2020, respectively)			19				7,907				7,874
Share premium							207,851				187,268
Retained earnings							630,389				586,340
Other components of equity							(172,704	)			(194,372	)
Total shareholders’ equity							673,443				587,110
TOTAL LIABILITIES AND EQUITY						$	1,059,367			$	1,012,329

See accompanying notes.

 

3

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				2020				2019				2020				2019
Revenue			20			$	222,580			$	226,193			$	430,381			$	440,746
Cost of revenue			21				137,917				142,138				278,338				275,603
Gross profit							84,663				84,055				152,043				165,143
Operating expenses:
Selling and marketing expenses			21				12,109				12,219				24,534				24,643
General and administrative expenses			21				28,611				32,691				60,499				62,652
Foreign exchange loss/(gain), net							1,404				(1,090	)			788				(1,895	)
Amortization of intangible assets							3,329				3,923				7,049				7,860
Operating profit							39,210				36,312				59,173				71,883
Other income, net			23				(3,028	)			(3,251	)			(6,235	)			(6,913	)
Finance expense			22				3,718				4,319				7,433				8,745
Profit before income taxes							38,520				35,244				57,975				70,051
Income tax expense			25				9,291				6,503				13,926				13,701
Profit after tax						$	29,229			$	28,741			$	44,049			$	56,350
Earnings per ordinary share			26
Basic						$	0.59			$	0.58			$	0.88			$	1.13
Diluted						$	0.56			$	0.56			$	0.84			$	1.09

See accompanying notes.

 

4

WNS (HOLDINGS) LIMITED

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME/(LOSS)

(Amounts in thousands)

 

		Three months ended September 30,								Six months ended September 30,
		2020				2019				2020				2019
Profit after tax		$	29,229			$	28,741			$	44,049			$	56,350
Other comprehensive income/(loss), net of taxes
Items that will not be reclassified to profit or loss:
Pension adjustment, net of tax			(102	)			(98	)			(650	)			(772	)
Items that will be reclassified subsequently to profit or loss:
Changes in fair value of cash flow hedges:
Current period gain			5,337				8,279				6,072				16,878
Net change in time value of option contracts designated as cash flow hedges			(616	)			(5,489	)			(1,042	)			(4,065	)
Reclassification to profit or loss			(882	)			(4,118	)			(2,221	)			(6,385	)
Foreign currency translation gain/(loss)			17,655				(16,400	)			20,787				(16,724	)
Income tax (expense)/benefit relating to above			(1,061	)			220				(1,278	)			(1,261	)
		$	20,433			$	(17,508	)		$	22,318			$	(11,557	)
Total other comprehensive income/(loss), net of taxes		$	20,331			$	(17,606	)		$	21,668			$	(12,329	)
Total comprehensive income/(loss)		$	49,560			$	11,135			$	65,717			$	44,021

See accompanying notes.

 

5

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 premium				Retained earnings				Foreign currency translation reserve				Cash flow hedging reserve				Pension adjustments				Treasury shares								Total shareholders’ equity
		Number				Par value																								Number				Amount
Balance as at March 31, 2019			51,153,220			$	8,056			$	269,529			$	478,145			$	(155,195	)		$	5,954			$	2,347				1,101,300			$	(56,417)			$	552,419
Adoption of IFRS 16 (net of tax)			—				—				—				(8,574	)			—				—				—				—				—				(8,574	)
Balance as at April 1, 2019			51,153,220				8,056				269,529				469,571				(155,195	)			5,954				2,347				1,101,300				(56,417	)			543,845
Shares issued for exercised options and restricted share units (“RSUs”)			626,065				159				(159	)			—				—				—				—				—				—				—
Cancellation of treasury shares (Refer Note 19)			(1,100,000	)			(137	)			(56,214	)			—				—				—				—				(1,100,000	)			56,351				—
Purchase of treasury shares (Refer Note 19)			—				—				—				—				—				—				—				1,098,700				(63,737	)			(63,737	)
Share-based compensation expense (Refer Note 24)			—				—				20,296				—				—				—				—				—				—				20,296
Excess tax benefits relating to share-based options and RSUs			—				—				272				—				—				—				—				—				—				272
Transactions with owners			(473,935	)			22				(35,805	)							—				—				—				(1,300	)			(7,386	)			(43,169	)
Profit after tax			—				—				—				56,350				—				—				—				—				—				56,350
Other comprehensive income/(loss), net of taxes			—				—				—				—				(16,724	)			5,167				(772	)			—				—				(12,329	)
Total comprehensive income/(loss) for the period			—				—				—				56,350				(16,724	)			5,167				(772	)			—				—				44,021
Balance as at September 30, 2019			50,679,285			$	8,078			$	233,724			$	525,921			$	(171,919	)		$	11,121			$	1,575				1,100,000			$	(63,803)			$	544,697

See accompanying notes.

 

6

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 premium				Retained earnings				Foreign currency translation reserve				Cash flow hedging reserve				Pension adjustments				Treasury shares								Total shareholders’ equity
		Number				Par value																								Number				Amount
Balance as at April 1, 2020			49,733,640			$	7,874			$	187,268			$	586,340			$	(197,391	)		$	1,282			$	1,737				—			$	—			$	587,110
Shares issued for exercised options and restricted share units (“RSUs”)			256,972				33				(33	)			—				—				—				—				—				—				—
Transaction charges on cancellation of treasury shares (Refer Note 19)			—				—				(55	)			—				—				—				—				—				—				(55	)
Share-based compensation expense (Refer Note 24)			—				—				19,268				—				—				—				—				—				—				19,268
Excess tax benefits relating to share-based options and RSUs			—				—				1,403				—				—				—				—				—				—				1,403
Transactions with owners			256,972				33				20,583				—				—				—				—				—				—				20,616
Profit after tax			—				—				—				44,049				—				—				—				—				—				44,049
Other comprehensive income/(loss), net of taxes			—				—				—				—				20,787				1,531				(650	)			—				—				21,668
Total comprehensive income/(loss) for the period			—				—				—				44,049				20,787				1,531				(650	)			—				—				65,717
Balance as at September 30, 2020			49,990,612			$	7,907			$	207,851			$	630,389			$	(176,604	)		$	2,813			$	1,087				—			$	—			$	673,443

See accompanying notes.

 

7

WNS (HOLDINGS) LIMITED

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Amounts in thousands)

 

		Notes		Six months ended September 30,
				2020				2019
Cash flows from operating activities:
Cash generated from operations				$	99,794			$	116,174
Income taxes paid					(13,379	)			(13,064	)
Interest paid					(6,814	)			(7,034	)
Interest received					2,257				1,436
Net cash provided by operating activities					81,858				97,512
Cash flows from investing activities:
Payment for property and equipment and intangible assets					(12,925	)			(18,408	)
Investment in fixed deposits					(23,572	)			(42,687	)
Proceeds from maturity of fixed deposits					34,772				18,520
Proceeds from sale of property and equipment					28				51
Profit on sale of marketable securities					1,232				1,138
Marketable securities (purchased)/sold, net (short-term)					(26,481	)			31,613
Net cash used in investing activities					(26,946	)			(9,773	)
Cash flows from financing activities:
Payment of repurchase of shares					—				(63,737	)
Transaction charges paid on cancellation of treasury shares					(55	)			—
Repayment of long-term debt					(8,400	)			(14,050	)
Principal payment of lease liabilities					(9,559	)			(11,323	)
Excess tax benefit from share-based compensation expense					326				473
Net cash used in financing activities					(17,688	)			(88,637	)
Exchange difference on cash and cash equivalents					3,007				(2,192	)
Net change in cash and cash equivalents					40,231				(3,090	)
Cash and cash equivalents at the beginning of the period					96,929				85,444
Cash and cash equivalents at the end of the period				$	137,160			$	82,354
Non-cash transactions:
Investing activities
(i) Liability towards property and equipment and intangible assets purchased on credit				$	6,320			$	2,980
(ii)  Release of restricted cash, held in escrow		4(d)			—				1,535

Reconciliation of liabilities arising from financing activities as at September 30, 2020 and September 30, 2019 is as follows:

 

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

 

		Opening balance April 1, 2019				Cash flows				Non-cash changes				Closing balance September 30, 2019
										Amortization of debt issuance cost
Long-term debt (including current portion)		$	61,391			$	14,050			$	132			$	47,473

See accompanying notes.

 

8

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 Australia, Canada, Dubai (United Arab Emirates), Germany, London (UK), New Jersey (US), New Zealand, Singapore and Switzerland and delivery centers in the People’s Republic of China (“China”), Costa Rica, India, the Philippines, Poland, Romania, Republic of South Africa (“South Africa”), Sri Lanka, Turkey, Spain, the United Kingdom (“UK”) and the United States (“US”). The Company’s clients are primarily in the travel, shipping and logistics services, utilities, retail and consumer products group, banking and financial and consulting and professional services, insurance services, healthcare, auto claims and others.

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

These unaudited condensed interim consolidated financial statements were authorized for issue by the Board of Directors on October 28, 2020.

 

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, 2020.

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, 2020.

Estimation uncertainty relating to COVID-19 pandemic

In evaluating the recoverability of trade receivables including unbilled revenue, contract assets, goodwill, long lived assets and investments, the Company has considered all internal and external information in the preparation of the consolidated financial statements including credit reports and economic outlook. The Company has performed sensitivity analysis on the assumptions used and based on current indicators of future economic conditions, the Company expects to recover the carrying amount of these assets. The impact of COVID-19 may be different from that estimated on preparation of these consolidated financial statements and the Company will continue to closely monitor any material changes to future economic conditions.

 

 

9

WNS (HOLDINGS) LIMITED

NOTES TO UNAUDITED CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

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

 

3.	New accounting pronouncements not yet adopted by the Company

Certain new standards, interpretations and amendments to existing standards have been published that are mandatory for the Company’s accounting periods beginning on or after April 1, 2021 or later periods. Those which are considered to be relevant to the Company’s operations are set out below.

 

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 twelve months and make explicit that only rights in place “at the end of the reporting period” should affect the classification of a liability;

 

•

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

 

•

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

The above amendments are effective for annual reporting periods beginning on or after January 1, 2023 and are to be applied retrospectively. Early application is permitted.

The Company is currently evaluating the impact of these amendments on its consolidated financial statements.

 

ii.	In January 2020, the IASB issued amendments to IAS 16 “Property, Plant and Equipment” regarding proceeds from selling items produced while bringing an asset into the location and condition necessary for it to be capable of operating in the manner intended by management. These amendments:

 

•

prohibit deducting from the cost of an item of property, plant and equipment any proceeds from selling items produced while bringing that asset to the location and condition necessary for it to be capable of operating in the manner intended by management; and

 

•

require an entity to recognizes the proceeds from selling such items, and the cost of producing those items, in profit or loss.

An entity is required to apply the amendments retrospectively only to items of property, plant and equipment that are brought to the location and condition necessary for them to be capable of operating in the manner intended by management on or after the beginning of the earliest period presented in the financial statements in which the entity first applies the amendments. The amendments are effective for annual periods beginning on or after January 1, 2022. Early application is permitted.

The Company is currently evaluating the impact of these amendments on its consolidated financial statements.

 

iii.	In January 2020, the IASB issued amendments to IAS 37 “Provisions, Contingent Liabilities and Contingent Assets” regarding costs a company should include as the cost of fulfilling a contract when assessing whether a contract is onerous. These amendments:

 

•

specify that the ‘cost of fulfilling’ a contract comprises the ‘costs that relate directly to the contract’; and

 

•

state that costs that relate directly to a contract can either be incremental costs of fulfilling that contract (examples would be direct labour or materials) or an allocation of other costs that relate directly to fulfilling contracts (an example would be the allocation of the depreciation charge for an item of property, plant and equipment used in fulfilling the contract).

An entity is required to apply the amendments to contracts for which the entity has not yet fulfilled all its obligations at the beginning of the annual reporting period in which the entity first applies the amendments. Comparatives are not required to be restated. The amendments are effective for annual periods beginning on or after January 1, 2022. Early application is permitted.

The Company is currently evaluating the impact of these amendments on its consolidated financial statements.

 

10

WNS (HOLDINGS) LIMITED

NOTES TO UNAUDITED CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

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

 

iv.

In August 2020, the IASB issued amendments to “Interest Rate Benchmark Reform — Phase 2” in relation to the modification of financial assets, financial liabilities and lease liabilities, specific hedge accounting requirements, and disclosure requirements applying IFRS 7 to accompany the amendments regarding modifications and hedge accounting. These amendments:

 

•

introduce a practical expedient for modifications required by the reform (modifications required as a direct consequence of the IBOR reform and made on an economically equivalent basis) whereby the modification is accounted for by updating the effective interest rate. All other modifications are accounted for using the current IFRS requirements. A similar practical expedient is proposed for lessee accounting applying IFRS 16.

 

•

state that the hedge accounting is not discontinued solely because of the IBOR reform. Hedging relationships (and related documentation) must be amended to reflect modifications to the hedged item, hedging instrument and hedged risk. Amended hedging relationships should meet all qualifying criteria to apply hedge accounting, including effectiveness requirements.

 

•

require disclosures to allow users to understand the nature and extent of risks arising from the IBOR reform to which the entity is exposed to and how the entity manages those risks as well as the entity’s progress in transitioning from IBORs to alternative benchmark rates, and how the entity is managing this transition, the amendments require that an entity discloses information about

 

•

how the transition from interest rate benchmarks to alternative benchmark rates is managed, the progress made at the reporting date, and the risks arising from the transition;

 

•

quantitative information about non-derivative financial assets, non-derivative financial liabilities and derivatives that continue to reference interest rate benchmarks subject to the reform, disaggregated by significant interest rate benchmark;

 

•

to the extent that the IBOR reform has resulted in changes to an entity’s risk management strategy, a description of these changes and how is the entity managing those risks.

The amendments are effective for annual periods beginning on or after January 1, 2021. Early application is permitted. Restatement of prior periods is not required; however, an entity may restate prior periods if, and only if, it is possible without the use of hindsight.

The Company is currently evaluating the impact of these amendments on its consolidated financial statements.

 

11

WNS (HOLDINGS) LIMITED

NOTES TO UNAUDITED CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

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

 

4.	Business Combinations

 

a)

Payment for business transfer - HotelBeds Group S.L.U. (“HotelBeds”)

On October 30, 2018, the Company entered into an agreement with HotelBeds, a leading provider of travel services in Spain, pursuant to which the Company agreed to acquire certain assets and the related workforce of HotelBeds, effective January 1, 2019 (“Acquisition Date”). The net purchase price of the transaction, which was paid in cash was $233. The excess of purchase price over the assets acquired amounted to $203, which has been recognized as goodwill.

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

 

b)

MTS HealthHelp Inc. and its subsidiaries (“HealthHelp”)

On March 15, 2017 (“Acquisition date”), the Company acquired all ownership interests of HealthHelp, which provides benefits management across several specialty healthcare areas, including radiology, cardiology, oncology, sleep care, orthopedics, and pain management, for a total consideration of $68,910, including working capital adjustments of $573 and a contingent consideration of $8,545, payable over a period of two years linked to revenue targets and continuation of an identified client contract. The Company funded the acquisition primarily with a five-year secured term loan. The Company is expected to leverage HealthHelp’s capability in care management to address the needs of payor, provider and insurance organizations. During the year ended March 31, 2018, the Company made a payment of $573 towards working capital adjustments.

During the year ended March 31, 2019 and 2018, contingent consideration of $4,438 and $3,114, respectively, was paid by the Company to the sellers on achievement of the revenue target in relation to the identified client contract relating to the respective measurement period. During the year ended March 31, 2018, an amount of $1,324 was reversed and credited to its consolidated income statement, due to the shortfall in revenue target achievement for the identified client contract, in accordance with the terms of the share purchase agreement.

 

c)

Denali Sourcing Services Inc. (“Denali”)

On January 20, 2017 (“Acquisition Date”), the Company acquired all outstanding shares of Denali, a provider of strategic procurement BPM solutions for a purchase consideration of $38,668 (including the contingent consideration of $6,277, dependent on the achievement of revenue targets over a period of three years and deferred consideration of $522 payable in first quarter of the year ended March 31, 2018), including adjustments for working capital. The Company funded the acquisition through a three-year secured term loan. Denali delivers global sourcing and procurement services to high-tech, retail and Consumer Packaged Goods (“CPG”), banking and financial services, utilities, and healthcare verticals. The acquisition of Denali is expected to add a strategic procurement capability to the Company’s existing Finance and Accounting services and will enable the Company to offer procurement solutions to its clients.

The Company made payment of $522 towards deferred consideration and reduced the purchase consideration by $968 towards working capital adjustments during the year ended March 31, 2018. During the year ended March 31, 2020, 2019 and 2018, contingent consideration of $1,745, $2,484 and $2,351, respectively, was paid by the Company to the sellers on achievement of the revenue target related to the respective measurement period.

 

d)

Value Edge Research Services Private Limited (“Value Edge”)

On June 14, 2016 (“Acquisition Date”), the Company acquired all outstanding equity shares of Value Edge which provides business research and analytics reports and databases across the domains of pharmaceutical, biotech and medical devices, for a total consideration of $18,265 including working capital adjustments of $765 and contingent consideration of $5,112 (held in escrow), subject to compliance with certain conditions, payable over a period of three years. The acquisition is expected to deepen the Company’s domain and specialized analytical capabilities in the growing pharma market, and provide the Company with a technology asset, which is leverageable across clients and industries.

During the year ended March 31, 2020, 2019 and 2018, the Company released from escrow an amount of $1,535 each towards contingent consideration payable to the sellers.

 

12

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, 2020				March 31, 2020
Cash and bank balances		$	76,342			$	57,523
Short-term deposits with banks*			60,818				39,406
Total		$	137,160			$	96,929

* 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, 2020				March 31, 2020
Investments in marketable securities and mutual funds		$	195,503			$	162,746
Investment in fixed deposits			33,801				43,030
Total		$	229,304			$	205,776

 

		As at
		September 30, 2020				March 31, 2020
Current investments		$	145,568			$	125,641
Non-current investments			83,736				80,135
Total		$	229,304			$	205,776

 

13

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, 2020				March 31, 2020
Trade receivables and unbilled revenue*		$	149,094			$	149,345
Non-current trade receivables			504				—
			149,598				149,345
Less: Allowances for expected credit loss (“ECL”)			(2,247	)			(1,590	)
Total		$	147,351			$	147,755

* As at September 30, 2020 and March 31, 2020, unbilled revenue includes contract assets amounting to $357 and $905, respectively.

The movement in the ECL is as follows:

 

		Three months ended September 30,								Six months ended September 30,
		2020				2019				2020				2019
Balance at the beginning of the period			2,117				1,195				1,590				1,182
Charged to profit or loss			433				203				1,054				472
Write-offs, net of collections			(190	)			(54	)			(337	)			(76	)
Reversals			(202	)			(309	)			(203	)			(515	)
Translation adjustment			89				(31	)			143				(59	)
Balance at the end of the period		$	2,247			$	1,004			$	2,247			$	1,004

 

14

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, 2020				March 31, 2020
Current:
Service tax and other tax receivables		$	4,755			$	5,953
Employee receivables			1,126				1,276
Advances to suppliers			2,906				1,602
Prepaid expenses			7,051				7,288
Other assets			5,520				5,880
Total		$	21,358			$	21,999
Non-current:
Deposits		$	10,411			$	9,491
Income tax assets			7,461				10,517
Service tax and other tax receivables			15,022				14,443
Other assets			1,890				1,501
Total		$	34,784			$	35,952

 

9.

Goodwill

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

 

		As at
		September 30,				March 31,
		2020				2020
Gross carrying amount		$	149,505			$	146,824
Accumulated impairment of goodwill			(26,694	)			(25,520	)
Total		$	122,811			$	121,304

The movement in goodwill balance by reportable segment as at September 30, 2020 and March 31, 2020 is as follows:

Gross carrying amount

 

		WNS				WNS Auto
		Global BPM				Claims BPM				Total
Balance as at April 1, 2019		$	126,496			$	26,957			$	153,453
Foreign currency translation adjustment			(5,192	)			(1,437	)			(6,629	)
Balance as at March 31, 2020		$	121,304			$	25,520			$	146,824
Foreign currency translation adjustment			1,507				1,174				2,681
Balance as at September 30, 2020		$	122,811			$	26,694			$	149,505

 

15

WNS (HOLDINGS) LIMITED

NOTES TO UNAUDITED CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

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

 

Accumulated impairment losses

 

		WNS				WNS Auto
		Global BPM				Claims BPM				Total
Balance as at April 1, 2019		$	—			$	22,642			$	22,642
Impairment of goodwill recognized during the year			—				4,085				4,085
Foreign currency translation adjustment			—				(1,207	)			(1,207	)
Balance as at March 31, 2020		$	—			$	25,520			$	25,520
Foreign currency translation adjustment			—				1,174				1,174
Balance as at September 30, 2020		$	—			$	26,694			$	26,694

 

16

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 year ended March 31, 2020 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, 2019		$	161,948			$	121,637			$	4,283			$	647			$	6,052			$	1,835			$	9,289			$	400			$	39,663			$	345,754
Additions			—				—				—				—				—				—				—				—				6,948				6,948
Translation adjustments			(6,734	)			(1,210	)			(215	)			(9	)			(102	)			—				(229	)			—				(2,996	)			(11,495	)
Balance as at March 31, 2020		$	155,214			$	120,427			$	4,068			$	638			$	5,950			$	1,835			$	9,060			$	400			$	43,615			$	341,207
Accumulated amortization
Balance as at April 1, 2019		$	158,374			$	69,388			$	4,232			$	501			$	1,717			$	1,835			$	5,447			$	—			$	24,072			$	265,566
Amortization			2,436				3,658				51				145				774				—				2,230				—				6,359				15,653
Translation adjustments			(6,717	)			(1,081	)			(215	)			(8	)			(51	)			—				(203	)			—				(1,837	)			(10,112	)
Balance as at March 31, 2020		$	154,093			$	71,965			$	4,068			$	638			$	2,440			$	1,835			$	7,474			$	—			$	28,594			$	271,107
Net carrying value as at March 31, 2020		$	1,121			$	48,462			$	—			$	—			$	3,510			$	—			$	1,586			$	400			$	15,021			$	70,100

The changes in the carrying value of intangible assets for the six months ended September 30, 2020 are as follows:

 

Gross carrying value		Customer contracts				Customer relationships				Intellectual Property and other rights				Trade names				Technology				Leasehold benefits				Covenant not-to- compete				Service mark				Software				Total
Balance as at April 1, 2020		$	155,214			$	120,427			$	4,068			$	638			$	5,950			$	1,835			$	9,060			$	400			$	43,615			$	341,207
Additions			—				—				—				—				—				—				—				—				4,035				4,035
Translation adjustments			1,794				531				176				2				27				—				66				—				1,124				3,720
Balance as at September 30, 2020		$	157,008			$	120,958			$	4,244			$	640			$	5,977			$	1,835			$	9,126			$	400			$	48,774			$	348,962
Accumulated amortization
Balance as at April 1, 2020		$	154,093			$	71,965			$	4,068			$	638			$	2,440			$	1,835			$	7,474			$	—			$	28,594			$	271,107
Amortization			601				1,811				—				—				382				—				919				—				3,336				7,049
Translation adjustments			1,794				502				176				2				17				—				67				—				355				2,913
Balance as at September 30, 2020		$	156,488			$	74,278			$	4,244			$	640			$	2,839			$	1,835			$	8,460			$	—			$	32,285			$	281,069
Net carrying value as at September 30, 2020		$	520			$	46,680			$	—			$	—			$	3,138			$	—			$	666			$	400			$	16,489			$	67,893

 

17