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 of

the Securities Exchange Act of 1934

 

For the quarter ended September 30, 2013

 

Commission File Number 001—32945

 


 

WNS (HOLDINGS) LIMITED

(Exact name of registrant as specified in the charter)

 


 

Not Applicable

(Translation of Registrant’s name into English)

 

Jersey, Channel Islands

(Jurisdiction of incorporation or organization)

 

Gate 4, Godrej & Boyce Complex

Pirojshanagar, Vikhroli (W)

Mumbai 400 079, India

+91-22 - 4095 -2100

(Address of principal executive offices)

 


 

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 x          Form 40-F o

 

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):    o

 

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):    o

 

Indicate by check mark whether the Registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.

 

Yes o           No x

 

If “Yes” is marked, indicate below the file number assigned to registrant in connection with Rule 12g3-2(b): Not applicable.

 

 

 



Table of Contents

 

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

7

 

 

NOTES TO UNAUDITED CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

8

 

 

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

33

 

 

Part III — RISK FACTORS

59

 

 

SIGNATURE

78

 



Table of Contents

 

WNS (Holdings) Limited is incorporating by reference the information and exhibits set forth in this Form 6-K into its registration statements on Form S-8 (Registration No: 333-136168), Form S-8 (File No. 333-157356), Form S-8 (File No. 333-176849), and Form S-8 (File No. 333-191416).

 

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 “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 “rupees” 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 and references to “RMB” are to the legal currency of China. Our financial statements are presented in US dollars and prepared in accordance with International Financial Reporting Standards and its interpretations, or IFRS, as issued by the International Accounting Standards Board, or the IASB, as in effect as at September 30, 2013. To the extent IASB issues any amendments or any new standards subsequent to September 30, 2013, 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, 2014. Unless otherwise indicated, references to “GAAP” in this report are to IFRS, as issued by the IASB.

 

In this report, we refer to business process management (BPM) services or industry and our reportable segments, WNS Global BPM and WNS Auto Claims BPM segments, respectively, which were previously described as business process outsourcing (BPO) services or industry, and our WNS Global BPO and WNS Auto Claims BPO segments, respectively, in our prior annual reports on Form 20-F.

 

References to a particular “fiscal” year are to our fiscal year ended March 31 of that calendar year. Any discrepancies in any table between totals and sums of the amounts listed are due to rounding.

 

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 “Commission” 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.

 

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SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

 

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

 

·                                          worldwide economic and business conditions;

 

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

 

·                                          regulatory, legislative and judicial developments;

 

·                                          our ability to attract and retain clients;

 

·                                          technological innovation;

 

·                                          telecommunications or technology disruptions;

 

·                                          future regulatory actions and conditions in our operating areas;

 

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

 

·                                          our ability to expand our business or effectively manage growth;

 

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

 

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

 

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

 

·                                          increasing competition in the business process management industry;

 

·                                          our ability to successfully grow our revenue, expand our service offerings and market share and achieve accretive benefits from our acquisition of (1) Fusion Outsourcing Services (Proprietary) Limited, or Fusion (which we have renamed as WNS Global Services SA (Pty) Ltd following our acquisition) or (2) Aviva Global Services Singapore Pte. Ltd., or Aviva Global (which we have renamed as WNS Customer Solutions (Singapore) Private Limited, or WNS Global Singapore, following our acquisition) and our master services agreement with Aviva Global Services (Management Services) Private Limited, or Aviva MS, as described below;

 

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

 

·                                          our ability to successfully consummate and integrate strategic acquisitions; and

 

·                                          volatility of our ADS price.

 

These and other factors are more fully discussed in our other filings with the Securities and Exchange Commission, or 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, 2013. 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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Part I- FINANCIAL INFORMATION

WNS (HOLDINGS) LIMITED

CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

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

 

 

 

Notes

 

As at
September 30, 2013

 

As at
March 31, 2013

 

 

 

 

 

(Unaudited)

 

 

 

ASSETS

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

Cash and cash equivalents

 

5

 

$

29,742

 

$

27,878

 

Investments

 

6

 

78,675

 

46,473

 

Trade receivables, net

 

7

 

58,379

 

64,438

 

Unbilled revenue

 

 

 

30,670

 

25,530

 

Funds held for clients

 

 

 

18,029

 

19,877

 

Derivative assets

 

13

 

4,380

 

7,589

 

Prepayments and other current assets

 

8

 

15,469

 

12,021

 

Total current assets

 

 

 

235,344

 

203,806

 

Non-current assets:

 

 

 

 

 

 

 

Goodwill

 

9

 

82,938

 

87,132

 

Intangible assets

 

10

 

74,371

 

92,104

 

Property and equipment

 

11

 

45,197

 

48,440

 

Derivative assets

 

13

 

1,737

 

3,756

 

Deferred tax assets

 

 

 

45,865

 

41,642

 

Investments

 

6

 

2

 

43,218

 

Other non-current assets

 

8

 

17,029

 

14,795

 

Total non-current assets

 

 

 

267,139

 

331,087

 

TOTAL ASSETS

 

 

 

$

502,483

 

$

534,893

 

LIABILITIES AND EQUITY

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

Trade payables

 

 

 

$

23,515

 

$

29,321

 

Provisions and accrued expenses

 

15

 

25,065

 

26,743

 

Derivative liabilities

 

13

 

20,814

 

3,857

 

Pension and other employee obligations

 

14

 

29,853

 

32,749

 

Short term line of credit

 

12

 

52,201

 

54,921

 

Current portion of long term debt

 

12

 

10,297

 

7,701

 

Deferred revenue

 

16

 

5,745

 

6,508

 

Current taxes payable

 

 

 

4,439

 

5,188

 

Other liabilities

 

17

 

9,333

 

15,397

 

Total current liabilities

 

 

 

181,262

 

182,385

 

Non-current liabilities:

 

 

 

 

 

 

 

Derivative liabilities

 

13

 

9,334

 

1,265

 

Pension and other employee obligations

 

14

 

4,715

 

5,596

 

Long term debt

 

12

 

28,567

 

33,741

 

Deferred revenue

 

16

 

2,678

 

3,308

 

Other non-current liabilities

 

17

 

3,652

 

4,395

 

Deferred tax liabilities

 

 

 

3,311

 

3,606

 

Total non-current liabilities

 

 

 

52,257

 

51,911

 

TOTAL LIABILITIES

 

 

 

233,519

 

234,296

 

Shareholders’ equity:

 

 

 

 

 

 

 

Share capital (ordinary shares $0.16 (10 pence) par value, authorized 60,000,000 shares; issued: 51,000,180 and 50,588,044 shares each as at September 30, 2013 and March 31, 2013, respectively)

 

18

 

7,987

 

7,922

 

Share premium

 

 

 

273,528

 

269,300

 

Retained earnings

 

 

 

96,165

 

80,084

 

Other components of equity

 

 

 

(108,716

)

(56,709

)

Total shareholders’ equity

 

 

 

268,964

 

300,597

 

TOTAL LIABILITIES AND EQUITY

 

 

 

$

502,483

 

$

534,893

 

 

See accompanying notes.

 

3



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WNS (HOLDINGS) LIMITED

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(Unaudited, amounts in thousands, except share and per share data)

 

 

 

 

 

Three months ended September 30,

 

Six months ended September 30,

 

 

 

Notes

 

2013

 

2012

 

2013

 

2012

 

Revenue

 

 

 

$

123,079

 

$

113,076

 

$

245,225

 

$

220,890

 

Cost of revenue

 

19

 

79,689

 

75,325

 

164,086

 

148,763

 

Gross profit

 

 

 

43,390

 

37,751

 

81,139

 

72,127

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

Selling and marketing expenses

 

19

 

9,042

 

7,219

 

16,887

 

14,667

 

General and administrative expenses

 

19

 

13,029

 

15,180

 

28,007

 

27,829

 

Foreign exchange loss, net

 

 

 

4,609

 

2,043

 

5,152

 

4,482

 

Amortization of intangible assets

 

 

 

5,813

 

6,505

 

12,020

 

13,104

 

Operating profit

 

 

 

10,897

 

6,804

 

19,073

 

12,045

 

Other income, net

 

21

 

(1,829

)

(954

)

(4,003

)

(1,945

)

Finance expense

 

20

 

754

 

899

 

1,549

 

1,904

 

Profit before income taxes

 

 

 

11,972

 

6,859

 

21,527

 

12,086

 

Provision for income taxes

 

23

 

2,636

 

2,541

 

5,446

 

4,927

 

Profit

 

 

 

$

9,336

 

$

4,318

 

$

16,081

 

$

7,159

 

Earnings per share of ordinary share

 

24

 

 

 

 

 

 

 

 

 

Basic

 

 

 

$

0.18

 

$

0.09

 

$

0.32

 

$

0.14

 

Diluted

 

 

 

$

0.18

 

$

0.08

 

$

0.31

 

$

0.14

 

 

See accompanying notes.

 

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WNS (HOLDINGS) LIMITED

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME/(LOSS)

(Unaudited, amounts in thousands)

 

 

 

 

 

Three months ended September 30,

 

Six months ended September 30,

 

 

 

Notes

 

2013

 

2012

 

2013

 

2012

 

Profit

 

 

 

$

9,336

 

$

4,318

 

$

16,081

 

$

7,159

 

Other comprehensive income/(loss), net of taxes

 

 

 

 

 

 

 

 

 

 

 

Items that may not be reclassified to profit or loss:

 

 

 

 

 

 

 

 

 

 

 

Pension adjustment

 

 

 

192

 

557

 

1,180

 

349

 

 

 

 

 

 

 

 

 

 

 

 

 

Items that are or may be reclassified subsequently to profit or loss:

 

 

 

 

 

 

 

 

 

 

 

Changes in fair value of cash flow hedges:

 

 

 

 

 

 

 

 

 

 

 

Current period gain/ (loss)

 

 

 

(21,783

)

7,450

 

(35,524

)

(813

)

Reclassification to profit/(loss)

 

 

 

5,125

 

2,967

 

5,260

 

6,762

 

Foreign currency translation

 

 

 

(9,677

)

15,842

 

(32,551

)

(7,379

)

Income tax relating to above

 

 

 

5,715

 

(3,304

)

9,628

 

(1,663

)

 

 

 

 

$

(20,620

)

$

22,955

 

$

(53,187

)

$

(3,093

)

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

 

 

 

$

(20,428

)

$

23,512

 

$

(52,007

)

$

(2,744

)

Total comprehensive income/ (loss)

 

 

 

$

(11,092

)

$

27,830

 

$

(35,926

)

$

4,415

 

 

See accompanying notes.

 

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WNS (HOLDINGS) LIMITED

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

 (Unaudited, amounts in thousands, except share and per share data)

 

 

 

 

 

 

 

 

 

 

 

Other components of equity

 

 

 

 

 

 

 

 

 

 

 

 

 

Foreign

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

currency

 

Cash flow

 

 

 

Total

 

 

 

Share Capital

 

Share

 

Retained

 

translation

 

hedging

 

Pension

 

shareholders’

 

 

 

Number

 

Par value

 

premium

 

earnings

 

reserve

 

reserve

 

adjustments

 

equity

 

Balance as at April 1, 2012

 

50,078,881

 

$

7,842

 

$

263,529

 

$

58,685

 

$

(41,784

)

$

(5,373

)

$

791

 

$

283,690

 

Shares issued for exercised options and restricted share units (“RSUs”)

 

256,456

 

40

 

(40

)

 

 

 

 

 

Reversal of share issuance cost

 

 

 

10

 

 

 

 

 

10

 

Share-based compensation

 

 

 

3,063

 

 

 

 

 

3,063

 

Excess tax benefits relating to share-based options and RSUs

 

 

 

(2

)

 

 

 

 

(2

)

Transactions with owners

 

256,456

 

40

 

3,031

 

 

 

 

 

3,071

 

Profit

 

 

 

 

7,159

 

 

 

 

7,159

 

Other comprehensive (loss)/gain, net of taxes

 

 

 

 

 

(7,379

)

4,286

 

349

 

(2,744

)

Total comprehensive (loss)/gain for the period

 

 

 

 

7,159

 

(7,379

)

4,286

 

349

 

4,415

 

Balance as at September 30, 2012

 

50,335,337

 

$

7,882

 

$

266,560

 

$

65,844

 

$

(49,163

)

$

(1,087

)

$

1,140

 

$

291,176

 

 

 

 

 

 

 

 

 

 

 

 

Other components of equity

 

 

 

 

 

 

 

 

 

 

 

 

 

Foreign

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

currency

 

Cash flow

 

 

 

Total

 

 

 

Share Capital

 

Share

 

Retained

 

translation

 

hedging

 

Pension

 

shareholders’

 

 

 

Number

 

Par value

 

premium

 

earnings

 

reserve

 

reserve

 

adjustments

 

equity

 

Balance as at April 1, 2013

 

50,588,044

 

$

7,922

 

$

269,300

 

$

80,084

 

$

(62,056

)

$

4,673

 

$

674

 

$

300,597

 

Shares issued for exercised options and RSUs

 

412,136

 

65

 

139

 

 

 

 

 

204

 

Share-based compensation

 

 

 

3,508

 

 

 

 

 

3,508

 

Excess tax benefits relating to share-based options and RSUs

 

 

 

581

 

 

 

 

 

581

 

Transactions with owners

 

412,136

 

65

 

4,228

 

 

 

 

 

4,293

 

Profit

 

 

 

 

16,081

 

 

 

 

16,081

 

Other comprehensive income/(loss), net of taxes

 

 

 

 

 

(32,551

)

(20,636

)

1,180

 

(52,007

)

Total comprehensive income/(loss) for the period

 

 

 

 

16,081

 

(32,551

)

(20,636

)

1,180

 

(35,926

)

Balance as at September 30, 2013

 

51,000,180

 

$

7,987

 

$

273,528

 

$

96,165

 

$

(94,607

)

$

(15,963

)

$

1,854

 

$

268,964

 

 

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WNS (HOLDINGS) LIMITED

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited, amounts in thousands)

 

 

 

Six months ended September 30,

 

 

 

2013

 

2012

 

Cash flows from operating activities:

 

 

 

 

 

Cash generated from operations

 

$

40,302

 

$

28,779

 

Interest paid

 

(1,604

)

(2,077

)

Interest received

 

120

 

101

 

Income taxes paid

 

(5,386

)

(5,634

)

Net cash provided by operating activities

 

33,432

 

21,169

 

Cash flows from investing activities:

 

 

 

 

 

Acquisition, net of cash acquired (Refer note 4)

 

 

(6,409

)

Purchase of property and equipment and intangibles

 

(10,533

)

(11,965

)

Proceeds from sale of property and equipment

 

49

 

149

 

Deferred consideration paid towards acquisition of Fusion (Refer note 4)

 

(7,608

)

 

Investment in Fixed Maturity Plan

 

(5,101

)

 

Dividend received

 

1,347

 

1,128

 

Marketable securities sold/(purchased), net

 

5,595

 

(2,031

)

Net cash used in investing activities

 

(16,251

)

(19,128

)

Cash flows from financing activities:

 

 

 

 

 

Direct cost incurred in relation to public offering

 

 

(16

)

Proceeds from exercise of stock options

 

204

 

 

Repayment of long term debt

 

(2,956

)

(25,067

)

Proceeds from long term debt

 

 

7,000

 

Excess tax benefit from share based compensation

 

86

 

30

 

(Repayments)/proceeds from short term borrowings, net

 

(4,631

)

6,655

 

Payment of debt issuance cost

 

 

(243

)

Net cash used in financing activities

 

(7,297

)

(11,641

)

Exchange difference on cash and cash equivalents

 

(8,020

)

(4,276

)

Net change in cash and cash equivalents

 

1,864

 

(13,876

)

Cash and cash equivalents at the beginning of the period

 

27,878

 

46,725

 

Cash and cash equivalents at the end of the period

 

$

29,742

 

$

32,849

 

Non-cash transactions:

 

 

 

 

 

Note: Liability towards property and equipment and intangible assets purchased on credit/deferred credit

 

$

1,780

 

$

1,868

 

 

See accompanying notes.

 

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WNS (HOLDINGS) LIMITED

NOTES TO UNAUDITED CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

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

 

1.  Company overview

 

WNS (Holdings) Limited (“WNS Holdings”), along with its subsidiaries (collectively, “the Company”), is a global business process management (“BPM”) company with client service offices in Australia, London (UK), New Jersey (US) and Singapore and delivery centers in Costa Rica, India, the People’s Republic of China (“China”), the Philippines, Poland, Republic of South Africa (“South Africa”), Romania, Sri Lanka, the UK and the US. The Company’s clients are primarily in the banking, consumer packaged goods (“CPG”), financial services, healthcare and utilities, insurance, public sector, retail and travel industries.

 

WNS Holdings is incorporated in Jersey, Channel Islands and maintains a registered office in Jersey at Queensway House, Hilgrove Street, St Helier, Jersey JE1 1ES.

 

These unaudited condensed interim consolidated financial statements were authorized for issue by the Board of Directors on October 15, 2013.

 

2.  Summary of significant accounting policies

 

a.                       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 IASB. They do not include all of the information required in annual financial statements in accordance with IFRS, as issued by 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, 2013.

 

The 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, 2013.

 

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, 2014 or later periods. Those which are considered to be relevant to the Company’s operations are set out below.

 

i.                               In November 2009, the IASB issued IFRS 9 “Financial Instruments: Classification and Measurement” (“IFRS 9”). This standard introduces certain new requirements for classifying and measuring financial assets and liabilities and divides all financial assets that are currently in the scope of IAS 39 into two classifications, viz. those measured at amortized cost and those measured at fair value. In October 2010, the IASB issued a revised version of IFRS 9, “Financial Instruments” (“IFRS 9 R”). The revised standard adds guidance on the classification and measurement of financial liabilities. IFRS 9 R requires entities with financial liabilities designated at fair value through profit or loss to recognize changes in the fair value due to changes in the liability’s credit risk in other comprehensive income. However, if recognizing these changes in other comprehensive income creates an accounting mismatch, an entity would present the entire change in fair value within profit or loss. There is no subsequent recycling of the amounts recorded in other comprehensive income to profit or loss, but accumulated gains or losses may be transferred within equity.

 

IFRS 9 R is effective for fiscal years beginning on or after January 1, 2015. Earlier application is permitted. The Company is currently evaluating the impact that this new standard will have on its consolidated financial statements.

 

8



Table of Contents

 

WNS (HOLDINGS) LIMITED

NOTES TO UNAUDITED CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

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

 

ii.                            In May 2013, the IASB issued an amendment to IAS 36 “Impairment of Assets” to reduce the circumstances in which the recoverable amount of assets or cash-generating units is required to be disclosed, clarify the disclosures required, and to introduce an explicit requirement to disclose the discount rate used in determining impairment (or reversals) where recoverable amount (based on fair value less costs of disposal) is determined using a present value technique.  This Amendment is effective for annual periods beginning on or after January 1, 2014.

 

The Company has evaluated the requirements of the above amendment and does not believe that the adoption of this amendment will have a material effect on its consolidated financial statements.

 

4.  Acquisition

 

On June 21, 2012, the Company acquired all outstanding equity shares of Fusion Outsourcing Services (Proprietary) Limited (“Fusion”) (subsequently renamed as WNS Global Services SA (Pty) Ltd), a provider of a range of outsourcing services including contact center, customer care and business continuity services to both South African and international clients.

 

The purchase price for the acquisition was £10,000 ($15,680 based on the exchange rate on June 21, 2012) plus £399 ($644 based on the exchange rate on October 30, 2012) towards adjustment for cash and working capital.

 

In accordance with the terms of the sale and purchase agreement entered in connection with the acquisition of Fusion, £5,000 ($7,840 based on the exchange rate on June 21, 2012) was paid at the completion arrangement on June 21, 2012, £399 ($644 based on the exchange rate on October 30, 2012) was paid based on completion accounts on October 30, 2012 and the remainder £5,000 ($7,840 based on the exchange rate on June 21, 2012) was payable on or before May 31, 2013 along with interest of 3% per annum above the base rate of Barclays Bank Plc. to be calculated on a daily accrual basis.

 

Consequently on May 31, 2013, the Company paid £5,151 ($7,838 based on the exchange rate on May 31, 2013) towards settlement of the final installment of the purchase consideration including an interest of £151.

 

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,

 

 

 

2013

 

2013

 

Cash and bank balance

 

$

24,700

 

$

21,323

 

Short term deposits with bank

 

5,042

 

6,555

 

Total

 

$

29,742

 

$

27,878

 

 

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.

 

9



Table of Contents

 

WNS (HOLDINGS) LIMITED

NOTES TO UNAUDITED CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

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

 

6.  Investments

 

Investments consist of the following:

 

 

 

As at

 

 

 

September 30,

 

March 31,

 

 

 

2013

 

2013

 

Marketable securities(1)

 

$

34,961

 

$

46,473

 

Investments in Fixed Maturity Plan

 

43,714

 

43,216

 

Others

 

2

 

2

 

Total

 

$

78,677

 

$

89,691

 

 

The current and non-current classifications of investments are as follows:

 

 

 

As at

 

 

 

September 30,

 

March 31,

 

 

 

2013

 

2013

 

Current investments

 

$

78,675

 

$

46,473

 

Non-current investments

 

2

 

43,218

 

Total

 

$

78,677

 

$

89,691

 

 


Note:

 

(1)   Marketable securities represent short term investments made principally for the purpose of earning dividend income.

 

7.  Trade receivables

 

Trade receivables consist of the following:

 

 

 

As at

 

 

 

September 30,

 

March 31,

 

 

 

2013

 

2013

 

Trade receivables

 

$

64,028

 

$

69,583

 

Allowances for doubtful trade receivables

 

(5,649

)

(5,145

)

Total

 

$

58,379

 

$

64,438

 

 

The movement in the allowances for doubtful trade receivables is as follows:

 

 

 

As at

 

 

 

September 30,
2013

 

March 31,
2013

 

Balance at the beginning of the period/year  

 

$

5,145

 

$

5,470

 

Charged to operations  

 

366

 

1,190

 

Write-off  

 

 

(955

)

Reversal  

 

(105

)

(349

)

Translation adjustment  

 

243

 

(211

)

Balance at the end of the period/year  

 

$

5,649

 

$

5,145

 

 

10



Table of Contents

 

WNS (HOLDINGS) LIMITED

NOTES TO UNAUDITED CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

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

 

8.  Prepayment and other assets

 

Prepayment and other assets consist of the following:

 

 

 

As at

 

 

 

September 30,
2013

 

March 31,
2013

 

Current:

 

 

 

 

 

Service tax and other tax receivables

 

$

4,766

 

$

4,588

 

Deferred transition cost

 

308

 

498

 

Employee receivables

 

1,299

 

1,190

 

Advances to suppliers

 

729

 

774

 

Prepaid expenses

 

5,292

 

3,329

 

Other assets

 

3,075

 

1,642

 

Total

 

$

15,469

 

$

12,021

 

 

 

 

 

 

 

Non-current:

 

 

 

 

 

Deposits

 

$

5,573

 

$

6,085

 

Non-current tax assets

 

3,750

 

3,826

 

Service tax and other tax receivables

 

5,394

 

4,199

 

Deferred transition cost

 

148

 

274

 

Others

 

2,164

 

411

 

Total

 

$

17,029

 

$

14,795

 

 

9.  Goodwill

 

The movement in goodwill balance by reportable segment as at September 30, 2013 and March 31, 2013 is as follows:

 

 

 

 

 

WNS

 

 

 

 

 

WNS

 

Auto

 

 

 

 

 

Global BPM

 

Claims BPM

 

Total

 

Balance as at April 1, 2012

 

$

53,570

 

$

33,125

 

$

86,695

 

Goodwill arising from acquisition of Fusion (See Note 4)

 

6,199

 

 

6,199

 

Foreign currency translation

 

(3,883

)

(1,879

)

(5,762

)

Balance as at March 31, 2013

 

$

55,886

 

$

31,246

 

$

87,132

 

Foreign currency translation

 

(6,350

)

2,156

 

(4,194

)

Balance as at September 30, 2013

 

$

49,536

 

$

33,402

 

$

82,938

 

 

11



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 year ended March 31, 2013 are as follows:

 

 

 

 

 

 

 

Intellectual

 

 

 

Covenant

 

 

 

 

 

Gross carrying value

 

Customer
contracts

 

Customer
relationship

 

property
rights

 

Leasehold
benefits

 

not-to-
compete

 

Software

 

Total

 

Balance as at April 1, 2012

 

$

175,967

 

$

64,482

 

$

4,956

 

$

1,835

 

$

353

 

$

1,017

 

$

248,610

 

Additions

 

 

 

 

 

 

4,890

 

4,890

 

On acquisition of Fusion

 

1,427

 

2,148

 

 

 

 

383

 

3,958

 

Translation adjustments

 

(6,536

)

(1,155

)

(281

)

 

(15

)

(147

)

(8,134

)

Balance as at March 31, 2013

 

$

170,858

 

$

65,475

 

$

4,675

 

$

1,835

 

$

338

 

$

6,143

 

$

249,324

 

Accumulated amortization

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance as at April 1, 2012

 

$

89,372

 

$

37,043

 

$

4,956

 

$

1,707

 

$

343

 

$

48

 

$

133,469

 

Amortization

 

17,887

 

7,425

 

 

128

 

10

 

900

 

26,350

 

Translation adjustments

 

(1,401

)

(912

)

(281

)

 

(15

)

10

 

(2,599

)

Balance as at March 31, 2013

 

$

105,858

 

$

43,556

 

$

4,675

 

$

1,835

 

$

338

 

$

958

 

$

157,220

 

Net carrying value as at March 31, 2013

 

$

65,000

 

$

21,919

 

$

 

$

 

$

 

$

5,185

 

$

92,104

 

 

The changes in the carrying value of intangible assets for the six months ended September 30, 2013 are as follows:

 

 

 

 

 

 

 

Intellectual

 

 

 

Covenant

 

 

 

 

 

Gross carrying value

 

Customer
contracts

 

Customer
relationship

 

property
rights

 

Leasehold
benefits

 

not-to-
compete

 

Software

 

Total

 

Balance as at April 1, 2013

 

$

170,858

 

$

65,475

 

$

4,675

 

$

1,835

 

$

338

 

$

6,143

 

$

249,324

 

Additions

 

167

 

 

 

 

 

2,463

 

2,630

 

Translation adjustments

 

(12,309

)

(521

)

322

 

 

16

 

(755

)

(13,247

)

Balance as at September 30, 2013

 

$

158,716

 

$

64,954

 

$

4,997

 

$

1,835

 

$

354

 

$

7,851

 

$

238,707

 

Accumulated amortization

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance as at April 1, 2013

 

$

105,858

 

$

43,556

 

$

4,675

 

$

1,835

 

$

338

 

$

958

 

$

157,220

 

Amortization

 

8,390

 

2,934

 

 

 

 

696

 

12,020

 

Translation adjustments

 

(4,847

)

(370

)

322

 

 

16

 

(25

)

(4,904

)

Balance as at September 30, 2013

 

$

109,401

 

$

46,120

 

$

4,997

 

$

1,835

 

$

354

 

$

1,629

 

$

164,336

 

Net carrying value as at September 30, 2013

 

$

49,315

 

$

18,834

 

$

 

$

 

$

 

$

6,222

 

$

74,371

 

 

12



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 year ended March 31, 2013 are as follows:

 

 

 

 

 

 

 

Furniture,

 

 

 

 

 

 

 

 

 

 

 

Computers

 

fixtures and

 

 

 

 

 

 

 

 

 

 

 

and

 

office

 

 

 

Leasehold

 

 

 

Gross carrying value

 

Buildings

 

software

 

equipment

 

Vehicles

 

improvements

 

Total

 

Balance as at April 1, 2012

 

$

11,495

 

$

64,668

 

$

55,861

 

$

1,648

 

$

47,924

 

$

181,596

 

Additions

 

 

4,148

 

5,595

 

363

 

4,932

 

15,038

 

On acquisition of Fusion

 

 

805

 

1,014

 

 

496

 

2,315

 

Disposal/Retirements

 

 

790

 

3,131

 

811

 

2,773

 

7,505

 

Translation adjustments

 

(363

)

(3,662

)

(2,988

)

(101

)

(2,694

)

(9,808

)

Balance as at March 31, 2013

 

$

11,132

 

$

65,169

 

$

56,351

 

$

1,099

 

$

47,885

 

$

181,636

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accumulated depreciation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance as at April 1, 2012

 

$

1,846

 

$

57,804

 

$

44,419

 

$

1,177

 

$

34,175

 

$

139,421

 

Depreciation

 

555

 

4,668

 

5,145

 

134

 

4,207

 

14,709

 

Disposal/Retirements

 

 

783

 

2,992

 

268

 

2,733

 

6,776

 

Translation adjustments

 

(57

)

(3,467

)

(2,424

)

(71

)

(2,026

)

(8,045

)

Balance as at March 31, 2013

 

$

2,344

 

$

58,222

 

$

44,148

 

$

972

 

$

33,623

 

$

139,309

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Capital work-in-progress

 

 

 

 

 

 

 

 

 

 

 

6,113

 

Net carrying value as at March 31, 2013

 

 

 

 

 

 

 

 

 

 

 

$

48,440

 

 

The changes in the carrying value of property and equipment for the six months ended September 30, 2013 are as follows:

 

 

 

 

 

 

 

Furniture,

 

 

 

 

 

 

 

 

 

 

 

Computers

 

fixtures and

 

 

 

 

 

 

 

 

 

 

 

and

 

office

 

 

 

Leasehold

 

 

 

Gross carrying value

 

Buildings

 

software

 

equipment

 

Vehicles

 

improvements

 

Total

 

Balance as at April 1, 2013

 

$

11,132

 

$

65,169

 

$

56,351

 

$

1,099

 

$

47,885

 

$

181,636

 

Additions

 

 

2,327

 

2,591

 

6

 

1,507

 

6,431

 

Disposal/Retirements

 

 

 

42

 

509

 

 

551

 

Translation adjustments

 

(732

)

(4,816

)

(5,985

)

(113

)

(5,501

)

(17,147

)

Balance as at September 30, 2013

 

$

10,400

 

$

62,680

 

$

52,915

 

$

483

 

$

43,891

 

$

170,369

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accumulated depreciation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance as at April 1, 2013

 

$

2,344

 

$

58,222

 

$

44,148

 

$

972

 

$

33,623

 

$

139,309

 

Depreciation

 

268

 

2,156

 

2,297

 

52

 

2,093

 

6,866

 

Disposal/Retirements

 

 

 

42

 

494

 

 

536

 

Translation adjustments

 

(161

)

(4,293

)

(4,926

)

(100

)

(4,285

)

(13,765

)

Balance as at September 30, 2013

 

$

2,451

 

$

56,085

 

$

41,477

 

$

430

 

$

31,431

 

$

131,874

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Capital work-in-progress

 

 

 

 

 

 

 

 

 

 

 

6,702

 

Net carrying value as at September 30, 2013

 

 

 

 

 

 

 

 

 

 

 

$

45,197

 

 

13



Table of Contents

 

WNS (HOLDINGS) LIMITED

NOTES TO UNAUDITED CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

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

 

12. Loans and borrowings

 

Short-term line of credit

 

The Company’s Indian subsidiary, WNS Global Services Private Limited (“WNS Global”), has secured and unsecured lines of credit with banks amounting to $61,386. Out of these available lines of credit, as at September 30, 2013, $41,367 was utilized for working capital requirements.

 

The Company has also established a line of credit in UK amounting to £9,880 ($15,970 based on the exchange rate on September 30, 2013), out of which £6,703 ($10,834 based on the exchange rate on September 30, 2013) was utilized for working capital requirements as at September 30, 2013. Further, the Company obtained a term loan facility of $203 and a line of credit of $407 in China. The term loan facility was fully repaid on August 2, 2013 and there was no amount utilized from the line of credit as at September 30, 2013.

 

Long-term debt

 

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

 

 

 

As at

 

Repayment schedule

 

 

 

September 30, 2013

 

March 31, 2013

 

Fiscal year

 

Interest rate

 

Foreign
currency

 

Total

 

Foreign
currency

 

Total

 

2014

 

2015

 

2016

 

10.30

%*

510,000

 

$

8,121

 

510,000

 

$

9,384

 

$

 

$

8,121

 

$

 

3M USD LIBOR + 3.5

%

$

 

6,924

 

$

 

6,889

 

 

 

6,924

 

3M USD LIBOR + 3.0

%

$

 

 

 

1,065

 

 

 

 

Bank of England base rate + 2.25

%

£

9,880

 

15,931

 

£

9,880

 

14,887

 

3,179

 

6,367

 

6,385

 

Bank of England base rate + 2.25

%

£

4,896

 

7,888

 

£

6,120

 

9,217

 

1,967

 

5,921

 

 

 

 

 

 

$

38,864

 

 

 

$

41,442

 

$

5,146

 

$

20,409

 

$

13,309

 

Current portion of long term debt

 

 

 

$

10,297

 

 

 

$

7,701

 

 

 

 

Long term debt

 

 

 

$

28,567

 

 

 

$

33,741

 

 

 

 

 

 

 

 


* The Company has entered into a currency swap to effectively reduce the overall cost.

 

The Company has pledged trade receivables, other financial assets, property and equipment with a carrying amount of $142,880 and $166,996 as of September 30, 2013 and March 31, 2013, respectively, as collateral for the aforesaid borrowings. In addition, the facility agreements for the aforesaid borrowings contain certain restrictive covenants on the indebtedness of the Company, total borrowings to tangible net worth ratio, total borrowings to EBITDA ratio and a minimum interest coverage ratio. As of September 30, 2013 the Company was in compliance with all of the covenants.

 

14



Table of Contents

 

WNS (HOLDINGS) LIMITED

NOTES TO UNAUDITED CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

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

 

13.              Financial instruments

 

Financial instruments by category

 

The carrying value and fair value of financial instruments by class as at September 30, 2013 are as follows:

 

Financial assets

 

 

 

 

 

 

 

Derivative

 

 

 

 

 

 

 

 

 

 

 

designated

 

 

 

 

 

 

 

 

 

Financial

 

as cash flow

 

Available

 

Total

 

 

 

Loans and

 

assets at

 

hedges (carried

 

for

 

carrying

 

 

 

receivables

 

FVTPL

 

at fair value)

 

sale

 

value/fair value*

 

Cash and cash equivalents

 

$

29,742

 

$

 

$

 

$

 

$

29,742

 

Investments

 

 

43,714

 

 

34,963

 

78,677

 

Trade receivables

 

58,379

 

 

 

 

58,379

 

Unbilled revenue

 

30,670

 

 

 

 

30,670

 

Funds held for clients

 

18,029

 

 

 

 

18,029

 

Prepayments and other assets (1)

 

2,908

 

 

 

 

2,908

 

Other non-current assets (2)

 

5,573

 

 

 

 

5,573

 

Derivative assets

 

 

2,289

 

3,828

 

 

6,117

 

Total carrying value

 

$

145,301

 

$

46,003

 

$

3,828

 

$

34,963

 

$

230,095

 

 

Financial liabilities

 

 

 

 

 

Derivative

 

 

 

 

 

 

 

 

 

designated

 

Financial

 

 

 

 

 

Financial

 

as cash flow

 

liabilities at

 

Total

 

 

 

liabilities at

 

hedges (carried

 

amortized

 

carrying

 

 

 

FVTPL

 

at fair value)

 

cost

 

value/fair value*

 

Trade payables

 

$

 

$

 

$

23,515

 

$

23,515

 

Current portion of long term debt

 

 

 

10,297

 

10,297

 

Long term debt

 

 

 

28,567

 

28,567

 

Short term line of credit

 

 

 

52,201

 

52,201

 

Other employee obligations (3)

 

 

 

26,338

 

26,338

 

Provision and accrued expenses (4)

 

 

 

24,294

 

24,294

 

Other liabilities(5)

 

 

 

1,954

 

1,954

 

Derivative liabilities

 

3,568

 

26,580

 

 

30,148

 

Total carrying value

 

$

3,568

 

$

26,580

 

$

167,166

 

$

197,314

 

 


* Fair value approximates to carrying value.

 

Notes:

 

(1)  Excluding non-financial assets $12,561.

 

(2)  Excluding non-financial assets $11,456.

 

(3)  Excluding non-financial liabilities $8,230.

 

(4)  Excluding non-financial liabilities $771.

 

(5)  Excluding non-financial liabilities $11,031.

 

15



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, 2013 are as follows:

 

Financial assets

 

 

 

 

 

 

 

Derivative

 

 

 

 

 

 

 

 

 

 

 

designated

 

 

 

 

 

 

 

 

 

Financial

 

as cash flow

 

Available

 

Total

 

 

 

Loans and

 

assets at

 

hedges (carried

 

for

 

carrying

 

 

 

receivables

 

FVTPL

 

at fair value)