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| REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934 |
| ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
| SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
| Title of each class |
Trading Symbol(s) |
Name of each exchange on which registered | ||
one Ordinary Share, par value 10 pence per share |
| Accelerated filer ☐ | Non-accelerated filer ☐ | |||
| Emerging growth company | ||||
| U.S. GAAP ☐ |
by the International Accounting Standards Board ☒ |
Other ☐ |
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TABLE OF CONTENTS
WNS (HOLDINGS) LIMITED
Ex-2.3 Description of securities registered under Section 12 of the Securities Exchange Act of 1934, as amended
Ex 4.4 Form of the Third Amended and Restated WNS (Holdings) Limited 2016 Incentive Award Plan — incorporated by reference to Exhibit 99.1 of WNS (Holdings) Limited’s Report on Form 6-K (File No. 001-32945), as furnished to the Commission on July 16, 2021
Ex 4.9 Lease Deed dated December 16, 2020 between WNS Global Services Private Limited and DLF Assets Private Limited with respect to the lease of office premises on the 10th floor of Block 10 at DLF IT Park.
Ex 4.10 Leave and License Agreement dated Feb 15, 2021 between Godrej and Boyce Manufacturing Company Limited and WNS Global Services Private Limited with respect to the lease of the office premises with an aggregate area of 84,429 square feet at plant 10.
Ex 4.11 Leave and License Agreement dated Feb 15, 2021 between Godrej and Boyce Manufacturing Company Limited and WNS Global Services Private Limited with respect to the lease of the office premises with an aggregate area of 1,08,000 square feet at plant 5.
Ex 4.12 Leave and License Agreement dated Feb 15, 2021 between Godrej and Boyce Manufacturing Company Limited and WNS Global Services Private Limited with respect to the lease of the office premises with an aggregate area of 84,934 square feet at plant 11.
Ex-4.13 Facility Agreement dated March 10, 2017 among WNS (Mauritius) Limited, HSBC Bank (Mauritius) Limited and Standard Chartered Bank, UK
Ex-8.1 List of subsidiaries of WNS (Holdings) Limited
Ex-12.1 Certification by the Chief Executive Officer to 17 CFR 240, 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
Ex-12.2 Certification by the Chief Financial Officer to 17 CFR 240, 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
Ex-13.1 Certification by the Chief Executive Officer to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
Ex-13.2 Certification by the Chief Financial Officer to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
Ex-15.1 Consent of Grant Thornton Bharat LLP, independent registered public accounting firm
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CONVENTIONS USED IN THIS ANNUAL REPORT
In this annual 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, 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 consolidated financial statements are presented in US dollars. Our consolidated financial statements included in this annual report are prepared in accordance with the International Financial Reporting Standards and its interpretations (“IFRS”), as issued by the International Accounting Standards Board (“IASB”). Unless otherwise indicated, references to “GAAP” in this annual report are to IFRS, as issued by the IASB.
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 amount listed are due to rounding. Any amount stated to be $0.0 million represents an amount less than $5,000.
In this annual 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,” “we,” “our” and “us” refer to WNS (Holdings) Limited and its subsidiaries.
In this annual report, references to “SEC” or “Commission” are to the United States Securities and Exchange Commission.
We also refer in various places within this annual 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.
We refer to information regarding the business process management (“BPM”) industry, our company and our competitors from market research reports, analyst reports and other publicly available sources. Although we believe that this information is reliable, we have not independently verified the accuracy and completeness of the information. We caution you not to place undue reliance on this data. BPM services are also sometimes referred to as business process outsourcing (“BPO”) services.
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SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
This annual report contains “forward-looking statements” that are based on our current expectations, assumptions, estimates and projections about our company and our industry. The forward-looking statements are subject to various risks and uncertainties. Generally, these forward-looking statements can be identified by the use of forward-looking terminology such as “anticipate,” “believe,” “estimate,” “expect,” “intend,” “will,” “project,” “seek,” “should” and similar expressions. Those statements include, among other things, the discussions of our business strategy and expectations concerning our market position, future operations, margins, profitability, liquidity and capital resources, tax assessment orders and future capital expenditures. We caution you that reliance on any forward-looking statement inherently involves risks and uncertainties, and that although we believe that the assumptions on which our forward-looking statements are based are reasonable, any of those assumptions could prove to be inaccurate, and, as a result, the forward-looking statements based on those assumptions could be materially incorrect. These risks and uncertainties include but are not limited to:
| • | worldwide economic and business conditions; |
| • | our dependence on a limited number of clients in a limited number of industries; |
| • | the impact of the ongoing coronavirus disease 2019 (“COVID-19”) pandemic on our and our clients’ business, financial condition, results of operations and cash flows; |
| • | currency fluctuations among the Indian rupee, the pound sterling, the US dollar, the Australian dollar, the |
| • | Euro, the South African rand and the Philippine peso; |
| • | political or economic instability in the jurisdictions where we have operations; |
| • | regulatory, legislative and judicial developments; |
| • | increasing competition in the BPM industry; |
| • | technological innovation; |
| • | our liability arising from cybersecurity attacks, fraud or unauthorized disclosure of sensitive or confidential client and customer data; |
| • | telecommunications or technology disruptions; |
| • | our ability to attract and retain clients; |
| • | negative public reaction in the US or the UK to offshore outsourcing; |
| • | our ability to collect our receivables from, or bill our unbilled services to, our clients; |
| • | our ability to expand our business or effectively manage growth; |
| • | our ability to hire and retain enough sufficiently trained employees to support our operations; |
| • | the effects of our different pricing strategies or those of our competitors; |
| • | our ability to successfully consummate, integrate and achieve accretive benefits from our strategic acquisitions, and to successfully grow our revenue and expand our service offerings and market share; |
| • | future regulatory actions and conditions in our operating areas; |
| • | our ability to manage the impact of climate change on our business; and |
| • | volatility of our ADS price. |
These and other factors are more fully discussed in “Part I — Item 3. Key Information — D. Risk Factors,” “Part I — Item 5. Operating and Financial Review and Prospects” and elsewhere in this annual report. 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
ITEM 1. IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS
Not applicable.
ITEM 2. OFFER STATISTICS AND EXPECTED TIMETABLE
Not applicable.
ITEM 3. KEY INFORMATION
A. [Reserved]
B. Capitalization and Indebtedness
Not applicable.
C. Reason for the Offer and the Use of Proceeds
Not applicable.
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D. Risk Factors
This annual report contains forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from those anticipated in these forward-looking statements as a result of a number of factors, including those described in the following risk factors and elsewhere in this annual report. If any of the following risks actually occur, our business, financial condition, results of operations and cash flows could suffer and the trading price of our ADSs could decline.
Risks Related to Our Business
The global economic and geo-political conditions have been and continue to be challenging and have had, and may continue to have, an adverse effect on the financial markets and the economy in general, which has had, and may continue to have, a material adverse effect on our business, clients, employees, financial performance, results of operations and cash flows and the prices of our equity shares and ADSs.
As we have operations in 13 countries and service clients across multiple geographic regions, our business, financial performance and results of operations depend significantly on worldwide macroeconomic and geo-political conditions. Recent economic conditions and geo-political developments have been and continue to be challenging for global economies and could materially and adversely affect our business and financial performance.
Economic factors, such as recessionary economic cycles, inflation, rising interest rates, fluctuations in foreign exchange rates, monetary tightening and volatility in the financial markets, have impacted, and may continue to impact, our business, financial condition and results of operations. The current global economic slowdown and the possibility of continued turbulence or uncertainty in the European, US, Asian and international financial markets and economies have adversely affected, and may continue to adversely affect, our and our clients’ liquidity and financial condition. High levels of inflation in the various geographies where we operate in have resulted in increased supply costs, which in turn have impacted pricing and consumer demand. Rising interest rates, coupled with illiquid credit markets and wider credit spreads, may increase our cost of borrowing and cause credit to become more limited, which could have a material adverse effect on not only on our financial condition, liquidity and cash flows, but also on our clients’ ability to use credit to purchase our services or to make timely payments to us. In addition, as a result of high debt levels, a number of countries have required and may continue to require additional financial support, sovereign credit ratings have declined and may continue to decline, and there may be default on the sovereign debt obligations of certain countries. Uncertainties remain regarding future central bank and other economic policies in the US and EU. Such adverse macroeconomic conditions economic conditions may further lead to increased volatility in the currency and financial markets globally. For example, the recent appreciation of the US dollar may have an unpredictable impact on our company in a number of ways, including the conversion of our operating results into our reporting currency, the US dollar. For further information, see “ 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 could have a material adverse effect on our results of operations.” In addition, volatility in the financial markets could have a material impact on our ADS price. We cannot predict the trajectory of the recent economic slowdown or any subsequent economic recovery. If adverse macroeconomic conditions continue for a prolonged period of time or even worsen, our business, financial condition and results of operations will be adversely affected.
Government policies or objectives pursued by countries in which we do business could potentially impact the demand for our services in certain countries. Changes in trade policies, increases in tariffs, the imposition of retaliatory tariffs, including those implemented by the United States, China and Europe and legislation requiring greater oversight of supply chains, may have a material adverse effect on global economic conditions and the stability of global financial markets and may reduce international trade.
The global outbreak and spread of the disease caused by the severe acute respiratory syndrome coronavirus known as COVID-19, which was reported to have surfaced in December 2019, has caused a slowdown in growth of the global economy. The global economy entered a pronounced slowdown in 2022 due to a rapid resurgence of COVID-19 in China. While countries around the world have relaxed restrictions imposed over the past three years during the global outbreak of COVID-19, there is still uncertainty around the future of the COVID-19 outbreak. For further information, see “— Our business operations and future growth have been, and may continue to be, negatively impacted on account of the COVID-19 pandemic.”
Geopolitical crises, such as war, political instability and terrorist attacks, could disrupt our operations. The conflict between Russia and Ukraine has led and could lead to significant market and other disruptions, including significant volatility in commodity prices, supply of energy resources, instability in financial markets, supply chain interruptions, political and social instability, changes in consumer or purchaser preferences as well as increase in cyberattacks and espionage. We have operations in Poland and Romania, which border Ukraine and have been materially and adversely affected by inflation, particularly increases in energy and food prices, resulting from disrupted supplies from Russia and Ukraine. In addition, as a result of the ongoing military conflict, there has been a growing number of migrants in Poland and Romania. Such an influx of migrants could further exacerbate inflation in these two countries, thereby resulting in an upward pressure on wages, which could have a material adverse effect on our operations in these two countries. The length, impact and outcome of the ongoing military conflict in Ukraine are highly unpredictable. If the conflict continues or extends beyond Ukraine, it would continue to have a significant impact on the global economy and our operations in Poland and Romania.
Additionally, major political events, including the UK’s withdrawal from the EU in January 2020, commonly referred to as “Brexit,” has also created uncertainty for businesses such as ours that operate in these markets. While the UK and the EU have ratified a trade and cooperation agreement to govern their relationship after Brexit, the agreement merely sets forth a framework in many respects and requires additional bilateral negotiations between the UK and the EU as both parties continue to work on the rules for implementation. Significant political and economic uncertainty remains about how the precise terms of the relationship between the parties will differ from the terms before withdrawal. Such terms could adversely affect the economic conditions in affected markets as well as the stability of the global financial markets, which in turn have had and may continue to have a material adverse effect on global economic conditions and financial markets, and may significantly reduce global market liquidity, restrict the ability of key market participants to operate in certain financial markets or restrict our access to capital. 25.4% of our revenues and 21.4% of our revenue less repair payments (non-GAAP) in fiscal 2023 and 29.5% of our revenues and 23.8% of our revenue less repair payments (non-GAAP) in fiscal 2022 were denominated in pound sterling. The extent and duration of the decline in the value of the pound sterling to the US dollar and other currencies is unknown at this time. A long-term reduction in the value of the pound sterling as a result of Brexit or otherwise could adversely impact our earnings growth rate and profitability. Although we believe that our hedging program is effective, there is no assurance that it will protect us against fluctuations in foreign currency exchange rates.
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A few major clients account for a significant portion of our revenue and any loss of business from these clients could reduce our revenue and significantly harm our business.
We have derived and believe that we will continue to derive in the near term a significant portion of our revenue from a limited number of large clients. In fiscal 2023 and 2022, our five largest clients accounted for 23.8% and 27.1% of our revenue and 25.0% and 27.6% of our revenue less repair payments (non-GAAP), respectively. In fiscal 2023 and 2022, our three largest clients accounted for 15.7% and 18.1% of our revenue and 16.6% and 19.6% of our revenue less repair payments (non-GAAP), respectively. In fiscal 2023, our largest client individually accounted for 6.5% and 6.8% of our revenue and revenue less repair payments (non-GAAP), respectively, as compared to 7.3% and 7.9% in fiscal 2022, respectively. Any loss of business from any major client could reduce our revenue and significantly harm our business.
For example, in January 2023, we ceased to provide certain services to a healthcare company because of internal decisions of the healthcare company to lower its exposure to one vendor. This healthcare company was one of our top five customers by revenue contribution in fiscal 2023. The customer accounted for 6.5% and 7.3% of our revenue and 6.8% and 7.9% of our revenue less repair payments (non-GAAP) in fiscal 2023 and in fiscal 2022, respectively
We have derived, and we expect to continue to derive for the foreseeable future, a significant portion of our revenue from Aviva Global Services (Management Services) Private Limited (“Aviva MS”). Under our master services agreement with Aviva MS, Aviva MS is permitted to terminate the agreement without cause with 180 days’ notice upon payment of a termination fee.
In addition, the volume of work performed for specific clients is likely to vary from year to year, particularly since we may not be the exclusive outside service provider for our clients. Thus, a major client in one year may not provide the same level of revenue in any subsequent year. For example, until fiscal 2018, Aviva MS was our largest client and revenue from Aviva MS decreased from $54.5 million in fiscal 2017 to $51.9 million in fiscal 2018 to $50.1 million in fiscal 2019 and increased to $53.3 million in fiscal 2020. This decline in revenue of fiscal 2018 and 2019 was partially attributable in part to revised pricing terms and in part to a reduction of services due to automation performed by Aviva MS and the automation of certain services by WNS. The loss of some or all of the business of any large client could have a material adverse effect on our business, results of operations, financial condition and cash flows. A number of factors other than our performance could cause the loss of or reduction in business or revenue from a client, and these factors are not predictable. For example, a client may demand price reductions, change its outsourcing strategy or move work in-house. A client may also be acquired by a company with a different outsourcing strategy that intends to switch to another BPM service provider or return work in-house.
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Our revenue is highly dependent on clients concentrated in a few industries, as well as clients located primarily in the US, the UK, Europe and Australia. Economic slowdowns or factors that affect these industries or the economic environment in the US, the UK, Europe or Australia could reduce our revenue and seriously harm our business.
A substantial portion of our clients are concentrated in the insurance industry, healthcare industry and the travel and leisure industry. In fiscal 2023 and 2022, 26.8% and 29.9% of our revenue, respectively, and 22.9% and 24.3% of our revenue less repair payments (non-GAAP), respectively, was derived from clients in the insurance industry. During the same periods, clients in the travel and leisure industry contributed 16.9% and 14.8% of our revenue, respectively, and 17.9% and 16.0% of our revenue less repair payments (non-GAAP), respectively and clients in the healthcare industry contributed 15.7% and 17.7% of our revenue, respectively, and 16.6% and 19.1% of our revenue less repair payments (non-GAAP), respectively. Our business and growth largely depend on continued demand for our services from clients in these industries and other industries that we may target in the future, as well as on trends in these industries to outsource business processes.
The current global macroeconomic and geo-political conditions has affected, and may continue to affect, both the industries in which our clients are concentrated and the geographies in which we do business. For more information, see “— The global economic and geo-political conditions have been and continue to be challenging and have had, and may continue to have, an adverse effect on the financial markets and the economy in general, which has had, and may continue to have, a material adverse effect on our business, clients, employees, financial performance, results of operations and cash flows and the prices of our equity shares and ADSs.” Certain of our targeted industries are especially vulnerable to crises in the financial and credit markets and potential economic downturns. Our results of operations depend on, among other things, our ability to maintain and increase our sales volume with existing clients and to attract new clients. The COVID-19 pandemic and any related resurgence, rising inflation and high interest rates have affected, and may continue to affect, the demand for our services across industries from a number of clients, depending on the ability of each client, and the nature of their industries, products and services, to cope with the effects of these developments. A downturn in any of our targeted industries, a slowdown or reversal of the trend to offshore business process outsourcing in any of these industries or the introduction of regulation which restricts or discourages companies from outsourcing could result in a decrease in the demand for our services and adversely affect our results of operations. For instance, the ongoing military conflict between Russia and Ukraine, especially in the event of further escalation beyond the borders of Ukraine and potential cascading effects of the sanctions on Russia, could have a material adverse effect on global trade and travel. In addition, travel restrictions imposed by governments across the globe as a response to the COVID-19 outbreak had a material impact on the travel and leisure industry, resulting in reduced business and personal travel. Our business has been, and we expect it will continue to be, impacted across industry verticals due to the Russia-Ukraine conflict.
In addition, any further weakening of or continuing uncertainty in worldwide economic and business conditions could result in a few of our clients reducing or postponing their outsourced business requirements. For example, the COVID-19 pandemic has caused, and may continue to cause, significant financial distress to some of our clients. These issues impacting our clients have in turn reduced, and may continue to reduce, the demand for our services, thereby adversely affecting our results of operations. Although we did not have any significant project cancelations during the COVID-19 pandemic, we agreed to limited volume commitment and payment term concessions with certain clients that were significantly affected by the COVID-19 pandemic. Additionally, our revenue is highly dependent on the economic environments in the the US, the UK, Europe and Australia. In fiscal 2023 and 2022, 49.2% and 45.4% of our revenue, respectively, and 51.8% and 49.1% of our revenue less repair payments (non-GAAP), respectively, were derived from clients located in the US. During the same periods, 28.7% and 32.8% of our revenue, respectively, and 24.9% and 27.4% of our revenue less repair payments (non-GAAP), respectively, were derived from clients located in the UK, 7.1% and 6.1% of our revenue, respectively, and 7.4% and 6.6% of our revenue less repair payments (non-GAAP), respectively, were derived from clients located in Europe (excluding the UK), and 6.1% and 6.1% of our revenue, respectively, and 6.4% and 6.6% of our revenue less repair payments (non-GAAP), respectively, were derived from clients located in Australia. Any further weakening of or continuing uncertainty in the US, UK, European or Australian economy will likely have a further adverse impact on our revenue.
Other developments may also lead to a decline in the demand for our services in our targeted industries. Significant changes in the financial services industry or any of the other industries on which we focus, or a consolidation in any of these industries or acquisitions, particularly involving our clients, may decrease the potential number of buyers of our services and have an adverse impact on our profitability. Any significant reduction in or the elimination of the use of the services we provide within any of these industries would result in reduced revenue and harm our business. Our clients may experience rapid changes in their prospects, substantial price competition and pressure on their profitability. Although such pressures can encourage outsourcing as a cost reduction measure, they may also result in increasing pressure on us from clients in these key industries to lower our prices which could negatively affect our business, results of operations, financial condition and cash flows.
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Our business operations and future growth have been, and may continue to be, negatively impacted on account of the COVID-19 pandemic.
Countries around the world have relaxed restrictions imposed over the past three years during the global outbreak of COVID-19, including the travel restrictions. However, the COVID-19 pandemic remains ongoing to varying degrees in many countries around the world, including countries where all of our delivery centers are located, and has created, and may continue to create, significant uncertainty and disruption. Governmental measures and regulations, such as city or country-wide lockdowns, local, domestic and international travel restrictions as well as closures of the enabling ecosystem necessary for our business to operate smoothly, impacted, and if reimposed in the future, could impact, our ability to fully deliver services to our clients, especially from our delivery centers. Our ability to continue operations is dependent on a number of factors, such as the continued availability of high-quality internet bandwidth, an uninterrupted supply of electricity and the sustainability of social infrastructure to enable our remote-working employees to continue delivering services. See also “— If we cause disruptions to our clients’ businesses, provide inadequate service or are in breach of our representations or obligations, our clients may have claims for substantial damages against us. Our insurance coverage may be inadequate to cover these claims and, as a result, our profits may be substantially reduced.”
Given the uncertainty around the extent and timing of the future spread or mitigation of the COVID-19 and around the imposition or relaxation of protective measures, we cannot reasonably estimate the impact to our future results of operations, cash flows or financial condition. In addition, the unknown scale and duration of these developments have had, and may continue to have, macro and micro negative effects on the financial markets and global economy, which has resulted in an economic downturn that has affected, and may continue to affect, demand for our services and has had, and may continue to have, a material adverse effect on our operations and financial results, earnings, cash flow, financial condition and our ADS price. These effects could be material and long-lasting. Subsequent outbreaks of COVID-19 could therefore prolong the economic impact of the COVID-19 pandemic.
Following guidance from local public health authorities in the countries in which we operate, we have taken various measures, and transitioned into new processes, to help reduce the spread of the virus and maintain the health and safety of our workforce, including but not limited to, implementing remote-working arrangements, restricting access to sites and implementing other measures to help maintain the safety of our workforce, which will allow us to carry out operations from our delivery centers. The effects of these policies have negatively impacted, and may continue to negatively impact, productivity and the magnitude of any effect will depend, in part, on the length and severity of the restrictions and other limitations on our ability to conduct our business in the ordinary course. Some of these measures have required, and continue to require, us to provide services and operate client processes in an unsupervised environment, and while this has been acknowledged by our clients, such alternative operating models may result in breaches of our contractual obligations. Also, if a natural disaster, power outage, connectivity issue, or other event occurs that impacts our employees’ ability to work remotely, it may be difficult or, in certain cases, impossible, for us to continue our business for a substantial period of time. The increase in remote working may also result in client privacy, IT security and fraud concerns as well as increase our exposure to potential wage and hour issues.
For example, in India, the Philippines, South Africa and the United States, we have large concentrations of employees performing critical operations. The closure or partial closure of operational facilities, or restrictions inhibiting our employees’ ability to access those facilities, during the past three years disrupted our ability to provide our services and solutions to our clients and resulted in, among other things, losses of revenue.Similar closure and restrictions could be reimposed to varying degrees in different jurisdictions from time to time, and any such closure and restrictions could cause such disruptions to our business. In addition, clients may defer decision making or delay planned work.
To the extent that the COVID-19 pandemic has adversely affected, and may continue to adversely affect, our business, financial condition, results of operations and cash flows, it may also have the effect of heightening many of the other risks described in this “Risk Factors” section, such as, but not limited to, those relating to:
| • | the global economic and geo-political conditions and financial markets and the economy in general and the resultant potential fluctuations in foreign exchange rates; |
| • | our revenue being highly dependent on clients concentrated in a few industries, as well as clients located primarily in the US, the UK, Europe and Australia; |
| • | potential disruptions to our clients’ businesses if we provide inadequate service or are in breach of our representations or obligations; |
| • | the negative public reaction to offshore outsourcing, proposed legislation or otherwise; |
| • | our operating results, which may differ from period to period and make it difficult for us to prepare accurate internal financial forecasts for responding in a timely manner to offset such period-to-period fluctuations; |
| • | a substantial portion of our assets and operations being located in India, which subjects us to regulatory, economic, social and political uncertainties in India; |
| • | restrictions on entry visas that may affect our ability to compete for and provide services to clients in the US and the UK; and |
| • | our ability to maintain effective controls that may materially impact or are reasonably likely to materially impact our disclosure controls and procedures and internal controls over financial reporting. |
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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 could have a material adverse effect on our results of operations.
Although substantially all of our revenue is denominated in US dollars, pound sterling, and to a lesser extent, Euro, Australian dollars, and South African rand, a significant portion of our expenses (other than payments to repair centers, which are primarily denominated in pound sterling) are incurred and paid in Indian rupees and, to a lesser extent, in South African rand and Philippine peso. Therefore, a weakening of the rate of exchange for the pound sterling, the US dollar, the Australian dollar or Euro against the Indian rupee or, to a lesser extent, a weakening of the pound sterling against the South African rand or the Philippine peso would adversely affect our results. Furthermore, we report our financial results in US dollars and our results of operations would be adversely affected if the pound sterling, Euro or the Australian dollar depreciates against the US dollar, or if the Indian rupee or, to a lesser extent, the South African rand or the Philippine peso appreciates against the US dollar.
Fluctuations between the Indian rupee, the pound sterling, the Australian dollar, the Euro, the South African rand or the Philippine peso, on the one hand, and the US dollar, on the other hand, expose us to translation risk when transactions denominated in such currencies are translated to US dollars, our reporting currency. The exchange rates between each of the Indian rupee, the pound sterling, the Australian dollar, the Euro, the South African rand or the Philippine peso, on the one hand, and the US dollar, on the other hand, have changed substantially in recent years and may fluctuate substantially in the future. The COVID-19 pandemic has impacted, and may continue to impact, the proper functioning of financial and capital markets and may result in unpredictable fluctuations in foreign currency exchange rates.
In addition, the military conflict between Russia and Ukraine may have substantial impact on the global economy and may result in unpredictable fluctuations in foreign currency exchange rates, and in particular, may negatively impact the pound sterling, the Euro and other currencies in which our revenue is denominated. The withdrawal of the UK from the EU in January 2020 has created significant political and economic uncertainty regarding the trading relationship between the UK and the EU. See “—The UK’s withdrawal from the EU may have a negative effect on global economic conditions, financial markets and our operations in the UK and EU, which could reduce the value of our ADS.” These developments have caused, and may continue to cause, volatility in the exchange rates between the pound sterling and other currencies.
The average Indian rupee to US dollar exchange rate was approximately ₹80.33 per $1.00 in fiscal 2023, which represented a depreciation of the Indian rupee by an average of 7.3% as compared with the average exchange rate of approximately ₹74.49 per $1.00 in fiscal 2022, which in turn represented a depreciation of the Indian rupee by an average of 0.3% as compared with the average exchange rate of approximately ₹74.25 per $1.00 in fiscal 2021.
The average pound sterling to US dollar exchange rate was approximately £0.83 per $1.00 in fiscal 2023, which represented a depreciation of the pound sterling by an average of 11.8% as compared with the average exchange rate of approximately £0.73 per $1.00 in fiscal 2022, which in turn represented an appreciation of the pound sterling by an average of 4.6% as compared with the average exchange rate of approximately £0.77 per $1.00 in fiscal 2021.
The average Australian dollar to US dollar exchange rate was approximately A$1.46 per $1.00 in fiscal 2023, which represented a depreciation of the Australian dollar by an average of 7.3% as compared with the average exchange rate of approximately A$1.35 per $1.00 in fiscal 2022, which in turn represented an appreciation of the Australian dollar by an average of 3.0% as compared with the average exchange rate of approximately A$1.39 per $1.00 in fiscal 2021.
The average Euro to US dollar exchange rate was approximately €0.959 per $1.00 in fiscal 2023, which represented a depreciation of the Euro by an average of 10.4% as compared with the average exchange rate of approximately €0.860 per $1.00 in fiscal 2022, which in turn represented a depreciation of the Euro by an average of 0.3% as compared with the average exchange rate of approximately €$0.857 per $1.00 in fiscal 2021.
The average South African rand to US dollar exchange rate was approximately R16.98 per $1.00 in fiscal 2023, which represented a depreciation of the South African rand by an average of 12.6% as compared with the average exchange rate of approximately R14.85 per $1.00 in fiscal 2022, which in turn represented an appreciation of the South African rand by an average of 10.3% as compared with the average exchange rate of approximately R16.37 per $1.00 in fiscal 2021.
The average Philippine peso to US dollar exchange rate was approximately PHP 55.32 per $1.00 in fiscal 2023, which represented a depreciation of the Philippine peso by an average of 9.5% as compared with the average exchange rate of approximately PHP 50.07 per $1.00 in fiscal 2022, which in turn represented a depreciation of the Philippine peso by an average of 2.2% as compared with the average exchange rate of approximately PHP49.00 per $1.00 in fiscal 2021.
Our results of operations would be adversely affected if the Indian rupee appreciates significantly against the US dollar or if the pound sterling or the Australian dollar depreciates against the US dollar or, to a lesser extent, if the South African rand or the Philippine peso appreciates significantly against the US dollar.
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For example, the depreciation of the Indian rupee, Philippine peso and the South African rand against the US dollar in fiscal 2023 positively impacted our results of operations whereas the depreciation of the pound sterling and the Australian dollar against the US dollar negatively impacted our results of operations during that year.
The depreciation of the Indian rupee, the Philippine peso, the appreciation of the pound sterling and the Australian dollar against the US dollar in fiscal 2022 positively impacted our results of operations whereas the appreciation of the South African rand against the US dollar negatively impacted our results of operations during that year.
We hedge a portion of our foreign currency exposures using options and forward contracts. We cannot assure you that our hedging strategy will be successful or will mitigate our exposure to currency risk.
The international nature of our business exposes us to several risks, such as unexpected changes in the regulatory requirements and governmental policy changes of multiple jurisdictions.
We have operations in Canada, China, Costa Rica, India, Malaysia, the Philippines, Poland, Romania, South Africa, Sri Lanka, Turkey, the UK and the US, and we service clients across Asia, Europe, South Africa, Australia and North America. Our corporate structure also spans multiple jurisdictions, with our parent holding company incorporated in Jersey, Channel Islands, and intermediate and operating subsidiaries (including branch offices) incorporated in Australia, Canada, China, Costa Rica, France, India, Mauritius, the Netherlands, the Philippines, Romania, South Africa, Singapore, Sri Lanka, Spain, Turkey, the United Arab Emirates, the UK and the US. As a result, we are exposed to risks typically associated with conducting business internationally, many of which are beyond our control. These risks include:
| • | legal uncertainty owing to the overlap of different legal regimes, and problems in asserting contractual or other rights across international borders; |
| • | potentially adverse tax consequences, such as scrutiny of transfer pricing arrangements by authorities in the countries in which we operate; |
| • | potential tariffs and other trade barriers; |
| • | unexpected changes in legal regimes and regulatory requirements; and |
| • | policy changes due to changes in government. |
During the fourth quarter of fiscal 2020, Brexit had a negative impact on the insurance industry and applied downward pressure on the expected future performance of the WNS Auto Claims reportable segment, due to contract renegotiations and loss of certain clients. These factors, together with the highly uncertain operating environment in the UK, have negatively impacted and caused us to significantly reduce our financial projections and estimates of the WNS Auto Claims BPM reportable segment from our previous estimates. Accordingly, we performed an impairment review of the goodwill associated with the companies we had acquired for our auto claims business and recorded an impairment charge of $4.1 million to our results of operations in fiscal 2020 for the remaining goodwill balance of our auto claims business.
The occurrence of other changes in legal regimes or regulatory requirements, or any other events associated with the risks of conducting business internationally, could have a material adverse effect on our results of operations and financial condition.
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Our global operations expose us to numerous and sometimes conflicting legal and regulatory requirements. Failure to adhere to the laws and regulations that govern our business or our clients’ businesses that we are required to comply with in performing our services could harm our business.
We have operations in 13 countries and our corporate structure spans multiple jurisdictions. Further, we service clients across multiple geographic regions and multiple industries. We are required to comply with numerous, and sometimes conflicting and uncertain, laws and regulations including on matters relating to import/export controls, trade restrictions, taxation, immigration, internal disclosure and control obligations, securities regulation, anti-competition, data privacy and protection, anti-corruption, and employment and labor relations. In addition, we are required to obtain and maintain permits and licenses for the conduct of our business in various jurisdictions. Our clients’ business operations are also subject to numerous regulations in the jurisdiction in which they operate or that are applicable to their industry, and our clients may contractually require that we perform our services in compliance with regulations applicable to them or in a manner that will enable them to comply with such regulations. For example, regulations to which our and our clients’ business operations are subject include the Gramm-Leach-Bliley Act, the Health Insurance Portability and Accountability Act, the Health Information Technology for Economic and Clinical Health Act and the California Consumer Privacy Act in the US, the Financial Services Act in the UK and the General Data Protection Regulation in the EU. Countries around the world, including those where we have business operations and where we service customers for our clients, have adopted or have proposed to adopt in the near future, comprehensive privacy and personal data protection laws, including the Protection of Personal Information Act (POPI) in South Africa and the upcoming Personal Data Protection Bill (PDPB) in India. EU regulators have also adopted revised standard contractual clauses that add requirements for transferring EU personal data to other jurisdictions, which may increase compliance and operational costs and legal risks and liabilities of that data transfer mechanism. In addition, HealthHelp, which we acquired in March 2017, administers programs offered by the Centers for Medicare & Medicaid Services, a United States federal agency that administers Medicare and Medicaid. Regulatory changes may result in our exiting certain parts of our business.
On account of the global nature of our and our clients’ operations, compliance with diverse legal and regulatory requirements is difficult, time-consuming and requires significant resources. Further, the extent of development of legal systems varies across the countries in which we operate and local laws may not be adequately developed or be able to provide us clear guidance to sufficiently protect our rights. Specifically, in many countries including those in which we operate and/or seek to expand to, the practices of local businesses may not be in accordance with international business standards and could violate anti-corruption laws and regulations, including the UK Bribery Act 2010 and the US Foreign Corrupt Practices Act 1977. Our employees, subcontractors, agents, business partners, the companies we acquire and their employees, subcontractors and agents, and other third parties with which we associate, could act in a manner which violates policies or procedures intended to ensure compliance with laws and regulations, including applicable anti-corruption laws or regulations.
Violations of such laws or regulations by us, our employees or any of these third parties could subject us to criminal or civil enforcement actions (whether or not we participated or were aware of the actions leading to the violations), including fines or penalties, breach of contract damages, disgorgement of profits and suspension or disqualification from work, any of which could materially and adversely affect our business, including our results of operations and our reputation. If we are unable to maintain our licenses, permits or other qualifications necessary to provide our services, we may not be able to provide services to existing clients or be able to attract new clients and could lose revenue, which could have a material adverse effect on our business.
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We face competition from onshore and offshore BPM companies and from information technology companies that also offer BPM services. Our clients may also choose to run their business processes themselves, either in their home countries or through captive units located offshore.
The market for outsourcing services is very competitive and we expect competition to intensify and increase from a number of sources. We believe that the principal competitive factors in our markets are price, service quality, sales and marketing skills, business process transformation capabilities and industry expertise. We face significant competition from our clients’ own in-house groups including, in some cases, in-house departments operating offshore or captive units. Clients who currently outsource a significant proportion of their business processes or information technology services to vendors in India may, for various reasons, including diversifying geographic risk, seek to reduce their dependence on any one country. We also face competition from onshore and offshore BPM and information technology services companies. In addition, the trend toward offshore outsourcing, international expansion by foreign and domestic competitors and continuing technological changes will result in new and different competitors entering our markets. The COVID-19 pandemic further hastened the development and adoption of such technological changes that may accelerate the pace of disintermediation, which may impact the services that the BPM industry currently provides.
These competitors may include entrants from the communications, software and data networking industries or entrants in geographic locations with lower costs than those in which we operate. Technological changes include the development of complex automated systems for the processing of transactions that are formerly labor intensive, which may reduce or replace the need for outsourcing such transaction processing.
Some of these existing and future competitors have greater financial, human and other resources, longer operating histories, greater technological expertise, more recognizable brand names and more established relationships in the industries that we currently serve or may serve in the future. In addition, some of our competitors may enter into strategic or commercial relationships among themselves or with larger, more established companies in order to increase their ability to address client needs, or enter into similar arrangements with potential clients. Increased competition, our inability to compete successfully against competitors, pricing pressures or loss of market share could result in reduced operating margins which could harm our business, results of operations, financial condition and cash flows.
Changes in technology could lead to changes in our clients’ businesses as well as their requirements for business process services, which may adversely impact our business and results of operations.
Proliferation of accessible technology, such as smartphones and internet, has had an impact on the manner in which customers and businesses interact with each other. Companies are increasingly adopting social media platforms, online self-help portals and mobile applications for communicating with and servicing their customers rather than utilizing BPM companies such as ourselves to manage these interactions. Our clients also continue to invest in technology by upgrading their platforms and application capabilities towards increased automation of transactions. Advances in software, such as artificial intelligence, machine learning, robotic process automation and voice recognition, have the potential to reduce dependency on human processing transactions. Such developments and other innovations, such as autonomous vehicles, have the potential to significantly change the way our clients’ businesses operate and may reduce their dependency on BPM companies, including our company, for managing their business processes. We are therefore subject to a risk of disintermediation on account of such changes in technology, which could impact our future growth prospects and may require continued investments in our business.
Additionally, in recent years, as a result of a number of factors, including changing client preferences, an increase in data and AI services and economic pressures that can cause delays or reductions in client purchasing decisions, our clients have increasingly engaged us on a short-cycle basis. Increased short-cycle engagements make business forecasting more complex given that they are generally for services that are more discretionary and non-recurring than our traditional services. Our contracts for short-cycle engagements typically permit our clients to terminate the agreement with shorter notice than is required under our longer-term contracts. Our failure to properly manage these shorter-cycle engagements could adversely affect our business, growth strategy and results of operations.
If we cause disruptions to our clients’ businesses, provide inadequate service or are in breach of our representations or obligations, our clients may have claims for substantial damages against us. Our insurance coverage may be inadequate to cover these claims and, as a result, our profits may be substantially reduced.
Most of our contracts with clients contain service level and performance requirements, including requirements relating to the quality of our services and the timing and quality of responses to the client’s customer inquiries. In some cases, the quality of services that we provide is measured by quality assurance ratings and surveys which are based in part on the results of direct monitoring by our clients of interactions between our employees and our clients’ customers. Lockdowns and other measures imposed by governments around the world, as well as other effects of the COVID-19 pandemic and related resurgence, may result in our temporary inability to meet the service level and performance requirements of our clients. Failure to consistently meet service level requirements of a client or errors made by our associates or the software and/or platforms we use in the course of delivering services to our clients could disrupt the client’s business and result in a reduction in revenue or a claim for substantial damages against us. For example, some of our agreements stipulate standards of service that, if not met by us, will require us to pay penalties to our clients or result in lower payment to us. Failure to meet these service level requirements could result in the payment of significant penalties by us to our clients which in turn could have an adverse effect on our business, results of operations, financial condition and cash flows. In addition, in connection with acquiring new business from a client or entering into client contracts, our employees may make various representations, including representations relating to the quality of our services, abilities of our associates and our project management techniques. A failure or inability to meet a contractual requirement or our representations could seriously damage our reputation and affect our ability to attract new business or result in a claim for substantial damages against us.
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Our dependence on our offshore delivery centers requires us to maintain active data and voice communications between our main delivery centers in Canada, China, Costa Rica, India, Malaysia, the Philippines, Poland, Romania, South Africa, Sri Lanka, Turkey, the UK and the US, our international technology hubs in the UK and the US and our clients’ offices. Although we maintain redundant facilities and communications links, disruptions could result from, among other things, technical and electricity breakdowns, computer glitches and viruses and adverse weather conditions. For instance, we depend on a continuous supply of electricity to operate our IT infrastructure. As a result of the COVID-19 pandemic, we have adopted a “hybrid” model, whereby a significant portion of our employees are working from home. While we have implemented multiple levels of electrical redundancies at our operating premises to mitigate against the risk of power shortage, such measures may not be available at our employees’ homes. Several countries where we operate from could face power shortage in the future, which may disrupt our operations, including for employees working from home, and slow down the expansion of our operations in these countries. For instance:
| • | South Africa has been facing widespread rolling power blackouts, with the current period of rolling blackouts taking place since March 2021, due to breakdowns in multiple power stations resulting in planned and unplanned power outages. |
| • | Sri Lanka has been unable to import sufficient oil required for electricity generation due to a foreign exchange crisis since 2021 and experienced nationwide power cuts in fiscal 2023. |
| • | Poland and Romania have suffered disruption of gas and oil supplies from Russia since early 2022 as a result of the ongoing conflict between Ukraine and Russia. This has led to shortage of electricity generation as well as increased energy costs in the countries. |
| • | India faced temporary power shortages from October to November 2021 as a result of shortages of coal used to generate electricity. |
Any significant failure of our equipment or systems, or any major disruption to basic infrastructure like power and telecommunications in the locations in which we operate, could impede our ability to provide services to our clients, have a negative impact on our reputation, cause us to lose clients, reduce our revenue and harm our business.
We depend on human resources to process transactions for our clients. Disruptive incidents, including man-made events such as military conflicts, civil strikes and shutdowns, may impact the ability of our employees to commute to and from our operating premises. Non-natural disasters, whether unintentional (such as those caused by accidents) or intentional (such as those caused by terrorist attacks), may also disrupt our operations. While we have implemented business continuity plans for clients where we have contractually agreed to do so, we may not always be able to provide services to our clients for the duration of such incidents. For example the COVID-19 pandemic negatively impacted our human resources planning, For further information see “— Our business operations and future growth have been, and may continue to be, negatively impacted on account of the COVID-19 pandemic.”
Although under most of our contracts with our clients, our liability for breach of our obligations is limited to actual damages suffered by the client and capped at a portion of the fees paid or payable to us under the relevant contract, our liability for breach of our obligations under certain of our contracts is unlimited. With respect to those of our contracts that contain limitations on liability, such limitations may be unenforceable or otherwise may not protect us from liability for damages. In addition, certain liabilities, such as claims of third parties for which we may be required to indemnify our clients, are generally not limited under those agreements. Further, although we have professional indemnity insurance coverage, the coverage may not continue to be available on reasonable terms or in sufficient amounts to cover one or more large claims and our insurers may disclaim coverage as to any future claims. The successful assertion of one or more large claims against us that exceed available insurance coverage, or changes in our insurance policies (including premium increases or the imposition of large deductible or co-insurance requirements), could have a material adverse effect on our business, reputation, results of operations, financial condition and cash flows.
We are liable to our clients for damages caused by unauthorized disclosure of sensitive or confidential information, whether through a breach or circumvention of our or our clients’ computer systems and processes, through our employees or otherwise. Further, cybersecurity and data privacy considerations could impact our business.
We are typically required to manage, utilize and store sensitive or confidential client data in connection with the services we provide. Under the terms of our client contracts, we are required to keep such information strictly confidential. Our client contracts do not include any limitation on our liability to them with respect to breaches of our obligation to maintain confidentiality of the information we receive from them. Although we seek to implement measures to protect sensitive and confidential client data, there can be no assurance that we would be able to prevent breaches of security. Further, some of our projects require us to conduct business functions and computer operations using our clients’ systems over which we do not have control and which may not be compliant with industry security standards. In addition, some of the client designed processes that we are contractually required to follow for delivering services to them and which we are unable to unilaterally change, could be designed in a manner that allows for control weaknesses to exist and be exploited. Any vulnerability in a client’s system or client designed process, if exploited, could result in breaches of security or unauthorized transactions and result in a claim for substantial damages against us. Although we have implemented appropriate policies, procedures and infrastructure to reduce the possibility of physical, logical and personnel security breaches, along with appropriate audit oversight for verifying continued operating effectiveness of the same through internal audits and external SSAE18 / ISAE3402, ISO27001 and PCI-DSS reviews, such measures can never completely eliminate the risk of cybersecurity attacks. Additionally, remote-working solutions deployed since the COVID-19 pandemic could potentially result in heightened information technology security and data protection risks on account of services being delivered in a physically unsupervised environment. If any person, including any of our employees, penetrates our or our clients’ network security or otherwise mismanages or misappropriates sensitive or confidential client data, we could be subject to significant liability and lawsuits from our clients or their customers for breaching contractual confidentiality provisions or privacy laws.
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The threat of cyberattacks has increased and evolved in recent years. In particular, since the COVID-19 pandemic, many companies across the world, including us, have experienced a significant increase in attempted malicious attacks. To date, although there has not been a material cybersecurity attack that has had an adverse effect on our operations, there can be no assurance that there will be no material adverse effect in the future. Rapid advancements and changes to the technological landscape may require us to make significant further investments in the domain of cybersecurity in order to protect our and our clients’ data and infrastructure. In addition, such advancements coupled with the rise in the sophisticated nature of cyber threats and attacks make it possible that certain threats or vulnerabilities may not be detected in time to prevent an attack on our or our clients’ business. On account of the interconnected nature of our business, there is an interdependency between our clients, business partners and our business to implement appropriate cybersecurity controls in order to mitigate cybersecurity risk. A failure of cybersecurity controls at our client or business partners could therefore result in a breach at our company.
While we have insurance coverage for mismanagement or misappropriation of such information by our employees, that coverage may not continue to be available on reasonable terms or in sufficient amounts to cover one or more large claims against us, and our insurers may disclaim coverage as to any future claims. Penetration of the network security of our or our clients’ data centers or computer systems or unauthorized use or disclosure of sensitive or confidential client data, whether through breach of our or our clients’ computer systems, systems failure, loss or theft of assets containing confidential information or otherwise, could also have a negative impact on our reputation which would harm our business.
We also cannot be certain that advances in criminal capabilities (including cyber-attacks or cyber intrusions over the internet, malware, computer viruses and the like), discovery of new vulnerabilities or attempts to exploit existing vulnerabilities in our or our clients’ or business partners’ systems, other data thefts, physical system or network break-ins or inappropriate access, or other developments will not compromise or breach the technology protecting our or our client’s or business partners’ computer systems and networks that access and store sensitive information. Cyber threats, such as phishing and trojans, could intrude into our or our clients’ or business partners’ network to steal data or to seek sensitive information. Any intrusion into our network or our clients’ or business partners’ network (to the extent attributed to us or perceived to be attributed to us) that results in any breach of security could cause damage to our reputation and adversely impact our business and financial results. A significant failure in security measures could have a material adverse effect on our business, reputation, results of operations and financial condition.
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Our business could be materially and adversely affected if we do not protect our intellectual property or if our services are found to infringe on the intellectual property of others.
Our success depends in part on certain methodologies, practices, tools and technical expertise we utilize in designing, developing, implementing and maintaining applications and other proprietary intellectual property rights. In order to protect our rights in such intellectual properties, we rely upon a combination of nondisclosure and other contractual arrangements as well as trade secret, copyright and trademark laws. We also generally enter into confidentiality agreements with our employees, consultants, clients and potential clients, and limit access to and distribution of our proprietary information to the extent required for our business purpose.
India is a member of the Berne Convention, an international intellectual property treaty, and has agreed to recognize protections on intellectual property rights conferred under the laws of other foreign countries, including the laws of the United States. There can be no assurance that the laws, rules, regulations and treaties in effect in the United States, India and the other jurisdictions in which we operate and the contractual and other protective measures we take, are adequate to protect us from misappropriation or unauthorized use of our intellectual property, or that such laws will not change. We may not be able to detect unauthorized use and take appropriate steps to enforce our rights, and any such steps may not be successful. Infringement by others of our intellectual property, including the costs of enforcing our intellectual property rights, may have a material adverse effect on our business, results of operations and financial condition.
Our clients may provide us with access to, and require us to use, third party software in connection with our delivery of services to them. Our client contracts generally require our clients to indemnify us for any infringement of intellectual property rights or licenses to third party software when our clients provide such access to us. If the indemnities under our client contracts are inadequate to cover the damages and losses, we suffer due to infringement of third party intellectual property rights or licenses to third party software to which we were given access, our business and results of operations could be adversely affected. We are also generally required by our client contracts to indemnify our clients for any breaches of intellectual property rights by our services. Although we believe that we are not infringing on the intellectual property rights of others, claims may nonetheless be asserted against us in the future, whether or not they are successful The costs of defending any such claims could be significant, and any successful claim may require us to modify, discontinue or rename any of our services. Any such changes may have a material adverse effect on our business, results of operations and financial condition.
Our clients may terminate contracts before completion or choose not to renew contracts, which could adversely affect our business and reduce our revenue.
The terms of our client contracts typically range from three to five years. Many of our client contracts can be terminated by our clients with or without cause, with three to six months’ notice and, in most cases, without penalty. The termination of a substantial percentage of these contracts could adversely affect our business and reduce our revenue. Contracts that will expire on or before March 31, 2024 (including work orders/statement of works that will expire on or before March 31, 2024) represented approximately 13.5% of our revenue and 14.3% of our revenue less repair payments (non-GAAP) from our clients in fiscal 2023. Failure to meet contractual requirements could result in cancellation or non-renewal of a contract. Some of our contracts may be terminated by the client if certain of our key personnel working on the client project leave our employment and we are unable to find suitable replacements. In addition, a contract termination or significant reduction in work assigned to us by a major client could cause us to experience a higher than expected number of unassigned employees, which would increase our cost of revenue as a percentage of revenue until we are able to reduce or reallocate our headcount. We may not be able to replace any client that elects to terminate or not renew its contract with us, which would adversely affect our business and revenue. Further, we may face difficulties in providing end-to-end business solutions or delivering complex, large or unique projects for our clients that could cause clients to terminate or not renew their contracts with us, which in turn could harm our business and our reputation.
For example, in January 2023, we ceased to provide certain services to a healthcare company because of internal decisions of the healthcare company to lower its exposure to one vendor. This healthcare company was one of our top five customers by revenue contribution in fiscal 2023. The customer accounted for 6.5% and 7.3% of our revenue and 6.8% and 7.9% of our revenue less repair payments (non-GAAP) in fiscal 2023 and in fiscal 2022, respectively.
For more information, see “— A few major clients account for a significant portion of our revenue and any loss of business from these clients could reduce our revenue and significantly harm our business.”
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Some of our client contracts contain provisions which, if triggered, could result in lower future revenue and have an adverse effect on our business.
In many of our client contracts, we agree to include certain provisions which provide for downward revision of our prices under certain circumstances. For example, certain contracts allow a client in certain limited circumstances to request a benchmark study comparing our pricing and performance with that of an agreed list of other service providers for comparable services. Based on the results of the study and depending on the reasons for any unfavorable variance, we may be required to make improvements in the service we provide or to reduce the pricing for services to be performed under the remaining term of the contract. Some of our contracts also provide that, during the term of the contract and for a certain period thereafter ranging from six to 12 months, we may not provide similar services to certain or any of their competitors using the same personnel. These restrictions may hamper our ability to compete for and provide services to other clients in the same industry, which may result in lower future revenue and profitability.
Some of our contracts specify that if a change in control of our company occurs during the term of the contract, the client has the right to terminate the contract. These provisions may result in our contracts being terminated if there is such a change in control, resulting in a potential loss of revenue.
Fraud on account of circumvention of controls within our or our clients’ computer systems and processes could adversely impact our business.
Our business is dependent on the secure and reliable operation of controls within our and our clients’ information systems and processes, whether operated or executed by our clients themselves or by us in connection with our provision of services to them. Although we take adequate measures to safeguard against system-related and other fraud, there can be no assurance that we would be able to prevent fraud or even detect them on a timely basis, particularly where it relates to our clients’ information systems which are not managed by us. For example, we have identified incidences where our employees have allegedly exploited weaknesses in information systems as well as processes in order to record fraudulent transactions. Additionally, the physically unsupervised nature of remote-working solutions adopted since the COVID-19 pandemic could potentially expose us to potential instances of fraud. We are generally required to indemnify our clients from third party claims arising out of such fraudulent transactions and our client contracts generally do not include any limitation on our liability to our clients’ losses arising from fraudulent activities by our employees. Our expansion into new markets may create additional challenges with respect to managing the risk of fraud due to the increased geographical dispersion and use of intermediaries. Accordingly, we may have significant liability arising from fraudulent transactions which may materially affect our business and financial results. Although we have professional indemnity insurance coverage for losses arising from fraudulent activities by our employees, that coverage may not continue to be available on reasonable terms or in sufficient amounts to cover one or more large claims against us, and our insurers may also disclaim coverage as to any future claims. We may also suffer reputational harm as a result of fraud committed by our employees, or by our perceived inability to properly manage fraud related risks, which could in turn lead to enhanced regulatory oversight and scrutiny.
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Our business may not develop in ways that we currently anticipate due to negative public reaction to offshore outsourcing, proposed legislation or otherwise.
We have based our strategy of future growth on certain assumptions regarding our industry, services, and future demand in the market for such services. However, the trend to outsource business processes may not continue and could reverse. In addition, we cannot accurately predict the impact that the COVID-19 pandemic, any related resurgence and other macroeconomic and geo-political developments might have on our clients’ outsourcing demands and efforts, which might be lower in the future, as some of our clients might decide to refrain from offshore outsourcing due to the pressures, they may face from increased unemployment in the regions in which they operate.
The issue of domestic companies outsourcing services to organizations operating in other countries is a topic of political discussion in the United States, as well as in Europe, Asia Pacific and other regions in which we have clients. Some countries and special interest groups have expressed concerns about a perceived association between offshore outsourcing and the loss of jobs in the domestic economy. This has resulted in increased political and media attention, especially in the United States, where the subject of outsourcing and immigration reform has been a focus of the current presidential administration. It is possible that there could be a change in the existing laws that would restrict or require disclosure of offshore outsourcing or impose new standards that have the effect of restricting the use of certain visas in the foreign outsourcing context. The measures that have been enacted to date are generally directed at restricting the ability of government agencies to outsource work to offshore business service providers. These measures have not had a significant effect on our business because governmental agencies are not a focus of our operations. However, some legislative proposals would, for example, require contact centers to disclose their geographic locations, require notice to individuals whose personal information is disclosed to non-US affiliates or subcontractors, require disclosures of companies’ foreign outsourcing practices, or restrict US private sector companies that have federal government contracts, federal grants or guaranteed loan programs from outsourcing their services to offshore service providers. Potential changes in tax laws may also increase the overall costs of outsourcing or affect the balance of offshore and onshore business services. Such changes could have an adverse impact on the economics of outsourcing for private companies in the US, which could in turn have an adverse impact on our business with US clients.
Such concerns have also led the UK and other EU jurisdictions to enact regulations which allow employees who are dismissed as a result of transfer of services, which may include outsourcing to non-UK or EU companies, to seek compensation either from the company from which they were dismissed or from the company to which the work was transferred. This could discourage EU companies from outsourcing work offshore and/or could result in increased operating costs for us. In addition, there has been publicity about the negative experiences, such as theft and misappropriation of sensitive client data, of various companies that use offshore outsourcing, particularly in India.
Current or prospective clients may elect to perform such services themselves or may be discouraged from transferring these services from onshore to offshore providers to avoid negative perceptions that may be associated with using an offshore provider. Any slowdown or reversal of existing industry trends towards offshore outsourcing would seriously harm our ability to compete effectively with competitors that operate out of facilities located in the UK or the US.
Adverse changes to our relationships with the companies with whom we have an alliance or in the business of the companies with whom we have an alliance could adversely affect our results of operations.
We have alliances with companies whose capabilities complement our own. For example, some of our services and solutions are based on technology, software or platforms provided by these companies. The priorities and objectives of these companies with whom we have an alliance may differ from ours. As most of our alliance relationships are non-exclusive, these companies with whom we have an alliance are not prohibited from competing with us or forming closer or preferred arrangements with our competitors. One or more of these companies with whom we have an alliance may be acquired by a competitor, or may merge with each other, either of which could reduce our access over time to the technology, software or platforms provided by those companies. In addition, these companies with whom we have an alliance could experience reduced demand for their technology, software or platforms, including, for example, in response to changes in technology, which could lessen related demand for our services and solutions. If we do not obtain the expected benefits from our alliance relationships for any reason, we may be less competitive and our ability to offer attractive solutions to our clients may be negatively affected, which could have an adverse effect on our results of operations.
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If we are unable to collect our receivables from, or bill our unbilled services to, our clients, our results of operations and cash flows could be adversely affected.
Our business depends on our ability to successfully obtain payment from our clients for work performed. We evaluate the financial condition of our clients and usually bill and collect on relatively short cycles. We maintain allowances, using the expected credit loss model, against receivables and unbilled services. Actual losses on client balances could differ from those that we currently anticipate and, as a result, we might need to adjust our allowances. We might not accurately assess the creditworthiness of our clients. Macroeconomic conditions, such as any domestic or global credit crisis, disruption of the global financial system, inflation and rising interest rates including on account of the COVID-19 pandemic, have resulted and may continue to result in financial difficulties for our clients, including, but not limited to, limited access to the credit markets, insolvency or bankruptcy and, as a result, have caused and may continue to cause, clients to delay payments to us, request modifications to their payment arrangements that could increase our receivables balance, or default on their payment obligations to us. Timely collection of client balances also depends on our ability to complete our contractual commitments and bill and collect our contracted revenues. If we are unable to meet our contractual requirements, we might experience delays in collection of and/or be unable to collect our client balances, and if this occurs, our results of operations and cash flows could be adversely affected. In addition, if we experience an increase in the time to bill and collect for our services, our cash flows could be adversely affected.
We may face difficulties as we expand our operations to establish delivery centers in onshore locations and offshore in countries in which we have limited or no prior operating experience.
In fiscal 2022, we added a new facility in Hyderabad, India and in fiscal 2023, we added a new facility each in Indore and Jaipur, India and as part of our acquisition of Vuram Technology Solutions Private Limited and its subsidiaries (“Vuram”), we acquired facilities in Trichy, India, and Ontario, Canada, and started our operations in Kuala Lumpur, Malaysia. We did not have any prior experience of operations in the any of these locations. We intend to continue to expand our global footprint in order to maintain an appropriate cost structure and meet our clients’ delivery needs. We plan to establish additional delivery centers in the Asia Pacific, North and Latin America and Europe, which may involve expanding into countries other than those in which we currently operate. Our expansion plans may also involve expanding into less developed countries, which may have less political, social or economic stability and less developed infrastructure and legal systems. As we expand our business into new countries, we may encounter regulatory, personnel, technological and other difficulties that increase our expenses or delay our ability to start up our operations or become profitable in such countries. This may affect our relationships with our clients and could have an adverse effect on our business, results of operations, financial condition and cash flows.
We may be unable to effectively manage our growth and maintain effective internal controls, which could have a material adverse effect on our operations, results of operations and financial condition.
We were founded in April 1996, and we have experienced growth and significantly expanded our operations. For example, over the last five fiscal years, our employees have increased to 59,755 as at March 31, 2023 from 36,540 as at March 31, 2018 and the number of delivery centers have increased from 54 to 64 centers between fiscal 2018 to fiscal 2023. We have delivery centers across 13 countries in Canada, China, Costa Rica, India, Malaysia, the Philippines, Poland, Romania, South Africa, Sri Lanka, Turkey, the UK, and the US. We intend to further expand our global delivery capability, and we are exploring plans to do so in Asia Pacific, North America and Europe.
We have also completed numerous acquisitions. In July 2022, we completed the acquisition of Vuram, a hyper automation services company that specializes in low-code enterprise automation and provides custom, scalable BPM solutions including industry-specific solutions for the banking/financial services, insurance, and healthcare verticals. In October 2022, we entered into a business transfer agreement with a large insurance company, under which we acquired certain assets, including a customer contract and operational process manuals, and assumed the employment agreements of the associated work force. In December 2022, we completed the acquisition of The Smart Cube Limited and its subsidiaries (“The Smart Cube”), which provides 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. In the same month, we also completed the acquisition 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 provides consulting, optimization, outsourcing, and training services and implementation solutions to their clients. For more information about more recent acquisitions, see “— We may not succeed in identifying suitable acquisition targets or integrating any acquired business into our operations, which could have a material adverse effect on our business, results of operations, financial condition and cash flows.”
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This growth places significant demands on our management and operational resources. In order to manage growth effectively, we must implement and improve operational systems, procedures and internal controls on a timely basis. If we fail to implement these systems, procedures and controls on a timely basis, we may not be able to service our clients’ needs, hire and retain new employees, pursue new business, complete future acquisitions or operate our business effectively. Failure to effectively transfer new client business to our delivery centers, properly budget transfer costs or accurately estimate operational costs associated with new contracts could result in delays in executing client contracts, trigger service level penalties or cause our profit margins not to meet our expectations or our historical profit margins. As a result of any of these potential problems associated with expansion, our business, results of operations, financial condition and cash flows could be materially and adversely affected.
We are subject to various risks relating to human capital management.
We face risks with respect to the management of human capital resources. If not managed properly, these risks could compromise our future success and harm our business. These risks are discussed in detail below.
Our executive and senior management team and other key team members in our business units are critical to our continued success and the loss of such personnel could harm our business.
Our future success substantially depends on the performance of the members of our executive and senior management team and other key team members in each of our business units. These personnel possess technical and business capabilities including domain expertise that are difficult to replace. There is intense competition for experienced senior management and personnel with technical and industry expertise in the BPM industry, and we may not be able to retain our key personnel due to various reasons, including the compensation philosophy followed by our company as described in “Part I — Item 6. Directors, Senior Management and Employees — Compensation”. Although we have entered into employment contracts with our executive officers, certain terms of those agreements may not be enforceable and in any event these agreements do not ensure the continued service of these executive officers. In the event of a loss of any key personnel, there is no assurance that we will be able to find suitable replacements for our key personnel within a reasonable time. The loss of key members of our senior management or other key team members, particularly to competitors, could have a material adverse effect on our business, results of operations, financial condition and cash flows.
We may fail to attract and retain enough sufficiently trained employees to support our operations, as competition for highly skilled personnel is significant and we experience significant employee attrition. These factors could have a material adverse effect on our business, results of operations, financial condition and cash flows.
The BPM industry relies on large numbers of skilled employees, and our success depends to a significant extent on our ability to attract, hire, train and retain qualified employees. The BPM industry, including our company, experiences high employee attrition. As companies, including our company, transition from a “work from home” model to a return to the office, we may face higher levels of attrition if employees are unwilling to return to pre-COVID working schedules. In addition, client mandates that restrict our delivery of services remotely could also adversely affect our ability to attract talents in the future. During fiscal 2023, 2022 and 2021, the attrition rate for our employees who have completed six months of employment with us was 39%, 36% and 22%, respectively. Our attrition rate may continue to increase or fluctuate in the future. There is significant competition in the jurisdictions where our operation centers are located, including India, the Philippines, Romania, South Africa and Sri Lanka, for professionals with the skills necessary to perform the services we offer to our clients. Increased competition for these professionals, in the BPM industry or otherwise, could have an adverse effect on us. A significant increase in the attrition rate among employees with specialized skills could decrease our operating efficiency and productivity and could lead to a decline in demand for our services.
In addition, our ability to maintain and renew existing engagements and obtain new business will depend largely on our ability to attract, train and retain personnel with skills that enable us to keep pace with growing demands for outsourcing, evolving industry standards and changing client preferences. Our failure either to attract, train and retain personnel with the qualifications necessary to fulfill the needs of our existing and future clients or to assimilate new employees successfully could have a material adverse effect on our business, results of operations, financial condition and cash flows.
Our success in attracting talent depends on our ability to foster a culture of diversity, equity and inclusion at our workplace. We are focused on promoting a range of matters to help foster our workplace culture, including diversity, equal opportunities, non-discrimination, inclusion and employee health and safety. We have adopted policies to promote compliance with laws and regulations as well as to foster a respectful workplace for all employees. Any failure in adhering to these policies could harm our reputation and result in negative publicity, thereby negatively affecting our ability to attract and retain talent.
Employee strikes and other labor-related disruptions may adversely affect our operations.
Our business depends on a large number of employees executing client operations. Strikes or labor disputes with our employees at our delivery centers may adversely affect our ability to conduct business. Our employees are not unionized, although they may in the future form unions. We cannot assure you that there will not be any strike, lock out or material labor dispute in the future. Work interruptions or stoppages could have a material adverse effect on our business, results of operations, financial condition and cash flows.
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Our loan agreements impose operating and financial restrictions on us and our subsidiaries.
We have incurred indebtedness in connection with our acquisitions and general corporate purposes. As at March 31, 2023, we had total indebtedness of $173.4 million in secured bank loans. See “Part I — Item 5. Operating and Financial Review and Prospects — Liquidity and Capital Resources.” Generally, our loan agreements contain a number of covenants and other provisions that, among other things, may impose operating and financial restrictions on us and our subsidiaries. These restrictions could put a strain on our financial position. For example:
| • | they may increase our vulnerability to general adverse economic and industry conditions; |
| • | they may require us to dedicate a substantial portion of our cash flow from operations to payments on our loans, thereby reducing the availability of our cash flow to fund capital expenditure, working capital and other general corporate purposes; |
| • | they may require us to seek lenders’ consent prior to paying dividends on our ordinary shares; |
| • | they may limit our ability to incur additional borrowings or raise additional financing through equity or debt instruments; and |
| • | they may impose certain financial covenants on us that we may not be able to meet, which may cause the lenders to accelerate the repayment of the remaining loan outstanding. |
Further, the restrictions that may be contained in our loan agreements may limit our ability to plan for or react to market conditions, meet capital needs or make acquisitions or otherwise restrict our activities or business plans. Our ability to comply with the covenants of our loan agreements may be affected by events beyond our control, and any material deviations from our forecasts could require us to seek waivers or amendments of covenants or alternative sources of financing or to reduce expenditures. We cannot assure you that such waivers, amendments or alternative financing could be obtained, or if obtained, would be on terms acceptable to us.
To fund our capital expenditures, service indebtedness and fund other potential liquidity requirements, we will require a significant amount of cash. Our ability to generate cash depends on many factors beyond our control and we may need to access the credit market to meet our liquidity requirements.
Our ability to fund planned capital expenditures and to make payments on outstanding loans will depend on our ability to generate cash in the future. This, to a large extent, is subject to general economic, financial, competitive, legislative, regulatory and other factors that are beyond our control. Furthermore, given the recent global economic slowdown and continued uncertainty over global economic conditions , including on account of the COVID-19 pandemic and the Russia-Ukraine military conflict, there can be no assurance that our business activity will be maintained at our expected level to generate the anticipated cash flows from operations, or that our credit facilities will be available or sufficient. If the current global economic slowdown and uncertainties continue, we may experience a decrease in demand for our services, resulting in our cash flows from operations being lower than anticipated. This may in turn result in our need to obtain financing, which may not be available to us on favorable terms or at all.
If we cannot fund our capital expenditures, service indebtedness or fund our other potential liquidity requirements, we may have to take actions such as seeking additional financing or reducing or delaying capital expenditures, strategic acquisitions and investments. We cannot assure you that any such actions, if necessary, could be undertaken on commercially reasonable terms or at all.
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Wage increases may prevent us from sustaining our competitive advantage and may reduce our profit margin.
Salaries and related benefits of our operations staff and other employees in countries where we have delivery centers, in particular India, are among our most significant costs. Wage costs in India have historically been significantly lower than wage costs in the US and Europe for comparably skilled professionals, which has been one of our competitive advantages. However, rapid economic growth in India, increased demand for BPM outsourcing to India, increased competition for skilled employees in India, and regulatory developments resulting in wage increases in India, may reduce this competitive advantage. For example, the Code on Wages 2019, Industrial Relations Code 2020, Social Security Code 2020 and Occupational Safety, Health & Working Condition Code 2020 received assent from the President of India on September 28, 2020. However, the rules for these Acts have not yet been published and the effective date from which these changes are applicable is yet to be notified. Accordingly, while we are unable to determine with certainty the financial impact due to these changes, it is possible that our wage costs in India may increase as a result of these changes when they become effective. In addition, if the US dollar or the pound sterling declines in value against the Indian rupee, wages in the US or the UK will further decrease relative to wages in India, which may further reduce our competitive advantage. We may need to increase our levels of employee compensation more rapidly than in the past to remain competitive in attracting the quantity and quality of employees that our business requires. Wage increases may reduce our profit margins and have a material adverse effect on our financial condition and cash flows.
Our operating results may differ from period to period, which may make it difficult for us to prepare accurate internal financial forecasts and respond in a timely manner to offset such period to period fluctuations.
Our operating results may differ significantly from period to period due to factors such as client losses, variations in the volume of business from clients resulting from changes in our clients’ operations, the business decisions of our clients regarding the use of our services, delays or difficulties in expanding our operational facilities and infrastructure, changes to our pricing structure or that of our competitors, inaccurate estimates of resources and time required to complete ongoing projects, currency fluctuations and seasonal changes in the operations of our clients. For example, our clients in the travel and leisure industry experience seasonal changes in their operations in connection with the US summer holiday season, as well as episodic factors such as adverse weather conditions. Transaction volumes have been, and continue to be, impacted by market conditions affecting the travel industry, including natural disasters, outbreak of infectious diseases (such as the COVID-19 pandemic, which led to a significant fall in air travel volumes,especially during fiscal 2021 and fiscal 2022), or other serious public health concerns, military conflict and terrorist attacks. In addition, our contracts do not generally commit our clients to provide us with a specific volume of business.
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In addition, the long sales cycle for our services, which typically ranges from three to 12 months, and the internal budget and approval processes of our prospective clients make it difficult to predict the timing of new client engagements. The extent to which the COVID-19 pandemic and any related resurgence impact the length of sales cycle for our services will depend on numerous evolving factors that we may not be able to accurately predict, including resurgence of the pandemic and the duration and scope thereof; the effect on our potential and existing clients and client demand for our services and solutions; our ability to sell and provide our services and solutions; the ability of our clients to pay for our services and solutions; and any further closures of our and our clients’ offices and facilities. Commencement of work and ramping up of volume of work with certain new and existing clients have in the past been slower than we had expected and may in the future be slower than we expect. Revenue is recognized upon actual provision of services and when the criteria for recognition are achieved. Accordingly, the financial benefit of gaining a new client may not be realized immediately due to delays in the implementation of our services. These factors may make it difficult for us to prepare accurate internal financial forecasts or replace anticipated revenue that we do not receive as a result of those delays. Due to the above factors, it is possible that in some future quarters our operating results may be significantly below the expectations of the public market, analysts and investors.
If our pricing structures do not accurately anticipate the cost and complexity of performing our work, our profitability may be negatively affected.
The terms of our client contracts typically range from three to five years. In many of our contracts, we commit to long-term pricing with our clients, and we negotiate pricing terms with our clients utilizing a range of pricing structures and conditions. Depending on the particular contract, these include input-based pricing (such as full-time equivalent-based pricing arrangements), fixed-price arrangements, output-based pricing (such as transaction-based pricing), outcome-based pricing, and contracts with features of all these pricing models. Our pricing is highly dependent on our internal forecasts and predictions about our projects and the marketplace, which are largely based on limited data and could turn out to be inaccurate. If we do not accurately estimate the costs and timing for completing projects, our contracts could prove unprofitable for us or yield lower profit margins than anticipated. Some of our client contracts do not allow us to terminate the contracts except in the case of non-payment by our client. If any contract turns out to be economically non-viable for us, we may still be liable to continue to provide services under the contract.
We intend to continue focusing on increasing our service offerings that are based on non-linear pricing models (such as fixed-price and outcome-based pricing models) that allow us to price our services based on the value we deliver to our clients rather than the headcount deployed to deliver the services to them. Non-linear revenues may be subject to short-term pressure on margins as initiatives in developing the products and services take time to deliver. The risk of entering into non-linear pricing arrangements is that if we fail to properly estimate the appropriate pricing for a project, we may incur lower profits or losses as a result of being unable to execute projects with the amount of labor we expected or at a margin sufficient to recover our initial investments in our solutions. While non-linear pricing models are expected to result in higher revenue productivity per employee and improved margins, they also mean that we continue to bear the risk of cost overruns, wage inflation, fluctuations in currency exchange rates and failure to achieve clients’ business objectives in connection with these projects.
Our profit margin, and therefore our profitability, are largely a function of our asset utilization and the rates we are able to recover for our services. During fiscal 2023, 2022, and 2021, we incurred significant expenditures to increase our number of seats by establishing additional delivery centers or expanding production capacities in our existing delivery centers. If we are not able to maintain the pricing for our services or an appropriate seat utilization rate, without corresponding cost reductions, our profitability will suffer. The rates we are able to recover for our services are affected by a number of factors, including our clients’ perceptions of our ability to add value through our services, competition, introduction of new services or products by us or our competitors, our ability to accurately estimate, attain and sustain revenue from client contracts, margins and cash flows over increasingly longer contract periods and general economic and political conditions. Our profitability is also a function of our ability to control our costs and improve our efficiency. As we increase the number of our employees and execute our strategies for growth, we may not be able to manage the significantly larger and more geographically diverse workforce that may result, which could adversely affect our ability to control our costs or improve our efficiency. Further, because there is no certainty that our business will ramp-up at the rate that we anticipate, we may incur expenses for the increased capacity for a significant period of time without a corresponding growth in our revenue. Commencement of work and ramping up of volume of work with certain new and existing clients have in the past been slower than we had expected and may in the future be slower than we expect. If our revenue does not grow at our expected rate, we may not be able to maintain or improve our profitability. The COVID-19 pandemic has also led to, and may continue to lead to, increased costs, as we have to incur additional expenses in relation to the measures we have implemented to safeguard our employees’ health and safety and client operations, such as enhanced sanitization measures at our office premises, laptop rental costs for employees who are working remotely, telecommunications costs for mobile broadband devices, additional software licenses and logistics costs for the movement of equipment and we may need to pay higher costs for compensation, rental, accommodation and other fixed costs as a result of disruptions caused by the continued spread of the virus.
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We have in the past and may in the future enter into subcontracting arrangements for the delivery of services. For example, in China, in addition to delivering services from our own delivery center, we used to deliver services through a subcontractor’s delivery center. We could face greater risk when pricing our outsourcing contracts, as our outsourcing projects typically entail the coordination of operations and workforces with our subcontractor, and utilizing workforces with different skill sets and competencies. Furthermore, when outsourcing work we assume responsibility for our subcontractors’ performance. Our pricing, cost and profit margin estimates on outsourced work may include anticipated long-term cost savings from transformational and other initiatives that we expect to achieve and sustain over the life of the outsourcing contract. There is a risk that we will underprice our contracts, fail to accurately estimate the costs of performing the work or fail to accurately assess the risks associated with potential contracts. In particular, any increased or unexpected costs, delays or failures to achieve anticipated cost savings, or unexpected risks we encounter in connection with the performance of this work, including those caused by factors outside our control, could make these contracts less or even not profitable , which could have an adverse effect on our profit margin.
We may not succeed in identifying suitable acquisition targets or integrating any acquired business into our operations, which could have a material adverse effect on our business, results of operations, financial condition and cash flows.
Our growth strategy involves gaining new clients and expanding our service offerings, both organically and through strategic acquisitions. It is possible that in the future, we may not succeed in identifying suitable acquisition targets available for sale or investments on reasonable terms, have access to the capital required to finance potential acquisitions or investments, or be able to consummate any acquisition or investments. Future acquisitions or joint ventures may also result in the incurrence of indebtedness or the issuance of additional equity securities, which may present difficulties in financing the acquisition or joint venture on attractive terms. The inability to identify suitable acquisition targets or investments or the inability to complete such transactions may affect our competitiveness and our growth prospects.
Historically, we have expanded some of our service offerings and gained new clients through strategic acquisitions. For example, in December, 2022, we completed the acquisition of The Smart Cube, which provides 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. In the same month, we also completed the acquisition of OptiBuy, which helps clients leverage the capabilities of leading third-party procurement and supply chain platforms and also provides consulting, optimization, outsourcing, and training services and implementation solutions to their clients. In October, 2022, we entered into a business transfer agreement with a large insurance company, under which we acquired certain assets, including a customer contract and operational process manuals, and the associated work force have joined our company. In July 2022, we completed the acquisition of Vuram, a hyper automation services company that specializes in low-code enterprise automation and provides custom, scalable BPM solutions including industry-specific solutions for the banking/financial services, insurance, and healthcare verticals. The lack of profitability of any of our acquisitions or joint ventures could have a material adverse effect on our operating results.
In addition, our management may not be able to successfully integrate any acquired business into our operations or benefit from any joint ventures that we enter into, and any acquisition we do complete or any joint venture we do enter into may not result in long-term benefits to us. For instance, if we acquire a company, we could experience difficulties in assimilating that company’s personnel, operations, technology and software, or the key personnel of the acquired company may decide not to work for us. There is no assurance that these acquisitions will be profitable for us. Further, we face the risk that the legal regime or regulatory requirements imposed on any business that we acquire may change following our acquisition and such changes may adversely affect our ability to achieve the expected accretive benefits from the acquisition, which could in turn require us to recognize an impairment of goodwill associated with the acquired business. For more information see “— The international nature of our business exposes us to several risks, such as unexpected changes in the regulatory requirements and government policy changes of multiple jurisdictions.”
We also face risks arising from acquisitions of businesses reliant upon a small number of key clients. The value of such acquisitions may decline in the event that their key clients decide not to renew their contracts, or decrease their volume of business or the prices paid for services. For example, HealthHelp, which we acquired in March 2017, is primarily reliant on one client. A decline in the volume of business from this client or in the pricing of our services to this client would likely adversely affect our ability to achieve the expected accretive benefits from our acquisition of HealthHelp.
Further, we may receive claims or demands by the sellers of the entities acquired by us on the indemnities that we have provided to them for losses or damages arising from any breach of contract by us. Conversely, while we may be able to claim against the sellers on their indemnities to us for breach of contract or breach of the representations and warranties given by the sellers in respect of the entities acquired by us, there can be no assurance that our claims will succeed, or if they do, that we will be able to successfully enforce our claims against the sellers at a reasonable cost. Acquisitions and joint ventures also typically involve a number of other risks, including diversion of management’s attention, legal liabilities and the need to amortize acquired intangible assets, any of which could have a material adverse effect on our business, results of operations, financial condition and cash flows.
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Goodwill, intangible or other assets that we carry on our balance sheet could give rise to significant impairment charges in the future.
As at March 31, 2023, we had goodwill and intangible assets of $532.9 million, which primarily resulted from our acquisitions of Vuram, The Smart Cube, OptiBuy, business transfers from a large insurance company, as well as our acquisitions of HealthHelp, Denali and Value Edge. Under IFRS, we are required to review our goodwill, intangibles or other assets for impairment when events or changes in circumstances indicate the carrying value may not be recoverable. In addition, goodwill, intangible or other assets with indefinite lives are required to be tested for impairment at least annually. During the fourth quarter of fiscal 2020, Brexit had a negative impact on the insurance industry and applied downward pressure on the expected future performance of the WNS Auto Claims reportable segment, due to contract renegotiations and loss of certain clients. These factors, together with the highly uncertain operating environment in the UK, have negatively impacted and caused us to significantly reduce our financial projections and estimates of the WNS Auto Claims BPM reportable segment from our previous estimate. Accordingly, we performed an impairment review of the goodwill associated with the companies we had acquired for our auto claims business and recorded an impairment charge of $4.1 million to our results of operations in fiscal 2020 for the remaining goodwill balance of our auto claims business. See also “— The international nature of our business exposes us to several risks, such as unexpected changes in the regulatory requirements of multiple jurisdictions.” We may be required to record further impairment charges to our goodwill and intangible assets associated with other acquisitions in the future. For example, if the research and analytics industry experiences a significant decline in business and we determine that we will not be able to achieve the cash flows that we had expected from our recent acquisitions, we may have to record an impairment of all or a portion of the goodwill or intangible assets relating to those acquisitions. Any further impairment to our goodwill or intangible assets may have a significant adverse impact on our results of operations.
We are incorporated in Jersey, Channel Islands under the Companies (Jersey) Law 1991 (the ”1991 Law”). If the tax benefits enjoyed by our company are withdrawn or changed, we may be liable for higher tax, thereby reducing our profitability.
As a company incorporated in Jersey, Channel Islands, we are currently subject to no Jersey income tax. Although we continue to enjoy the benefits of the Jersey business tax regime, if Jersey tax laws change or the tax benefits we enjoy are otherwise withdrawn or changed, we may become liable for higher tax, thereby reducing our profitability.
If we fail to maintain an effective system of internal control over financial reporting, we may not be able to accurately report our financial results or prevent or detect fraud. As a result, current and potential investors could lose confidence in our financial reporting, which could harm our business and have an adverse effect on our ADS price.
Effective internal control over financial reporting is necessary for us to provide reliable financial reports. The effective internal controls together with adequate disclosure controls and procedures are designed to prevent or detect fraud. Deficiencies in our internal controls may adversely affect our management’s ability to record, process, summarize, and report financial data on a timely basis. As a public company, we are required by Section 404 of the Sarbanes-Oxley Act of 2002 to include a report of management’s assessment on our internal control over financial reporting and an independent auditor’s attestation report on our internal control over financial reporting in our annual reports on Form 20-F.
If material weaknesses are identified in our internal controls over financial reporting, we could be required to implement remedial measures. If we fail to maintain effective disclosure controls and procedures or internal control over financial reporting, we could lose investor confidence in the accuracy and completeness of our financial reports, which could have a material adverse effect on our ADS price.
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Risks Related to Key Delivery Locations
A substantial portion of our assets and operations are located in India and we are subject to regulatory, economic, social and political uncertainties in India.
Our primary operating subsidiary, WNS Global Services Private Limited (“WNS Global”), is incorporated in India, and a substantial portion of our assets and employees are located in India. The Government of India, however, has exercised and continues to exercise significant influence over many aspects of the Indian economy. The Government of India has provided significant tax incentives and relaxed certain regulatory restrictions in order to encourage foreign investment in specified sectors of the economy, including the BPM industry. Those programs that have benefited us include tax holidays, liberalized import and export duties and preferential rules on foreign investment and repatriation. We cannot assure you that such liberalization policies will continue. The Government of India may also enact new tax legislation or amend the existing legislation that could impact the way we are taxed in the future. For more information, see “— Tax legislation and the results of actions by taxing authorities may have an adverse effect on our operations and our overall tax rate.” Other legislation passed by the Government of India may also impact our business. For example, the Code on Wages 2019, Industrial Relations Code 2020, Social Security Code 2020 and Occupational Safety, Health & Working Condition Code 2020 received assent from the President of India on September 28, 2020. However, the rules for these Acts have not yet been published and the effective date from which these changes are applicable is yet to be notified. Accordingly, while we are unable to determine with certainty the financial impact due to these changes, it is possible that our wage costs in India may increase as a result of these changes when they become effective. In December 2019, the Parliament of India passed the Citizenship (Amendment) Act, 2019, which provides citizenship to religious minorities in Pakistan, Bangladesh and Afghanistan, prompting protests across India. In addition, there are concerns over the slowing growth of India’s economy resulting from recent macroeconomic and geo-political developments and the negative impact that COVID-19 has had, and may continue to have, on India’s economy. Our financial performance and the market price of our ADSs may be adversely affected by changes in inflation, exchange rates and controls, interest rates, Government of India policies (including taxation regulations and policies), social stability or other political, economic or diplomatic developments affecting India in the future.
India has witnessed communal clashes in the past. Although such clashes in India have, in the recent past, been sporadic and have been contained within reasonably short periods of time, any such civil disturbance in the future could result in disruptions in transportation or communication networks, as well as have adverse implications for general economic conditions in India. Such events could have a material adverse effect on our business, the value of our ADSs and your investment in our ADSs.
The UK’s withdrawal from the EU may have a negative effect on global economic conditions, financial markets and our operations in the UK and EU, which could reduce the value of our ADS.
We have operations in the UK, Romania, Spain and Poland. Brexit has created significant political and economic uncertainty regarding the trading relationship between the UK and the EU and could cause disruptions to, and create uncertainty surrounding, our operations in the UK and the EU. The long-term effects of Brexit will depend on the agreements or arrangements with the EU for the UK to retain access to EU markets either during a transitional period or more permanently. These developments may have an adverse effect on our operations in the UK and the EU, the value of our ADSs and your investment in our ADSs.
Our business in South Africa is evaluated for compliance with the South African government’s Broad-Based Black Economic Empowerment (“BBBEE”) legislation. Failure to maintain a minimum BBBEE rating would result in a loss of certain government grants, and may also result in us losing certain business opportunities or clients imposing contractual penalties on us.
Our business in South Africa is evaluated for compliance with the South African government’s BBBEE legislation against a BBBEE scorecard, which has different levels based on various criteria. South African government grants are available to businesses that meet specified conditions, including achieving a specified minimum BBBEE rating. A level one BBBEE rating has the most rigorous criteria. Additionally, many South African companies require their service providers to maintain a minimum BBBEE rating, and many of our South African client contracts contain clauses that allow our clients to terminate their contracts with us or impose specified penalties on us if we do not maintain a minimum BBBEE rating.
We conduct our domestic business in South Africa (serving clients based in South Africa) through our South Africa subsidiary, WNS South Africa (Pty) Ltd, and our international business in South Africa (serving clients based outside South Africa) through our South Africa subsidiary, WNS Global Services SA (Pty) Limited. During fiscal 2020, pursuant to the requirements of the South African government’s BBBEE Codes of Good Practice, the WNS B-BBEE Staff Share Trust subscribed to one participating preference share issued by WNS Global Services SA (Pty) Ltd, which entitles it to 45.56% of voting rights in WNS South Africa (Pty) Ltd. In fiscal 2022, the voting rights were increased to 48.84% to help ensure WNS South Africa (Pty) Ltd maintains the same level of rating. We achieved a level one rating in respect of WNS South Africa (Pty) Ltd in May 2022, which is valid until April 2023 and achieved a level six rating in respect of WNS Global Services SA (Pty) Limited in June 2022 which is valid until June 2023. The BBBEE verification audit for WNS South Africa (Pty) Ltd is in process and the new rating is expected to be received by the end of May 2023. Our program developed for the purpose of meeting the criteria to achieve the requisite BBBEE rating in respect of WNS Global Services SA (Pty) Limited includes, among other measures, divesting some of our interests in such subsidiary to address the criterion relating to the percentage of ownership of an entity by “black people” (as defined under the applicable legislation).
With the achievement of a level six rating in respect of WNS Global Services SA (Pty) Limited and a level one rating in respect of WNS South Africa (Pty) Ltd, we currently continue to meet the minimum BBBEE rating required under our contracts with South African clients and be eligible for government grants associated with our domestic and international business.
However, there is no assurance that we will maintain our existing BBBEE rating with respect to WNS Global Services SA (Pty) Limited or WNS South Africa (Pty) Ltd in our next or future annual BBBEE verification audits or thereafter. If we fail to maintain or achieve the required minimum BBBEE ratings, we will cease to be eligible for government grants, will be disqualified from bidding for certain business, and certain of our clients may terminate their contracts with us or impose penalties on us. These outcomes would have an adverse effect on our business, results of operations, financial condition and cash flows.
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Our facilities are at risk of damage by natural disasters.
Our operational facilities and communication hubs may be damaged in natural disasters such as earthquakes, floods, heavy rains, tsunamis and cyclones. For example, Durban, South Africa was affected by severe flooding in April 2022. Although our clients experienced minimal disruptions during the flood due to the business continuity planning and infrastructure resiliency measures we have implemented with a view to minimizing the impact of natural disasters on our business, such measures may be rendered less effective in other circumstances. In addition, we have operational facilities and communication hubs located in regions which are considered to be particularly vulnerable to natural disasters, such as the Philippines and Houston in the United States, which have experienced severe natural disasters such as typhoons, hurricanes and floods. Such natural disasters may lead to disruption to information systems and telephone service for sustained periods , and such natural disasters may become more frequent or intense as a result of climate change. Damage or destruction that interrupts our provision of BPM services could damage our relationships with our clients and may cause us to incur substantial additional expenses to repair or replace damaged equipment or facilities. We may also be liable to our clients for disruption in service resulting from such damage or destruction. While we currently have property damage insurance and business interruption insurance, our insurance coverage may not be sufficient. Furthermore, we may be unable to secure such insurance coverage at premiums acceptable to us in the future or secure such insurance coverage at all. Prolonged disruption of our services as a result of natural disasters would also entitle our clients to terminate their contracts with us.
If the tax benefits and other incentives that we currently enjoy are reduced or withdrawn or not available for any other reason, our financial condition would be negatively affected.
We have benefitted from, and continue to benefit from, certain tax holidays and exemptions in various jurisdictions in which we have operations.
In fiscal 2023, 2022 and 2021 our tax rate in India, the Philippines and Sri Lanka impacted our effective tax rate. We would have incurred approximately $20.7 million, $20.9 million and $11.1 million in additional income tax expense on our combined operations in our Special Economic Zone operations in India, the Philippines and Sri Lanka, if the tax holidays and exemptions described below had not been available for the respective periods.
We expect our tax rate in India, the Philippines and Sri Lanka to continue to impact our effective tax rate.
One of our Indian subsidiary with operating units registered under the Special Economic Zone (‘’SEZ’’) is eligible to claim income tax exemption with respect to profits earned from export revenue. Upon the 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 current intent is to continue to be subject to the current rate of 34.95% with respect to this subsidiary and claim tax holidays associated with SEZ. Our other Indian subsidiaries have elected the lower income tax rate of 25.17%. See “Part I — Item 4. Information on the Company — B. Business Overview — Regulations”.
When any of our tax holidays or exemptions expire or terminate, or if the applicable government withdraws, changes the conditions or reduces the benefits of a tax holiday or exemption that we enjoy, our tax expense may materially increase and this increase may have a material impact on our results of operations. For example, any changes in the regulations relating to work from home arrangements may impact the tax exemption benefits available to us. The applicable tax authorities may also disallow deductions claimed by us and assess additional taxable income on us in connection with their review of our tax returns.
Tax legislation and the results of actions by taxing authorities may have an adverse effect on our operations and our overall tax rate.
The government of India, the US or other jurisdictions where we have a presence could enact new tax legislation which would have a material adverse effect on our business, results of operations and financial condition. In addition, our ability to repatriate surplus earnings from our delivery centers in a tax-efficient manner is dependent upon interpretations of local laws, possible changes in such laws and the renegotiation of existing double tax avoidance treaties. Changes to any of these may adversely affect our overall tax rate, or the cost of our services to our clients, which would have a material adverse effect on our business, results of operations and financial condition.
The UK government has revised the corporate tax rate from 19% to 25% from fiscal 2024. The US Government has proposed to increase the US corporate tax rate. Once effective, this tax rate change will have an impact on the various current and deferred tax items recorded by the Company’s subsidiaries.
Member countries of the OECD/G20 Inclusive Framework on Base Erosion and Profit Shifting have agreed on a two Pillar approach to address the tax challenges arising from the digitalization of the global economy. This is expected to alter the global tax landscape. Once effective, these changes may have an impact on the various current and deferred tax items recorded by the Company’s subsidiaries.
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We are subject to transfer pricing and other tax related regulations and any determination that we have failed to comply with them could materially adversely affect our profitability.
Transfer pricing regulations to which we are subject require that any international transaction among our company and its subsidiaries, or the WNS group enterprises, be on arm’s-length terms. We believe that the international transactions among the WNS group enterprises are on arm’s-length terms. If, however, the applicable tax authorities determine that the transactions among the WNS group enterprises do not meet arm’s-length criteria, we may incur increased tax liability, including accrued interest and penalties. This would cause our tax expense to increase, possibly materially, thereby reducing our profitability and cash flows. We have signed an advance pricing agreement with the Government of India providing for the agreement on transfer pricing matters over certain transactions covered thereunder for a period of five years starting from April 2018. We have filed an application with the Government of India for the renewal of the advance pricing agreement on similar terms for another five years starting from April 2023.
We may be required to pay additional taxes in connection with audits by the tax authorities.
From time to time, we receive orders of assessment from Indian tax authorities assessing additional taxable income on us and/or our subsidiaries in connection with their review of our tax returns. We currently have orders of assessment in fiscal 2003 through fiscal 2018 pending before various appellate authorities. These orders assess additional taxable income that could in the aggregate give rise to an estimated ₹560.9 million ($6.8 million based on the exchange rate on March 31, 2023) in additional taxes, including interest of ₹153.1 million ($1.9 million based on the exchange rate on March 31, 2023).
These orders of assessment allege, among others, that the transfer prices we applied to certain of the international transactions between our Indian subsidiaries and our other wholly-owned subsidiaries were not on arm’s-length terms, disallow a tax holiday benefit claimed by us, deny the set-off of brought forward business losses and unabsorbed depreciation and disallow certain expenses claimed as tax deductible by our Indian subsidiaries, as the case may be. As at March 31, 2023 we have provided a tax reserve of ₹816.9 million ($9.9 million based on the exchange rate on March 31, 2023) primarily on account of the Indian tax authorities’ denying the set off of brought forward business losses and unabsorbed depreciation. We have appealed against these orders of assessment before higher appellate authorities. For more details on these assessments, See “Part I — Item 5. Operating and Financial Review and Prospects —Tax Assessment Orders.”
In addition, we currently have orders of assessment pertaining to similar issues that have been decided in our favor by appellate authorities, vacating tax demands of ₹6,556.9 million ($79.8 million based on the exchange rate on March 31, 2023) in additional taxes, including interest of ₹2,353.2 million ($28.6 million based on the exchange rate on March 31, 2023). The income tax authorities have filed or may file appeals against these orders at higher appellate authorities.
In case of disputes, the Indian tax authorities may require us to deposit with them all or a portion of the disputed amounts pending resolution of the matters on appeal. Any amount paid by us as deposits will be refunded to us with interest if we succeed in our appeals. We have deposited ₹904.1 million ($11.0 million based on the exchange rate on March 31, 2023) of the disputed amount with the tax authorities and may be required to deposit the remaining portion of the disputed amount with the tax authorities pending final resolution of the respective matters.
As at March 31, 2023, corporate tax returns in fiscal 2020 and thereafter remain subject to examination by tax authorities in India.
After consultation with our Indian tax advisors and based on the facts of these cases, certain legal opinions from counsel, the nature of the tax authorities’ disallowances and the orders from appellate authorities deciding similar issues in our favor in respect of assessment orders for earlier fiscal years, we believe these orders are unlikely to be sustained at the higher appellate authorities and we intend to dispute the orders of assessment.
In addition, the Company currently has orders of assessment outstanding for various years pertaining to pre-acquisition period of newly acquired entities, which assess additional taxable income that could in the aggregate give rise to an estimated ₹63.2 million ($0.8 million based on the exchange rate on March 31, 2023) in additional taxes, including interest of ₹31.1million ($0.4 million based on the exchange rate on March 31, 2023). These orders of assessment disallow tax holiday benefit claimed by the newly acquired entities. The newly acquired entities have appealed against these orders of assessment before higher appellate authorities.
We have received orders of assessment from the value-added tax (“VAT”), service tax and goods and services tax (“GST”) authorities, demanding payment of ₹159.60 million ($1.9 million based on the exchange rate on March 31, 2023) towards VAT, service tax and GST for the period April 1, 2014 to March 31, 2019. The tax authorities have rejected input tax credit on certain types of input services. Based on consultations with our tax advisors, we believe these orders of assessments will more likely than not be vacated in our favour by the higher appellate authorities and we intend to dispute the order of assessments.
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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 March 31, 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 Tax Appeal Commission in this regard. Based on consultations with our tax advisors, we believe this order of assessment will more likely than not be vacated in our favour by the higher appellate authorities and we intend to dispute the order of assessment.
No assurance can be given, however, that we will prevail in our tax disputes. If we do not prevail, payment of additional taxes, interest and penalties may adversely affect our results of operations, financial condition and cash flows. There can also be no assurance that we will not receive similar or additional orders of assessment in the future.
Terrorist attacks, civil unrest and other acts of violence in any of the countries in which we operate or their neighboring countries could adversely affect our operations, resulting in a loss of client confidence and materially adversely affecting our business, results of operations, financial condition and cash flows.
Terrorist attacks and other acts of violence or war in any of the countries in which we operate or their neighboring countries may adversely affect worldwide financial markets and could potentially lead to economic recession, which could adversely affect our business, results of operations, financial condition and cash flows. For example, South Asia has, from time to time, experienced instances of terrorism, civil unrest and hostilities in and among neighboring countries, including Sri Lanka, India and Pakistan. In February 2022, a military conflict arose between Russia and Ukraine, and we have operations in Poland and Romania, which border Ukraine. While the conflict has not presently spread beyond Ukraine, any escalation of the military conflict in the future may directly impact our operations in Poland and Romania. In April 2019, several churches and hotels in Sri Lanka, including premises within one kilometer of one of our delivery centers, were targeted in a series of coordinated terrorist bombings. In previous years, military confrontations between India and Pakistan have occurred in the region of Kashmir and along the India/Pakistan border. There have also been incidents in and near India, such as the bombings of the Taj Mahal Hotel and Oberoi Hotel in Mumbai in 2008, a terrorist attack on the Parliament of India, troop mobilizations along the India/Pakistan border and an aggravated geopolitical situation in the region. Such military activity or terrorist attacks in the future could disrupt our operations or influence the Indian economy by disrupting communications and making travel more difficult. Resulting political tensions could create a greater perception that investments in Indian companies involve a high degree of risk. Such political tensions could similarly create a perception that there is a risk of disruption of services provided by India-based companies, which could have a material adverse effect on the market for our services. Furthermore, if India were to become engaged in armed hostilities, particularly hostilities that were protracted or involved the threat or use of nuclear weapons, we might not be able to continue our operations.
Increasing scrutiny of, and attention to, environmental, social and governance matters may adversely affect our business operations, clients, profitability and may further expose us to reputational risks and legal liability.
Increasingly, in addition to financial results, companies are being judged by performance on a variety of environmental, social and governance (ESG) matters, which can contribute to the long-term sustainability of a company’s performance. Expectations regarding voluntary ESG initiatives and disclosures may result in increased costs (including but not limited to increased costs related to compliance, stakeholder engagement, contracting and insurance), changes in demand for certain products, enhanced compliance or disclosure obligations, or other adverse impacts to our business, financial condition, or results of operations.
While we may at times engage in voluntary initiatives (such as voluntary disclosures, certifications, or goals, among others) to improve the ESG profile of our company or to respond to stakeholder expectations, such initiatives may be costly and may not have the desired effect. Expectations around company’s management of ESG matters continues to evolve rapidly, in many instances due to factors that are out of our control. For example, although WNS has developed a long-term [Scope 1 and 2] net zero and interim reduction goal (pending validation by the Science Based Targets Initiative) we may ultimately be unable to complete this or other initiatives or targets, either on the timelines initially announced or at all, due to technological, cost, or other constraints, which may be within or outside of our control. Moreover, actions or statements that we may take based on expectations, assumptions, or third-party information that we currently believe to be reasonable may subsequently be determined to be erroneous or be subject to misinterpretation. Our inability to successfully perform or perceived failures on ESG matters and to meet societal expectations may negatively affect our reputation or relation with the stakeholders (e.g., investors, clients, and employees).
Certain market participants, including major institutional investors and capital providers, use third-party benchmarks, ratings and scores to assess companies’ ESG profiles in making investment or voting decisions. There currently are many third-party providers of ESG benchmarks, ratings and scores, and the number of such providers has increased in recent years. WNS has limited control and limited visibility over what data such providers choose to use, and no control and often no visibility over their various methodologies. As a result, such ratings may be materially inaccurate, incomplete or misleading. Unfavorable ESG ratings could lead to increased negative investor sentiment towards us or our industry, which could negatively impact our ADS price as well as our access to and cost of capital. To the extent ESG matters negatively impact our reputation, it may also impede our ability to compete as effectively to attract and retain employees or clients, which may adversely impact our operations. Considering investors’ increasing focus on ESG matters, the fast pace of change of external expectations, and a range of upcoming regulations, there can be no certainty that we will manage such issues successfully, that the ESG standards we currently use to measure our performance against will remain the same, or that we will successfully meet society or investors’ expectations. This and other stakeholder expectations will likely lead to increased costs as well as scrutiny that could heighten all of the risks identified in this risk factor. Additionally, many of our clients and suppliers may be subject to similar expectations, which may augment or create additional risks, including risks that may not be known to us.
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We are subject to a series of risks related to climate change.
We operate in many regions, countries and communities around the world where our businesses, and the activities of our clients, could be impacted by climate change and broader ESG-related issues. These issues pose both short and long-term risks to us and our clients. Climate change could expose us to financial risk either through its physical (e.g., climate or weather related events or chronic changes) or transition (e.g., changes in market conditions, capital availability, climate policy or in the regulations applicable to our industry or verticals where we operate in with respect to climate change risks, etc.) effects. Physical risks may result in more frequent or intense natural disasters or chronic changes to temperature and precipitation patterns, which may result in damage to our building infrastructure and other physical assets, disrupt the continued functioning of infrastructure on which we rely (such as the transportation network and utilities in the countries where we operate), and negatively affect the morale of our employees. For more information, see “— Our facilities are at risk of damage by natural disasters.” Additionally, changes in the availability of natural resources like water in countries where we operate could directly impact our operations and our employees’ livelihood, which could impact our ability to do business and promote business continuity. While we may take various actions to mitigate our business risks associated with climate change, this may require us to incur substantial costs and may not be successful, due to, among other things, the uncertainty associated with the longer-term projections associated with managing climate risks. Increasing physical impacts of climate change, or the increasing frequency of deleterious climatic events, may also result in changes to public or investor sentiment or policymaker priorities, which may accelerate transition risks.
Such regulatory, market and other changes to respond to climate change may require us to incur increased costs or otherwise adversely impact our business, financial condition, or results of operations. In response to increasing awareness in climate change and other related socio-environmental issues, clients increasingly request for our emission performance during the RFP or bidding stage. This could translate into filtering criteria or other parameters in the clients’ process of selecting their service providers. If our performance is not managed in these areas, it may adversely impact our ability to compete and win contracts.
As countries worldwide undertake to lower greenhouse gas emissions, we may be increasingly subject to regulatory requirements, disclosure-related and otherwise. For example, several jurisdictions have adopted, or are considering adopting, greenhouse gas emissions limits or fees (sometimes referred to as “carbon taxes”). Separately, the Commission has proposed a rule that, if finalized, may require us to incur significant costs to assess and disclose on a range of climate-related data and risks. Risks resulting from potential violations or non-compliance with such laws and regulations can impact our profitability through penalties and/or by limiting our ability to operate in certain countries, adversely affect our reputation and brand, and result in increased legal risks, whether through enforcement actions or litigation, whether or not such claims have any merit. All of these risks may also impact our suppliers or clients, which may indirectly impact our business, financial condition, or results of operations.
Restrictions on entry visas may affect our ability to compete for and provide services to clients in the US and the UK, which could have a material adverse effect on future revenue.
The vast majority of our employees are Indian nationals. The ability of some of our executives to work with and meet our European and North American clients and our clients from other countries depends on the ability of our senior managers and employees to obtain the necessary visas and entry permits. In response to previous terrorist attacks and global unrest, US and European immigration authorities have sharply increased the level of scrutiny in granting visas. Immigration laws in those countries may also require us to meet certain other legal requirements as a condition to obtaining or maintaining entry visas. These restrictions have significantly lengthened the time requirements to obtain visas for our personnel, which has in the past resulted, and may continue to result, in delays in the ability of our personnel to meet with our clients. Further, the COVID-19 pandemic resulted in the temporary suspension of existing visas and several governments not granting new visas. While many countries have resumed the issuance of visas and have reopened their borders for travel, continuing or intermittent restrictions on visas and travel may recur in the future. In addition, immigration laws are subject to legislative change and varying standards of application and enforcement due to political forces, economic conditions or other events, including terrorist attacks. We cannot predict the political or economic events that could affect immigration laws or any restrictive impact those events could have on obtaining or monitoring entry visas for our personnel. If we are unable to obtain the necessary visas for personnel who need to visit our clients’ sites or, if such visas are delayed, we may not be able to provide services to our clients or to continue to provide services on a timely basis, which could have a material adverse effect on our business, results of operations, financial condition and cash flows.
If more stringent labor laws become applicable to us, our profitability may be adversely affected.
India has stringent labor legislation that protects the interests of workers, including legislation that sets forth detailed procedures for dispute resolution and employee removal and legislation that imposes financial obligations on employers upon retrenchment. Though we are exempt from a number of these labor laws at present, there can be no assurance that such laws will not become applicable to the BPM industry in India in the future. In addition, our employees may in the future form unions. If these labor laws become applicable to our workers or if our employees unionize, it may become difficult for us to maintain flexible human resource policies, discharge employees or downsize, and our profitability may be adversely affected.
Most of our delivery centers operate on leasehold property and our inability to renew our leases on commercially acceptable terms or at all may adversely affect our results of operations.
Most of our delivery centers operate on leasehold property. Our leases are subject to renewal and we may be unable to renew such leases on commercially acceptable terms or at all. Our inability to renew our leases, or a renewal of our leases with a rental rate higher than the prevailing rate under the applicable lease prior to expiration, may have an adverse impact on our operations, including disrupting our operations or increasing our cost of operations. In addition, in the event of non-renewal of our leases, we may be unable to locate suitable replacement properties for our delivery centers or we may experience delays in relocation that could lead to a disruption in our operations. Any disruption in our operations could have an adverse effect on our results of operations.
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Risks Related to our ADSs
Substantial future sales of our shares or ADSs in the public market could cause our ADS price to fall.
Sales by us or our shareholders of a substantial number of our ADSs in the public market, or the perception that these sales could occur, could cause the market price of our ADSs to decline. These sales, or the perception that these sales could occur, also might make it more difficult for us to sell securities in the future at a time or at a price that we deem appropriate or to pay for acquisitions using our equity securities. As at March 31, 2023, we had 48,360,817 ordinary shares outstanding, including 48,142,457 shares represented by 48,142,457 ADSs. In addition, as at March 31, 2023, a total of 3,769,584 ordinary shares or ADSs are issuable upon the exercise or vesting of options and restricted share units (“RSUs”) outstanding under our 2006 Incentive Award Plan (as amended and restated, the “2006 Incentive Award Plan”) and our 2016 Incentive Award Plan (as amended and restated, the “2016 Incentive Award Plan”). All ADSs are freely transferable, except that ADSs owned by our affiliates may only be sold in the US if they are registered or qualify for an exemption from registration, including pursuant to Rule 144 under the Securities Act of 1933, as amended (the “Securities Act”). The remaining ordinary shares outstanding may also only be sold in the US if they are registered or qualify for an exemption from registration, including pursuant to Rule 144 under the Securities Act.
The market price for our ADSs may be volatile.
The market price for our ADSs is likely to be highly volatile and subject to wide fluctuations in response to factors including the following:
| • | announcements of technological developments; |
| • | regulatory developments in our target markets affecting us, our clients or our competitors; |
| • | actual or anticipated fluctuations in our operating results; |
| • | changes in financial estimates by securities research analysts; |
| • | changes in the economic performance or market valuations of other companies engaged in BPM; |
| • | addition or loss of executive officers or key employees; |
| • | sales or expected sales of additional shares or ADSs; |
| • | loss of one or more significant clients; and |
| • | a change in control, or possible change of control, of our company. |
In addition, securities markets generally and from time to time experience significant price and volume fluctuations that are not related to the operating performance of particular companies. These market fluctuations may also have a material adverse effect on the market price of our ADSs.
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We may not be able to pay any dividends on our shares and ADSs.
We have never declared or paid any dividends on our ordinary shares. We cannot give any assurance that we will declare dividends of any amount, at any rate or at all. Because we are a holding company, we rely principally on dividends, if any, paid by our subsidiaries to us to fund our dividend payments, if any, to our shareholders. Any limitation on the ability of our subsidiaries to pay dividends to us could have a material adverse effect on our ability to pay dividends to you.
Any future determination to pay cash dividends will be at the discretion of our Board of Directors and will be dependent upon our results of operations and cash flows, our financial position and capital requirements, general business conditions, legal, tax, regulatory and any contractual restrictions on the payment of dividends and any other factors our Board of Directors deems relevant at the time.
Subject to the provisions of the Companies (Jersey) Law 1991 (the “1991 Law”) and our Articles of Association, we may by ordinary resolution declare annual dividends to be paid to our shareholders according to their respective rights and interests in our distributable reserves. Any dividends we may declare must not exceed the amount recommended by our Board of Directors. Our Board of Directors may also declare and pay an interim dividend or dividends, including a dividend payable at a fixed rate, if paying an interim dividend or dividends appears to the Board to be justified by our distributable reserves. We can only declare dividends if our directors who are to authorize the distribution make a prior statement that, having made full enquiry into our affairs and prospects, they have formed the opinion that:
| • | immediately following the date on which the distribution is proposed to be made, we will be able to discharge our liabilities as they fall due; and |
| • | having regard to our prospects and to the intentions of our directors with respect to the management of our business and to the amount and character of the financial resources that will in their view be available to us, we will be able to continue to carry on business and we will be able to discharge our liabilities as they fall due until the expiry of the period of 12 months immediately following the date on which the distribution is proposed to be made or until we are dissolved under Article 150 of the 1991 Law, whichever first occurs. |
Subject to the deposit agreement governing the issuance of our ADSs, holders of ADSs will be entitled to receive dividends paid on the ordinary shares represented by such ADSs. See “— Risks Related to Our Business — Our loan agreements impose operating and financial restrictions on us and our subsidiaries.”
Holders of ADSs may be restricted in their ability to exercise voting rights.
At our request, the depositary of our ADSs will mail to you any notice of shareholders’ meeting received from us together with information explaining how to instruct the depositary to exercise the voting rights of the ordinary shares represented by ADSs. If the depositary timely receives voting instructions from you, it will endeavor to vote the ordinary shares represented by your ADSs in accordance with such voting instructions. However, the ability of the depositary to carry out voting instructions may be limited by practical and legal limitations and the terms of the ordinary shares on deposit. We cannot assure you that you will receive voting materials in time to enable you to return voting instructions to the depositary in a timely manner. Ordinary shares for which no voting instructions have been received will not be voted.
As a foreign private issuer, we are not subject to the proxy rules of the Commission, which regulate the form and content of solicitations by US-based issuers of proxies from their shareholders. The form of notice and proxy statement that we have been using does not include all of the information that would be provided under the Commission’s proxy rules.
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Holders of ADSs may be subject to limitations on transfers of their ADSs.
The ADSs are transferable on the books of the depositary. However, the depositary may close its transfer books at any time or from time to time when it deems necessary or advisable in connection with the performance of its duties. In addition, the depositary may refuse to deliver, transfer or register transfers of ADSs generally when the transfer books of the depositary are closed, or at any time or from time to time if we or the depositary deem it necessary or advisable to do so because of any requirement of law or of any government or governmental body or commission or any securities exchange on which the American Depositary Receipts or our ordinary shares are listed, or under any provision of the deposit agreement or provisions of or governing the deposited shares, or any meeting of our shareholders, or for any other reason.
Holders of ADSs may not be able to participate in rights offerings or elect to receive share dividends and may experience dilution of their holdings, and the sale, deposit, cancellation and transfer of our ADSs issued after exercise of rights may be restricted.
If we offer our shareholders any rights to subscribe for additional shares or any other rights, the depositary may make these rights available to them after consultation with us. We cannot make rights available to holders of our ADSs in the US unless we register the rights and the securities to which the rights relate under the Securities Act, or an exemption from the registration requirements is available. In addition, under the deposit agreement, the depositary will not distribute rights to holders of our ADSs unless we have requested that such rights be made available to them and the depositary has determined that such distribution of rights is lawful and reasonably practicable. We can give no assurance that we can establish an exemption from the registration requirements under the Securities Act, and we are under no obligation to file a registration statement with respect to these rights or underlying securities or to endeavor to have a registration statement declared effective. Accordingly, holders of our ADSs may be unable to participate in our rights offerings and may experience dilution of your holdings as a result. The depositary may allow rights that are not distributed or sold to lapse. In that case, holders of our ADSs will receive no value for them. In addition, US securities laws may restrict the sale, deposit, cancellation and transfer of ADSs issued after exercise of rights.
We may be classified as a passive foreign investment company, which could result in adverse US federal income tax consequences to US holders of our ADSs or ordinary shares.
Based on our financial statements and relevant market and shareholder data, we believe that we should not be treated as a passive foreign investment company for US federal income tax purposes (“PFIC”) with respect to our most recently closed taxable year. However, the application of the PFIC rules is subject to uncertainty in several respects, and we cannot assure you that we will not be a PFIC for any taxable year. A non-US corporation will be a PFIC for any taxable year if either (i) at least 75% of its gross income for such year is passive income or (ii) at least 50% of the value of its assets (based on an average of the quarterly values of the assets) during such year is attributable to assets that produce passive income or are held for the production of passive income. A separate determination must be made after the close of each taxable year as to whether we were a PFIC for that year. Because the value of our assets for purposes of the PFIC test will generally be determined by reference to the market price of our ADSs and ordinary shares, fluctuations in the market price of the ADSs and ordinary shares may cause us to become a PFIC. In addition, changes in the composition of our income or assets may cause us to become a PFIC. If we are a PFIC for any taxable year during which a US holder (as defined in “Part I — Item 10. Additional Information — E. Taxation — US Federal Income Taxation”) holds an ADS or ordinary share, certain adverse US federal income tax consequences could apply to such US holder.
If a United States person is treated as owning at least 10% of our ordinary shares (or ADSs), such holder may be subject to adverse US federal income tax consequences.
If a United States person is treated as owning (directly, indirectly or constructively) at least 10% of the value or voting power of our ordinary shares (or ADSs), such person may be treated as a “United States shareholder” with respect to each “controlled foreign corporation” in our group (if any). Because our group includes one or more US subsidiaries, certain of our non-US subsidiaries could be treated as controlled foreign corporations regardless of whether we are or are not treated as a controlled foreign corporation (although there is currently a pending legislative proposal to limit the application of these rules). A United States shareholder of a controlled foreign corporation may be required to annually report and include in its US taxable income its pro rata share of “Subpart F income,” “global intangible low-taxed income” and investments in US property by controlled foreign corporations, whether or not we make any distributions. An individual that is a United States shareholder with respect to a controlled foreign corporation generally would not be allowed certain tax deductions or foreign tax credits that would be allowed to a United States shareholder that is a US corporation. A failure to comply with these reporting obligations may subject such holder to significant monetary penalties and may prevent the statute of limitations with respect to such holder’s US federal income tax return for the year for which reporting was due from starting. We cannot provide any assurances that we will assist investors in determining whether any of our non-US subsidiaries are treated as a controlled foreign corporation or whether such investor is treated as a United States shareholder with respect to any of such controlled foreign corporations or furnish to any United States shareholders information that may be necessary to comply with the aforementioned reporting and tax paying obligations. The IRS has provided limited guidance on situations in which investors may rely on publicly available information to comply with their reporting and taxpaying obligations with respect to certain controlled foreign corporations. A United States investor should consult its own advisors regarding the potential application of these rules to its investment in our ordinary shares (or ADSs).
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Our share repurchase programs could affect the price of our ADSs.
In September 2020, our shareholders authorized a new share repurchase program for the repurchase of up to 3,300,000 of our ADSs, each representing one ordinary share, at a price range of $10 to $110 per ADS. Pursuant to the terms of the repurchase program, our ADSs may be purchased in the open market from time to time for 36 months from April 1, 2021 to March 31, 2024. To date, we have repurchased 2,200,000 ADSs in the open market under this repurchase program.
We have funded, and intend to continue to fund, the repurchases of ADSs under our repurchase programs with cash on hand. We intend to hold the shares underlying any such repurchased ADSs as treasury shares.
Any repurchases pursuant to our repurchase programs could affect the price of our ADSs and increase its volatility. The existence of a repurchase program could also cause the price of our ADSs to be higher than it would be in the absence of such a program and could potentially reduce the market liquidity of our ADSs. There can be no assurance that any repurchases will enhance shareholder value because the market price of our ADSs may decline below the levels at which we repurchase any ADSs. In addition, although our repurchase programs are intended to enhance long-term shareholder value, short-term price fluctuations in our ADSs could reduce the program’s effectiveness. Significant changes in the price of our ADSs and our ability to fund our repurchase programs with cash on hand could impact our ability to repurchase ADSs. The timing and amount of future repurchases is dependent on our cash flows from operations, available cash on hand and the market price of our ADSs. Furthermore, our programs do not obligate us to repurchase any dollar amount or number of ADSs and may be suspended at any time at our discretion, and any suspension or discontinuation could cause the market price of our ADSs to decline.
We have certain anti-takeover provisions in our Articles of Association that may discourage a change in control.
Our Articles of Association contain anti-takeover provisions that could make it more difficult for a third party to acquire us without the consent of our Board of Directors. These provisions include:
| • | a classified Board of Directors with staggered three-year terms; and |
| • | the ability of our Board of Directors to determine the rights, preferences and privileges of our preferred shares and to issue the preferred shares without shareholder approval, which could be exercised by our Board of Directors to increase the number of outstanding shares and prevent or delay a takeover attempt. |
These provisions could make it more difficult for a third party to acquire us, even if the third party’s offer may be considered beneficial by many shareholders. As a result, shareholders may be limited in their ability to obtain a premium for their shares.
It may be difficult for you to effect service of process and enforce legal judgments against us or our affiliates.
We are incorporated in Jersey, Channel Islands, and our primary operating subsidiary, WNS Global, is incorporated in India. A majority of our directors and senior executives are not residents of the US and the majority of our assets and the assets of those persons are located outside the US. As a result, it may not be possible for you to effect service of process within the US upon those persons or us. In addition, you may be unable to enforce judgments obtained in courts of the US against those persons outside the jurisdiction of their residence, including judgments predicated solely upon the securities laws of the US. Furthermore, shareholders of Jersey companies may not have standing to initiate a shareholders derivative action in courts of the US.
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ITEM 4. INFORMATION ON THE COMPANY
| A. | History and Development of our Company |
WNS (Holdings) Limited was incorporated as a private liability company on February 18, 2002 under the laws of Jersey, Channel Islands, and maintains a registered office in Jersey at 22 Grenville Street, St Helier, Jersey JE4 8PX, Channel Islands. We converted from a private limited company to a public limited company on January 4, 2006 in accordance with Article 17A of the 1991 Law, when we acquired more than 30 shareholders as calculated in accordance with Article 17A of the 1991 Law. We gave notice of this to the Jersey Financial Services Commission (“JFSC”) in accordance with Article 17(3) of the 1991 Law on January 12, 2006. Our principal executive office is located at Gate 4, Godrej & Boyce Complex, Pirojshanagar, Vikhroli (W), Mumbai 400 079, India, and the telephone number for this office is (91-22) 4095-2100. Our website address is www.wns.com. Information contained on our website does not constitute part of this annual report. Our agent for service in the US is our subsidiary, WNS North America Inc., 515 Madison Avenue, 8th Floor, New York, NY 10022.
We began operations as an in-house unit of British Airways in 1996 and became a business process outsourcing service provider for third parties in fiscal 2003. Warburg Pincus acquired a controlling stake in our company from British Airways in May 2002 and inducted a new senior management team.
Fiscal 2003 — 2008
We made a number of acquisitions that helped expand our service offerings. These acquisitions included:
| • | Town and Country Assistance Limited (which we subsequently rebranded as WNS Assistance and which is part of WNS Auto Claims BPM), a UK-based automobile claims handling company, in fiscal 2003; |
| • | the health claims management business of Greensnow Inc. in fiscal 2004; |
| • | Trinity Partners Inc. (which we subsequently merged into our subsidiary, WNS North America Inc.), a provider of BPM services to financial institutions, focusing on mortgage banking, in fiscal 2006; |
| • | The fare audit services business of PRG Airlines Services Limited and the financial accounting business of GHS Holdings LLC in fiscal 2007; |
| • | Marketics, a provider of offshore analytics services, in fiscal 2008; and |
| • | Flovate (which we subsequently renamed as WNS Workflow Technologies Limited), a company engaged in the development and maintenance of software products and solutions, in fiscal 2008. |
In July 2006, we completed our initial public offering, whereupon our ADSs became listed on the New York Stock Exchange (the “NYSE”) under the symbol “WNS.” In February 2012, in connection with our follow-on offering, we issued new ordinary shares in the form of ADSs, at a price of $9.25 per ADS, aggregating approximately $50.0 million and at the same time, Warburg Pincus divested 6,847,500 ordinary shares in the form of ADSs. In February 2013, Warburg Pincus sold its remaining 14,519,144 ordinary shares in the form of ADSs, thereby divesting its entire stake in our company.
We invested in our infrastructure to expand our service portfolio from data-oriented processing to include complex voice and blended data/voice service capabilities, and commenced offering comprehensive processes in the travel and leisure, banking and financial services and insurance industries.
We opened facilities in a number of locations, including Gurgaon, India; Colombo, Sri Lanka; and Bucharest, Romania, thereby expanding our operating footprint across India, Sri Lanka and Romania. We also expanded our facilities in Gurgaon, Mumbai and Pune, India. In fiscal 2008, we transferred our delivery center in Sri Lanka to Aviva Global pursuant to “build-operate-transfer” contractual arrangement we had with Aviva.
We entered into a joint venture with ACS, a provider in BPM services and customer care in the Philippines, to form WNS Philippines Inc. (which became our wholly owned subsidiary following our acquisition of ACS’s shareholding in WNS Philippines Inc, in fiscal 2012)
Fiscal 2009 — Fiscal 2013
We acquired a number of companies, including:
| • | Chang Limited, an auto insurance claims processing services provider in the UK, in fiscal 2009; |
| • | BizAps, a provider of SAP® solutions, in fiscal 2008 to optimize the enterprise resource planning functionality for our finance and accounting processes; |
| • | Fusion Outsourcing Services (Proprietary) Limited (“Fusion”) (which we subsequently renamed as WNS Global Services SA (Pty) Ltd), a provider of a range of management services, including contact center, customer care and business continuity services, to both South African and international clients, in fiscal 2013. |
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We opened facilities in Manila, the Philippines; San Jose, Costa Rica; Vizag, India; and Gydnia, Poland; and also expanded various facilities in India, the Philippines, Costa Rica and Romania, as well as our sales office in the UK.
We completed a follow-on public offering of ADSs in fiscal 2012, which raised approximately $50.0 million to fund our growth initiatives and enhance delivery capability.
Fiscal 2014 — 2018
We acquired the following companies in fiscal 2017:
| • | Value Edge Research Services Private Limited (“Value Edge”), a leading provider of commercial research and analytics services to clients in the pharmaceutical and biopharmaceutical industries; |
| • | Denali Sourcing Services Inc. (“Denali”), a leading provider of strategic procurement BPM services; and |
| • | MTS HealthHelp Inc. and its subsidiaries (“HealthHelp”), an industry leader in BPM care management. |
Fiscal 2019 — present
| • | We added new facilities in Manila and Iloilo, the Philippines; Madrid, Spain; Vizag and Pune, India; and New South Wales, Australia. We also expanded our facilities in Bangalore, Gurgaon, Nashik and Pune, India; |
| • | We made the following acquisitions in fiscal 2022: |
| • | MOL Information Processing Services (I) Private Limited (which we subsequently renamed as WNS Information Services (India) Private Limited and which has been amalgamated with WNS Global Services Private Limited); and |
| • | Business of CEPROCS S.R.L. (“CEPROCS”), a provider of global sourcing and procurement services, pursuant to which we also acquired its customer contract, skilled workforce and related assets. |
| • | We acquired the following companies in fiscal 2023: |
| • | Vuram, a hyper automation services company that specializes in low-code enterprise automation and provides custom, scalable BPM solutions including industry-specific solutions for the banking/financial services, insurance, and healthcare verticals; |
| • | The Smart Cube, which provides 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; and |
| • | OptiBuy, which helps clients leverage the capabilities of leading third-party procurement and supply chain platforms and provides consulting, optimization, outsourcing, and training services and implementation solutions to their clients. |
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In April 2017, we established the WNS B-BBEE Staff Share Trust with the principal objective of creating meaningful participation of the Black employees (as defined in the applicable legislation) of our South African subsidiaries in the growth of the company. We are committed to transformation in South Africa and are implementing this structure to benefit Black People in accordance with the objectives and requirements of the Codes of Good Practice on Black Economic Empowerment as promulgated by section 9(1) of the Broad-Based Black Economic Empowerment Act No. 53 of 2003 of South Africa. On July 21, 2022, we incorporated WNS Global Services Malaysia Sdn. Bhd and on March 1, 2023, we incorporated a Delaware entity, WNS BPM Americas Holdings Inc. On March 3, 2023 we incorporated a subsidiary WNS BPM Americas LLC, which is a wholly owned subsidiary of WNS BPM Americas Holdings Inc. Our organizational structure now comprises 59 entities in 29 countries, and 11 branches in Poland, UAE, China, Singapore, France, Romania, Turkey, Ireland and Spain. Of these 59 entities, WNS Cares Foundation, which is a wholly-owned subsidiary of WNS Global, is a not-for-profit organization registered under the Section 8 of the Indian Companies Act, 2013, India. The WNS Cares Foundation was formed for the purpose of promoting corporate social responsibilities and does not qualify as a subsidiary under IFRS 10 — Consolidated Financial Statements and hence is not considered for the purpose of preparing our consolidated financial statements.
We have our principal executive office in Mumbai, India, and we have client service offices in Sydney (Australia), Canada, Dubai (United Arab Emirates), Germany, London (UK), New York (US), Mexico, and Switzerland, and we have delivery centers in Saint John (Canada), Dalian, Guangzhou and Shanghai (China), San Jose (Costa Rica), Bangalore, Chennai, Gurgaon, Hyderabad, Indore, Jaipur, Mumbai, Nashik, Noida, Pune, Trichy, Vizag (India), Kuala Lampur (Malaysia), Alabang, Iloilo and Manila (Philippines), Katowice, Kielce, Tri-city Gdynia, and Warszawa (Poland), Bucharest, Sibiu and Timisoara (Romania), Capetown, Claremont, Johannesburg and Durban (South Africa), Colombo (Srilanka), Istanbul (Turkey), Ipswich and Manchester (the UK), and, Columbia, South Carolina, Houston, Pittsburgh and Tampa (the US).
Our capital expenditures in fiscal 2023, 2022 and 2021 amounted to $45.0 million, $28.3 million and $26.5 million, respectively. Our principal capital expenditures were incurred for the purposes of setting up new delivery centers, expanding existing delivery centers and developing new technology-enabled solutions to enable execution and management of clients’ business processes. We estimate that our expected capital expenditure in fiscal 2024 would be up to $60.0 million. The geographical distribution, timing and volume of our capital expenditures in the future will depend on new client contracts we may enter into or the expansion of our business under our existing client contracts.
As at March 31, 2023, we had commitments for capital expenditures of $17.9 million (net of advances to capital vendors) relating to the purchase of property and equipment for our delivery centers. Of this committed amount, we plan to spend approximately $8.9 million in India, approximately $4.6 million in Philippines, approximately $3.3 million in South Africa, and approximately $1.1 million in the rest of the world. We expect to fund these estimated capital expenditures from cash generated from operating activities, existing cash and cash equivalents and the use of existing credit facilities. See “Part I — Item 5. Operating and Financial Review and Prospects — Liquidity and Capital Resources” for more information.
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B. Business Overview
We are a global BPM company, offering an array of end-to-end industry-specific and cross-industry solutions. We combine our deep industry knowledge with technology, analytics and process expertise to co-create innovative, digitally enabled transformational solutions with 627 clients across various industries as at March 31, 2023 (with each client generating more than $0.01 million in revenue in fiscal 2023). Our solutions and capabilities encompass intelligent automation (including robotic process automation (“RPA”), hyperautomation, artificial intelligence (“AI”) and cognitive computing), natural language processing and machine learning (“ML”), blockchain, Internet of Things (“IoT”), business process-as-a-service (“BPaaS”) platforms, embedded analytics and process re-engineering frameworks. Hyperautomation refers to an approach that organizations adopt to accelerate digital transformation and rapidly automate business processes. It involves the orchestrated use of technologies such as AI, RPA, ML and natural language processing.
A key element in all our transformation engagements is our ability to deliver business value through the co-creation of solutions and products with our clients and strategic partners. We seek to help our clients “transform” their businesses by identifying business and process optimization opportunities through technology-enabled solutions, improvements to their processes, global delivery capabilities, analytics and domain-led understanding of their business. This, combined with our client-centric approach, enables us to align our people, processes, technologies and delivery network with our clients’ business requirements. Our industry-aligned approach helps us provide a specialized focus on each of the sectors that we target, effectively transform and manage our clients’ business processes, and offer customized solutions and business insights designed to improve their competitive positioning. The major industry verticals that we currently focus on are: insurance, travel and leisure, healthcare, diversified businesses (including manufacturing, retail and consumer packaged goods (“CPG”), media and entertainment, and telecommunication (telecom)), shipping and logistics, banking and financial services, hi-tech and professional services (formerly known as consulting and professional services) and utilities.
Our cross-industry solutions, common across multiple industries, include finance and accounting (including procurement), customer experience services, research and analytics (which we have branded as “WNS Triange”), consulting and transformation, human resources, technology and automation, and governance, risk and compliance services.
We measure our execution of clients’ business processes against multiple performance parameters, and aim to consistently meet and exceed these parameters to maintain and expand our client relationships. We strive to build long-term client relationships, and typically sign multi-year contracts with our clients that provide us with recurring revenue. In fiscal 2023, 170 and 165 clients contributed more than $1 million to our revenue and revenue less repair payments (non-GAAP), respectively.
As at March 31, 2023, we had 59,755 employees executing business processes for our 627 clients (with each client generating more than $0.01 million in revenue in fiscal 2023).
In fiscal 2023, our revenue was $1,224.3 million, our revenue less repair payments (non-GAAP) was $1,162.0 million and our profit was $137.3 million. Our revenue less repair payments is a non-GAAP financial measure. For a discussion of our revenue less repair payments (non-GAAP) and a reconciliation of our revenue less repair payments (non-GAAP) to revenue, see “Part I — Item 5. Operating and Financial Review and Prospects — Overview.”
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Industry Overview
The global BPM market continues to evolve in response to a disruptive business landscape as companies navigate a recessionary environment, supply chain challenges, climate change and geopolitical factors. While companies still look to benefit from process efficiency, cost advantage and labor arbitrage from their BPM solution providers, the continually evolving marketplace has resulted in a broader and more strategic narrative on outsourcing, with a strong focus on domain-led, technology-enabled, and innovative value creation. Customer experience, data-led insights and digital innovation are integral to business success, and enterprises expect their BPM solution providers to play a bigger and more profound role in driving transformational outcomes. We continue to increasingly see BPM solution providers leverage the power of data, advanced analytics and AI to drive intelligent transformation, operational agility, scalability and sustainability for enterprises. As companies outsource more of their complex and high-end business processes, a key consideration for them is the ability of the BPM provider to understand their unique industry and client-specific requirements, design and develop transformational plans, execute intricate, multi-layered process transitions, design a robust business continuity plan and successfully manage these processes on an ongoing basis. The increasing focus on variable cost structures and the delivery of tangible business benefits have resulted in alternative service delivery and pricing models such as transaction-based, outcome-based and subscription models.
While BPM companies continue to address business disruptions caused by digital and technological changes and evolving customer expectations, they have also placed strong focus on cybersecurity, data privacy, and business continuity. Clients now expect BPM service providers to co-architect new, resilient and flexible solutions and models that enable business safety and continuity during a wide array of adverse situations.
BPM companies are required to leverage a diversified geographical footprint and deliver continuity solutions that enable clients to maximize operational agility, scalability and sustainability. These solutions increasingly deploy technology and automation, and leverage the potential for increased adoption of “work-from-home” models.
We expect that going forward, clients will continue to strengthen their focus on reducing costs, accelerating business transformation and digital adoption, leveraging data and analytics, and adopting outcome-based pricing models. We expect that BPM providers will play a key role in helping clients across industries to create and digitize end-to-end processes. It is important for BPM companies to leverage their geographical footprint and implement robust practices that help businesses achieve maximum operational agility, scalability and sustainability. Innovative digital ways of working and extensive adoption of hybrid working models have come into sharp focus, and are emerging as the new norms for BPM solutions.
In such an environment, businesses are thus undertaking a rigorous and multi-faceted evaluation process when selecting a BPM provider. Based on our experience, a client typically seeks the following key attributes in a BPM provider:
| • | Domain knowledge and industry-specific expertise |
| • | Process expertise across horizontal service offerings |
| • | “Skin in the game” approach denoting the ability to work as a true partner, absorb risks and prioritize outcomes |
| • | Ability to invest in infrastructure and talent to innovate, automate, transform, provide operational expertise and drive best practices based on internal and external benchmarking |
| • | Proven ability to execute a diverse range of mission-critical and often complex business processes |
| • | Ability to tie service delivery, technology implementation and process automation with the client’s existing information technology (“IT”) infrastructure, negating the need for large IT overhauls |
| • | Capabilities to drive improved process standardization across business units and multiple locations, demonstrating strong global delivery capabilities |
| • | Comprehensive analytical capabilities to deliver actionable business insights; domain-led analytics solutions customized to industry requirements and embedded as part of the larger BPM services portfolio |
| • | Ability to deliver technology-enabled services and solutions, including RPA, cognitive computing, intelligent automation, AI, natural language processing, IoT, industrial robotics, blockchain, cloud-based offerings and platform-based BPM |
| • | Agility to build robust operational models that will swiftly and comprehensively manage disruptions and drive maximum business continuity, underpinned by an extensive geographical footprint, a seamless transition methodology, digital ways of working and a strong remote work model |
| • | Strong global presence through a mix of offshore, nearshore and onshore delivery centers to access talent and capabilities, create cultural alignment, leverage language skills, and mitigate risks |
| • | Capability to scale employees and infrastructure without a diminution in quality of service |
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| • | Ability to raise client’s competitive positioning by improving operating efficiency, reducing cost, enhancing the end-client experience, delivering actionable insights, and creating differentiation |
| • | End-to-end solutions, which encompass “design”, “build”, and “run” |
The global BPM industry is a large and growing industry. According to the Gartner Forecast: IT Services, Worldwide, 2021-2027, 1Q23 Update, the worldwide Business Process Services (“BPS”) market comprising traditional and digital components is estimated to be at $195.4 billion in the year ending 2022. Gartner has estimated that the revenues for the worldwide BPS market will grow from $195.4 billion in 2022 to $285.54 billion in 2027 at a compounded annual growth rate of 7.9% (compounded annual growth rate calculated by Gartner).
The following chart sets forth the estimated growth in revenue generated in the Worldwide BPS market:
Chart / Graph created by WNS Global Services based on Gartner research.
Source: Gartner, Inc., Forecast: IT Services, Worldwide, 2021-2027, 1Q23 Update. Srujan Akurathi, Cathy Tornbohm, Robert Brown, David Ackerman, Colleen Graham, Arup Roy et al., March 30, 2023.
The Gartner content described herein (the “Gartner Content”) represent(s) research opinion or viewpoints published, as part of a syndicated subscription service, by Gartner, Inc. (“Gartner”), and are not representations of fact. Gartner Content speaks as of its original publication date (and not as of the date of this annual report), and the opinions expressed in the Gartner Content are subject to change without notice.
The industry trends continue to drive BPM providers to be more innovative, strategic and forward-looking in their approach. Against the backdrop of this changing environment, we believe that WNS, with our focused domain, digital, and data-to-insights capabilities, guiding principles of co-creation and client centricity, extensive global footprint, robust business continuity planning methodologies, and transformational and re-engineering frameworks, is well positioned to deliver business value to our clients. We offer hyperautomation and technology-enabled BPaaS solutions that are designed help companies adapt rapidly to changing business scenarios and accelerate their business transformation. Further, we offer customized engagement models that cater to each client’s scale and transformation journey. In addition to traditional pricing models based on headcount (often referred to as full-time equivalents (FTE)), we offer transaction-based, subscription-based and outcome-based pricing models to provide clients with cost flexibility and measurable business benefits.
In fiscal 2023, 32.3% of our total revenues were generated from “non-FTE” models. These “non-linear” pricing models, which de-link the relationship between headcount and revenue for BPM providers, create an incentive for the providers to improve the productivity of their employees, increase the use of technology, and enhance the overall efficiency of their operations.
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Competitive Strengths
We believe that we have the competitive strengths necessary to maintain and enhance our position as a leading global provider of BPM services.
Well-positioned for the evolving BPM market
The BPM industry, which started with the first wave of simple, labor-based outsourced processes, has now expanded to include complex business processes and higher-value services that involve consulting, process re-engineering, business and digital transformation, management of mission-critical operations, and generation of business insights to aid decision-making. We believe that our industry-specific expertise, end-to-end service offerings, digital-led transformation capabilities, technology-enabled solutions, process management skills, advanced analytics, global delivery network and customer-centric approach position us at the forefront of the evolving BPM market.
To meet the needs of a rapidly evolving and growing BPM market, we continue to develop new innovation-driven and outcome-led capabilities across domain, digital, data and analytics, customer experience, hyperautomation and new technologies. We believe that our scalable digital accelerators, products and prototypes form the foundation of our ability to provide leading-edge industry solutions and collaborate with global organizations through the course of their transformation journeys.
For instance, our WNS Co-creation Labs, currently in New York, London and Pune (India), have been designed to provide clients with an environment conducive to ideating, prototyping and testing innovations before they are taken to the market. Equipped with state-of-the-art virtual capabilities and on-site immersive spaces, our WNS Co-creation Labs seek to enable businesses to solve crucial challenges, seize new opportunities and preempt risks, interweaving empathetic design principles at every step. They have been designed to foster real-time collaboration and deliver solutions that are customized to the markets, strategies and competitive challenges of our clients.
Deep industry expertise
We have established deep expertise in the industries we target as a result of our vertical organizational structure, legacy client relationships, proprietary technology offerings, strategic acquisitions, targeted training programs and the hiring of management with specific industry knowledge. Our deep domain expertise in each of the 12 industries we serve helps us develop keen insights and transform them into leading-edge impactful business solutions with the help of technology, analytics and process rigor. We have developed methodologies, frameworks, proprietary knowledge and industry-specific technology platforms applicable to our target industries that allow us to provide industry-focused solutions and help clients compete within these industries.
We have structured our company into business units aligned with each of the industries on which we focus. This gives us strong advantages of in-depth industry knowledge and industry-specific technology platforms and solutions, which in turn enable us to approach clients in each of our target industries with an integrated effort covering sales, marketing and delivery. Effective April 1, 2023, we have adopted a new organizational structure featuring four strategic business units (“SBUs”), each headed by a chief business officer (“CBO”). Under the new organizational structure, we combine our company’s existing verticals into the four SBUs. We believe the new organizational structure will help drive improved outcomes for our global clients and enable our company to better drive business synergies, enhance scalability, generate operating leverage, and create organizational depth.
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We have received numerous recognitions for our industry leadership. Our awards and recognitions in fiscal 2023 and 2022 are set forth below:
Vertical-specific Recognitions
Insurance:
| • | A “Leader” in ISG Provider LensTM Insurance Services 2022 Quadrant Report for the US in property and casualty insurance (“P&C”), life and retirement insurance (“L&R”), and L&R third-party administrator |
| • | A “Leader” in ISG Provider LensTM Insurance Services 2022 Quadrant Report for the UK in P&C and L&R |
| • | A “Leader” in ISG Provider LensTM Insurance Services 2022 Quadrant Report for Australia in P&C and a “Rising Star” in L&R |
| • | A “Leader” in Everest Group’s P&C Insurance — Service Provider Landscape with Services PEAK Matrix® Assessment 2022 |
| • | A “Leader” in Digital Platform and Augmentation Suite in Insurance BPS — Provider Landscape with Services PEAK Matrix® Assessment 2022 |
Healthcare:
| • | A “Major Contender” in Everest Group’s Life Sciences Operations — Services PEAK Matrix® Assessment 2022 |
| • | A “Major Contender” in Everest Group’s Revenue Cycle Management Operations – Services PEAK Matrix® Assessment 2022 |
| • | A “Horizon-1 Disruptor” in HFS Horizons: Healthcare Payer Service Providers, 2022 |
Banking and Financial Services:
| • | A “Leader” in NelsonHall’s Vendor Evaluation Assessment Tool (“NEAT”) for Mortgage and Loan Services 2022 |
| • | A “Major Contender” in Everest Group’s Capital Markets Operations — Services PEAK Matrix® Assessment 2023 |
| • | A “Major Contender” and a “Star Performer” in Everest Group’s Financial Crime and Compliance Operations — Services PEAK Matrix® Assessment 2022 |
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Horizontal-specific Recognitions
Finance and Accounting:
| • | A “Leader” in Gartner Magic Quadrant for Finance and Accounting (“F&A”) BPO 2022 |
| • | A “Leader” in ISG Provider LensTM Finance and Accounting Outsourcing Services 2022 Global Report across Procure-to-Pay, Order-to-Cash, Record-to-Report and Financial Planning & Analysis |
| • | A “Major Contender” in Everest Group’s Finance and Accounting Outsourcing — Service Provider Landscape with PEAK Matrix® Assessment 2022 |
| • | A “Horizon-1 Disruptor” in HFS Horizons: Strategic Finance, 2022 |
| • | Ranked number #9 in HFS Top 10: CFO F&A Service Providers, 2022 |
Customer Experience Services:
| • | A “Leader” in AI and Analytics, and Social Media for Customer Experience (“CX”) Services in the ISG Provider LensTM 2022 Global Contact Center Customer Experience Services report |
Research and Analytics:
| • | A “Leader” in AI and Analytics, and Social Media for CX Services in the ISG Provider LensTM 2022 Global Contact Center Customer Experience Services report |
| • | A “Major Contender” in Everest Group’s Advanced Analytics & Insights Services PEAK Matrix® Assessment 2023 |
Procurement:
| • | A “Horizon-3 Market Leader” in HFS Horizons: Sourcing and Procurement Service Providers, 2022 |
| • | A “Major Contender” and a “Star Performer” in Everest Group’s Procurement Outsourcing — Service Provider Landscape with Services PEAK Matrix® Assessment 2022 |
Intelligent Automation:
| • | WNS-Vuram recognized as a “Leader” in ISG Provider Lens™ Intelligent Automation Services and Solutions Quadrant Report 2022 in the US and UK |
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Corporate:
| • | The Shared Services & Outsourcing Network (“SSON”) North America Impact Awards 2022 — Business Resilience Impact |
| • | SSON North America Impact Awards 2022 — Runner Up — Service Provider of the Year |
| • | WNS included in 2023 Bloomberg Gender-Equality Index |
| • | The Global Sourcing Association UK Award 2022 for Service provider of the Year (Energy & Utilities) |
| • | Two Business World People Diversity & Inclusion Awards |
| • | Diversity & Inclusion |
| • | Developing Women Leaders |
| • | European Contact Center and Customer Service Awards (“ECCCSA”) 2022 in the category of Best Use of Data (CX) (Bronze Award) |
| • | WNS Group CFO Sanjay Puria recognized as a Leading CFO for Digital Transformation at the CII CFO Excellence Awards 2022 |
| • | WNS Group CFO Sanjay Puria won the CFO100 Roll of Honor Award in the category Raising Capital / Fund Management |
| • | Business Process Enabling South Africa (“BPESA”) Alchemy Awards 2022 |
| • | Top BPO Operator Award 2022 |
| • | Top Non-Technical Award 2022 |
| • | Top Support Services Award 2022 — Ucademy South Africa |
| • | Covid Reporting Compliance Award (Special Recognition) |
| • | Three Stevie International Business Awards 2022 |
| • | Customer Service Department of the Year (Silver Award) |
| • | Business Technology Solutions — Cloud Application / Service (Bronze Award) |
| • | Customer Service Team of the Year (Bronze Award) |
| • | Two Stevie Great Employers Awards 2022 |
| • | Employer of the Year — Business & Professional Services (Bronze Award) |
| • | Achievement in Leadership Development (Bronze Award) |
| • | Three Stevie Sales and Customer Service Awards 2023 |
| • | Customer Service Training Team of the Year (Gold Award) |
| • | Customer Service Success (Gold Award) |
| • | Customer Service Department of the Year (Bronze Award) |
Technology:
| • | Core Media Chief Information Officer (“CIO”) Powerlist — Nayan Desai — CIO of the Year |
| CIO Conclave & Award 2022 in the category Innovative Technology Implementation of the Year |
| NASSCOM AI Gamechangers Award 2022 for WNS Malkom |
| UiPath Excellence Award 2022 for Best Automation Project of the Year — ITES |
| UiPath Partner Award 2022 — Asia Pacific & Japan in the category BPO / Managed Services Partner of the Year |
| Brainalytics Digital BPM Award for the Corporate category Best Technology Innovation of the Year |
| Two CIO100 Symposium and Awards 2022 in the categories: |
| • | Main CIO100 Award — Suhrid Brahma |
| • | Mission Critical Masters — Malkom and TAPP applications |
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Risk Management:
| • | Data Security Council of India (“DSCI”) Excellence Award for Industry Leaders — Security Leader of the Year |
Human Resources (“HR”):
| • | Two Brandon Hall Human Capital Management Excellence Awards |
| • | Gold Award for Best Advance in Leadership Development for Women |
| • | Bronze Award for Best Advance in Employee Recognition Program |
| • | Tata Institute of Social Sciences (“TISS”) LeapVault Chief Learning Officer (“CLO”) Awards 2022 |
| • | Gold Award for TISS LeapVault CLO for Best Diversity & Inclusion Program |
| • | Silver Award for TISS LeapVault CLO for Best Corporate University |
| • | Silver Award for TISS LeapVault CLO for Best Digital Learning Transformation |
| • | WNS named to Forbes 2022 list of World’s Best Employer |
| • | WNS included in the 2022 Bloomberg Gender-Equality Index |
Corporate Social Responsibility (“CSR”):
| • | Golden Peacock Global Award for Corporate Social Responsibility 2022 |
| • | National CSR Times Award 2022 (Gold) for Digital Education & CyberSmart |
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End-to-end service portfolio including higher-value transformational services and technology-enabled solutions
We continue to focus our service portfolio on more complex processes and solutions, and shift away from reliance on services that are less integral to our clients’ business operations, such as commoditized voice and transactional services (telemarketing and technical helpdesks), which characterized the business process outsourcing industry in its early days. We offer an array of higher-value, judgment-based services that seek to not only reduce cost and improve operating efficiency, but also enable improved decision-making, competitive positioning and business outcomes for our clients. These include high-end finance and accounting services, including strategic sourcing through supply chains, digital customer experience solutions, consulting and transformation services, technology-enabled offerings and analytics capabilities. We also provide a wide array of industry-specific solutions, which cut across traditional “horizontal” services. These solutions are designed to help clients address process efficiency requirements, provide digital capabilities, generate business insights, and improve competitive positioning within their respective industries.
We have also developed and continue to develop technology-enabled, or automated, solutions that utilize our proprietary software and licensed software in conjunction with our core BPM services. These integrated, technology-enabled solutions allow us to offer higher-value, differentiated services, which are more scalable and repeatable and create value for our clients through increased process efficiency and quality. We also collaborate with technology companies, combining their software tools, platforms and expertise with our service capabilities to deliver business solutions to the marketplace. These technologies include RPA, cognitive computing, ML, AI, natural language processing and hyperautomation. We believe that technology-enabled automated solutions will enable us to grow our revenue in a non-linear way by decoupling revenue growth from headcount growth.
To this end, we offer platform-enabled BPM or BPaaS that tightly integrates our domain expertise, business processes, automation, embedded analytics and cloud-based infrastructure.
Proven global delivery platform
We deliver our services from 64 delivery centers in 13 countries around the world, located in Canada, China, Costa Rica, India, the Philippines, Poland, Romania, South Africa, Malaysia, Sri Lanka, Turkey, the UK and the US. Our ability to offer services delivered from a mix of onshore, nearshore and offshore locations benefits our clients from the perspectives of access to skills and talent, cultural alignment, language capabilities, business continuity, risk mitigation, scalability, efficiency and cost effectiveness.
We believe the breadth of our delivery capability allows us to meet our clients’ needs, diversifies our workforce, provides business continuity, and allows us to access local talent pools around the world. Additionally, we have put in place a distributed workforce model that comprises an efficient blend of in-office and remote working to tap the best available talent and skills globally.
Our client-centric focus
We have a client-centric engagement model that leverages our industry-specific and shared-services expertise, flexible pricing models, “client-partner” relationship approach, as well as our global delivery platform to offer business solutions designed to meet our clients’ specific needs. We work closely with our clients to understand their specific requirements and to “co-create” unique, custom solutions that are designed to enable them to better compete and create differentiation within their respective industries.
We seek to enhance our value proposition to our clients by providing them with flexible pricing models that align our objectives with those of our clients. In addition to traditional FTE-based pricing, we provide alternative pricing models such as transaction-based pricing, outcome-based pricing and subscription pricing. A sizable percentage of our revenue, being 32.3% in fiscal 2023, is derived from these “non-FTE”-based pricing models. These models enable our clients to pay only for actual work performed or tangible benefit received.
We have also adopted a client-centric sales model, which is tightly integrated with our vertical organizational structure. Strategic client accounts are assigned a dedicated “client-partner” from our team who is responsible for managing the day-to-day relationship with the client. The “client-partner” is typically a seasoned resource with deep domain experience, who often works directly in the client’s local offices. Within our company, the “client-partner” is assigned to a specific vertical, and directly manages sales resources responsible for expanding client relationships. The “client-partner” is responsible for driving business value to our clients, monitoring quality of delivery and customer satisfaction, and managing account growth and profitability.
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Proven experience in transitioning processes and running them efficiently
Many of the business processes that clients outsource to us are core to their operations, requiring substantial program management expertise to enable the transition of work to us. A well-planned and effectively managed transition is the cornerstone of our business proposition and helps our clients outsource their operations effectively and efficiently, focus on their business priorities and implement operating models that are designed to help them achieve their business strategies.
Our transition approach is structured to help deliver business outcomes to our clients by:
| • | Minimizing risk and achieving rapid transition of services; |
| • | Ramping up operations with minimal disruption to existing business, metrics, customers and suppliers; |
| • | Effectively managing changes brought about by transformative tools and technologies; |
| • | Managing a seamless transfer of responsibilities from any incumbent service provider to us; and |
| • | Continuing to engage with clients to adapt to and drive changes for a future-ready transition model by leveraging remote training. |
At its core, all aspects of the transition process are governed by EnABLE, our proprietary transition toolkit, which has been tested and evolved over 20 years. EnABLE embeds multi-level governance, visibility, transparency, flexibility and compliance across the entire transition lifecycle.
Our differentiators include:
| • | Customer-centricity: Our practice of “early transition voice of customer” identifies and addresses opportunities to do better at meeting clients’ objectives and success criteria. |
| • | Robust governance: Our multi-level governance approach seeks to ensure that transition reviews are conducted at all levels up to executive leadership. Risks are assessed and proactive support is provided with a view to achieving clients’ objectives. |
| • | Strong leadership and experience: We have a robust and mature transition methodology with a strong record in managing and delivering transitions from clients as well as from major incumbent players. |
| • | Global presence: Our team of skilled transition managers operates from all our major global delivery locations. Our agile and readily deployable team is always available for clients’ needs. |
Extensive investment in human capital development
At WNS, we have created a learning organization with the objective of empowering employees with skills that will help them to constantly collaborate, co-create and outperform in a changing business landscape. This learning organization is designed to offer developmental programs to every employee band level in the organization, across business units and enabling units. It is responsible for developing organization-wide skills within focus groups, such as behavioral, domain, technical, leadership, functional as well as process-related skills. See “— Human Capital — Training and Development.”
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Learning Academy (the “LA”): The LA not only focuses on developing initiatives and programs that aim to enable high-impact leadership and potential across all employee band levels and geographies, but also focuses on building internal capability to create a future-ready and digital-savvy workforce. The LA has over 300 unique programs for various employee band levels and behavioral skill areas that are conducted across locations based on the learning strategies defined for each team.
The learning organization comprises the following building blocks:
| • | Digital Capability Building |
| • | WNS Education Program: In line with our digital transformation strategy, WNS Education Program (a niche arm of the LA) strives to raise the digital consciousness of our company through bespoke certification programs and digital awareness modules. |
| • | Digital Future (“DiFU”) Digital Competency Framework: This four-step journey helps us identify, assess and build the competencies required for digital readiness. To put it into practice, we engaged with Deloitte Consulting who conducted a study with MIT Sloan to identify 23 critical indicators of digital readiness. These indicators have been customized to WNS-specific contexts to create a Digital Competency framework. |
| • | Immersive Learning Experience On-Demand (“GLINT”): This is an AI-led digital learning and knowledge platform comprising tailored modules mapped to specific business requirements. GLINT facilitates an environment of knowledge sharing and peer-to-peer learning, helping drive collaboration among employees. |
| • | Leadership Programs: These comprise unique interventions designed for leaders, from future first-level managers up to senior executive leadership. They also focus on grooming women leaders and next-generation leaders. |
| • | Accessible, On-demand and Personalized Learning: We aim to achieve accessible, on-demand personalized learning through platform play, which leverages an AI-driven search engine to help employees learn on the go. The learning is available on demand and is accessible across regions over commonly used smart devices. |
| • | Business-aligned Learning: To ensure learning is aligned to the goals of the business units and is performance driven, the business partner arm within the Learning Academy works in consultation with the business units’ leaders to create customized learning journeys for employees. The aim is to drive focused behavioral / potential development. |
Experienced management team
We benefit from the effective leadership of a global management team with diverse backgrounds, including extensive experience in outsourcing. Members of our executive and senior management team have, on average, more than 20 years of experience in diverse industries, including in the business process and IT outsourcing sector, and in the course of their respective careers have gathered experience in developing long-standing client relationships, leveraging technology, launching practices in new geographies, developing new service offerings and successfully integrating acquisitions.
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Business Strategy
Our objective is to further develop and strengthen our position as a leading global partner to our clients, providing a breadth of services, including professional services, consulting, digital transformation, data and analytics services, operations and business process management. Our industry awards, digital assets, and wide range of unique solutions, which deliver strong business outcomes for our clients, demonstrate our organizational capabilities. We intend to continue to increase our client base and expand our existing relationships through deep industry expertise, our ability to develop trusted client relationships and by being a strategic partner to support our clients’ business strategies and transformational requirements. To serve our clients better, we continue to invest in domain expertise, digital capabilities including domain-led hyperautomation, data and analytics, technology, customer experience, digital operations, intelligent automation, agile execution, consulting and transformation, and our employees to serve our clients better. We also continue to make select acquisitions to accelerate progress and fill capability gaps. Our recent acquisitions of Vuram, The Smart Cube and OptiBuy demonstrate this strategy and enhance our ability to meet client needs.
WNS’ strategic investment programs are aligned with the market changes towards the accelerated need for deeper domain expertise, digital transformation, data and analytics and broader BPM services. We are confident that our differentiated capabilities, solid business momentum and proven ability to execute position us well to drive long-term sustainable value for all of our key stakeholders. We have made significant investments with a view toward accelerating our growth and staying competitive in a changing industry environment with a stronger focus on digital transformation requirements. These investments include:
| • | Expansion and development of our sales activities, onshore digital transformation consulting, and organizational change management teams, so as to be closer to our clients and address their business challenges and evolving requirements; |
| • | Expansion of other sales channels including the development of new collaborations and alliances, and broadening our engagement with industry advisors and analysts; |
| • | Increase in the range of services and solutions offered to our clients across different industries and business functions, including services to assess, design and execute digital transformations such as: |
| • | Building industry-specific and cross-industry digital solutions, and augmenting our digital capabilities through strategic partnerships and targeted acquisitions; |
| • | Building our business transformation capabilities with a digital focus including domain-led hyperautomation, cognitive technologies and AI, intelligent automation, customer/user experience and design, technology, data and analytics, transformation program management and organization change management capabilities through new talent, internally developed intellectual property, strategic partnerships and acquisitions; |
| • | Focused interventions towards digitally enabled operations through automated metrics management, agent utilization monitoring, and digital training and quality assurance; and |
| • | Applying agile practices and approaches and setting up our WNS Co-creation Labs to support the design and delivery of our customer experience services, including the use of targeted operating model design, Center of Excellence (“CoE”) (a CoE approach refers to organizations meticulously bringing together the best of delivery models, innovative technology, process excellence frameworks and talent to orchestrate business transformation) or shared services approaches, business transformation assessments, solutions and execution, customer experience, and user experience and design thinking. |
| • | Expansion of our domain CoEs as function-specific repositories combining WNS’ deep domain expertise, industry best practice knowledge, latest digital technologies and dedicated subject matter experts to create specialist capability and drive business value for clients; |
| • | Increasing expertise, management and digital capability of our workforce; |
| • | Expansion of our global delivery platform; and |
| • | Focused strategic acquisitions to improve our capabilities. |
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The key elements of our growth strategy are described below.
Increase business from existing clients and new clients
We are focused on building a sales team with strategic offerings, and more consultative skills including transformation, digital technology enablement, advanced analytics and new operating models. We have organized our company into vertical business units. The addition of vertically focused practice leaders in key geographies is bringing senior-level domain and market focus, especially for large deals and strategic client relationships. These client-facing investments are expected to enable WNS to further drive innovation and co-creation.
Our sales force of 143 members as at March 31, 2023 provides broad sales coverage and management experience. Our sales force is organized into two groups, one focused primarily on expanding existing client relationships (which we refer to as “farmers”) and another focused on adding new clients (which we refer to as “hunters”). We have established a coordinated and focused approach at a global level to strengthen our sales activities.
We seek to expand our relationships with existing clients by cross-selling new services (such as digital transformation including technology, automation, and data and analytics offerings), moving up the value chain, and expanding into other lines of business and geographies within each client. Our account managers and “client-partners” have industry-specific knowledge and expertise, and are responsible for maintaining a thorough understanding of our clients’ strategies and outsourcing roadmaps, as well as identifying and advocating new business solutions and opportunities. As a result of this strategy, we have built a strong track record of extending the scope of our client relationships over time.
For new clients, we seek to provide value-added solutions by leveraging our deep industry knowledge built on the back of process expertise, digital enablement, customer experience, data and analytics, and digital transformation solutions. As a result of our capabilities and industry vertical go-to-market approach, we have been able to compete effectively for new opportunities.
Reinforce leadership in existing industries
Through our industry-focused operating model, we have established leading professional services, digital transformation, data and analytics and BPM practices in various industry verticals and business sectors. To complement our industry-focused approach, we continue to invest in digital capabilities (including data and analytics, customer experience, AI, intelligent automation and other new technologies), agile execution and talent acquisition and training with the goal of expanding our business and acquiring industry-specific expertise to improve our service offerings across industries.
We intend to leverage our knowledge of the following industries to penetrate additional client opportunities: insurance; travel and leisure; healthcare; diversified businesses (including manufacturing, retail, CPG, media and entertainment and telecom); shipping and logistics; banking and financial services; hi-tech and professional services; and utilities.
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Provide higher value-added services
The BPM market is continuing to evolve and transform towards digital business models, user design and experience, innovation and transformation. Enterprises expect their BPM providers to be a strategic partner and key driver of business transformations involving digital solutions around new technologies, cognitive, intelligent automations, hyperautomation, and advanced data and analytics. We are further developing our client value proposition by combining our extensive domain and industry expertise with our capabilities in these areas to deliver enterprise-wide digital transformations for our customers that are designed to take their business performance to new levels. As the BPM market further evolves and matures, the demand for industry-specific services and new pricing models will increase. We continue to make significant investments in these areas which we believe will give us a competitive advantage. We intend to broaden the scope of our higher-value service offerings to capture new market opportunities. By delivering a wider portfolio of higher-value services to our clients, and migrating them towards subscription, transaction, and outcome-based pricing models, we aim to move up the value chain with our clients and thereby enhance the size, strength and profitability of these relationships.
Our focus has been on building capabilities, new services and product offerings around digital business including our research and analytics positioning (which we have branded as “WNS Triange”), hyperautomation (which we have branded as “WNS-Vuram”), cognitive technologies, intelligent automation, data and analytics, and technologies that are targeted to the challenges and requirements of specific industry sectors. We continue to develop key complementary capabilities such as organization change management, co-creation facilitation, program management and agile enablement to help enable enterprise-wide transformation. We are proactively addressing the shift to technology, analytics and automation through a combination of internal capability development, strategic collaborations and acquisitions.
Enhance awareness of the WNS brand name
Our reputation for operational excellence, domain expertise, and technology and analytics capabilities among our clients has been instrumental in attracting and retaining clients as well as talented and skilled employees. We believe that our guiding principles of co-creation and client centricity resonate favorably with clients as they are indicative of our intent to completely align with client needs and leverage synergistic collaboration (with clients and strategic partners) to drive outcomes.
We also believe that we have benefited from strong client referrals that have helped us to scale our business. We are actively driving initiatives to enhance awareness of the WNS brand in our target client and employee markets. We are further streamlining acquisition integration to execute a concerted, unified go-to-market strategy. To accomplish this, we have a dedicated global marketing team comprising experienced industry talent. We are also focusing on developing channels to increase market awareness of the WNS brand, including participation in industry events and conferences, exposure in industry publications, publication of articles and white papers, webinars and podcasts, internet and digital media, social media, and other initiatives that create enhanced visibility of the WNS brand and establish WNS’ thought leadership capabilities in the BPM industry.
We are working to improve visibility and positioning with the BPM industry analysts, sourcing advisors, general management consulting firms, and boutique outsourcing firms, who are often retained by prospective clients to provide strategic advice, act as intermediaries in the sourcing processes, develop scope specifications, and aid in the partner selection and implementation process. We are also leveraging our global partner network for joint go-to-market strategies. Given COVID-19’s impact, we have augmented our digital engagement by leveraging various platforms to further enhance our brand presence.
Expand our delivery capabilities
We currently operate from 64 delivery centers located in 13 countries around the world. As at the end of fiscal 2023, we increased our delivery capacity by 2,728 seats, or approximately 8%, as compared to the end of fiscal 2022, as a result of addition of new delivery locations as well as expansion in some of our existing delivery locations. We intend to expand our global delivery capability, as necessary, through additional delivery centers in onshore, nearshore and offshore locations as well as through collaboration with other providers, based on client demand and market trends. Depending on talent pool availability, we plan to further expand to locations classified as tier 2 cities in India to access under-tapped talent pool and provide more flexibility to our employees. Additionally, we will continue to expand and/or consolidate our capacity requirements across our existing locations, as necessary, in line with client demands and through the adoption of a hybrid operating model that consists of both work-from-home and work-from-office arrangements in the medium to long term. This approach will allow us to offer our clients maximum value and flexibility and gain access to potential clients and markets that may have specific delivery requirements or constraints.
We remain focused on creating a delivery model that can provide certainty in outcomes despite business variability. Our focus remains on enhancing both our in-office and remote cybersecurity protocols and fine-tuning a new longer-term future-state hybrid model solution that will allow us to seamlessly move delivery between office and home. We have also adopted a hybrid people model with full time, temporary contract and gig workers, such as independent contractors, online platform workers, contract firm workers and on-call workers.
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Leverage acquisitions and partnerships to expand our capabilities in attractive market segments
We believe that capability-based acquisitions are the centerpiece of our inorganic growth strategy. In line with this philosophy, we made three acquisitions in fiscal 2023 to bolster our solutions portfolio. All three acquisitions have strengthened our positioning in attractive market segments and are aligned with our integrated approach to digital transformation and advanced analytics. These acquisitions have deepened our horizontal expertise and provided strong synergies with our core BPM model and existing business scope.
Our vision going forward remains focused on filling gaps in our capabilities and market coverage through acquisitions and partnerships. We continue to pursue a strategy focused on exploring targeted capabilities that have a high degree of business and cultural fit with us and would help us capitalize on strong end-market opportunities. Our acquisition track record demonstrates our ability to successfully integrate, manage and develop the businesses we have acquired.
Business Process Management Service Offerings
We offer our services to clients through industry-focused business units. We are organized into the following vertical business units to provide more specialized focus on each of these industries and more effectively manage our sales, solutions, marketing and delivery processes:
| • | Insurance; |
| • | Travel and leisure; |
| • | Healthcare; |
| • | Diversified businesses (including manufacturing, retail, CPG, media and entertainment, and telecom); |
| • | Shipping and logistics; |
| • | Banking and financial services; |
| • | Hi-tech and professional services (formerly known as consulting and professional services); and |
| • | Utilities |
Effective April 1, 2023, we have adopted a new organizational structure featuring four strategic business units (“SBUs”), each headed by a chief business officer (“CBO”). Under the new organizational structure, we combine our company’s existing verticals into the four SBUs. We believe the new organizational structure will help drive improved outcomes for our global clients and enable our company to better drive business synergies, enhance scalability, generate operating leverage, and create organizational depth.
In addition to industry-specific services, we offer a range of services that are common across multiple industries (which we refer to as our horizontal services), including finance and accounting (including procurement), customer experience services, research and analytics (which we have branded as “WNS Triange) and technology services. In addition, our global transformation practice offers higher-value services such as digital transformation and consulting services, which are designed to help our clients modify their business processes to enhance productivity, manage changes in the business environment, and leverage business knowledge to increase market competitiveness. We help clients drive these initiatives with technology-enabled solutions, process re-design including initiatives such as Six Sigma or Lean, and business analytics.
To achieve an in-depth understanding of our clients’ industries and the geographies in which they operate, we manage and conduct our sales processes in our four key markets — Europe, North America, Asia-Pacific and Africa. Our sales teams are led by senior professionals who focus on target industries, processes and clients. Each business unit is staffed by a dedicated team of managers and employees engaged in providing BPM client solutions. In addition, each business unit draws upon common support services from our information technology, human resources, training, corporate communications, corporate finance, risk management and legal departments, which we refer to as our corporate-enabling units.
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Vertical Business Units:
Insurance
Our insurance services are structured into multiple lines of business and cater to a diverse and sizeable number of clients globally. We offer industry-specific and cross-industry solutions combining our deep industry knowledge with automation, digital technology, analytics and process expertise to co-create digitally enabled transformational solutions.
Our solutions span the end-to-end insurance value chain for life, annuity and general insurers, brokers, loss adjusters, syndicates and managing general agents (“MGAs”) in the Lloyd’s of London market space. Our services include new business and policy administration services, underwriting support and delegated underwriting, actuarial services, end-to-end claims management, finance and accounting, customer experience management, analytics and transformation services. Our service models provide go-to-market solutions for back-office support, customer experience services, capabilities for new product introductions and sales enablement.
Historically, our insurance vertical grew as we opened delivery centers in new geographies and expanded our digital footprint with new solutions. We have invested in co-creation labs and digital transformation practices to develop end-to-end modularized digital solutions. These solutions leverage hyperautomation, robotics, cognitive automation, advanced analytics, AI, blockchain and IoT.
Some of our recent initiatives include:
| • | Setting up an office in Lloyd’s of London – a first for any BPM company |
| • | Setting up insurance service delivery centers in Australia (Sydney) and Malaysia (in Kuala Lumpur) |
| • | Renewing contracts with two of our largest clients and signing contracts with new clients |
| • | Enhancing the scope of our solutions by adding travel claims processes and complex actuarial services, such as IFRS17 implementation support and pricing support activities |
As at March 31, 2023, we had 12,472 employees working in this business unit. In fiscal 2023 and 2022, this business unit accounted for 26.8% and 29.9% of our revenue, and 22.9% and 24.3% of our revenue less repair payments (non-GAAP), respectively.
Sub-verticals / Industry Sectors. The key insurance sub-verticals and industry sectors we serve include:
| • | Life insurance, pensions and annuity providers; |
| • | Property and casualty insurance providers; |
| • | Reinsurers; |
| • | Insurance and reinsurance brokers; |
| • | Loss assessors; and |
| • | Lloyd’s of London market syndicates, MGAs, coverholders and brokers. |
Service Offerings. We provide the following key areas of services to clients in this business unit:
| Insurance — Service Offerings | ||||||||
| Operations |
Actuarial Services |
Enterprise Shared Services |
Research and Analytics |
Customer Experience | ||||
| Underwriting support and delegated underwriting, supply chain, claims management, policy administration, risk and compliance, premium / billing management, mailroom operations, contract issuance/ change management, channel management and reinsurance services; | In-force model projections / reporting, financial modeling, product management and pricing, capital management, asset-liability management, reserving and claims analysis, solvency II (a regulatory framework applicable to insurance companies) and capital modeling, pricing and underwriting support, and catastrophe modeling, IFRS17 implementation support; | Finance and accounting, technology support, HR and payroll, and consulting services
Sourcing and procurement (strategic sourcing, category management, contract management, spending analytics and transactional procurement)
Platform consulting and implementation support, consulting and transformation services (automation, business process re-engineering and digital); |
Claims analytics, subrogation and recovery analytics, fraud analytics, customer analytics, broker analytics, underwriting analytics, reserve estimation, risk selection and analytics, speech analytics, pricing analytics, data mining and management services, reporting, dashboarding and visualization, data science and predictive modeling across claims, and claims liability decision tool; and | Sales and service, customer analytics, customer inquiry management and customer information administration. | ||||
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Technology Tools / Platforms. We utilize the following proprietary and partnership-driven digital solutions to deliver services to our clients in this business unit:
| • | WNS EXPIRIUS microservices, which include: |
| • | EXPIRIUS Converse EX – a conversational cognitive self-serve solution; |
| • | EXPIRIUS CloudServ EX – an omni-channel cloud contact center-as-a-service offering; |
| • | EXPIRIUS Assist EX – proactive agent assistance and automation; |
| • | EXPIRIUS Translate EX – a real-time language translation solution; |
| • | EXPIRIUS Engage EX – a workforce engagement suite; |
| • | EXPIRIUS Remote EX – user monitoring for security and compliance; |
| • | EXPIRIUS Elevate EX – comprehensive customer insights and integrated analytics-as-a-service; and |
| • | EXPIRIUS Journey EX – a customer journey discovery and orchestration solution. |
| • | Travel claims STP: A hyperautomation solution driving end-to-end straight-through processing (“STP”) of claims from lodgement to closure; |
| • | Digital workbench: A solution to transform underwriting business by simplifying and digitizing complex IT systems and fragmented processes; |
| • | HIFFI: A one-touch UK home insurance quote-to-buy solution; |
| • | BAIL: A tool for intelligent and versatile liability assessment and first notice of loss (FNOL) decision-making; |
| • | Attestiv: A solution designed to authenticate digital media captured by any person or device using AI and blockchain; |
| • | Rightindem: A solution for electronic notification of loss for reporting motor and property claims in a conversational style; |
| • | Formotiv: This is designed to provide first-party behavioral data and intent scores that enable intuitive and personalized digital experiences; |
| • | eAdjudicator :This automates the end-to-end claims adjudication process, real-time operations and business dashboards; |
| • | WNS Skense: A proprietary cognitive data capture and contextualization platform, powered by AI and ML techniques, which extracts data from multiple unstructured and structured sources, without the need for an input template / rule-based set-up. It presents the contextualized information in a structured, usable format; |
| • | Messenger Connect: This allows a customer to instantly lodge a claim anytime from anywhere through a convenient messenger medium, such as WhatsApp and short message service “SMS”; |
| • | E-FNOL: A self-service app for registering claims and follow-ups; |
| • | Underwriting Pricing Accelerator: Advanced analytics integrated with an AI-based pricing engine for commercial decisions relating to policy underwriting, including insights from cross-selling, premium calculation, profitability and probability modeling, and risk scoring; |
| • | Indemnity Spend Optimizer: A solution for telephony-based claims lodgement and total loss prediction, fraud detection and recovery propensity estimation; |
| • | Enterprise Subrogation Platform/Services: An end-to-end subrogation suite for quick claims processing using auto claims allocation, AI-based liability evaluation, recovery, legal dispute resolution, vendor management, business dashboard and blockchain for real-time updates; |
| • | Annuity Universe: This solution offers real-time recommendations for strategic decision-making of annuities businesses through multidimensional analysis of large data from products and customers segmented by country, customer likeability, age, income and premium; |
| • | Claims Lodgement Intelli-bot: An e-mail-based automation claims lodgement and adjudication solution; |
| • | Device Protection Knowledge Graph: A solution for InsurTech clients to establish the relationship between multiple datasets to provide effective device protection service; |
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Travel and Leisure
We deliver end-to-end services to clients across the travel and leisure industry value chain.
Our endeavor to improve our clients’ competitive positioning is underpinned by a combination of domain expertise and digital-led solutions. We co-create intelligent, automated, resilient systems, and facilitate our clients’ adoption of digitalization. Through our digital product portfolio of cloud-based, as-a-service models and application programming interface (“API”)-integrated offerings, we seek to improve customer experience, enhance operational control and efficiency, and drive revenue uplift. We also collaborate with third-party global technology solution providers in our efforts to drive innovation in our service offerings that seek to provide customized and best-of-breed digital-driven solutions to our clients.
As at March 31, 2023, we had 13,345 employees in this business unit, several hundred of whom have International Air Transport Association, Universal Federation of Travel Agents or other travel industry related certifications. In fiscal 2023 and 2022, this business unit accounted for 16.9% and 14.8% of our revenue and 17.9% and 16.0% of our revenue less repair payments (non-GAAP), respectively.
Sub-verticals / Industry Sectors. The key travel and leisure sub-vertical and industry sectors we serve include:
| • | Suppliers: Airlines, cargo, hotels, cruise lines, coach companies; |
| • | Travel intermediaries: Online travel agencies, travel management companies, tour operators; and |
| • | Other travel segments: Airports, hospitality brands, global distribution systems (“GDS”), travel technology companies. |
Service Offerings. We provide the following key areas of services to clients in this business unit:
| Travel and Leisure — Service Offerings | ||||||
| Operations |
Enterprise Shared Services |
Research and Analytics |
Customer Experience Services | |||
| Commercial / Marketing: Passenger name record fulfillment, fares and distribution, billing information data tapes audit, campaign management and eCommerce;
Crew scheduling and rostering, disruption management, during travel services, maintenance and engineering, port operations and baggage desk, Right to Fly;
Digital Content Services: Content loading, content parity, rate loading and content writing;
Cargo: Commercial, revenue management, trucking, operations and BI, revenue accounting, rate / revenue audit and helpdesk; |
Finance and accounting, procurement, human resources; | Loyalty and customer analytics, guest experience and customer satisfaction score analytics, market and campaign analytics, strategic research and market intelligence, business intelligence and data management; and | Bookings and reservations, cancellations and reschedules, rates enquiry, booking refunds, ancillary cross sell / up sell and corporate bookings;
Guest relations, general queries, website assistance, complaint management and surveys, VIP desk / concierge / after hours, guest special requests and social customer experience management; and
Member Services: Enrollment and administration, general program enquiries, redemption bookings, membership fulfillment, tier management and technical helpdesk. | |||
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Technology Tools / Platforms. We utilize the following technology tools and platforms in delivering services to our clients in this business unit:
| • | WNS EXPIRIUS: A digital customer experience model that integrates human-assisted design and domain expertise with AI-driven conversational insights and consulting-led strategies; |
| • | SocioSEER™: A social media analytics platform; |
| • | Verifare Plus 3.0SM: A fare audit solution; |
| • | BIDT Audit: An automated, cloud-hosted revenue integrity platform for the audit and recovery of any revenue losses resulting from non-compliance in travel agency bookings; |
| • | Claim fraud analytics: An automated analytics solution to identify fraudulent passenger and baggage claims; |
| • | AnciFly: An ancillary revenue analytics engine; |
| • | SeatSure: Intelligent automation for seating of minors; |
| • | QbaySM: A multi-GDS platform for queue management; |
| • | WNS ACOSS: An end-to-end cargo solution powered by intelligent automation, advanced analytics and domain expertise; |
| • | CFO digital cockpit: One-view analytical insights of the finance organization; |
| • | WNS eClose: A financial workflow solution for streamlining the period-end close process; |
| • | WNS Risk and Audit Analytics: A risk and audit analytics application designed to identify the right set of audit targets from accounts payable invoices and travel and expense claims using a range of intelligent statistical and forensic methods; |
| • | CFO TRAC: A unified and comprehensive suite of technology solutions designed to enable the futuristic agenda of chief financial officers (“CFOs”); |
| • | InsighTRAC: A cloud-based procurement analytics platform; |
| • | WNS Duplicate Invoice Detector: A nimble and non-intrusive universal duplicate detection application with multiple cutting-edge features such as fuzzy matching (a technique that provides improved ability to process word-based matching queries to find matching phrases or sentences from a database), phonetic matching and user customizable strictness; and |
| • | WNS Skense: A proprietary cognitive data capture and contextualization platform, powered by AI and ML techniques, which extracts data from multiple unstructured and structured sources without the need for an input template / rule-based set-up. It presents the contextualized information in a structured, usable format. |
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Healthcare
We deliver end-to-end BPM solutions across the healthcare and life sciences value chain. We facilitate business transformation through the adoption of new-age digital solutions, data platforms and advanced analytics, business process re-engineering and RPA. Besides seeking to deliver significant cost reduction for our clients, we co-create innovative and high-impact solutions that focus on end customers with a view to enabling value creation. Our solutions are designed to help clients enhance the quality of care by driving improved compliance with clinical pathways and derive deeper insights for better decision-making through advanced analytics.
We are well-positioned in the pharmaceutical and biopharmaceutical industry with research and analytics expertise to support the product lifecycle and commercial operations. We enable our clients to engage in data-driven decision-making by leveraging our proprietary solutions such as PRECIZON (a cloud-based, natural language processing driven fully customizable competitive intelligence platform), Forecasto (a cloud-based self-serve forecasting platform for business planning cycles), Unified Analytics Platform (a proprietary cloud-based business intelligence self-serve analytics platform), WNS Skense (a proprietary cognitive data capture and contextualization platform), SocioSEERTM (a social media analytics platform), Therapy Area Analyzer (a proprietary therapy area knowledge repository, covering 12 disease areas and 120 indications and providing information on disease etiology, epidemiology and product analysis for 15 countries) and other technology or domain intellectual property (“IP”), which we have built with a view to delivering holistic value to our clients.
We specialize in enabling the end-to-end sales and marketing value chain with an industry-led talent pool supporting key functions like sales force sizing, sales force effectiveness, market mix modeling, multi-channel marketing and attribution, and next-best-action marketing. Our analytics knowledge center comprises more than 1,000 analytics experts who leverage deep pharmaceutical domain knowledge, strong analytics capabilities and proprietary frameworks to deliver actionable business insights to leading pharmaceutical companies. Supporting our analytics team is a strong group of technical experts skilled across various data-related domains, including platform-agnostic data hosting, curation and governance, data ingestion, visualization and big data feed for advanced analytics.
We seek to create value for our healthcare payer clients, helping them deliver value-based care to their members by driving claims transformation, managing end-to-end clinical programs and delivering claims decision support by leveraging technology and domain to optimize cost, improve quality and provide superior member and provider experience. For healthcare providers, we deliver clinically empowered revenue cycle management designed to improve financial performance and modernize customer experience. For third-party administrators, we seek to enable high compliance and cost savings through our innovative medical bill review solution. Our solution modernizes workflows and leverages analytics, clinical knowledge and domain-backed technology to create an exceptional customer experience that seamlessly engages with providers, payers and patients with a view to delivering value-based care.
Further, we believe we are well-positioned to be a strategic provider, helping the healthcare industry deliver benefits management across several key specialty healthcare areas, including radiology, cardiology, oncology, sleep care, orthopedics and pain management. Our analytics-based medical-content-rules-driven platforms, ConsultTM and Protus™, seek to deliver the right care to patients and reduce cost of care for our clients in the process.
As at March 31, 2023, our business unit had 5,978 employees including medical practitioners, registered nurses, pharmacists, healthcare graduates and analytics professionals. In fiscal 2023 and 2022, this business unit accounted for 15.7% and 17.7% of our revenue and 16.6% and 19.1% of our revenue less repair payments (non-GAAP), respectively.
Sub-verticals / Industry Sectors. The key healthcare sub-verticals and industry sectors we serve include:
| • | Durable medical equipment manufacturers; |
| • | Health insurance companies; |
| • | Healthcare provider practices, hospitals and diagnostic centers; |
| • | Pharmaceutical, biotech and medical technology companies; and |
| • | Third-party administrators. |
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Service Offerings. We provide the following key areas of services to clients in this business unit:
| Healthcare — Service Offerings | ||||||||
| Providers |
Payers |
Durable Medical |
Enterprise Shared Services |
Pharmaceutical and | ||||
| Revenue cycle management, medical coding, bill preparation, receivables management, payment posting, debt analysis; | Claims administration, member and provider services, clinical support, overpayment recovery, fraud detection and investigation, utilization management services (that is, optimizing payer healthcare spend on areas such as tests and procedures without compromising the patient care-quality-safety norms); | Order management, sales support and complaints, billing and submission, fulfillment support, collections, patient services, collection analytics, reporting and dashboarding, sales force effectiveness; | Finance and accounting, workflow / platforms, research and analytics (knowledge process outsourcing), technology solutions, front-end / mailroom, customer experience / helpdesk services; procurement support; and | Medical affairs, scientific communication, patient and healthcare provider experience, competitive intelligence, pipeline analysis, product profiling, forecasting, key performance indicators reporting, epidemiology analysis, market opportunity assessment, social media analysis, key opinion leader research, modeling and tool building support, pricing analytics, patient data analytics, market mix model, big data platform development, data governance, and scientific content development and medical information management. | ||||
Technology Tools / Platforms. We utilize the following technology tools and platforms in delivering services to our clients in this business unit:
| • | PRECIZON: A cloud-based, natural language processing driven fully customizable competitive intelligence platform; |
| • | SocioSEER™: A social media analytics platform; |
| • | Unified Analytics Platform: A proprietary cloud-based business intelligence self-serve analytics platform; |
| • | WNS Forecasto: A cloud-based forecasting platform for business planning cycles; |
| • | Therapy Area Analyzer: A proprietary therapy area knowledge repository; |
| • | Consult™: A clinical decision support technology platform; |
| • | TrackBox: A proprietary workflow management solution; and |
| • | WNS Skense: A proprietary cognitive data capture and contextualization platform, powered by AI and ML techniques, which extracts data from multiple unstructured and structured sources without the need for an input template / rule-based set-up. It presents the contextualized information in a structured, usable format. |
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Diversified Businesses (including Manufacturing, Retail and CPG, Media and Entertainment and Telecom)
We deliver comprehensive BPM solutions for diversified businesses, including manufacturing, retail and CPG, media and entertainment, and telecom. Across these industries, we have developed a suite of transformative digital and analytics solutions that are designed to optimize business performance and enhance customer experience. Our offerings include a host of platform-based and intelligent automation-driven solutions such as WNS’ Financial Intelligence-in-a-Box (“FIAB”) designed to prevent financial leakages, unlock working capital and bolster compliance; WNS EXPIRIUS designed for enhanced customer experience and higher sales; warranty management BPaaS; supply chain planning suite and control tower; CPO TRAC (a procurement management solution to assist chief procurement officers (“CPOs”)) for digital-led procurement management; e-commerce digital merchandising and digital order management.
Our offerings also encompass advanced analytics solutions that help drive business performance, including working capital optimization, sourcing spend reduction, marketing spend optimization, supply chain risk reduction and increased customer lifetime value.
As at March 31, 2023, we had 4,435 employees in this business unit. In fiscal 2023 and 2022, this business unit accounted for 14.7% and 13.5% of our revenue and 15.5% and 14.6% of our revenue less repair payments (non-GAAP), respectively.
Manufacturing: Our manufacturing team has rich experience in delivering metrics-driven solutions and transformation programs for our manufacturing clients.
Sub-verticals / Industry Sectors. The key manufacturing sub-verticals and industry sectors we serve include:
| • | Electronics manufacturers; |
| • | Metal and mining companies; |
| • | Optical equipment and imaging product manufacturers; |
| • | Building and construction product manufacturers; |
| • | Aeronautical product manufacturers; |
| • | Precision engineering companies; |
| • | Industrial manufacturing companies; |
| • | Specialty chemicals companies; |
| • | High-tech products companies; and |
| • | Food processing companies. |
Service Offerings. We provide the following key areas of services to clients in this business unit:
| Manufacturing – Service Offerings | ||||
| Supply Chain Planning and Forecasting |
Sourcing and Procurement |
Fulfillment and Logistics | ||
| Sales and operations planning, demand forecasting, supply planning, inventory management, inventory analytics; | Strategic sourcing, category management, contract management, spend analytics, transactional procurement; | Order entry and processing, order tracking, billing / invoicing, transport management, logistics optimization; | ||
| Warranty and Returns Management |
Sales, Marketing and Customer Services |
Enterprise Shared Services | ||
| Warranty customer operations, warranty claims management, parts / repair management, warranty financial management, returns management, customer helpdesk; | Global market opportunities, brand building, go-to market strategy, customer experience services, order management, acquisition analytics, retention analytics; and | Finance and accounting services, statutory and compliance support, customer experience services, human resource services, IT service desk, application support. | ||
Technology Tools / Platforms. We utilize the following technology tools and platforms in delivering services to our clients in this business unit:
| • | FIAB: This combines advanced analytics-led techniques, applications and methods designed to enable end-to-end data management and help improve control, prevent financial leakages, unlock working capital and bolster compliance; |
| • | CPO TRAC: A procurement management solution that leverages digital advancements along with predictive and functional analytics designed to transform procurement functions; |
| • | Manufacturing RPA & Intelligent Automation TRAC: A suite of automation solutions that streamlines operations across the manufacturing value chain; and |
| • | Warranty Management BPaaS: A platform-led offering that is designed to enable automated claims processing, improve customer satisfaction and reduce cost of warranty operations. |
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Retail and Consumer Packaged Goods: Our retail and CPG solutions are designed to help our clients derive consumer behavioral insights, optimize marketing expenditures, plan their growth strategy, reduce operational costs and streamline processes through efficiency, quality and productivity improvements, and improve customer service.
Our services are supported by a research and analytics platform, WADESM, which was designed and developed to enable retail and CPG companies to access, organize and analyze data from various external sources and further use the insights gained to make informed decisions.
Sub-verticals / Industry Sectors. The key retail and CPG sub-verticals and industry sectors we serve include:
| • | Beverage companies; |
| • | Fast food chains and restaurants; |
| • | Processed food suppliers; |
| • | Cosmetics and healthcare companies; |
| • | Apparel and footwear; |
| • | General merchandize retailers; |
| • | Specialty retailers; and |
| • | E-commerce retailers. |
Service Offerings. We provide the following key areas of services to clients in this business unit:
| Retail and Consumer Packaged Goods – Service Offerings | ||||
| Strategy Solutions |
Customer Experience Services |
Supply Chain Solutions | ||
| Market entry strategy, balancing portfolio investments, consumer and market insights, innovation strategies, power brand strategy, marketing spending optimization; | Omni-channel (phone, e-mail, fax, website, live chat, social media) customer experience services; | Retailer-supplier collaboration for demand-driven supply chain and retail execution management, supply intelligence, supplier performance and risk monitoring, contract management, supply chain orchestration – global trade shared services, trading partner helpdesks, logistics; | ||
| Revenue Management Solutions |
Content Services |
Enterprise Shared Services | ||
| Planning and execution of transaction and interaction-based campaign strategies, loyalty management, credit control and collections; | Product catalogs, user-generated content moderation, digital content protection, web / print content, website analytics and optimization; and | Finance and accounting services, statutory and compliance support, sourcing and procurement services, human resource services, IT service desk and application support. | ||
Technology Tools / Platforms. We utilize the following technology tools and platforms in delivering services to our clients in this business unit:
| • | WNS EXPIRIUS: A digital customer experience model that integrates human-assisted design and domain expertise with AI-driven conversational insights and consulting-led strategies; |
| • | WNS Skense: A proprietary cognitive data capture and contextualization platform, powered by AI and ML techniques, which extracts data from multiple unstructured and structured sources without the need for an input template / rule-based set-up. It presents the contextualized information in a structured, usable format; |
| • | FIAB: A combination of advanced analytics-led techniques, applications and methods that are designed to enable end-to-end data management and help improve control, prevent financial leakages, unlock working capital and bolster compliance; |
| • | SocioSEERTM: A social media analytics platform; and |
| • | CPO TRAC: A procurement management solution that leverages digital advancements along with predictive and functional analytics designed to transform procurement functions. |
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Media and Entertainment: Our media and entertainment offerings are designed to help our clients create new revenue streams, capitalize on emerging digital opportunities, attract next-generation consumers and boost margins.
Working with some of the largest media and entertainment companies in the world gives us an undisputed advantage in understanding the nuances of the business. We leverage years of industry and process experience, and a large team of digital media experts to deliver next-generation cost-effective solutions to clients in this industry.
Sub-verticals / Industry Sectors. The key media and entertainment sub-verticals and industry sectors we serve include:
| • | Music; |
| • | Publishing; |
| • | Television; |
| • | Radio; |
| • | Filmed entertainment; |
| • | Gaming and animation; |
| • | Sports entertainment; and |
| • | Internet and outdoor advertising firms. |
Service Offerings. We provide the following key areas of services to clients in this business unit:
| Media and Entertainment – Service Offerings | ||||
| Strategy Solutions |
Digital Operations and Royalty Management |
Sales, Marketing and Distribution Solutions | ||
| Market entry strategy, balancing portfolio investments, consumer and market insights, innovation strategies, brand power strategy, marketing expense optimization; | Digital operations solutions to help companies successfully expand into the digital business; royalty management solutions to help clients manage rights and royalties in both new media and traditional media; piracy protection services to help companies prevent media piracy issues; | Seamless integration of traditional and digital product sales, marketing and distribution to enable clients to roll out timely innovative pricing / packaging strategies; | ||
| Customer Experience Services |
Content Services |
Enterprise Shared Services | ||
| Omni-channel (phone, e-mail, fax, website, live chat, social media) customer experience services; | Product catalogs, user-generated content moderation, digital content protection, web / print content, website analytics, optimization; and | Finance and accounting services, statutory and compliance support, sourcing and procurement services, human resource services, IT service desk, application support. | ||
Technology Tools / Platforms. We utilize the following technology tools and platforms in delivering services to our clients in this business unit:
| • | SocioSEER™: A social media analytics platform; |
| • | WNS EXPIRIUS: A digital customer experience model that integrates human-assisted design and domain expertise with AI-driven conversational insights and consulting-led strategies; |
| • | FIAB: A combination of advanced analytics-led techniques, applications and methods that are designed to enable end-to-end data management and help improve control, prevent financial leakages, unlock working capital and bolster compliance; and |
| • | CPO TRAC: A procurement management solution that leverages digital advancements along with predictive and functional analytics designed to transform procurement functions. |
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Telecom: Our experience in consolidating and centralizing the functions of our telecommunications clients with built-in variable capacity to meet business requirements helps us deliver business value. WNS’ end-to-end BPM solutions are designed to enable telecom companies to transform their value chain while tackling myriad challenges.
Our solutions are underpinned by the right mix of digital, analytics, and domain and process expertise that enables our clients to achieve cost efficiencies and drive sustainable growth.
Service Offerings: We provide the following key areas of services to clients in this business unit:
| Telecom — Service Offerings | ||||||
| Customer Acquisition |
Order Provisioning and Order |
Operations and Customer |
Enterprise Shared Services | |||
| Contract administration, sales order processing, service administration and data control; | New products and services, service delivery process creation, order provisioning, technical validation and support, rejected order tracking, order tracking, proactive order management, billing, data management (for example, forms and administration); | Inbound customer experience services, logging and monitoring service requests, customer relationship management (“CRM”) analytics, collection analytics, web correspondence, IT customer experience services (global service desk); and | Finance and accounting services, statutory and compliance support, sourcing and procurement services, human resource services, IT service desk, application support. | |||
Shipping and Logistics
We are one of only a few providers of BPM solutions for the shipping and logistics market. Our strategic focus is demonstrated through our organizational structure, where we have a separate logistics vertical and approximately 4,000 dedicated logistics BPM professionals who cater to more than 24 leading logistics brands worldwide. Our client solutions span the entire shipment lifecycle, such as booking, documentation, core operations support, customer experience services, finance and accounting, customer experience services, business technology and data analytics.
We have a long-term strategic focus on developing and deploying new-age technologies, tools and platforms designed to create sustainable cost and quality advantage for our clients. We also leverage our analytics expertise in combination with industry domain knowledge and custom-built proprietary frameworks to help clients make informed decisions at the right time. We provide an array of services to our clients, such as complex data integration, cutting-edge advanced analytics, personalization and big data.
As at March 31, 2023, we had 6,355 employees working in this business unit. In fiscal 2023 and 2022, this business unit accounted for 7.6% and 7.7% of our revenue, and 8.0% and 8.3% of our revenue less repair payments (non-GAAP), respectively.
Sub-verticals / Industry Sectors. The key shipping and logistics sub-verticals and industry sectors we serve include:
| • | Global air express and courier companies; |
| • | Ocean shipping — Non-vessel operating common carrier, ocean liners, ports and terminals and shipping agencies; |
| • | Trucking — Less-than-truckload, full truckload, truck rental and leasing, compliance, safety and accountability; companies |
| • | Third-party logistics and fourth-party logistics services; |
| • | Rail; and |
| • | Transportation safety and compliance. |
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Service Offerings. We provide the following key areas of services to clients in this business unit:
| Shipping and Logistics — Service Offerings | ||||||
| Sales and Marketing |
Customer Experience Services |
Document Processing |
Operations Support | |||
| Tariff filing and maintenance, rate quotes, service contract / rate agreement creation and maintenance and actuarial services; | Customer file and debtor file administration, customer helpdesk, booking desk-phone / e-mail / electronic data interchange web, rating companies) and capital modeling, pricing and underwriting support, and catastrophe modeling; | Exports, bill of lading, processing, advance custom manifest submission, freight audit, billing and invoicing, vessel closures, imports, import data quality process / checks, arrival notifications, import general manifest filings with delivery order issuance, customers document processing, verified gross mass updating; | Vessel schedules — long-term support, vessel schedules — coastal, routing module maintenance, traffic control coordination, booking with carrier, hazardous cargo approvals, vendor management — vendor file administration, purchase order / job order creation, gate moves, ship husbanding, stowage planning, bay plan submission and distribution, inbound and outbound trans-shipment, maintenance and repairs, global stock reconciliation, container leasing validation, vessel performance reports, inventory management, chart corrections management, safety and environmental key performance indicator (“KPI”) monitoring onshore; | |||
| Shipping and Logistics — Service Offerings | ||||||
| Transportation Safety and |
Enterprise Shared Services |
HR and Payroll |
Sourcing and Procurement | |||
| Driver logs, driver qualification, video log monitoring, and miles without hours exceptions handling; | Accounts payable, accounts receivables, disbursement accounting, credit and collections, agency reconciliations, general ledger / bank reconciliation, cash reporting and audit / vendor reconciliation, financial management reporting, vendor helpdesk, monthly closing / quarterly / yearly closing, treasury support, agency audits, claims management; | Strategic sourcing, category management, contract management, spending analytics, and transactional procurement; | ||||
| Research and Analytics |
Technology Services |
|||||
| Metrics realization and analysis, network design and optimization, transport management, shipping performance management, tonnage analytics, carrier sourcing analytics, fleet analysis and maintenance, reverse logistics analytics, revenue analytics, and distribution center analytics; and | Intranet support, claims management, data hubbing, e-commerce registration, e-learning module content management, e-learning module content creation and intelligent automation services across segments; platform consulting and implementation support, consulting and transformation services (automation, business process re-engineering, digital). | |||||
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Technology Tools / Platforms. We utilize the following technology tools and platforms in delivering services to our clients in this business unit:
| • | WNS Malkom™: An AI- and ML-enabled optical character recognition billing platform designed to digitize and automate approximately 60-70 percent of a bill of lading with a front-end application; |
| • | WNS Fire: A desktop app designed to enable organizations to build a world-class dispute management process by reducing resolution cycle time and maximizing customer satisfaction with real-time data and insights; |
| • | WNS Bridge: A single enterprise-wide real-time visual dashboard to enable decision support; |
| • | WNS EXPIRIUS: A digital customer experience model that integrates human-assisted design and domain expertise with AI-driven conversational insights and consulting-led strategies; |
| • | Digital Freight Automation Services: Driving end-to-end transparency and intelligent process automation across the shipping management value chain of sales and marketing, customer service, operations, export and import documentation, finance and accounting, and human resources along with AI and ML-driven workflows and real-time data to drive intelligent operations; |
| • | ACE: Intelligent automation BOTs for portals to raise and rectify disputes; |
| • | iLearn: A digital learning platform; |
| • | Bolt: Custom learning experience to address training needs around logistics sectors from domain perspective; and |
| • | GLINT — A full-stack AI learning journey management platform. |
Banking and Financial Services
Our banking and financial services practice supports more than 30 leading clients, including large commercial and retail banks, wholesale and retail lenders, wealth advisors, asset managers, investment banks, private equity firms, hedge funds, financial technology (or commonly referred to as FinTech) organizations and mortgage servicing companies, with a comprehensive suite of BPM and transformation solutions.
We seek to add value to our clients’ businesses by improving customer experience, unlocking cost efficiencies and revenue opportunities, streamlining processes, and leveraging a wide range of process re-engineering, automation (robotic and non-robotic), and digital and advanced analytics (AI and ML) solutions.
As at March 31, 2023, we had 3,956 employees working in this business unit. In fiscal 2023 and 2022, this business unit accounted for 6.7% and 5.8% of our revenue, and 7.1% and 6.2% of our revenue less repair payments (non-GAAP), respectively.
Sub-verticals / Industry Sectors. The key banking and financial services sub-verticals and industry sectors we serve include:
| • | Retail and commercial banking; |
| • | Mortgage and loans; |
| • | Wealth and investment banking; |
| • | Financial technology; |
| • | Asset management; |
| • | Financial advisory firms; |
| • | Financial research and financial market intelligence companies; |
| • | Trade finance; and |
| • | Private equity and hedge funds. |
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Service Offerings. We provide the following key areas of services to clients in this business unit:
| Banking and Financial Services — Service Offerings | ||||||
| Retail Banking |
Commercial Banking |
Capital Markets |
Mortgage | |||
| Account set up, on-boarding application processing, document review and verification, KYC and customer due diligence, underwriting, spend limit, payments checks, cards and remittance, fraud management, disputes and chargebacks, default management;
Servicing: Maintenance, customer support, transaction processing, complaints and disputes handling, vulnerable customer management, fraud detection and management, chargebacks, AML transaction monitoring; |
On-boarding: Application processing, KYC / ultimate beneficial owner verification, document review and verification, screening;
Credit Risk: Credit analysis, probability of default / loss given default, financial statement spreading, risk grading support, limit set up, funding and closing;
Operations: Collateral management, covenant monitoring, renewals, annual reviews, settlement, rollovers, billing, limit monitoring, amendments and settlements;
Cash Management: Funds transfer, Nostro / Vostro (these terms are used with reference to one bank maintaining money at another bank), reconciliation, payment processing and investigation, AML transaction monitoring;
Trade Finance: Letter of credit issuance; document collection, acceptance and payments, export bills negotiations, guarantees, financing, bank guarantee issuance and amendment, bill discounting, receivables , pre and post shipment finance, customer service, trade-based money laundering support; |
Front Office: Financial and business research, investment strategy and modeling, order entry, allocation / rebalancing; portfolio manager support, pitch book and graphic support, financial statement spreading, customer support and servicing;
Middle Office: Portfolio construction/paraplanning, investment research, cash flow forecasting, risk management, amendments / maintenance of existing data, manual trade allocations, manual trade booking, trade exception / rejection management, trade compliance, trade confirmation, queries handling;
Back Office: Clearing and settlement, custody / record keeping, stock transfer, collateral management, expense and income processing, fund accounting / net asset value calculations, reconciliations, financial reporting, settlement, corporate actions; |
Origination: Application processing, KYC, pre-underwriting and underwriting support, credit evaluation, title commitment, pre-funding audit, disbursal;
Servicing: Customer service, loan boarding and set-up, adjustable rate mortgage audit, payments processing, assignments and endorsements, lien release, escrow management / periodic analysis, final documents follow up and audit;
Default Management: Pre-loss mitigation, foreclosure support, borrower research, loan modification, forbearance support, early stage collections;
Secondary Market: Post close audit, due diligence of acquired packets, documentary fulfillment, trailing doc follow ups; | |||
| Fintech |
Enterprise Shared Services |
Research and Analytics | ||
| Application processing support / helpdesk, customer service, complaints handling, customer screening, transaction monitoring, fraud management and chargebacks, operations advisory and transformation consulting services, regulatory and compliance support; | Finance and Accounting: Accounts payable, travel and expenses management, general ledger, budgeting and forecasting, financial planning and analysis, reporting, capital management support, asset liability management;
Sourcing and Procurement: Strategic sourcing, category management, contract management, spend analytics, transactional procurement; vendor management; and |
Financial and business research, equity / fixed income / credit research, risk analytics, fraud analytics, model development and validation, loyalty analytics, customer interaction analytics and business reporting. | ||
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Technology Tools / Platforms. We utilize the following technology tools and platforms in delivering services to our clients in this business unit:
| • | KYC case management tool: A workflow solution addressing the KYC management lifecycle; |
| • | Cheque clearing automation: An RPA-based tool for automated clearing of cheques; |
| • | Card dispute management system: A cards chargebacks and disputes management solution to help banks handle card-related disputes; |
| • | A risk monitoring and reporting solution for managing operational risk; |
| • | Delinquency management: A loan delinquency and collections management platform; |
| • | Credit Risk Decisioner: An AI-based smart credit mortgage evaluation tool; |
| • | Skense Credit: An AI-based financial statement spreading tool; |
| • | Tookitaki: An analytics-led transaction monitoring platform; |
| • | MozaIQ: An automation solution to enable digital mortgage origination; |
| • | Automated IDV tool: An analytics-powered workflow solution to facilitate automated identity verification; and |
| • | Customer Risk Rating tool: An analytics-powered tool to assign risk rating to a client or account based on the financial institution model. |
Hi-Tech and Professional Services
Our hi-tech and professional services (“HPS”) business unit’s objective is to help clients gain a competitive edge and outperform in their respective industries by leveraging digital transformation and tech-enabled solutions under a consultancy-led approach. We currently cater to more than 40 clients from our key delivery centers in India, Romania, China, the Philippines and Sri Lanka.
Our HPS business unit offers an array of solutions to key sub-segments within the vertical. Our solutions are designed to address trust and safety issues, fraud operations, revenue operations, business and market intelligence, and data management, annotation and labeling. We have helped clients streamline and centralize their operations, set up global business services centers and optimize cost of operations encompassing industry-specific services along with key horizontal services such as finance and accounting, human resource management, customer interaction services, procurement, and IT and infrastructure management.
As at March 31, 2023, we had 4,103 employees in the business unit. In fiscal 2023 and 2022, this business unit accounted for 6.6% and 6.2% of our revenue, and 6.9% and 6.7% revenue less repair payments (non-GAAP), respectively.
Sub-verticals / Industry Sectors. The key HPS sub-verticals and industry sectors we serve include:
| • | Information processing services; |
| • | Background and identity verification companies; |
| • | High technology (“Hi-Tech”) firms; |
| • | Legal services firms; |
| • | Executive search firms; |
| • | Real estate service firms; and |
| • | Marketing service providers. |
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Service Offerings. We provide the following key areas of services to clients in this business unit:
| Hi-Tech and Professional Services — Service Offerings | ||||||
| Hi-Tech Firms |
Information Processing Services |
Executive Search Firms |
Legal Services Firms | |||
| Revenue operations (lead generation and scrubbing, upper funnel management, subscription management, advertisement sales, digital and print advertisement operations, campaign management, agency and partner support);
Trust and safety (transaction monitoring, vendor and customer due diligence, know your customer (“KYC”) / anti-money laundering (“AML”) document verification), fraud investigation, business-to-business content moderation (advertisement monitoring and review, IP infringement, spam reporting, and flagging false and misleading content);
Annotation solutions (synthetic data management, data quality assurance, text annotation, image annotation, data annotation, video annotation, speech annotation, data extraction and machine learning solutions);
Domain-led consulting, decision support services and BPaaS services (workforce management-as-a-service, an end-to-end workforce management framework to forecast, schedule, monitor and report across the entire organization;
Training-as-a-service, designed to provide training support to companies in a way that aligns with the way they work;
Transition-as-a-service supporting clients in all aspects of the transition process such as risk fit assessment and change management; and
Quality as a Service enabling clients to achieve desired quality business outcomes by leveraging a variety of approaches, tools and frameworks such as process re-engineering, end-to-end process diagnostics, customer satisfaction score and root cause analysis); |
Content sourcing, content creation, database creation, maintenance and update, aggregation, indexing and tagging, content copy editing and proofing, content enrichment, analysis and product creation, content review and quality assurance, design and production services for digital / print products, advertising operations and order fulfillment, analytics and CRM support; | Search lifecycle support, sourcing, pre-screening, name identification, interview and offer management, pitch book support, business intelligence, industry and company research, database clean-up, update and management, document management, marketing and business development support, talent consulting, contract checks and audits; | Legal support, legal and business research, case management, document management, digital dictation transcription, pitch support, patent and trademark searches, contract management, title checking, lease management, company secretarial services, legal transcription and documentation, personal injury litigation support, property law (conveyancing); | |||
| Background Verification and |
Real Estate Services Firms |
Marketing Service Providers | ||||
| Background checks, identity, education, employment, criminal background and social media checks, corporate investigative research, enhanced due diligence, international verification checks, occupational health checks, credit history checks, motor vehicle records checks for Federal Motor Carrier Safety Administration and Department of Transportation compliance; | Real estate accounting, lease management, surveying and lettings support, business and financial research, real estate analytics, portfolio and fund accounting, sales and marketing support, end-to-end conveyancing process, contract management and secretarial services; | Industry, company and product research, market research operations, market research analytics, shopper and CRM analytics, web / digital analytics, campaign management and analytics, database management, digital content management and production support (designing and development). | ||||
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Utilities
We are a leading utilities BPM solutions provider with domain expertise across the utilities value chain — generation, transmission, distribution and retail. Our solutions portfolio supports utility companies catering to the residential, industrial, and small and medium enterprise segments.
We are a strategic transformation provider to clients from the US, the UK, and Asia-Pacific and African regions. We offer digital-driven, technology-enabled, analytics-led and automation-infused services. We support business-to-consumer and business-to-business processes for our clients through our solutions spanning meter-to-cash (including customer acquisition and management, billing and metering, payment processing, credit and collections) and other areas within the utilities value chain, including distribution and field services. Our long-standing relationships with leading global companies have helped us develop geography- and industry-specific domain expertise and capabilities in key segments. We enable business transformation by leveraging analytics, digital platforms, tools and solutions, and automation through AI and cognitive intelligence solutions.
Our capabilities to support clients across processes in oil and gas, electricity and water suppliers include end-customer support, back-office processes, new product offerings (including prepay meters), finance and accounting outsourcing services (including procurement services), debt management and other enabling services, such as meter reading, bill printing and digital support services (including smart metering). Our Utility-in-a-Box tool offers platform integration, application integration, data integration, process integration, component integration and system integration capabilities along with document control and digitization, master data management, enterprise resource planning implementation and support, and digital meter-to-cash.
Our digital customer experience services are led by our go-to-market differentiator WNS EXPIRIUS, which is powered by our CoEs that leverage human-assisted design to integrate domain, technology and analytics to create a holistic digital experience. We have built eight modular digital solutions in the WNS EXPIRIUS suite, which enable us to offer on-demand scalable omni-channel service. Its contact strategy employs bot conversations to intelligently act on customer intent in a human-like manner, supporting major needs in billing, refunds, payment schemes and payment mode changes, home-moves, and mapping customer account information to power and utility trends.Using social media analytics and big data analytics across multiple channels, we help provide clients with a single view of the customer. Our analytics offerings include mining of structured and unstructured data, speech and text analytics, and revenue assurance analytics that includes home-move and void solutions, debt management, collections, vulnerable customer support and an analytics CoE. Our offerings in RPA, AI and ML include feasibility studies to identify processes, design and build solutions, and develop codes to automate processes for deployment in live environments. As an organization, we are also working on our oil and gas capability and building our renewable energy capability by evaluating a carbon emission model that is designed to not only help our clients but also their customers.
As at March 31, 2023, we had 4,692 employees working in this business unit. In fiscal 2023 and 2022, this business unit accounted for 4.9% and 4.4% of our revenue, and 5.2% and 4.7% of our revenue less repair payments (non-GAAP), respectively.
Sub-verticals / Industry Sectors. The key utilities sub-verticals and industry sectors we serve include:
| • | Oil and gas; |
| • | Electricity; and |
| • | Water. |
Service Offerings. We provide the following key areas of services to clients in this business unit:
| Utilities — Service Offerings | ||||||
| Digital Meter-to-Cash |
Customer Experience Services |
RPA, AI and ML |
Research and Analytics | |||
| Managing the customer lifecycle, which covers acquisition, billing, payment and withdrawal along with dispute resolution, exception handling, customer debt management, payment management for electricity, gas and water utilities across residential and business customers, all-encompassing smart and analog meters, reduction in voids and gap properties, energy efficiency and zero carbon emission; | Sales CoE encompassing customer acquisitions, retention, enhancement, cross-selling / up-selling, customer experience services — queries, correspondence, and asset management; prepay to help our clients set up a completely new offering for the customers; | Feasibility studies to identify processes, build solution design, develop codes to automate processes for deployment in live environments; | Data mining, decision-support services, revenue assurance covering smart collections, fraud analytics, bankruptcy forecasting, fraud reduction, cash flow improvement and engagement with vulnerable customers; this also has customer analytics — segmentation, lifetime value analysis, net promoter score analysis, speech analytics and text analytics; | |||
| Enterprise Shared Services |
||||||
| Finance and accounting, supply chain management and procurement: E-sourcing, vendor rationalization, supplier management, procurement optimization, sourcing, procure-to-pay transactions, supply chain analytics, order-to-cash transactions and record-to-report; and
Human resource management: Administration support and payroll services. |
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Horizontal Units
Finance and Accounting
Our finance and accounting services encompassing an array of end-to-end industry-specific and cross-industry solutions are powered by deep domain knowledge, data-to-insights capabilities and digital innovation. We seek to drive end-to-end finance transformation leveraging intelligent automation, AI, cognitive computing, natural language processing, ML, blockchain, IoT, BPaaS platforms, embedded analytics and process re-engineering frameworks.
As at March 31, 2023, we had 9,107 employees in this horizontal unit. In fiscal 2023 and 2022, this horizontal unit accounted for 23.0% and 22.4% of our revenue, and 24.3% and 24.2% of our revenue less repair payments (non-GAAP), respectively.
Sub-vertical / Industry Sectors. The key industry sectors we serve include:
| • | Retail and CPG; |
| • | Insurance; |
| • | Energy and utilities; |
| • | Healthcare; |
| • | Media and entertainment; |
| • | Banking and financial services; |
| • | Telecom; |
| • | Manufacturing; |
| • | Shipping and logistics; |
| • | Travel and leisure; |
| • | Hi-tech and professional services; and |
| • | Other emerging industries. |
Service Offerings. We provide the following key areas of services to clients in this horizontal unit:
| Finance and Accounting — Service Offerings | ||||||
| Source-to-Pay |
Quote-to-Sustain |
Record-to-Report |
Decision Support | |||
| Sourcing to Contract: Sourcing and supplier relationship management;
Procurement: Procurement operations;
Invoice to Pay: Document management, invoice processing and reporting, purchasing card and travel expense claims processing, payment remittances and accounts payable enquiries;
Miscellaneous activities and month-end close; |
Quote-to-Order: Customer master data, credit management and customer contract management;
Order-to-Bill: Customer order management and customer billing management;
Bill-to-Cash: Collections and dispute management, and cash application and customer deduction management;
Report-to-Sustain: Customer request and inquiries, reports and analytics dashboards, and perform revenue assurance; |
Record: Master data management, book keeping, fixed assets, intercompany and general accounting;
Report: Financial reporting, statutory reporting and taxation; |
Budgeting, forecasting, variance analysis and management reporting; | |||
| Corporate Functions |
Supply Chain Finance |
Governance, Risk, Compliance and |
Industry-specific Accounting | |||
| Treasury, cash management, financial planning and analysis, tax and compliance, decision support and management accounting; | Product costing, inventory accounting, manufacturing accounting, supply chain analytics and supply chain fulfillment support; | Governance consulting, risk analytics services, compliance services and audit services; and | Passenger revenue accounting, revenue audit and recovery, claims management, loan account maintenance, royalty accounting, actuarial, fiduciary accounting, trip records, freight and fuel charges accounting, cost accounting, franchise accounting, meter reading, pre-payment billing and disbursement accounting. | |||
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WNS CFO Advisory Services: We seek to deliver to our clients innovative transformation solutions focused on facilitating their progression along the maturity curve aross process, technology and analytical interventions. Our pool of consultants seeks to help customers achieve this through varied advisory service offerings, enabling value creation for the CFO and organization. These advisory services are primarily classified into:
| • | Target Operating Model: An assessment of operating, process, technology and governance models utilizing the “Outperforming CFO Framework”, a best practices-enabled framework with toolkits for assessment and digital enablement, designed to create transformation roadmaps and enhance process optimization; |
| • | Operational Excellence: A service focusing on CoE creation and process maturity modeling, including benchmarking, business process reengineering, performance management and process mining; |
| • | Finance Modernization: An extensive landscape of proprietary and partner solutions focused on intelligent automation, hyperautomation, implementation and optimization support for bolt-on solutions, platforms, enterprise resource platforms (ERPs) and enterprise performance management rollout. The following is a list of key proprietary solutions: |
| • | WNS eClose: A workflow solution for streamlining the period-end close process; |
| • | WNS RecTRAC: A workflow solution with a checklist for automatic reconciliation tracking, processing and validation; |
| • | WNS JE TRAC: A Journal Entry Advisor hyperautomation app that is an end-to-end journal entry solution to analyze input files, prepare journals, identify anomalies in postings, track approval and post journals in the ERP; |
| • | AP TRAC: An end-to-end accounts payable invoice processing and workflow solution; |
| • | WNS Trackpoint Pro: A web-based case management tool; and |
| • | F&A TRAC: An e-forms and workflow solution that can be utilized in multiple F&A processes across source-to-pay, quote-to-sustain and record-to-report. |
| • | Finance Analytics: This includes Financial Intelligence-in-a-Box (“FIAB”), a proprietary suite of advanced analytics offerings for CFOs, to generate insights and aid in decision-making with enhanced visibility and control. The following are the primary applications under FIAB: |
| • | Journal Entry Analytics Platform: An app based on advanced statistical models, designed to transform how controllership works; |
| • | enC@SH: Working capital enhancement through advanced AP analytics and a range of simulators for “what-if” analysis; provides a prioritized list of opportunities to enhance liquidity and bottom-line impact; |
| • | DoppelSkanner: A nimble and non-intrusive universal duplicate detection application with multiple cutting-edge features such as fuzzy matching (a technique that provides improved ability to process word-based matching queries to find matching phrases or sentences from a database), phonetic matching and user customizable strictness; and |
| • | WNS Risk and Audit Analytics: A risk and audit analytics application designed to identify the right set of audit targets from accounts payable invoices and travel and expense claims using a range of intelligent statistical and forensic methods. |
| • | Compliance and Control: This includes process controls framework design, Sarbanes-Oxley Act-related controls (design, testing and reporting), internal audit support and accounting standards change support (for example, for IFRS 17 implementation and US GAAP long duration targeted improvements). |
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Customer Experience Services
Our digital CX services are enabled by our proprietary solution WNS EXPIRIUS, which integrates human-assisted design and domain expertise with AI-driven conversational insights and CX consulting-led strategies to create a holistic customer experience.
The EXPIRIUS model comprises eight modular solutions, or microservices, which are all focused on achieving return on investment. These solutions have been designed to meet the specific CX demands of businesses powered through consulting and CoEs, which enable us to deliver smart digital solutions around sales, fulfillment, collections, omni-channel services and more. Our global network of WNS Co-creation Labs leverages a human-centered approach to support the design and delivery of digital CX services.
As at March 31, 2023, we had 17,207 employees in this horizontal unit. In fiscal 2023 and 2022, this horizontal unit accounted for 19.4% and 17.1% of our revenue, and 20.4% and 18.5% of our revenue less repair payments (non-GAAP), respectively.
Sub-verticals / Sectors. The key industry sectors we serve include:
| • | Healthcare; |
| • | Manufacturing; |
| • | Retail and CPG; |
| • | Shipping and logistics; |
| • | Banking and financial services; |
| • | Travel and leisure; |
| • | Media and entertainment; |
| • | Telecom; |
| • | Utilities; and |
| • | Hi-Tech and Professional Services. |
Service Offerings. We provide the following key areas of services to clients in this horizontal unit:
| Customer Experience Services — Service Offerings | ||||||
| Customer Experience Consulting |
Centers of Excellence |
Workforce Models |
Engagement Models | |||
| Cutting-edge technology, proven methodologies and frameworks, and human-assisted solutions;
Expertise across CX initial state assessment, customer journey mapping, omni-channel engagement and hyper-personalized solutions, customer analysis, intelligent automation; |
WNS’ industry-contextualized CoEs combine domain experts with WNS EXPIRIUS;
Four CoEs: WNS Sales CoE (A “Sales + Service” bundled offering designed to transform order-taking contact centers to revenue-generating profit centers), WNS Fulfillment CoE (designed to enable seamless, omni-channel, and unified fulfillment experiences through a digital and analytics driven approach), WNS Assisted Digital Channels CoE (leverages an integrated omni-channel contact strategy, underpinned by AI, cognitive and analytical solutions), and WNS’ Smart Collections CoE (a debt collections strategy driven by in-house smart tools); |
WNS Open Talent Model: Designed to foster communities of domain experts and enable enterprises to access best-in-class talent on demand; underpinned by open workforce, open workflow and open workspace;
Channels: Voice, email, chat, social media (traditional sites such as Facebook, Twitter, forums, blogs and review sites), digital engagement (mobile, web) and asynchronous messaging;
Languages: Support in English, French, Italian, Spanish, German, Arabic, Afrikaans and more than 20 key regional languages across the globe; and |
Innovative, outcome-driven commercial models aimed at reducing the total cost of ownership and unlocking non-linear growth through levers across digital, domain and delivery during the deal tenure. | |||
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Technology Tools / Platforms. We utilize the following technology tools and platforms in delivering services to our clients in this horizontal unit:
| • | WNS EXPIRIUS Toolkit: We collaborate with leading enterprise platform providers, CX technology players, niche vendors and in-house technology and analytics specialists to co-create domain-specific solutions leveraging the right digital infrastructure. As a result, under the EXPIRIUS umbrella, we have created a toolkit of bolt-on microservices, which can be adopted by clients to complement their existing digital CX landscape and deliver business outcomes. |
| • | EXPIRIUS ConverseEX enables businesses to design the right contact strategy — from messaging bots to conversational interfaces across channels — to intelligently act on customer intent in a human-like manner; |
| • | EXPIRIUS CloudServEX enables anytime, anywhere omni-channel contact center access with on-demand scalability and business continuity; |
| • | EXPIRIUS AssistEX empowers contact center agents to drive meaningful interactions with customers through real-time guidance for improved brand experience. It also enhances agent effort by intelligently summarizing customer interactions; |
| • | EXPIRIUS TranslateEX provides instant support across all languages on digital channels via real-time language translation, and is supported by human curation to deliver native-speaker proficiency; |
| • | EXPIRIUS EngageEX leverages a compendium of best-in-class practices for operational oversight, delivered through AI-powered business performance dashboards and intelligent workforce management supporting agile delivery models, effective training and coaching toolkits; |
| • | EXPIRIUS RemoteEX strengthens the remote work environment beyond data and workstation security by leveraging AI and analytics for operational oversight, security and compliance; |
| • | EXPIRIUS ElevateEX provides a “single source of truth” through intelligent conversation mining across channels, voice of customer analytics and custom predictive models, enabling faster decision-making for Customer Experience Officers; and |
| • | EXPIRIUS JourneyEX leverages customer touchpoints (across self-service and assisted service channels) to hyper-personalize journeys in real time, derive actionable insights, and tailor an optimum contact strategy for a true omni-channel customer experience. |
We have successfully launched new capabilities across the customer interaction lifecycle with:
| • | HIFFI: An AI-led property insurance policy quote-to-buy solution that enhances customer experience while reducing cost to serve; |
| • | Frictionless CX: A solution that offers frictionless journey and straight-through processing; and |
| • | Digitally Simulated Training Environment: An intelligent training solution that drives engaging and experiential learning and development. |
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WNS Triange
WNS Triange (formerly “Research and Analytics”) seeks to deliver end-to-end data-driven transformation by enabling businesses to define the right data, analytics and AI strategy, and execute that strategy with cloud-based platforms and solutions designed to achieve improved outcomes.
With deep domain understanding across industries as the foundation, WNS Triange aims to help businesses ask the right questions to accurately identify all the critical challenges, strategize on clear goals, translate them to impactful actions and achieve desired outcomes at speed and scale.
WNS Triange is underpinned by advanced analytics capabilities and domain knowledge, deep understanding of intelligent cloud platforms and technology deployments, outcome-driven models, specialized data and analytics CoE services, co-creation labs designed to deliver continuous innovation and experimentation, and strategic partnerships with leaders in analytics and technology solutions.
The three core pillars of our data, analytics and AI practice are Triange Consult, Triange NxT and Triange CoE.
As at March 31, 2023, we had 3,845 employees in this horizontal unit. In fiscal 2023 and 2022, this horizontal unit accounted for 10.8% and 10.5% of our revenue, and 11.3% and 11.3% of our revenue less repair payments (non-GAAP), respectively.
Sub-vertical / Industry Sectors. The key research and analytics sub-verticals we serve include:
| • | Manufacturing; |
| • | Retail and CPG; |
| • | Banking and financial services; |
| • | Insurance; |
| • | Healthcare; |
| • | Travel and leisure; |
| • | Utilities; and |
| • | Other emerging industries. |
Service Offerings. We provide the following key areas of services to clients in this horizontal unit:
| WNS Triange – Service Offerings | ||||
| Triange Consult |
Triange NxT |
Triange CoE | ||
| Triange Consult is the consulting arm that co-creates strategy and foundation with enterprises for their data, analytics and AI needs, from roadmaps, gap analyses and change management to governing standards and processes; Triange Consult helps organizations simplify and demystify everyday complexities and analytical requirements using design thinking principles; | Triange NxT integrates next-generation AI, ML and cloud capabilities for enterprises; Triange NxT adopts an AI-led platform approach to drive business value at scale and achieve faster time-to-market for enterprises by deploying different pre-trained models that are relevant and accurately mapped to the data and analytics maturity of organizations; core components are leveraged to build various AI-powered industry analytics modules with seamless user interface to help solve specific business problems; and | Triange CoE drives the end-to-end execution of industry-specific analytics programs that fuel transformation across the enterprise value chain. | ||
Technology Tools / Platforms. Some of the key platform-driven offerings that are part of Triange NxT include:
| • | Unified Analytics Platform: This cloud-based, integrated analytics platform aims to refine and accelerate the data-to-insights journey across industries. Modular and cloud-based, it provides end-to-end integration from data to actionable insights and can easily be embedded into existing infrastructure as a “plug-and-play” system, or deployed in an “as-a-service” model. For example, Insurance Analytics in-a-Box is built to combine the platform’s core data components with analytics design patterns, API-driven architecture, insurance-specific algorithms (including claims, pricing, underwriting, fraud, marketing and customer analytics) and AI-powered decision models, and deliver seamless and visually intuitive insights to enable business users of insurance clients to make data-driven decisions; and |
| • | WNS Skense: A proprietary cognitive data capture and contextualization platform, powered by AI and ML techniques, which extracts data from multiple unstructured and structured sources without the need for an input template / rule-based set-up. It presents the contextualized information in a structured, usable format. The platform drives multiple use cases, such as insurance binders, healthcare claims, financial spreading, airwaybills, research documents and contracts. |
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Technology Services
Our technology strategy for clients has been to leverage established and emerging technologies to re-define existing business models, embed process intelligence and automation into business operations, and drive organizational agility.
At the core of our technology strategy is “WNS TRAC ®,” which is a consolidated suite of comprehensive digital BPM solutions. It combines the strengths of deep domain and technology expertise, a global partner ecosystem and end-to-end service provisioning (from consulting / advisory to implementation, support and managed services).
WNS TRAC ® solutions are pre-configured with best practices and industrialized accelerators designed to drive development and adoption of cloud-native applications, intelligent automation, AI/ML and advanced analytics – with a host of deployment options and commercial models to choose from. Available as all-inclusive BPaaS or plug-and-play solutions that are designed to seamlessly integrate with clients’ existing technology environment, our digital solutions seek to drive transformation for today’s anytime-anywhere consumers.
As at March 31, 2023, we had 1,432 employees in this horizontal unit. In fiscal 2023 and 2022, this horizontal unit accounted for 3.7% and 2.1% of our revenue, and 3.9% and 2.2% of our revenue less repair payments (non-GAAP), respectively.
Sub-verticals / Industry Sectors. The key industry sectors we serve include:
| • | Travel and leisure; |
| • | Insurance; |
| • | Shipping and logistics; |
| • | Utilities; |
| • | Retail and CPG; |
| • | Healthcare; |
| • | Banking and financial services; and |
| • | Hi-tech and professional services. |
Industry-specific Technology Tools / Platforms. We utilize the following industry-specific technology tools and platforms in delivering services to our clients in this horizontal unit:
| • | Travel TRAC |
| • | Verifare Plus 3.0SM: An automated, analytics-enabled and web-based fare audit solution on cloud, designed to enable airlines to maximize revenue recovery and minimize revenue leakage; |
| • | QbaySM: An automated, cloud-hosted workflow management platform designed to manage back-office operations across centers and geographies, minimize costs and enhance customer service; |
| • | SmartPro® Interline Audit Tool: An automated, analytics-led and web-enabled proration engine designed to help airlines make better revenue management decisions, arrest revenue leakage, prorate accurately, comply with industry regulations and reduce total cost of operations; |
| • | BIDT Audit: An automated, cloud-hosted revenue integrity platform for the audit and recovery of any revenue losses resulting from non-compliance in travel agency bookings; |
| • | WNS ACOSS: A suite of agile solutions designed to enhance efficiencies across revenue and cost-critical cargo processes; and |
| • | Commercial Planning Suite: A cloud-based and unified decision support / analytics platform designed to drive actionable insights from disparate sources for functions such as revenue management, sales, pricing, network planning, code share and alliances. |
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| • | Insurance TRAC |
| • | WNS InVog (Insurance-in-a-Box Solution): A target operating model designed to provide insurers with the combined advantage of technology platforms and BPaaS; |
| • | Claimonix: An auto claims management solution with claims reporting and repair management capabilities suited for small and mid-tier carriers; |
| • | Underwriting Workbench: An end-to-end process management solution to help underwriters access relevant data quickly and for efficient decision-making; |
| • | Mobile-enabled First Notice of Loss: A smartphone self-serve application designed for claims lodgement; and |
| • | eAdjudicator: An RPA- and analytics-led solution designed to automate the end-to-end adjudication process for various types of claims. |
| • | Banking and Financial Services TRAC |
| • | Client Onboarding: This complete solution for onboarding clients in both retail and corporate banks includes KYC checks and identity verification; and |
| • | Card Dispute Management: This automates and streamlines the entire dispute cycle starting from dispute request through chargeback workflow to processing incoming chargeback requests. |
| • | Shipping and Logistics TRAC |
| • | WNS Malkom: A freight automation platform, underpinned by ML, designed to automate the end-to-end bill of lading and customs invoicing process; and |
| • | WNS CollecTRAC: A re-usable collections bot that may be used as a plug-and-play solution or one that is ready-to-integrate with customer-specific portals and enterprise applications, designed to improve aging AR and turnaround time (“TAT”) for dispute resolution and response to customer queries. |
| • | CPG and Retail TRAC |
| • | Warranty BPaaS: A platform-led offering designed to automate claims processing, improve customer satisfaction and reduce the cost of warranty operations. |
| • | Healthcare TRAC |
| • | WNS TRACbox: A multi-channel healthcare claims processing and workflow platform for advanced document handling and operational efficiency. |
Cross-industry Technology Tools / Platforms. We utilize the following cross-industry technology tools and platforms in delivering services to our clients in this horizontal unit:
| • | CFO TRAC |
| • | Procure-to-Pay: A technology solution designed to facilitate multi-channel introduction of invoices, data extraction and processing, followed by seamless transfer to native enterprise resource planning systems for further action; |
| • | Order-to-Cash: A software-as-a-service solution designed to standardize the order-to-cash process in line with industry-leading practices; and |
| • | Record-to-Report: A solutions suite designed to automate complex and high-volume transactional reconciliations for banks and large organizations and streamline period closure activity tracking. |
| • | CPO TRAC: A procurement management solution that leverages digital advancements along with predictive and functional analytics designed to transform procurement functions |
| • | ProjectTRAC: A product for end-to-end procurement portfolio management with capabilities around project intake, project tracking, savings, value management and resource utilization; |
| • | InsightTRAC: Holistic procurement and category analytics providing predictive and actionable insights; |
| • | PIA: This AI-based digital assistant, integrated with real-time data tools and automation for a simplified stakeholder experience across the procurement ecosystem, assists with guided buying and queries around procurement policy, purchase order, purchase requisition, invoice and project status; |
| • | KnowledgeTRAC: A one-stop procurement knowledge platform for category managers, for playbooks, category intelligence, collaboration and best practices; |
| • | IntelliTRAC: An AI-enabled tool — powered by Wide Narrow, an AI/ML-based collaborative market intelligence platform — designed to transform unstructured market data into meaningful and actionable insights, providing proactive market intelligence for category managers; and |
| • | CategoryTRAC: A next-generation category strategy and execution platform that provides portfolio management, analytics and intelligence to enable strategic category management. |
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| • | WNS Xpert |
| • | A proprietary low-code / no-code process-agnostic workflow automation platform with best-of-breed technology and scalable, secure architecture. |
| • | Managed Services |
| • | TrackPoint Pro: A proprietary, web-based case management solution that is designed to transform operations, track end-to-end task lifecycle and drive higher stakeholder satisfaction; |
| • | Zoho Desk: A cloud-hosted solution designed to streamline work practices and increase collaboration through easy and effective query resolution; and |
| • | Zoho Manage Engine ServiceDesk Plus: A cloud-hosted IT service management solution designed for quicker ticket resolution and better availability of IT services to establish a more organized way of working. |
| • | Analytics |
| • | Unified Analytics Platform: A modular, cloud-based, integrated analytics platform designed to refine and accelerate the data-to-insights journey across industries. It seeks to provide end-to-end integration from data to actionable insights and can be embedded into existing infrastructure as a ‘plug-and-play’ system, or deployed in an ‘as-a-service’ model; |
| • | WNS Skense: A proprietary cognitive data capture and contextualization platform, powered by AI and ML techniques, which extracts data from multiple unstructured and structured sources without the need for an input template / rule-based set-up. It presents the contextualized information in a structured, usable format; |
| • | Precizon: A SaaS-based pharma competitive intelligence solution powered by WNS’ deep therapeutic expertise and an AI/ML enabled platform; |
| • | Forecasto: A customized online platform that supports forecasting across the product lifecycle – pre-launch, launch and in-line – and underpins key processes, such as strategic planning, long-range forecasting and budgeting, designed to reduce TAT during stakeholder alignment and consensus building. |
| • | SocioSEER™: A social media analytics platform; |
| • | WNS Sentinel: An AI-led tracking tool for early identification of trends for new product development; and |
| • | AI Workbench: An enterprise-grade AI and analytics solution for end-to-end data and AI lifecycle management, with integrated model management, data connectors for multiple data sources, access controls and advanced business reporting and visualization. |
| • | Customer Experience |
| • | WNS EXPIRIUS: A digital customer experience model designed to integrate human-assisted design and domain expertise with AI-driven insights and consulting-led strategies, offering multiple solutions as mentioned below: |
| • | Conversational AI solutions based on a platform-driven delivery model, designed to lead to better customer experience at reduced operational cost; and |
| • | CCaaS (Contact center as a service) solutions offering voice, email, SMS, chat, video, web and social media services in parallel. |
| • | RPA and Intelligent Automation TRAC™: A proprietary suite of automation solutions developed on third-party collaborators’ platforms for RPA, cognitive technologies, ML and AI systems. It is designed to deliver automation and transformation services to our clients. |
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Sales and Marketing
The sales cycle for BPM services is time-consuming and complex in nature. The extended sales cycle generally includes initiating client contact, submitting requests for information and requests for proposals for client business, hosting client visits to our delivery centers (in person or virtually), and performing analysis (including diagnostic studies, proofs-of-concept, and pilot implementations) to demonstrate our delivery capabilities, finally culminating into a contract with the client. Due to the complex nature of the sales cycle, we have aligned our sales teams to our vertical business units and horizontal capabilities (such as WNS Triange) and staffed them with “hunting” or new relationship sales professionals (which we refer to as “hunters”), as well as “farming” or existing client relationship professionals (which we refer to as “farmers”). Our hunters and farmers have specialized industry knowledge and experience, which enable them to better understand prospective and existing clients’ business needs and to offer appropriate domain-specific solutions.
Our sales and sales support professionals are based in Australia, the UAE, Eastern Europe, India, Singapore, South Africa, the UK and the US. Our sales teams work closely with our global sales support team, which provides critical analytical support throughout the sales cycle. Other key capabilities offered by our sales support team include hyperautomation, transformation, consulting, generating leads for potential business opportunities and research support.
Our sales teams comprise highly experienced professionals, with an average tenure at WNS exceeding three years. They bring a wealth of industry expertise and leverage their knowledge to orchestrate transformative deals with new and existing clients. As at March 31, 2023, our front-line sales teams consisted of 143 members including hunters and farmers.
Our hunting team’s focus post-pandemic is to continue strengthening WNS’ position in our key sectors and service lines and open up new sub-sectors and geographies to become a market leader. We continue to focus on large transformative opportunities that drive desired business outcomes for our clients. Our teams of farmers are responsible for identifying and initiating discussions with and selling services in new areas to existing clients, while our hunters are responsible for identifying opportunities with new clients who seek to outpace and outperform their peers by transforming their operational and digital service models.
Both farmers and hunters work with clients to co-create digital-led solutions that help our clients embrace change and deliver value to their end customers. By leveraging their detailed understanding of the clients’ business objectives gained through close interactions, our sales teams actively identify and target processes that can be better digitized and delivered by WNS’ expert talent with a view to improving self-service, cost efficiency, service accuracy, effectiveness, financial control and systematized performance consistency. Through this forward-looking design philosophy, we have developed a strong track record of increasing our sales year-on-year as well as expanding our relationships with existing clients.
A key aspect of our sales growth has been the ability of our sales leaders, in collaboration with their expert solutions and operations team, to both foresee and adapt to market changes that impact clients’ respective industries, operating and revenue models. The pervasiveness of AI and ML and the integration of data into the human-centric and automated decision making process have changed WNS’ approach to BPM. Our team’s focus has evolved into developing service models that utilize digital offerings and services by means of our proprietary and our industry alliance partners’ solutions. This helps us to address and often go beyond clients’ needs. We are an evolved digital solutions provider in key business verticals such as insurance, banking, manufacturing, healthcare, travel and retail. Our acquisitions of domain-agnostic operating companies such as Vuram, The Smart Cube and OptiBuy, combined with industry vertical expertise, deliver domain-specific hyperautomation solutions to our prospects and clients.
We take a long-term, holistic approach toward building client relationships – from initial contact to business as usual, underpinned by a multi-layered governance methodology to ensure collaboration, co-creation and service evolution. We believe it is the commitment of our sales, service and leadership teams that is the core reason behind clients collaborating with and continuing with WNS through opportune and turbulent times.
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Clients
As at March 31, 2023, we had a diverse client base of 627 clients (with each client contributing more than $0.01 million in revenue in fiscal 2023) across a variety of industries and service types, including companies that we believe are among the leading players in their respective industries.
We believe the diversity in our client profile differentiates us from our competitors. See “Part I – Item 5. Operating and Financial Review and Prospects – Revenue” for additional information on our client base.
The table below sets forth the number of our clients by revenue for the periods indicated. We believe that the large number of clients who generate more than $1 million of annual revenue indicates our ability to extend the depth of our relationships with existing clients over time.
| Year ended March 31, | ||||||||
| 2023 | 2022 | |||||||
| Below $1.0 million |
457 | 258 | ||||||
| $1.0 million to $5.0 million |
120 | 108 | ||||||
| $5.0 million to $10.0 million |
23 | 25 | ||||||
| More than $10.0 million |
27 | 23 | ||||||
Competition
Competition in the BPM services industry is intense and growing steadily. See “Part I – Item 3. Key Information – D. Risk Factors – Risks Related to Our Business – We face competition from onshore and offshore BPM companies and from information technology companies that also offer BPM services. Our clients may also choose to run their business processes themselves, either in their home countries or through captive units located offshore.”
We compete primarily with:
| • | Focused BPM service companies with presence in offshore locations (primarily India), such as EXL Service Holdings, Inc., Firstsource Solutions Limited and Genpact Limited |
| • | BPM divisions of numerous information technology service companies operating out of India, such as Cognizant Technology Solutions, Infosys Technologies Limited, Tata Consultancy Services Limited and Wipro Technologies Limited |
| • | Global companies such as Accenture Limited, Capgemini, Electronic Data Systems Corporation, a division of Hewlett-Packard, and International Business Machines Corporation, which provide an array of products and services, including broad-based information technology, software, consulting and business process outsourcing services |
| • | Global financial services and consulting firms such as Deloitte Private Limited, industry-focused niche technology players such as InterGlobe Enterprises Limited and Accelya Holding World SL, and specialty analytics service providers such as Mu Sigma Inc. |
In addition, departments of certain companies may choose to perform their business processes in-house, and in some cases via an owned and operated facility in an offshore location such as India. Their employees provide these services as part of their regular business operations.
Intellectual Property
We use a combination of our own proprietary software platforms and systems, together with our clients’ software systems and third party software platforms and systems, to deliver our BPM and Technology services. Our proprietary solutions, combined with licensed software (including on-premise or cloud hosted services like software-as-a-service/ platform-as-a-service), allow us to position and market our Services as integrated solutions under our WNS TRAC® suite. In most of the cases, these technology solutions are combined with our core BPM service offerings. Our principal proprietary software solutions include:
| (1) | WNS TRAC® industry-specific solutions, including the following: |
| a) | Insurance TRACTM solutions including digital claims platform, WNS InVog (Insurance-in-a-box), and other proprietary solutions in our Insurance business unit; |
| b) | Travel TRACTM solutions, including revenue accounting platform, fare audit platform (“Verifare Plus 3.0SM”), fare pro-ration solution (SmartPro), revenue integrity solution (“BIDT”), queue distribution and productivity management solution (QbaySM), ACOSS as suite of agile solutions designed to enhance efficiencies across revenue and cost-critical cargo processes, and other solutions which we use in our Travel business unit |
| c) | S&L TRACTM solutions including WNS Malkom, a cloud native digital platform that covers end-to-end freight automation for logistics carriers and shipping companies, and helps drive optimization using AI/ML algorithms |
| d) | Healthcare TRAC™ solutions including multi-channel workflow platform for advanced document handling and improvement in process and operational efficiency (WNS TRACKBox) and |
| e) | Industry-specific point-solutions used in other business units. |
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| (2) | WNS auto claims software platform (Claimonix) for insurers and fleet services, which we use in our WNS Assistance business, as well as other insurance clients; |
| (3) | WNS TRAC ® cross-industry solutions, including the following: |
| a) | CFO TRACTM solutions for our finance and accounting services, combining our proprietary software as well as solutions developed on 3rd party software. The suite includes AP TRACTM, solution for end-to-end invoice processing workflow, |
| b) | Digital CIS TRACTM solutions including WNS EXPIRIUS for our CIS (Customer Interaction Services) practice, combining multiple solutions across the customer interaction lifecycle |
| c) | CPO TRACTM solutions for procurement including proprietary solutions like ProjectTRAC, InsightTRAC, WNS Procurement Card and PIA chatbot for procurement services |
| (4) | WNS RPA and Intelligent Automation TRACTM, including our proprietary automation solutions and solutions developed on third party partner platforms for RPA, cognitive technologies, ML and AI systems for delivering automation and transformation services to our clients. |
| (5) | WNS Vuram includes our hyperautomation proprietary solutions and accelerators on a low-code platform, such as TrustHall to automate commercial contract lifecycle, AppEzy to empower business users with dynamic application building and workflows and ESGHall to enable organizations to achieve their ESG goals through automation. |
| (6) | The Smart Cube includes proprietary assets across four core segments namely, Procurement & Supply Chain, Commercial, Sales & Marketing, Digital & Analytics and Strategy & Investment Research, and proprietary platform “Amplifi PRO”. |
| (7) | OptiBuy provides procurement transformation and consulting through its proprietary assets including its “OptiPRO” methodology to help implement end-to-end procurement transformation with process mapping and mining analysis. |
There are other proprietary software, point solutions and platform solutions developed on third party software used for cross-industry
services including our WNS Triange business unit.
We customarily enter into licensing and non-disclosure agreements with our clients with respect to the use of their software platforms and systems. We maintain intellectual property rights in our proprietary software platforms and systems, and license the use of third party software platforms and systems from their respective owners. Under our contracts with third-party software platform providers, any solutions developed by us based on such third party software platforms, using our domain knowledge, are our intellectual property (unless qualified otherwise). Our client contracts usually provide that all customized intellectual property created specifically for the use of our clients will be assigned to them, unless it is clearly identified as our intellectual property.
Our employees are also required to sign confidentiality agreements as a condition to their employment. These agreements include confidentiality undertakings regarding our company’s and the client’s intellectual property that bind our employees even after they cease to work with us. These agreements also ensure that all intellectual property created or developed by our employees in the course of their employment is assigned to us.
We have registered the trademarks “WNS,” “WNS-Extending Your Enterprise” and “WNS TRAC” in most of the countries where we have a presence.
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Technology
We have a dedicated team of technology experts who support clients at every stage of their engagement with us. The team designs, implements and supports technology solutions to enable delivery of business processes for our clients.
Wide-area-network — We have designed and built a highly redundant and resilient global multi-protocol label switching (“MPLS”) network, connecting all of our delivery centers and client datacenters. We run data, voice and video services on this global MPLS network to serve our clients.
Customer experience services technology infrastructure — We have deployed omni-channel contact center platforms with voice, web chat, e-mail, social media, and interactive voice response channels across all our delivery centers, designed to improve customer experience. These customized platforms orchestrate omni-channel customer journeys across digital channels including self-service and payment card industry data security standard compliance.
Data centers — We have built highly secure, redundant data centers for hosting our omni-channel contact center platforms, automation tools, corporate infrastructure and application services.
Cloud computing — We have adopted cloud computing services such as office productivity tools, virtual servers, virtual storage, and web and e-mail security, for some of our clients and our corporate use.
Work from Anywhere: We have designed a highly secure and resilient work-from-anywhere solution leveraging multi-cloud technology. We have plugged in the Zero-Trust platform designed to protect internal and external applications against compromised remote devices and data theft. Further, strengthening of the platform’s security layer is done by implementing a multi-factor authentication.
Technology service management methodology — Our technology service delivery management is based on an information technology infrastructure library framework. We assist over 600 clients with technology implementation, service delivery and support for end user computing, wide area network, local area network telecommunications, customer interaction management platform, IT security, datacenter systems and cloud computing technology platforms.
Process and Quality Assurance and Risk Management
Our process and quality assurance compliance programs are critical for the success of our operations. We have an independent quality team to monitor, analyze, and provide feedback and report process performance and compliance. Our company-wide quality management system focuses on effectively managing our client processes on an ongoing basis. Our process delivery is managed by independent empowered teams and is measured regularly against pre-defined operational metrics. We have over 1,500 employees that help us meet quality assurance and ISO 9001 standards for Quality Management Systems and ensure continued compliance. We apply Lean Six Sigma methodologies, which are statistical and process-focused methodologies to improve and deliver consistent quality to customers. We apply well-defined quality management principles to improve and provide consistent levels of service quality to our clients. In fiscal 2023, more than 1,300 different projects / ideas completed using Lean Six Sigma / Kaizen methodologies and over 300 ideas/ additional projects are in progress. We also trained over 36,000 employees in ISO 9001 and Lean Six Sigma principles in fiscal 2023.
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Our Board of Directors is primarily responsible for overseeing our risk management processes. The Board of Directors receives and reviews reports from the Chief Risk Officer as considered appropriate regarding our company’s assessment of risks. The Board of Directors focuses on the most significant risks facing our company and our company’s general risk management strategy, and also ensures that risks taken by our company are consistent with the Board’s appetite for risk.
Our risk management framework also focuses on three important elements: business continuity planning, information security and operations risk management.
Our approach to business continuity planning involves implementation of an organization-wide business continuity management framework which includes continual self-assessment, strategy formulation, execution and review. Our business continuity strategy leverages our expanding network of delivery centers for operational and technological risk mitigation in the event of a disaster. To manage our business continuity planning program, we employ a dedicated team of experienced professionals. A customized business continuity strategy is developed for key clients, depending on their specific requirements. For mission-critical processes, operations are typically split across multiple delivery centers in accordance with client-approved customized business continuity plans.
We have further enhanced our business continuity strategy, in view of the COVID-19 pandemic, through the implementation of a secure hybrid “Work-from-Home and Work-from-Office” model.
“Our approach to information security involves implementation of an organization-wide information security management system, which complies with the ISO 27001:2013 to manage organizational information security risks. These measures seek to ensure that sensitive information pertaining to our company or our clients remains secure. Currently, information security systems at 52 delivery centers are ISO 27001:2013 certified, and we expect to seek similar certifications for our newer delivery centers. We also comply with the Payment Card Industry Data Security Standard (“PCI DSS”) which is a security standard aimed at helping companies proactively protect cardholder data and sensitive authentication data. In addition, on an annual basis, we undergo “Service Organization Controls (“SOC”) 1 Type 2” audits, pursuant to Statements on Standards for Attestation Engagement No. 18 and International Standards for Assurance Engagements No. 3402, with respect to our general control environment supporting operational delivery, and “SOC 2 Type 2” audits, with respect to the trust service categories of security, availability and confidentiality.
Our approach to operations risk management involves the implementation of a “three lines of defense” framework for our clients’ offshored business processes. Under this framework, the quality assurance teams embedded within the business units act as the first line of defense, an independent and centralized risk management team acts as the second line of defense and an independent centralized audit team acts as the third line of defense. Our lines of defense are designed to identify potential risks, evaluate design efficiency and operating effectiveness of controls embedded within the outsourced business processes that we manage for our clients, and propose additional controls as appropriate for mitigation of the identified risks.
In addition, our clients may be governed by regulations specific to their industries or in the jurisdictions where they operate or where their customers are domiciled which may require them to comply with certain process-specific requirements. As we serve a large number of clients globally and across various industries, we rely on our clients to identify the process-specific compliance requirements and the measures that must be implemented in order to comply with their regulatory obligations. We assist our clients to maintain and enforce compliance in their business processes by implementing control and monitoring procedures and providing training to our employees serving specific client programs. These control and monitoring procedures are separate from and in addition to our periodic internal audits.
Human Capital
As at March 31, 2023, we had 59,755 employees, of whom 38,869 were based in India, 11,764 were based in the Philippines, 4,440 were based in South Africa, 1,326 were based in the US, 1,009 were based in Sri Lanka, 647 were based in Romania, 548 were based in the UK, 497 were based in China, 201 were based in Poland, 164 were based in Costa Rica, 111 were based in Australia, 76 were based in Spain, 40 were based in Turkey, 17 were based in Canada, 11 were based in Malaysia, 10 were based in Germany, 9 were based in Mexico, 8 were based in France, 4 were based in the United Arab Emirates, 3 were based in Singapore, and 1 was based in Switzerland. Most of our associates hold university degrees. As at March 31, 2022, we had 52,081 employees. Our employees are not unionized. We believe that our employee relations are good. We focus heavily on recruiting, training and retaining our employees.
Recruiting and Retention
We believe that talent acquisition is an integral part of our overall organizational strategy. We have developed effective human resource strategies and demonstrated a strong track record in recruitment specific to the needs of our business units to optimize the training and development of our employees. As we continue to grow, we look to improve and enhance our candidate pool, which we source from recruitment agencies, job portals, advertisements, college campuses and walk-in applications. In addition, a significant number of our applicants are referred to us by existing employees. We recruited an average of 3,127 employees per month in fiscal 2023.
During fiscal 2023, 2022 and 2021, the attrition rate for our employees who had completed six months of employment with us was 39%, 36% and 22% respectively.
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Learning and Development
In the past three years, we have been growing at an accelerated pace with a diversified client base. Our talent strategy complements our business strategy to access, mobilize and optimize talents for the organization’s aspiration to impact clients and stakeholders. In the age of “new normal” and rapid digital transformation, we are poised to build a digital-capable and resilient workforce that is ready for the future.
We have created a learning strategy based on a combination of organizational, business-unit and horizontal strategies, employee input and leadership conversations. Our talent development team carries out an intensive analysis of our training needs at the organization, business unit and location levels each year. Final training plans are approved by the leaders of our business units in alignment with their respective strategies.
Our talent strategy consists of four main components: (i) future ready workforce, (ii) robust leadership bench, (iii) inclusive culture, and (iv) talent fungibility.
Future-ready Workforce. Digital technology is fast-evolving and is becoming increasingly more pervasive in our lives. We recognize the importance of a workforce that is ready for a digital future. We aim to prepare our workforce to become digital natives. Below are some of the programs that we have implemented to create a future-ready workforce.
| • | Digital Future: DiFU is a program through which we develop capabilities across the organization in order to be digitally ready for the future. We collaborated with Deloitte Consulting and MIT Sloan to establish a digital competency framework that has been tailored for employees at all levels. Select employees at the leadership level go through a “digital mindset” development program, which is a series of seven workshops curated in partnership with Deloitte Consulting and the WNS leadership team. |
| • | WNS Education Program: This is a structured, curriculum-based, industry-relevant certification program for developing technologically savvy domain specialists with the right temperament to thrive in a digital world. The program was conceived to address vocational and skillset deficiencies expected in the foreseeable future. The WNS Education Program aims at: |
| • | Building capabilities to lead digital transformation in the BPM space by enabling the workforce to create ready-to-deploy capstone projects; |
| • | Raising the organization’s digital consciousness by driving awareness on and familiarizing the workforce with emerging technology; |
| • | Repurposing and re-skilling our workforce (since BPM-specific education is not available in the WNS ecosystem) to created conduits between business and emerging technology; and |
| • | Preparing a workforce of digital natives who are tech-aware and capable of working on technological projects. |
The WNS Education Program currently caters to 15 geographies, offering seven conduit / catalyst-level certifications in AI / ML, data analytics, Power BI (a data sharing and visualization platform provided by Microsoft) and RPA and four awareness-level certifications in emerging technologies (such as digital, RPA, big data and AI). The program was established 4 years ago. We now have more than 415 upskilled employees, 300 capstone ideas and 11,200 digital badges awarded.
| • | FutureSkills: FutureSkills is a new age learning experience platform established by NASSCOM. The FutureSkills platform aims to help IT professionals develop capabilities in digital technologies. The platform enables continuous learning and deep skills development in nine emerging technologies – RPA, big data, AI, cybersecurity, IoT, virtual reality, 3D printing, social and mobile and cloud computing. In addition to technical skills, FutureSkills users have the opportunity to develop professional skills such as digitalization, problem solving, design thinking, communication and story-telling, project management, negotiation and influencing, collaboration, product management, program management and continuous learning. WNS has made the platform accessible via license for each and every employee across the globe. |
| • | GLINT: GLINT is an AI-led digital learning and knowledge platform designed to enable us to democratize learning, keep pace with digitization, create future-ready workforce and foster a culture of excellence. GLINT offers an immersive learning experience through modules that are tailored to our specific business needs. The platform also facilitates an environment of knowledge sharing and peer to peer learning to foster collaboration. This provides an excellent solution for us as an organization as we evolve to keep pace with digitization, creating a future-ready workforce and driving collaborative innovation. As digitization touches all aspects of our lives, virtual workplaces and learning environments are increasingly becoming the new normal. |
| • | Empowered LMS: Empowered LMS, the Learning Management System platform powered by Enthralltech, is an extension of the GLINT digital learning platform with advanced training management capabilities. It offers end-to-end blended learning solutions that are mapped to our specific business needs. The platform is designed to manage structured learning programs by planning, organizing and delivering live, virtual and blended training programs in a modern and agile manner. With a simplified user experience, the platform helps manage the assessments and certification of users. It also supports an advanced reporting dashboard with in-depth training analytics and customized reports. |
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Robust Leadership Bench. We have also established a number of programs that focus on nurturing and developing future leaders of the organization.
| • | Signature Leadership Development Program (“SLDP”): As companies digitize products and processes, and new ecosystems take shape, some industries face a greater risk of disruption than others. We expect that the leadership will seek to explore new paradigms, thoughts and perspectives as their organizations undergo digital transformation. With this in mind, we have curated SLDP as an executive leadership development program in partnership with Korn Ferry and Harvard Business Publishing. |
SLDP is a 12-month program, designed as a combination of face-to-face in-person and virtual sessions, providing one-on-one as well as group coaching, along with corporate immersions. The last leg of this program was completed in September 2022 with an academic immersion at Harvard University, Boston.
| • | The CEO Millennial Council: Approximately 80% of our workforce are millennials and “Generation Z”. The CEO Millennial Council is an initiative where young minds at WNS get the opportunity to work closely with senior leaders in our Company. Council members are tasked with helping the WNS brand stay in alignment with changing trends. They also develop action plans for the organization in their chosen fields, including employee engagement, corporate social responsibility, technology and enhancement of our brand presence. |
| • | WNS’ Leadership Academy: This initiative for leadership development aims at offering customized, role-specific, competency-aligned leadership development solutions for our leaders in the role band of C2 and above. The objective is to build leadership capabilities to enable the organization to reach its business goals. Programs are mapped to a competency set titled “Leadership Winning DNA” and includes competencies related to the client, business acumen, digital mindset, people leadership and personal mastery. WNS’ Leadership Academy offers learning programs developed with academic institutions and business consulting / training firms such as Duarte Training, Deloitte, Strategic Proposals, Ariel Group and Wilson Learning. |
| • | The Trusted Client Advisor (“TCA”): This program develops strategic client management capabilities of our client partnering teams across the globe to make them trusted advisors. This curated learning journey spreads over a total of 31 hours and comprises four modules, which are co-created with four leading learning providers. This capability-building program was not required for the current financial year, but will be launched again for a new cohort in the coming financial year. |
| • | The WNS Sales Academy: The WNS Sales Academy has been launched for our global sales team to foster a culture of continuous professional development. This curated program is a blend of self-paced learning, masterclasses from eminent speakers and roundtable conversations. The program content has been curated in partnership with LinkedIn Learning and is mapped to the essential aspects of WNS’ sales cycle, which include demand generation and pipeline, consulting and advisory, stakeholder management and relationships, negotiation and closing deals, and essential sales acumen. |
| • | “Q-rious” Awards: WNS’ learning-excellence awards cover 12 categories and are designed to fuel curiosity, encourage knowledge acquisition and celebrate learning excellence; winners are announced every quarter and celebrated in an annual award ceremony. |
| • | i-Excel: This leadership-learning intervention is designed for specific cohorts from business units, horizontals and support functions, based on key identified areas / themes. The programs are delivered by Harvard Business Publishing and Cornell University. A series of programs are conducted virtually over a period of a few months, using a blend of virtual classroom sessions, group assignments, simulations and self-paced learning modules. |
| • | In collaboration with Harvard Business Publishing: A total of four sessions on the theme “Leading in Turbulent Times” are spread over six months and facilitated by HBP moderators. This program focuses on three core areas, namely personal leadership, leading through crisis and being client-first in the new world. |
| • | In collaboration with Cornell University: A total of nine sessions (three sessions per theme) are facilitated by professors from Cornell University on three key themes of enterprise leadership, inspirational leadership and being future forward (i.e., developing an understanding of key trends impacting the organization’s future). |
| • | Gravitas: Developed in collaboration with leading learning organizations, this is a curated 23-hour journey with two components — a programmatic journey focusing on self-introspection, impactful communication, professional presence and personal well-being; and a self-introspection journey, which gives 360-degree feedback in a virtual live and survey format. |
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| • | Building Coaching Capabilities |
| • | WNS Certified Coach: This program for mid-level managers has been conceptualized to enable a coaching mindset and build coaching capabilities across the enterprise. |
| • | Leader as Mentor and Coach: This program has been created to help leaders acquire coaching and mentoring tools and techniques to augment their leadership style. |
These leadership programs are available on multiple platforms in different formats, including self-paced courses, virtual instructor-led sessions, simulation-based training and other blended learning methods.
Inclusive Culture. We are committed to creating an inclusive culture within the organization. To this end, some of the programs we have implemented include:
| • | Centurion Program: A talent management program for grooming women leaders within the organization, this program has so far given us about 45 women leaders for roles in middle management across business teams. The program has been launched to meet the following initiatives: |
| • | Build a talent pipeline of potential women leaders through structured development; |
| • | Provide an aspirational and structured career progression framework for high-potential female employees; and |
| • | Further our diversity and inclusion agenda. |
| • | Bloomberg Gender Equality Index: WNS has been included in the Bloomberg Gender Equality Index for three consecutive years from 2021 to 2023. |
Talent Fungibility. The BPM industry has been revolutionized by AI, robotics and other digital disruptions. As such, there is an increasing need for a pool of fungible talents to meet changing business requirements. We have implemented a number of initiatives designed to keep our employees’ skills relevant in the competitive market and in different roles.
Examples include:
| • | The “Aspire” Program: The Aspire program enables the creation of talent pools for roles that are expected to develop in the near future. Employees are taken through a specially designed journey which includes tie-ups with reputed academic institutes, leader-speak sessions, live projects, etc. |
| • | HR Leadership Program: This 18-month journey, created in collaboration with Deloitte Consulting, has been curated for human resources managers to move into leadership roles for different human resources functions. |
| • | COMPASS: This is a dedicated, self-paced learning platform for managers transitioning into new roles. |
| • | Emerging Leaders Program: This is a program that specifically caters to emerging leaders in tier II locations in India within our Company. A few key focus areas are managing new expectations and changes; client collaboration and handling conversations; managing team performance and retention; building linguistic capability; and building a pool of self-sufficient front-line managers. |
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Employee Health and Safety
WNS Occupational Health & Safety—Management System
WNS has a well-defined Occupational Health and Safety Management System and its major service delivery locations such as WNS India, Philippines, South Africa, Romania, and Sri Lanka have implemented and have been certified for the latest international standard ISO 45001:2018, which cover WNS’ major headcount and area footprint. The organization has a systematic approach of integrating Environment Health and Safety (“EHS”) into its business practices. Other locations of WNS will be included under the certification program in phases pursuant to the business/client requirement.
WNS has a well-defined EHS policy which is signed by the Group CEO. This policy reflects the intent, direction and commitment of the top management towards environment protection, health and safety of employees and contractor employees working at WNS. The four key elements of the EHS policy are:
| • | Environment & sustainability |
| • | Encourage compliance |
| • | Employees & stakeholders (clients, suppliers, contractors & government) |
| • | EHS integration & business excellence |
The purpose of EHS system is to identify and control hazards on an on-going basis to protect the environment and the health and safety of employees and stakeholders. Our EHS management system partners with all concerned internal and external stakeholders to provide a safe and health work place. Technically, the complete EHS Program follows the Plan Do Check Act (“PDCA”) approach which provides the opportunity to identify the scope of improvement and move towards continual development.
EHS awareness is part of a new employee induction program. WNS has a dedicated team for risk management. The high-level risk assessments are performed and necessary control measures are placed accordingly to minimize risks. The risk management team also performs periodical risk audits at each location and follows up for the relevant closures. In addition to the high-level risk assessment performed by the risk management team, the hazard identification and risk assessment at functional/task level are also performed by the EHS team. The control measures are being set accordingly. Appropriate information and training are provided to concerned teams for better execution of the allotted role/task and continual improvement. EHS is a part of new employee induction program. Online trainings modules on health and safety topics with assessment are available for employees. Post completion of the assessment, the digital certificates are provided for the successful participants.
In addition, WNS has a dedicated corporate legal team that ensures complete adherence to applicable regulatory requirements. The organization has an automated online Ernst & Young Global Compliance Manager Tool (“GCT”) to help ensure a high level of compliance.
| • | GCT contains a comprehensive repository of applicable statutory compliances for each entity/branch/function. |
| • | IT provides timely alerts and enables the users to report compliance activities seamlessly. |
| • | GCT dashboard provides a real-time status of the organization’s compliance health to the management. |
The on ground implementation of the local regulations and international standards as per ISO 45001 is co-ordinated by the facilities and admin-EHS function.
The EHS program of WNS not only protects the employees but also cares for the contract workers, through various trainings, awareness session and health screening camps. The program has a matured pathway for the management of sustainable development, while taking care of the health and safety of its employees and service providers. For this purpose, several new procedures and practices were also laid down. Sites are equipped with emergency mitigating systems and procedures. Sufficient exit routes, fire alarm and fighting equipments have been installed which are periodically inspected. Mock drills and other necessary trainings are also performed. Required periodical Internal, Client and Certification audits are also conducted to check maintenance of the program.
WNS has an Incident Management System which is an online intranet portal to report all types of incidents. The purpose of IMS is to ensure that all Occupational Illness, Injury & Learning Incident (Near Miss), Environmental Releases by spill or leakages are appropriately managed, promptly & appropriately reported. Any event that requires investigation (due to either its intensity of harm to people, environment or property or might have potential of causing such harm) are evaluated to find the root cause and necessary corrective and preventive action shall be taken wherever required in response to it for the enhancement of safety and environmentally sound at workplace.
The EHS policies and procedures include:
| 1) | EHS Policy |
| 2) | Corporate EHS Manual |
| 3) | EHS Standard Procedures and Guidelines which has below major procedures and guidelines |
| 4) | EHS Committee |
| 5) | Compliance and Communication for Contractors, Service Providers & Suppliers |
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| 6) | Change Management |
| 7) | Occupational Health Center Management |
| 8) | Walking Working Surfaces and Ladder Safety |
| 9) | Fire Prevention and Protection Systems |
| 10) | Occupational incident and Environmental Release |
| 11) | Sustainability Reporting |
EHS Forms/Checklist:
| • | Change Management Form |
| • | EHS Committee MOM Form |
| • | Permit to work Form |
| • | Fire Extinguisher Inspection Form |
| • | Walking working Surfaces Checklist |
| • | Health & Safety Management certification ISO45001:2018 |
| • | Occupational Safety and Health Award: Silver Award at the 4th OSH India Awards 2016 conducted by UBM. |
| • | Global safety Summit Award 2019 for two categories, Environment Awards (ITES) and Health & Safety Awards (ITES) 2019 |
Environmental, Social and Governance
As responsible stewards of the environment, we have implemented a robust sustainability strategy encompassing our operations, products and services. Our holistic approach focuses on conserving natural resources, reducing our carbon footprint and promoting a circular economy. WNS is now a signatory to the United Nations Global Compact and adheres to the principles of human rights, labour, environment and anti-corruption. We have published an ESG report in accordance with Global Reporting Initiative, Sustainability Accounting Standards Boards and United Nations Sustainable Development Goals.
Our five-pronged people-centric approach guides WNS’ Environment, Social and Governance agenda by:
| • | Enabling our people to outperform by nurturing diversity and inclusivity |
| • | Delivering value to our clients through end-to-end business transformation steered by our industry expertise, data-to-insights capabilities and digital innovation prowess |
| • | Caring for our communities through the WNS Cares Foundation’s targeted programs guided by the three pillars: Educate, Empower and Enrich |
| • | Building a safe ecosystem for all our stakeholders through ethics, integrity and compliance |
| • | Protecting our planet by managing our environmental performance while optimizing resource consumption |
For more information about our ESG initiatives, and accomplishments, please see our ESG Report available in the “About us” section of our website.
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Regulations
Due to the industry and geographic diversity of our operations and services, our operations are subject to a variety of rules and regulations, and several federal and state agencies in Australia, China, Costa Rica, Canada, France, Germany, India, Ireland, Mauritius, Malaysia, the Mexico, the Netherlands, New Zealand, the Philippines, Poland, Portugal, Romania, Singapore, South Africa, Spain, Sri Lanka, Switzerland, Turkey, United Arab Emirates, the UK and the US that regulate various aspects of our business. See “Part I — Item 3. Key Information — D. Risk Factors — Risks Related to our Business — Our global operations expose us to numerous and sometimes conflicting legal and regulatory requirements. Failure to adhere to the laws and regulations that govern our business or our clients’ businesses that we are required to comply with in performing our services could harm our business.” We have benefitted from, and continue to benefit from, certain tax holidays and exemptions in various jurisdictions in which we have operations.
In fiscal 2023, 2022 and 2021, our tax rate in India, the Philippines and Sri Lanka impacted our effective tax rate. We would have incurred approximately $20.7 million, $20.9 million and $11.1 million in additional income tax expense on our combined operations in our SEZ operations in India, the Philippines and Sri Lanka in fiscal 2023, 2022 and 2021 respectively, if the tax holidays and exemptions described below had not been available for the respective periods.
We expect our tax rate in India, the Philippines and Sri Lanka to continue to impact our effective tax rate. Our tax rate in India has been impacted by the reduction in the tax exemption enjoyed by our delivery center operating under the SEZ scheme. From fiscal 2016 until fiscal 2023, we started operations in various delivery centers in the Philippines that are eligible for tax exemption benefits expiring between fiscal 2020 and fiscal 2026. Following the expiry of the tax benefits, income generated by the Philippines subsidiary will be taxed at the prevailing special tax rate, which currently is 5.0% on gross profit. As per The Corporate Recovery and Tax Incentives for Enterprises Act (“CREATE”) which is effective from April 2021, enterprises will be taxed at 5% on gross profit for a fixed period of 10 years. Also, any changes in the regulations relating to work from home arrangements may impact the tax exemption benefits available to our Philippines subsidiary. Our effective tax rate in Sri Lanka had been impacted by the withdrawal of tax exemption on export income in Sri Lanka with effect from April 1, 2018 until December 31, 2019, following which the income from export of service had been subject to tax at 14% on net basis. From January 1, 2020, our operations in Sri Lanka are eligible to claim income tax exemption with respect to the profits earned from export revenue, as more fully described below.
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India
In the past, the majority of our Indian operations were eligible to claim income tax exemption with respect to profits earned from export revenue from operating units registered under the STPI. The benefit was available for a period of 10 years from the date of commencement of operations, but not beyond March 31, 2011. Effective April 1, 2011, upon the expiration of this tax exemption, income derived from our operations in India became subject to the prevailing annual tax rate of 34.95%.
In 2005, the Government of India implemented the SEZ legislation, with the effect that taxable income of new operations established in designated SEZs may be eligible for a 15-year tax holiday scheme consisting of a complete tax holiday for the initial five years and a partial tax holiday for the subsequent ten years, subject to the satisfaction of certain capital investment conditions in the last five years. From fiscal 2012 until fiscal 2023, the Company started operations in various delivery centers in Mumbai, Pune, Chennai, Gurgaon and Noida, India that were registered under the SEZ scheme. Some of these operations are eligible for a 100.0% income tax exemption for a period of five years from the date of commencement of operations, which are set to expire between fiscal 2022 and fiscal 2024. Following the expiry of the 100.0% income tax exemption, these operations are eligible for a 50.0% income tax exemption, which are set to expire between fiscal 2026 and fiscal 2034. Such income tax exemptions are only eligible for business units and operations set up under the SEZ legislation on or before March 31, 2020.
In addition to these tax holidays, our Indian subsidiaries are also entitled to certain benefits under relevant state legislation and regulations. These benefits include rebates and waivers in relation to payment for transfer of property and registration (including for purchase or lease of premises) and commercial usage of electricity.
The Government of India may enact new tax legislation that could impact the way we are taxed in the future. For example, the change in the law in fiscal 2017 has resulted in any new business units or operations set up under the SEZ legislation after March 31, 2020 not being eligible for the same income tax holidays that our existing SEZ operations currently enjoy. See “Part I — Item 3. Key Information — D. Risk Factors — Risks Related to Key Delivery Locations — Tax legislation and the results of actions by taxing authorities may have an adverse effect on our operations and our overall tax rate.”
Philippines
From fiscal 2016 until fiscal 2023, our Company started operations in various delivery centers in the Philippines which are eligible for tax exemption benefits expiring between 2020 and 2026. Following the expiry of the tax benefits, income generated by the Philippines subsidiary will be taxed at the prevailing special tax rate, which currently is 5.0% on gross profit. As per the Corporate Recovery and Tax Incentives for Enterprises Act (“CREATE”) which is effective from April, 2021, enterprises will be taxed at 5% on gross profit for a fixed period of 10 years.
Any changes in the regulations relating to work from home arrangements may impact the tax exemption benefits available to our Philippines subsidiary.
Sri Lanka
Our operations in Sri Lanka were eligible to claim income tax exemption with respect to the profits earned from export revenue until fiscal 2018 and have since been taxed at 14% on net basis with effect from April 1, 2018 until December 31, 2019. From January 1, 2020, our operations in Sri Lanka are eligible to claim income tax exemption with respect to the profits earned from export revenue.
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Enforcement of Civil Liabilities
We are incorporated in Jersey, Channel Islands. Most of our directors and executive officers reside outside of the US. Substantially all of the assets of these persons and substantially all of our assets are located outside the US. As a result, it may not be possible for investors to effect service of process on these persons or us within the US, or to enforce against these persons or us, either inside or outside the US, a judgment obtained in a US court predicated upon the civil liability provisions of the federal securities or other laws of the US or any state thereof. A judgment of a US court is not directly enforceable in Jersey, but constitutes a cause of action which will be enforced by Jersey courts provided that:
| • | the court which pronounced the judgment has jurisdiction to entertain the case according to the principles recognized by Jersey law with reference to the jurisdiction of the US courts; |
| • | the judgment is given on the merits and is final and conclusive — it cannot be altered by the courts which pronounced it; |
| • | there is payable pursuant to the judgment a sum of money, not being a sum payable in respect of tax or other charges of a like nature or in respect of a fine or other penalty; |
| • | the courts of the US have jurisdiction in the circumstances of the case; |
| • | the judgment can be enforced by execution in the jurisdiction in which the judgment is given; |
| • | the person against whom the judgment is given does not benefit from immunity under the principles of public international law; |
| • | there is no earlier judgment in another court between the same parties on the same issues as are dealt with in the judgment to be enforced; |
| • | the judgment was not obtained by fraud, duress and was not based on a clear mistake of fact; and |
| • | the recognition and enforcement of the judgment is not contrary to public policy in Jersey, including observance of the principles of natural justice which require that documents in the US proceeding were properly served on the defendant and that the defendant was given the right to be heard and represented by counsel in a free and fair trial before an impartial tribunal. |
It is the policy of Jersey courts to award compensation for the loss or damage actually sustained by the person to whom the compensation is awarded. Although the award of punitive damages is generally unknown to the Jersey legal system, there is no prohibition on them either by statute or by customary law. Whether a judgment is contrary to public policy depends on the facts of each case. Exorbitant, unconscionable, or excessive awards will generally be contrary to public policy. Moreover, if a US court gives a judgment for multiple damages against a qualifying defendant, the Protection of Trading Interests Act 1980, an Act of the UK extended to Jersey by the Protection of Trading Interests Act 1980 (Jersey) Order 1983 (“the Order”), provides that such judgment would not be enforceable in Jersey and the amount which may be payable by such defendant may be limited. The Order provides, among others, that such qualifying defendant may be able to recover such amount paid by it as represents the excess of such multiple damages over the sum assessed as compensation by the court that gave the judgment. A “qualifying defendant” for these purposes is a citizen of the UK and Colonies, a body corporate incorporated in the UK, Jersey or other territory for whose international relations the UK is responsible or a person carrying on business in Jersey.
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Jersey courts cannot enter into the merits of the foreign judgment and cannot act as a court of appeal or review over the foreign courts. It is doubtful whether an original action based on US federal securities laws can be brought before Jersey courts. A plaintiff who is not resident in Jersey may be required to provide security for costs in the event of proceedings being initiated in Jersey. There is uncertainty as to whether the courts of Jersey would:
| • | recognize or enforce judgments of US courts obtained against us or our directors or officers predicated upon the civil liability provisions of the securities laws of the US or any state in the US; or |
| • | entertain original actions brought in each respective jurisdiction against us or our directors or officers predicated upon the federal securities laws of the US or any state in the US. |
In India, recognition and enforcement of foreign judgments is provided for under Section 13 and Section 44A of the Code of Civil Procedure, 1908 (India) (the “Civil Code”), as amended. Section 44A of the Civil Code provides that where a foreign judgment has been rendered by a superior court in any country or territory outside India which the Indian government has by notification declared to be a reciprocating territory, such foreign judgment may be enforced in India by proceedings in execution as if the judgment had been rendered by a competent court in India. However, Section 44A of the Civil Code is applicable only to monetary decrees not being in the nature of amounts payable in respect of taxes or other charges of a similar nature or in respect of fines or other penalties and does not include arbitration awards. The US has not been declared by the Indian government to be a reciprocating territory for the purposes of Section 44A of the Civil Code. Accordingly, a judgment of a foreign court, which is not a court in a reciprocating territory, may be enforced in India only by a fresh suit instituted in a court of India and not by proceedings in execution. Furthermore, the execution of the foreign decree under Section 44A of the Civil Code is also subject to the exception under Section 13 of the Civil Code, as discussed below.
Section 13 of the Civil Code, states that a foreign judgment is conclusive as to any matter directly adjudicated upon except:
| • | where the judgment has not been pronounced by a court of competent jurisdiction; |
| • | where the judgment has not been given on the merits of the case; |
| • | where it appears on the face of the proceedings that the judgment is founded on an incorrect view of international law or a refusal to recognize the law of India in cases where such law is applicable; |
| • | where the proceedings in which the judgment was obtained were opposed to natural justice; |
| • | where the judgment has been obtained by fraud; or |
| • | where the judgment sustains a claim founded on a breach of any law in force in India. |
The suit must be brought in India within three years from the date of the judgment in the same manner as any other suit filed to enforce a civil liability in India. It is unlikely that a court in India would award damages on the same basis as a foreign court if an action is brought in India. Furthermore, it is unlikely that an Indian court would enforce foreign judgments if it viewed the amount of damages awarded as excessive or inconsistent with public policy in India. A party seeking to enforce a foreign judgment in India is required to obtain prior approval from the Reserve Bank of India under the Indian Foreign Exchange Management Act, 1999, to repatriate any amount recovered pursuant to such execution and such amount may be subject to tax in accordance with applicable laws. Any judgment in a foreign currency would be converted into Indian rupees on the date of judgment and not on the date of payment. We cannot predict whether a suit brought in a court in India will be disposed of in a timely manner.
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C. Organizational Structure
The following diagram illustrates our company’s organizational structure and the place of organization of each of our subsidiaries as at the date hereof. Unless otherwise indicated, each of our subsidiaries is wholly owned, directly or indirectly, by WNS (Holdings) Limited. Directly owned subsidiaries of WNS are represented by shaded boxes.
| 1. | # WNS Cares Foundation is a company registered under Section 8 of the Companies Act, 2013 (prev. Section 25 of Companies Act, 1956). |
| 2. | One redeemable participating preference share entitles The WNS B-BBEE Staff Share Trust to: |
(i) participate in 48.84% of the economic interest of WNS South Africa (Pty) Ltd;
(ii) exercise 48.84% of the voting rights on any shareholder’s resolution proposed by WNS South Africa (Pty) Ltd
| 3. | WNS Global Services Private Limited acquired Vuram with effect from July 1, 2022. |
| 4. | WNS Global Services Malaysia Sdn. Bhd.,was incorporated in Malaysia with effect from July 21, 2022. |
| 5. | WNS Information Services (India) Private Limited (formerly known as MOL Information Processing Services (India) Private Limited which was a subsidiary of WNS (Mauritius) Limited was amalgamated (Merger by Absorption) with WNS Global Services Private Limited effective from August 30, 2022. |
| 6. | WNS Global Services (UK) Limited acquired The Smart Cube & OptiBuy w.e.f. December 16, 2022. |
| 7. | WNS BPM Americas Holdings Inc. was incorporated in Delaware, US with effect from March 1, 2023. |
| 8. | WNS BPM Americas LLC. was incorporated in Delaware, US with effect from March 3, 2023. |
| 9. | Denali Sourcing Services, Inc. and WNS Global Service Inc. were each converted into a limited liability company with effect from April 1, 2023. |
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D. Property, Plants and Equipment
As at March 31, 2023, we have an installed capacity of 37,222 production workstations, or seats, that can operate on an uninterrupted 24/7 basis and can be staffed on a three-shift per day basis.
The majority of our properties are leased by us, as described in the table below, and most of our leases are renewable at our option, as described below. The following table describes each of our delivery centers and sales offices, including centers under construction, and sets forth our lease expiration dates.
| Location |
Total Space (square feet) |
Total number of work stations |
Lease Expiration Date | Extendable Until ( 1) | ||||||||||||
| India: |
||||||||||||||||
| Mumbai |
421,387 | 3,207 | ||||||||||||||
| Godrej Plant 10 |
February 15, 2026 | N/A | ||||||||||||||
| Godrej Plant 11 |
February 15, 2026 | N/A | ||||||||||||||
| Godrej Plant 5 |
February 15, 2026 | N/A | ||||||||||||||
| Raheja (SEZ), Airoli |
May 31, 2029 | N/A | ||||||||||||||
| Interface building, Malad – 4th floor |
March 31, 2025 | N/A | ||||||||||||||
| Gurgaon |
342,351 | 4,022 | ||||||||||||||
| World Tech park Block – B2 – 9th floor |
April 30, 2027 | April 30, 2032 | ||||||||||||||
| World Tech park Block – B3 – 9th floor |
April 30, 2027 | April 30, 2032 | ||||||||||||||
| World Tech Park – 8th, 9th, 10th & part 11thfloor |
April 30, 2027 | April 30, 2032 | ||||||||||||||
| World Tech Park– Remaining part of 11th floor |
April 30, 2027 | April 30, 2032 | ||||||||||||||
| World Tech Park – Block A3 – 11th floor |
April 30, 2027 | April 30, 2032 | ||||||||||||||
| World Tech Park – Block B3 – 10th floor |
April 30, 2027 | April 30, 2032 | ||||||||||||||
| World Tech Park – Block B2 – 10th floor |
April 30, 2027 | April 30, 2032 | ||||||||||||||
| World Tech Park – Block A2& A3 – 10th floor |
April 30, 2027 | April 30, 2032 | ||||||||||||||
| Pune |
656,046 | 8,773 | ||||||||||||||
| Magarpatta |
N/A | N/A | ||||||||||||||
| Weikfield – Phase I |
Feb 14, 2028 | June 14, 2028 | ||||||||||||||
| Weikfield – Phase II |
April 30, 2028 | June 14, 2028 | ||||||||||||||
| Weikfield – Phase III |
June 14, 2028 | N/A | ||||||||||||||
| Magarpatta (SEZ) – Level 5 |
February 14, 2026 | N/A | ||||||||||||||
| Magarpatta (SEZ) – Level 6 |
October 26, 2026 | N/A | ||||||||||||||
| Magarpatta (SEZ) – Level 7 |
February 28, 2027 | N/A | ||||||||||||||
| Magarpatta – Tower 9 |
February 28, 2029 | N/A | ||||||||||||||
| Pune Info city – 5th floor |
June 14, 2027 | June 14, 2032 | ||||||||||||||
| Pune Info city – 4th floor |
June 14, 2028 | N/A | ||||||||||||||
| Pune Info city – 3rd floor |
September 30, 2023 | September 30, 2033 | ||||||||||||||
| Nashik |
114,908 | 1,813 | ||||||||||||||
| Shreeniketan |
June 30, 2023 | N/A | ||||||||||||||
| Vtech |
October 13, 2023 | N/A | ||||||||||||||
| Ashoka Business Conclave – 6th floor |
November 19, 2024 | N/A | ||||||||||||||
| Ashoka Business Conclave – 3rd floor |
November 19, 2025 | N/A | ||||||||||||||
| Bangalore |
191,890 | 1,900 | ||||||||||||||
| RMZ Centennial – Ground floor and Level 1 |
June 14, 2025 | June 14, 2028 | ||||||||||||||
| RMZ Centennial – Level 2 and 3 |
October 31, 2025 | October 31, 2028 | ||||||||||||||
| RMZ Centennial – Terrace |
July 31, 2025 | July 31, 2028 | ||||||||||||||
| Chennai |
140,144 | 1,320 | ||||||||||||||
| RMZ Millenia Ground and 1st floor(2) |
March 31, 2024 | March 31, 2045 | ||||||||||||||
| DLF (SEZ) – Phase 1&2 |
March 15, 2026 | March 14, 2031 | ||||||||||||||
| DLF IT SEZ – 9th floor |
March 15, 2026 | March 15, 2031 | ||||||||||||||
| Vuram Shyamala Towers – 3rd floor |
January 31, 2026 | January 31, 2031 | ||||||||||||||
| Vuram Shyamala Towers – 2nd floor |
July 31, 2025 | July 31, 2028 | ||||||||||||||
| Vishakhapatnam |
212,693 | 1,697 | ||||||||||||||
| Vizag IT Park Ltd |
April 1, 2034 | N/A | ||||||||||||||
| Tech Mahindra |
March 31, 2026 | March 31, 2029 | ||||||||||||||
| Tirchy |
||||||||||||||||
| Vuram|Elcot IT Park |
5,976 | 80 | February 28, 2025 | February 28, 2028 | ||||||||||||
| Noida |
22,111 | 638 | ||||||||||||||
| Brookfield |
January 22, 2028 | January 22, 2033 | ||||||||||||||
| Windsor IT Park |SmartCube |
March 31, 2025 | N/A | ||||||||||||||
| Jaipur |
7 | |||||||||||||||
| Vuram IndiQube Fort |
October 31, 2023 | N/A | ||||||||||||||
| Indore |
52,214 | 522 | ||||||||||||||
| Brilliant Titanium – 5th floor |
May 15, 2032 | May 5, 2037 | ||||||||||||||
| Hyderabad |
19,863 | 329 | ||||||||||||||
| Maximus Tower, 1st floor |
January 5, 2028 | N/A | ||||||||||||||
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| Location |
Total Space (square feet) |
Total number of work stations |
Lease Expiration Date | Extendable Until ( 1) | ||||||||||||
| Sri Lanka: |
54,675 | 771 | ||||||||||||||
| Colombo (HNB) – Level 12 and 13 |
July 31, 2028 | N/A | ||||||||||||||
| Colombo (Orion City) |
August 24, 2023 | August 24, 2028 | ||||||||||||||
| UK: |
14,883 | 170 | ||||||||||||||
| Ipswich (Museum Street) |
May 23, 2028 | N/A | ||||||||||||||
| Piccadilly (Malta House) |
February 10, 2027 | N/A | ||||||||||||||
| Lloyds Building |
December 31, 2024 | N/A | ||||||||||||||
| Sackville House,39-40 Piccadilly |
January 9, 2025 | January 9, 2030 | ||||||||||||||
| Regus Manchester Didsbury |
August 31, 2023 | N/A | ||||||||||||||
| US: |
86,212 | 404 | ||||||||||||||
| 7909 Parklane Road, Columbia SC-1st floor |
May 31, 2026 | October 15, 2029 | ||||||||||||||
| Bellevue (Sterling Plaza) – 5th and 6th floors |
June 30, 2024 | N/A | ||||||||||||||
| Pittsburg (One Waterfront Place) |
July 31, 2027 | March 31, 2036 | ||||||||||||||
| Jay Madison Avenue |
June 30, 2024 | N/A | ||||||||||||||
| Vuram |Tampa Oaks LLC |
March 31, 2025 | February 28, 2028 | ||||||||||||||
| Canada: |
||||||||||||||||
| Canada | Vuram Mindshare Space |
August 31, 2023 | N/A | ||||||||||||||
| Malaysia: |
||||||||||||||||
| Axiata Tower |
6 | May 14, 2024 | N/A | |||||||||||||
| Turkey: |
N/A | 10 | ||||||||||||||
| Istanbul (MeydanK Plaza) |
April 30, 2024 | N/A | ||||||||||||||
| Switzerland: |
2,077 | — | ||||||||||||||
| Zurich (Bahnhofstrasse)(4) |
Not specified | N/A | ||||||||||||||
| Romania: |
47,274 | 616 | ||||||||||||||
| Bucharest (West Gate) – 2nd and 3rd floors |
February 25, 2024 | N/A | ||||||||||||||
| Centrul de Afacer – 8th floor |
December 31, 2024 | December 31, 2025 | ||||||||||||||
| Philippines: |
||||||||||||||||
| Manila |
653,842 | 7,207 | ||||||||||||||
| Eastwood – 10th floor |
June 30, 2026 | N/A | ||||||||||||||
| Eastwood – 9th floor |
June 30, 2026 | N//A | ||||||||||||||
| Techno Plaza II |
April 30, 2026 | N/A | ||||||||||||||
| Zeta Tower – 10th floor |
May 14, 2024 | May 14, 2029 | ||||||||||||||
| Exxa tower – 15th floor |
November,30, 2028 | N/A | ||||||||||||||
| Exxa Tower – 16th floor |
June 14, 2023 | June 14, 2028 | ||||||||||||||
| Exxa Tower – 17th floor |
November 30, 2023 | November 30, 2028 | ||||||||||||||
| Giga Tower – 8th floor |
October 15, 2024 | October 15, 2029 | ||||||||||||||
| Giga Tower – 9th floor |
April 30, 2025 | April 30, 2030 | ||||||||||||||
| Ilo Ilo |
||||||||||||||||
| One Global Centre |
January 15, 2026 | N/A | ||||||||||||||
| Three Techno Place – 4th floor |
March 16, 2027 | March 16, 2032 | ||||||||||||||
| Two Techno Place |
April 30, 2024 | April 30, 2029 | ||||||||||||||
| Cybergate Tower 1- 7th floor |
December 31, 2026 | N/A | ||||||||||||||
| Alabang |
||||||||||||||||
| Vector 2 – 9th and 10th floors |
February 28, 2027 | February 28, 2032 | ||||||||||||||
| Capella – 15th and 16th floors |
May 31, 2026 | N/A | ||||||||||||||
| FiliInvest Axis – 21st floor |
August 14, 2023 | August 14, 2028 | ||||||||||||||
| FiliInvest Axis – 22nd floor |
November 30, 2023 | November 30, 2028 | ||||||||||||||
| Tera Towers |
September 30, 2025 | N/A | ||||||||||||||
| Costa Rica: |
12,592 | 199 | ||||||||||||||
| San Jose (Forum H) |
April 30, 2025 | N/A | ||||||||||||||
| United Arab Emirates: |
510 | N/A | ||||||||||||||
| Dubai Airport Free Trade Zone |
November 22, 2023 | N/A | ||||||||||||||
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| Location |
Total Space (square feet) |
Total number of work stations |
Lease Expiration Date | Extendable Until ( 1) | ||||||||||||
| South Africa: |
3,04,052 | 2,701 | ||||||||||||||
| Cape Town |
||||||||||||||||
| Knowledge Park |
March 31, 2025 | March 31, 2030 | ||||||||||||||
| Claremont – Level 4(3) |
June 30, 2023 | June 30, 2027 | ||||||||||||||
| Claremont – Level 5(3) |
June 30, 2023 | June 30, 2027 | ||||||||||||||
| Bellevile |
||||||||||||||||
| Ambition House – 4th floor |
October 31, 2025 | N/A | ||||||||||||||
| Johannesburg |
||||||||||||||||
| DownSouth Ridge Park |
August 31, 2026 | N/A | ||||||||||||||
| Durban |
||||||||||||||||
| Hippopark Avenue – Sections 1 and 2 |
April 30, 2025 | N/A | ||||||||||||||
| Poland: |
20,242 | 323 | ||||||||||||||
| Gdynia (Luzycka Office Park)- Buildings C and D |
August 31, 2027 | N/A | ||||||||||||||
| Poland|Eqlibrium|Optibuy |
May 15, 2025 | N/A | ||||||||||||||
| Poland|Building 5 Mfynska Street|Optibuy |
December 31, 2023 | N/A | ||||||||||||||
| Poland|Technology Incubator|Optibuy |
August 16, 2023 | N/A | ||||||||||||||
| China: |
47,598 | 516 | ||||||||||||||
| Guangzhou (Zhongshan Street) – 22nd and 30th floor |
April 30, 2024 | N/A | ||||||||||||||
| Dalian (Dalian Software Park) – Building 22 |
May 15, 2026 | N/A | ||||||||||||||
| Beijing (YongAnDongLi) – 5th floor |
May 31, 2023 | N/A | ||||||||||||||
| Shanghai (Huangu PL) |
January 31, 2026 | N/A | ||||||||||||||
| Germany: |
32 | — | ||||||||||||||
| Friedrich-Ebert-Anlage 36 |
October 31, 2024 | N/A | ||||||||||||||
| Australia: |
1,216 | — | ||||||||||||||
| Sydney (Berry Street) |
March 27, 2025 | N/A | ||||||||||||||
Notes:
N/A means not applicable.
| (1) | Reflects the expiration date if the applicable extension option is exercised. |
| (2) | We have issued a termination notice in relation to RMZ Millenia, Chennai for the facility to be surrendered in June 2023. |
| (3) | We have issued a termination notice in relation to Claremont, Capetown for the facility to be surrendered in June 2023. |
| (4) | Terra Tower, 9th & 10th Floor for an area of 4,497 square meters signed for 63 months ending December 31, 2027; not yet operational. |
| (5) | Momentum, 201 Umhlanga Ridge Boulevard, Cornubia, Durban for 5,164 square meters, signed for 67 months ending on June 30, 2028; not yet operational. |
| (6) | We have signed a lease for new premises located at Central Avenue, Mumbai, India (the second, third and fourth floors), effective starting from April 1, 2023; the premises have 187,457 square feet of total space; not yet operational. |
| (7) | Bridge Park, ERF 6993, Portion of ERF 6992, Montague Gardens, for an area of 4,005 square meters, signed for 63 months ending on December 31, 2027; not yet operational. |
| (8) | Prestige Cyber Towers, 5th and 6th Floor, 117, Rajiv Gandhi Salai for an area of 7,433 square meters signed for 60 months ending December 31, 2028; not yet operational. |
| (9) | World Tech Park, Silokhera, DLF World Tech Park, B3, 11th floor, Silokhera, Gurgaon for an area of 3,206 square metres signed for 120 months ending on February 19, 2033; not yet operational. |
| (10) | Sunclare Building, 2nd and 3rd floor, 21 Dreyer Street, Claremont for an area of 3,654 square meters, signed for 60 months ending on May 31, 2028; not yet operational. |
| (11) | Bridgeway, 2nd Floor & 3rd Floor, West Block, Montague gardens, Century City, Cape Town for 4,051 square meters, signed for 37 months ending June 30, 2026; not yet operational. |
| (12) | We have signed a lease for new premises located at Cybergate Tower 1, Ilo Ilo, Philippines (the third and fourth floors), effective starting from July 31, 2022; the premises have 44,945 square feet of total space; not yet operational. |
Our delivery centers are equipped with fiber optic connectivity and have backups to their power supply designed to achieve uninterrupted operations. In fiscal 2024, we intend to continue to streamline our operations by further consolidating production capacities in our delivery centers.
| ITEM 4A. | UNRESOLVED STAFF COMMENTS |
None.
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| ITEM 5. | OPERATING AND FINANCIAL REVIEW AND PROSPECTS |
The following discussion on the financial condition and results of operations of our company should be read in conjunction with our consolidated financial statements and the related notes included elsewhere in this annual report. Some of the statements in the following discussion contain forward-looking statements that involve risks and uncertainties. See “Special Note Regarding Forward-Looking Statements.” Our actual results could differ materially from those anticipated in these forward-looking statements as a result of a number of factors, including, but not limited to, those described below and elsewhere in this annual report, particularly in the risk factors described in “Part I — Item 3 Key Information — D. Risk Factors.”
For a discussion of our results in fiscal 2022 compared to fiscal 2021 and certain comparative numbers in fiscal 2021, please refer to “Part I — Item 5. Operating and Financial Review and Prospects” contained in our Annual Report on Form 20-F for fiscal 2022 filed with the SEC on May 17, 2022.
Overview
We are a leading global provider of BPM services, offering comprehensive data, voice, analytical and business transformation services with a blended onshore, near shore and offshore delivery model. We transfer the business processes of our clients to our delivery centers, located in Canada, China, Costa Rica, India, Malaysia, the Philippines, Poland, Romania, South Africa, Sri Lanka, Turkey, the UK, and the US, with a view to offer cost savings, operational flexibility, improved quality and actionable insights to our clients. We seek to help our clients “transform” their businesses by identifying business and process optimization opportunities through technology-enabled solutions, improvements to their processes, global delivery capabilities, analytics and an understanding of their business.
We win outsourcing engagements from our clients based on our domain knowledge of their business, our experience in managing the specific processes they seek to outsource and our customer-centric approach. Our company is organized into vertical business units in order to provide more specialized focus on each of the industries that we target, to more effectively manage our sales and marketing process and to develop in-depth domain knowledge. The major industry verticals we currently target are the insurance; travel and leisure; healthcare; diversified businesses (including manufacturing, retail and CPG, media and entertainment, and telecom); shipping and logistics; banking and financial services; hi-tech and professional services; and utilities industries.
Our portfolio of services includes vertical-specific processes that are tailored to address our clients’ specific business and industry practices. In addition, we offer a set of shared services that are common across multiple industries, including finance and accounting, customer experience services, research and analytics, technology services, legal services, and human resources outsourcing.
Although we typically enter into long-term contractual arrangements with our clients, these contracts can usually be terminated with or without cause by our clients and often with short notice periods. Nevertheless, our client relationships tend to be long-term in nature given the scale and complexity of the services we provide coupled with risks and costs associated with switching processes in-house or to other service providers. We structure each contract to meet our clients’ specific business requirements and our target rate of return over the life of the contract. In addition, since the sales cycle for offshore BPM is long and complex, it is often difficult to predict the timing of new client engagements. As a result, we may experience fluctuations in growth rates and profitability from quarter to quarter, depending on the timing and nature of new contracts. Our operating results may also differ significantly from quarter to quarter due to seasonal changes in the operations of our clients. For example, our clients in the travel and leisure industry typically experience seasonal changes in their operations in connection with the US summer holiday season, as well as episodic factors such as adverse weather conditions. Our focus, however, is on deepening our client relationships and maximizing shareholder value over the life of a client’s relationship with us.
The following table represents our revenue (a GAAP financial measure) for the periods indicated:
| Year ended March 31, | ||||||||
| 2023 | 2022 | |||||||
| (US dollars in millions) | ||||||||
| Revenue |
$ | 1,224.3 | $ | 1,109.8 | ||||
Our revenue is generated primarily from providing BPM services. We have two reportable segments for financial statement reporting purposes — WNS Global BPM and WNS Auto Claims BPM. In our WNS Auto Claims BPM segment, we provide both “fault” and “non-fault” repairs. For “fault” repairs, we provide claims handling and repair management services, where we arrange for automobile repairs through a network of third party repair centers. In our repair management services, where we act as the principal in our dealings with the third party repair centers and our clients, the amounts which we invoice to our clients for payments made by us to third party repair centers are reported as revenue. Where we are not the principal in providing the services, we record revenue from repair services net of repair cost. See Note 2(s) to our consolidated financial statements included elsewhere in this annual report. Since we wholly subcontract the repairs to the repair centers, we evaluate the financial performance of our “fault” repair business based on revenue less repair payments to third party repair centers, which is a non-GAAP financial measure. We believe that revenue less repair payments (a non-GAAP financial measure) for “fault” repairs reflects more accurately the value addition of the BPM services that we directly provide to our clients. Management believes that revenue less repair payments (non-GAAP) may be useful to investors as a more accurate reflection of our performance and operational results.
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For our “non-fault” repairs business, we generally provide a consolidated suite of accident management services including credit hire and credit repair, and we believe that measurement of such business on a basis that includes repair payments in revenue is appropriate. Revenue including repair payments is therefore used as a primary measure to allocate resources and measure operating performance for accident management services provided in our “non-fault” repairs business. Our “non-fault” repairs business where we provide accident management services accounts for a relatively small portion of our revenue for our WNS Auto Claims BPM segment.
Revenue less repair payments is a non-GAAP financial measure which 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. Our revenue less repair payments (non-GAAP) may not be comparable to similarly titled measures reported by other companies due to potential differences in the method of calculation.
The following table reconciles our revenue (a GAAP financial measure) to revenue less repair payments (a non-GAAP financial measure) for the periods indicated:
| Year ended March 31, | ||||||||
| 2023 | 2022 | |||||||
| (US dollars in millions) | ||||||||
| Revenue |
$ | 1,224.3 | $ | 1,109.8 | ||||
| Less: Payments to repair centers(1) |
62.2 | 83.0 | ||||||
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| Revenue less repair payments (non-GAAP) |
$ | 1,162.0 | $ | 1,026.8 | ||||
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Note:
| (1) | Consists of payments to repair centers in our auto claims business for “fault” repair cases where we act as the principal in our dealings with the third party repair centers and our clients. |
The following table sets forth our constant currency revenue less repair payments (a non-GAAP financial measure) for the periods indicated. Constant currency revenue less repair payments is a non-GAAP financial measure. We present constant currency revenue less repair payments (non-GAAP) so that revenue less repair payments (non-GAAP) may be viewed without the impact of foreign currency exchange rate fluctuations, thereby facilitating period-to-period comparisons of business performance. Constant currency revenue less repair payments (non-GAAP) is presented by recalculating prior period’s revenue less repair payments (non-GAAP) denominated in currencies other than in US dollars using the foreign exchange rate used for the latest period, without taking into account the impact of hedging gains/losses. Our non-US dollar denominated revenue includes, but is not limited to, revenue denominated in pound sterling, the Australian dollar, the Euro and the South African rand. Management believes constant currency revenue less repair payments (non-GAAP) may be useful to investors in evaluating the underlying operating performance of our company. 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. Our constant currency revenue less repair payments (non-GAAP) may not be comparable to similarly titled measures reported by other companies due to potential differences in the method of calculation.
| Year ended March 31, | ||||||||
| 2023 | 2022 | |||||||
| (US dollars in millions) | ||||||||
| Revenue less repair payments (non-GAAP) |
$ | 1,162.0 | $ | 1,026.8 | ||||
| Exchange rate impact |
2.2 | (47.2 | ) | |||||
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| Constant currency revenue less repair payments (non-GAAP) |
$ | 1,164.2 | $ | 979.6 | ||||
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Global Economic Conditions
As we have operations in 13 countries and service clients across multiple geographic regions, our business, financial performance and results of operations depend significantly on worldwide macroeconomic and geo-political conditions. Recent economic conditions and geo-political developments have been and continue to be challenging for global economies and could materially and adversely affect our business and financial performance.
Economic factors, such as recessionary economic cycles, inflation, rising interest rates, fluctuations in foreign exchange rates, monetary tightening and volatility in the financial markets, have impacted, and may continue to impact, our business, financial condition and results of operations. The current global economic slowdown and the possibility of continued turbulence or uncertainty in the European, US, Asian and international financial markets and economies have adversely affected, and may continue to adversely affect, our and our clients’ liquidity and financial condition. High levels of inflation in the various geographies where we operate in have resulted in increased supply costs, which in turn have impacted pricing and consumer demand. Rising interest rates, coupled with illiquid credit markets and wider credit spreads, may increase our cost of borrowing and cause credit to become more limited, which could have a material adverse effect on not only on our financial condition, liquidity and cash flows, but also on our clients’ ability to use credit to purchase our services or to make timely payments to us. In addition, as a result of high debt levels, a number of countries have required and may continue to require additional financial support, sovereign credit ratings have declined and may continue to decline, and there may be default on the sovereign debt obligations of certain countries. Uncertainties remain regarding future central bank and other economic policies in the US and EU. Such adverse macroeconomic conditions economic conditions may further lead to increased volatility in the currency and financial markets globally. For example, the recent appreciation of the US dollar may have an unpredictable impact on our company in a number of ways, including the conversion of our operating results into our reporting currency, the US dollar. For further information, see “— 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 could have a material adverse effect on our results of operations.” In addition, volatility in the financial markets could have a material impact on our ADS price. We cannot predict the trajectory of the recent economic slowdown or any subsequent economic recovery. If adverse macroeconomic conditions continue for a prolonged period of time or even worsen, our business, financial condition and results of operations will be adversely affected.
Government policies or objectives pursued by countries in which we do business could potentially impact the demand for our services in certain countries. Changes in trade policies, increases in tariffs, the imposition of retaliatory tariffs, including those implemented by the United States, China and Europe and legislation requiring greater oversight of supply chains, may have a material adverse effect on global economic conditions and the stability of global financial markets and may reduce international trade.
The global outbreak and spread of the disease caused by the severe acute respiratory syndrome coronavirus known as COVID-19, which was reported to have surfaced in December 2019, has caused a slowdown in growth of the global economy. The global economy entered a pronounced slowdown in 2022 due to a rapid resurgence of COVID-19 in China. While countries around the world have relaxed restrictions imposed over the past three years during the global outbreak of COVID-19, there is still uncertainty around the future of the COVID-19 outbreak. For further information, see “— Impact of COVID-19.”
Geopolitical crises, such as war, political instability and terrorist attacks, could disrupt our operations. The conflict between Russia and Ukraine has led and could lead to significant market and other disruptions, including significant volatility in commodity prices, supply of energy resources, instability in financial markets, supply chain interruptions, political and social instability, changes in consumer or purchaser preferences as well as increase in cyberattacks and espionage. We have operations in Poland and Romania, which border Ukraine and have been materially and adversely affected by inflation, particularly increases in energy and food prices, resulting from disrupted supplies from Russia and Ukraine. In addition, as a result of the ongoing military conflict, there has been a growing number of migrants in Poland and Romania. Such an influx of migrants could further exacerbate inflation in these two countries, thereby resulting in an upward pressure on wages, which could have a material adverse effect on our operations in these two countries. The length, impact and outcome of the ongoing military conflict in Ukraine are highly unpredictable. If the conflict continues or extends beyond Ukraine, it would continue to have a significant impact on the global economy and our operations in Poland and Romania.
Additionally, major political events, including the UK’s withdrawal from the EU in January 2020, commonly referred to as “Brexit,” has also created uncertainty for businesses such as ours that operate in these markets. While the UK and the EU have ratified a trade and cooperation agreement to govern their relationship after Brexit, the agreement merely sets forth a framework in many respects and requires additional bilateral negotiations between the UK and the EU as both parties continue to work on the rules for implementation. Significant political and economic uncertainty remains about how the precise terms of the relationship between the parties will differ from the terms before withdrawal. Such terms could adversely affect the economic conditions in affected markets as well as the stability of the global financial markets, which in turn have had and may continue to have a material adverse effect on global economic conditions and financial markets, and may significantly reduce global market liquidity, restrict the ability of key market participants to operate in certain financial markets or restrict our access to capital. 25.4% of our revenues and 21.4% of our revenue less repair payments (non-GAAP) in fiscal 2023 and 29.5% of our revenues and 23.8% of our revenue less repair payments (non-GAAP) in fiscal 2022 were denominated in pound sterling. The extent and duration of the decline in the value of the pound sterling to the US dollar and other currencies is unknown at this time. A long-term reduction in the value of the pound sterling as a result of Brexit or otherwise could adversely impact our earnings growth rate and profitability. Although we believe that our hedging program is effective, there is no assurance that it will protect us against fluctuations in foreign currency exchange rates.
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In addition to the pound sterling, a weakening of the rate of exchange for the US dollar or, to a lesser extent, the Australian dollar or the Euro (in which our revenue is principally denominated) against the Indian rupee, or to a lesser extent, the Philippine peso or the South African rand (in which a significant portion of our costs are denominated) would also adversely affect our results.
Fluctuations between the Indian rupee, the Philippine peso, the pound sterling, the South African rand, the Euro, or the Australian dollar, on the one hand, and the US dollar, on the other hand, also expose us to translation risk when transactions denominated in these currencies are translated into US dollars, our reporting currency. The exchange rates between each of the Indian rupee, the Philippine peso, the pound sterling, the South African rand, the Euro, and the Australian dollar, on the one hand, and the US dollar, on the other hand, have changed substantially in recent years and may fluctuate substantially in the future.
For example, the Indian rupee depreciated against the US dollar by an average of 7.8%, the Philippine peso depreciated against the US dollar by an average of 10.5%, the Euro depreciated against the US dollar by an average of 10.4%, the pound sterling depreciated against the US dollar by an average of 11.8%, the South African rand depreciated against the US dollar by an average of 14.4%, and the Australian dollar depreciated against the US dollar by an average of 7.3%, in fiscal 2023.
The depreciation of the Indian rupee, the Philippine peso, and the South African rand in each case against the US dollar in fiscal 2023, positively impacted our results of operations, whereas the depreciation of the pound sterling, the Euro and the Australian dollar in each case against the US dollar, negatively impacted our results of operations in fiscal 2023.
Impact of COVID-19
The COVID-19 pandemic has had a significant impact on the global economy, our clients’ businesses, and on our operations, financial performance, and visibility of business outlook and remains ongoing to varying degrees in many countries globally. It has required organizations around the world, including our Company, to re-think their business strategies around service delivery, workforce management, information technology, cyber security and data privacy. The pandemic has played a major role in reshaping the global economy and demand for our services from a number of our clients across industries, depending on the ability of each client, and the nature of their industries, products and services, in coping with the “new normal”.
We have seen a deterioration in many of our clients’ businesses, and the outlook going forward remains uncertain and volatile. Our revenue has faced pressure from declined clients’ demand volumes, delays in new business ramp-ups. However, for fiscal 2022 and fiscal 2023, we experienced revenue improvement on a year-on-year basis, as our clients’ businesses began to recover. Such improvement was driven by broad-based revenue growth across verticals and service offerings and reduced COVID-19 headwinds. These benefits more than offset the impact of wage increases and increased facility-related and business continuity costs.
We have a business continuity planning mechanism in place and are actively working to understand our clients’ changing requirements, adapt delivery to a “hybrid” model, ensure data security, prioritize critical processes, adjust service levels and manage discretionary costs (such as travel costs) and fixed costs (such as personnel costs). Our “hybrid” delivery capability steadily improved throughout fiscal 2022 and fiscal 2023, from delivering over 80% of our clients’ requirements in April 2020 to 100% of our clients’ requirements in the second, third and fourth quarters of fiscal 2022 and throughout fiscal 2023. In addition, we have also worked, and continue to work with national, state, and local authorities, so as to comply with applicable rules and regulations related to “hybrid” and “work from home” models.
The COVID-19 pandemic, along with its impact on ways of working and talent access, has required us to increase our expenses to ensure an adequate transition due to the need to ensure the continuity of our operations. For example, we have incurred costs as we significantly shifted towards a “hybrid” model, where we purchased additional equipment (such as desktops and laptops) for our employees’ home use, software and internet connectivity devices, productivity enhancement technology tools, provided accommodation, meal and transportation allowances and overtime compensation to our employees and organized sanitization and cleaning of our offices and facilities. As a result of these early investments, we are now able to execute a “hybrid” model for both existing and new clients. We expect that we will continue to require additional expenditures to meet evolving client requirements for flexible work arrangements and expanded services to support areas outside of their traditional business focus. We also expect that we will continue to incur additional costs to monitor and improve operational efficiency of our “hybrid” model, invest in information technology solutions and security measures to safeguard against information security risks and incrementally transition to a “hybrid” model on a limited basis as local restrictions ease and circumstances permit, including costs to implement safeguards to protect the health and safety of our employees as they gradually return to the office. We believe that these short-to-medium term costs incurred might benefit us in the long term, as these steps have broadened our “hybrid” capabilities, which we expect to become an opportunity and a permanent feature in our future delivery strategy, as well as our business continuity plans, given that the COVID-19 pandemic has caused our clients to critically evaluate their business models and potentially adopt a shift towards BPM and a greater willingness to embrace digital transformation services and technology-enabled, automated process solutions.
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In the longer term, while we remain confident in our business and the quality of our services, the magnitude of COVID-19’s impact to our business and financial performance in fiscal 2024 and beyond will be a function of several factors, including, but not limited to, the following:
| • | the level of demand for services from clients across the industries, including the demand within their own customer base that we serve; |
| • | the extent of governmental restrictions, such as lockdowns and travel restrictions, which will affect our ability to sustain the delivery of services to clients and to gain new business in a “remote working” environment; |
| • | our ability to implement policies and measures to ensure the health and safety of our employees, such as conducting temperature screening for all personnel and visitors, ensuring adequate cleaning of our offices and facilities and having adequately aware and trained medical staff; |
| • | the impact and challenge of managing “remote working” arrangements on the effectiveness of our productivity or operating capability, due to varying local governmental regulations, client requirements, size and scale of operations and technology or infrastructure issues, such as hardware access, software compatibility and internet connectivity; |
| • | the volatility in exchange rate movements; and |
| • | the development of COVID-19 globally and the duration that it will take for our clients’ businesses to stabilize and recover. |
We continue to work closely with our clients to maximize our ability to service their rapidly changing business requirements.
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We are continually evaluating the impact of the COVID-19 pandemic on our liquidity and financial position. As at March 31, 2023, we have cash and cash equivalents and investments of $304.9 million, unutilized lines of credit amounting to $139.6 million and long-term debt amounting to $173.4 million. Based on our current level of operations, we expect that our anticipated cash generated from operating activities, cash and cash equivalents on hand, and use of existing credit facilities will be sufficient to fund our debt repayment obligations, estimated capital expenditures, share repurchases and working capital needs for the next 12 months. However, under the current challenging economic and business conditions as discussed under “— Global Economic Conditions,” there can be no assurance that our business activity would be maintained at the expected level to generate the anticipated cash flows from operations. Also, see “— Liquidity and Capital Resources” for more information.
Following the COVID-19 pandemic, more businesses globally will adopt delivery models with improved technology infrastructure, and incorporate elements of the “work from home” model. Countries may enact more flexible labor laws, which may potentially expand a company’s employee base to include a higher number of part-time and gig workers, such as independent contractors, online platform workers, contract firm workers and on-call workers. This may allow businesses such as ours to expand delivery models beyond the larger cities and into the smaller ones, for example, Tier 2 and Tier 3 cities in India.
For further information, see “Part I — Item 3. Key Information — D. Risk Factors — Our business operations and future growth may be negatively impacted on account of the COVID-19 pandemic.”
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Revenue
We generate revenue by providing BPM services to our clients. The following table shows our revenue (a GAAP financial measure) and revenue less repair payments (a non-GAAP financial measure) for the periods indicated:
| Year ended March 31, | Change | |||||||||||||||
| 2023 | 2022 | $ | % | |||||||||||||
| (US dollars in millions) | ||||||||||||||||
| Revenue |
$ | 1,224.3 | $ | 1,109.8 | 114.5 | 10.3 | % | |||||||||
| Revenue less repair payments (non-GAAP) |
$ | 1,162.0 | $ | 1,026.8 | 135.2 | 13.2 | % | |||||||||
We have a large client base diversified across industries and geographies. As at March 31, 2023, we had a diverse client base of 627 clients (with each client contributing more than $0.01 million in revenue in fiscal 2023).
Our revenue is characterized by client, industry, service type, geographic and contract type diversity, as the analysis below indicates.
Revenue by Top Clients
In fiscal 2023 and 2022, the percentage of revenue and revenue less repair payments (non-GAAP) that we derived from our largest clients were in the proportions set forth in the following table:
| As a percentage of revenue | As a percentage of revenue less repair payments (non-GAAP) |
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| Year ended March 31, | Year ended March 31, | |||||||||||||||
| 2023 | 2022 | 2023 | 2022 | |||||||||||||
| Top client |
6.5 | % | 7.3 | % | 6.8 | % | 7.9 | % | ||||||||
| Top five clients |
23.8 | % | 27.1 | % | 25.0 | % | 27.6 | % | ||||||||
| Top ten clients |
37.4 | % | 41.1 | % | 38.4 | % | 41.4 | % | ||||||||
| Top twenty clients |
51.1 | % | 55.3 | % | 51.1 | % | 54.3 | % | ||||||||
Revenue by Industry
For financial statement reporting purposes, we aggregate our operating segments, except for the WNS Auto Claims BPM (which we market under the WNS Assistance brand) as it does not meet the aggregation criteria under IFRS. See “— Results by Reportable Segment.”
We organize our company into the following industry-focused business units to provide more specialized focus on each of these industries: insurance; travel and leisure; healthcare; diversified businesses (including manufacturing, retail, CPG, media and entertainment, and telecom); shipping and logistics; banking and financial services; hi-tech and professional services; and utilities.
In fiscal 2023 and 2022, our revenue and revenue less repair payments (non-GAAP) were diversified across our industry-focused business units in the proportions set forth in the following table:
| As a percentage of revenue | As a percentage of revenue less repair payments (non-GAAP) |
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| Year ended March 31, | Year ended March 31, | |||||||||||||||
| Service Type |
2023 | 2022 | 2023 | 2022 | ||||||||||||
| Insurance |
26.9 | % | 29.9 | % | 22.9 | % | 24.3 | % | ||||||||
| Travel and leisure |
16.9 | % | 14.8 | % | 17.9 | % | 16.0 | % | ||||||||
| Healthcare |
15.7 | % | 17.7 | % | 16.6 | % | 19.1 | % | ||||||||
| Diversified businesses including manufacturing, retail, CPG, media and entertainment, and telecom |
14.7 | % | 13.5 | % | 15.5 | % | 14.6 | % | ||||||||
| Shipping and logistics |
7.6 | % | 7.7 | % | 8.0 | % | 8.3 | % | ||||||||
| Banking and financial services |
6.7 | % | 5.8 | % | 7.1 | % | 6.2 | % | ||||||||
| Hi-tech and professional services |
6.6 | % | 6.2 | % | 6.9 | % | 6.7 | % | ||||||||
| Utilities |
4.9 | % | 4.4 | % | 5.1 | % | 4.8 | % | ||||||||
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| Total |
100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | ||||||||
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Certain services that we provide to our clients are subject to the seasonality of our clients’ business. Accordingly, we typically see an increase in transaction related services within the travel and leisure industry during holiday seasons, such as during the US summer holidays (our fiscal second quarter); an increase in business in the insurance industry during the beginning and end of the fiscal year (our fiscal first and last quarters) and during the US peak winter season (our fiscal third quarter); and an increase in business in the consumer product industry during the US festive season towards the end of the calendar year when new product launches and campaigns typically happen (our fiscal third quarter).
Revenue by Service Type
In fiscal 2023 and 2022, our revenue and revenue less repair payments (non-GAAP) were diversified across service types in the proportions set forth in the following table:
| As a percentage of revenue | As a percentage of revenue less repair payments (non-GAAP) |
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| Year ended March 31, | Year ended March 31, | |||||||||||||||
| Service Type |
2023 | 2022 | 2023 | 2022 | ||||||||||||
| Industry-specific |
36.9 | % | 38.9 | % | 38.9 | % | 42.0 | % | ||||||||
| Finance and accounting |
23.0 | % | 22.4 | % | 24.3 | % | 24.2 | % | ||||||||
| Customer experience services |
19.4 | % | 17.1 | % | 20.4 | % | 18.5 | % | ||||||||
| Research and analytics |
10.8 | % | 10.5 | % | 11.3 | % | 11.3 | % | ||||||||
| Auto claims |
5.9 | % | 8.7 | % | 0.8 | % | 1.3 | % | ||||||||
| Others(1) |
4.0 | % | 2.4 | % | 4.3 | % | 2.7 | % | ||||||||
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| Total |
100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | ||||||||
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Note:
| (1) | Others includes revenue from technology services, legal services and human resources outsourcing services. |
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Revenue by Geography
In fiscal 2023 and 2022, our revenue and revenue less repair payments (non-GAAP) were derived from the following geographies (based on the location of our clients) in the proportions set forth below in the following table:
| As a percentage of revenue | As a percentage of revenue less repair payments (non-GAAP) |
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| Year ended March 31, | Year ended March 31, | |||||||||||||||
| Geography |
2023 | 2022 | 2023 | 2022 | ||||||||||||
| North America (primarily the US) |
49.2 | % | 45.4 | % | 51.8 | % | 49.1 | % | ||||||||
| UK |
28.7 | % | 32.8 | % | 24.9 | % | 27.4 | % | ||||||||
| Europe (excluding the UK) |
7.1 | % | 6.1 | % | 7.4 | % | 6.6 | % | ||||||||
| Australia |
6.1 | % | 6.1 | % | 6.6 | % | 6.6 | % | ||||||||
| South Africa |
1.1 | % | 2.0 | % | 1.2 | % | 2.2 | % | ||||||||
| Rest of world |
7.8 | % | 7.6 | % | 8.1 | % | 8.1 | % | ||||||||
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| Total |
100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | ||||||||
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Our business in South Africa is evaluated for compliance with the South African government’s BBBEE legislation against a BBBEE scorecard, which has different levels based on various criteria. South African government grants are available to businesses that meet specified conditions, including achieving a specified minimum BBBEE rating. A level one BBBEE rating has the most rigorous criteria. Additionally, many South African companies require their service providers to maintain a minimum BBBEE rating, and many of our South African client contracts contain clauses that allow our clients to terminate their contracts with us or impose specified penalties on us if we do not maintain a minimum BBBEE rating.
We conduct our domestic business in South Africa (serving clients based in South Africa) through our South Africa subsidiary, WNS South Africa (Pty) Ltd, and our international business in South Africa (serving clients based outside South Africa) through our South Africa subsidiary, WNS Global Services SA (Pty) Limited. During fiscal 2020, pursuant to the requirements of the South African government’s BBBEE Codes of Good Practice, the WNS B-BBEE Staff Share Trust subscribed to one participating preference share issued by WNS Global Services SA (Pty) Ltd, which entitles it to 45.56% of voting rights in WNS South Africa (Pty) Ltd. In fiscal 2022, the voting rights were increased to 48.84% to help ensure WNS South Africa (Pty) Ltd maintains the same level. We achieved a level one rating in respect of WNS South Africa (Pty) Ltd in May 2022, which is valid until May 2023 and achieved a level six rating in respect of WNS Global Services SA (Pty) Limited in June 2022 which is valid until June 2023. The BBBEE verification audit for WNS South Africa (Pty) Ltd is in process and the new rating is expected to be received by the end of May 2023. To help us achieve the requisite BBBEE rating for WNS Global Services SA (Pty) Limited, we have implemented a program that includes divesting some of our interests in such subsidiary to address the requirement relating to the percentage of ownership of an entity by “black people” (as defined under the applicable legislation). We expect to maintain a level one or achieve level two rating in respect of WNS South Africa (Pty) Ltd and maintain a level six or achieve a level seven rating in respect of WNS Global Services SA (Pty) Limited, which would help ensure that we continue to meet the minimum BBBEE rating required under our contracts with South African clients and be eligible for government grants associated with our domestic and international business. However, there is no assurance that WNS South Africa (Pty) Ltd or WNS Global Services SA (Pty) Limited will maintain their existing BBBEE ratings in the ongoing or future annual BBBEE verification audits. If we fail to maintain or achieve the required minimum BBBEE ratings, we will cease to be eligible for government grants, will be disqualified from bidding for certain business, and certain of our clients may terminate their contracts with us or impose penalties on us. These outcomes would have an adverse effect on our business, results of operations, financial condition and cash flows.
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Revenue by Location of Delivery Centers
For fiscal 2023 and 2022, our revenue and revenue less repair payments (non-GAAP) were derived from the following geographies (based on the location of our delivery centers) in the proportions set forth in the following table:
| As a percentage of revenue | As a percentage of revenue less repair payments (non-GAAP) |
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| Year ended March 31, | Year ended March 31, | |||||||||||||||
| Location of Delivery Center |
2023 | 2022 | 2023 | 2022 | ||||||||||||
| India |
51.9 | % | 50.1 | % | 54.7 | % | 54.1 | % | ||||||||
| United States(1) |
15.2 | % | 15.2 | % | 16.0 | % | 16.4 | % | ||||||||
| Philippines |
13.5 | % | 12.9 | % | 14.2 | % | 13.9 | % | ||||||||
| UK(2) |
8.4 | % | 11.5 | % | 3.5 | % | 4.4 | % | ||||||||
| South Africa |
5.1 | % | 5.1 | % | 5.4 | % | 5.5 | % | ||||||||
| Romania |
1.7 | % | 1.1 | % | 1.8 | % | 1.2 | % | ||||||||
| Sri Lanka |
1.3 | % | 1.5 | % | 1.4 | % | 1.6 | % | ||||||||
| China |
1.1 | % | 1.3 | % | 1.2 | % | 1.4 | % | ||||||||
| Poland |
0.6 | % | 0.4 | % | 0.6 | % | 0.5 | % | ||||||||
| Costa Rica |
0.4 | % | 0.3 | % | 0.5 | % | 0.4 | % | ||||||||
| Australia(3) |
0.4 | % | 0.1 | % | 0.4 | % | 0.1 | % | ||||||||
| Spain |
0.4 | % | 0.5 | % | 0.3 | % | 0.5 | % | ||||||||
| Malaysia |
0.0 | % | — | 0.0 | % | — | ||||||||||
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100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | ||||||||
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Notes:
| (1) | Includes revenue and revenue less repair payments (non-GAAP) derived from Canada, which were not significant. |
| (2) | Includes revenue and revenue less repair payments (non-GAAP) derived from Turkey and Germany, which was not significant. |
| (3) | Revenue from Australia is for process being delivered under our “work from home” model. We do not have any delivery center in Australia. |
Our Contracts
We provide our services under contracts with our clients, which typically range from three to five years, with some being rolling contracts with no end dates. Typically, these contracts can be terminated by our clients with or without cause and with short notice periods. However, we tend to have long-term relationships with our clients given the complex and comprehensive nature of the business processes executed by us, coupled with the switching costs and risks associated with relocating these processes in-house or to other service providers.
Each client contract has different terms and conditions based on the scope of services to be delivered and the requirements of that client. Occasionally, we may incur significant costs on certain contracts in the early stages of implementation, with the expectation that these costs will be recouped over the life of the contract to achieve our targeted returns. Each client contract has corresponding service level agreements that define certain operational metrics based on which our performance is measured. Some of our contracts specify penalties or damages payable by us in the event of failure to meet certain key service level standards within an agreed upon time frame.
When we are engaged by a client, we typically transfer that client’s processes to our delivery centers over a six-month period. This transfer process is subject to a number of potential delays. Therefore, we may not recognize significant revenue until several months after commencing a client engagement.
In the WNS Global BPM segment, we charge for our services based on the following pricing models:
| 1) | per full-time-equivalent arrangements, which typically involve billings based on the number of full-time employees (or equivalent) deployed on the execution of the business process outsourced; |
| 2) | per transaction arrangements, which typically involve billings based on the number of transactions processed (such as the number of e-mail responses, or airline coupons or insurance claims processed); |
| 3) | subscription arrangements, which typically involve billings based on per member per month, based on contractually agreed rates; |
| 4) | fixed-price arrangements, which typically involve billings based on achievements of pre-defined deliverables or milestones; |
| 5) | outcome-based arrangements, which typically involve billings based on the business result achieved by our clients through our service efforts (such as measured based on a reduction in days sales outstanding, an improvement in working capital, an increase in collections or a reduction in operating expenses); or |
| 6) | other pricing arrangements, including cost-plus arrangements, which typically involve billing the contractually agreed direct and indirect costs and a fee based on the number of employees deployed under the arrangement. |
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Apart from the above-mentioned pricing methods, a small portion of our revenue is comprised of reimbursements of out-of-pocket expenses incurred by us in providing services to our clients.
Outcome-based arrangements are examples of non-linear pricing models where revenues from platforms and solutions and the services we provide are linked to usage or savings by clients rather than the efforts deployed to provide these services. We intend to focus on increasing our service offerings that are based on non-linear pricing models that allow us to price our services based on the value we deliver to our clients rather than the headcount deployed to deliver the services to them. We believe that non-linear pricing models help us to grow our revenue without increasing our headcount. Accordingly, we expect increased use of non-linear pricing models to result in higher revenue per employee and improved margins. Non-linear revenues may be subject to short-term pressure on margins, however, as initiatives in developing the products and services take time to deliver. Moreover, in outcome-based arrangements, we bear the risk of failure to achieve clients’ business objectives in connection with these projects. For more information, see “Part I — Item 3. Key Information — D. Risk Factors — If our pricing structures do not accurately anticipate the cost and complexity of performing our work, our profitability may be negatively affected.”
In our WNS Auto Claims BPM segment, we earn revenue from claims handling, repair management services and legal services relating to personal injury claims. For claims handling, we charge on a per claim basis or a fixed fee per vehicle over a contract period. For automobile repair management services, where we arrange for the repairs through a network of repair centers that we have established, we invoice the client for the amount of the repair. When we direct a vehicle to a specific repair center, we receive a referral fee from that repair center. We also provide a consolidated suite of services towards accident management including credit hire and credit repair for “non-fault” repairs business. Further, we provide legal services relating to personal injury claims through our subsidiary WNS Legal Assistance LLP.
Revenue by Contract Type
For fiscal 2023 and 2022, our revenue and revenue less repair payments (non-GAAP) were diversified by contract type in the proportions set forth in the following table:
| As a percentage of revenue | As a percentage of revenue less repair payments (non-GAAP) |
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| Year ended March 31, | Year ended March 31, | |||||||||||||||
| Revenue by Contract type |
2023 | 2022 | 2023 | 2022 | ||||||||||||
| Full-time-equivalent |
67.7 | % | 63.4 | % | 71.4 | % | 68.5 | % | ||||||||
| Transaction |
14.8 | % | 17.0 | % | 10.2 | % | 10.3 | % | ||||||||
| Subscription |
7.7 | % | 9.3 | % | 8.1 | % | 10.0 | % | ||||||||
| Fixed price |
5.5 | % | 5.7 | % | 5.8 | % | 6.2 | % | ||||||||
| Others (1) |
4.3 | % | 4.6 | % | 4.5 | % | 5.0 | % | ||||||||
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Note:
| (1) | Others includes revenue from “outcome-based arrangements”, which typically involve billings based on the business result achieved by our clients through our service efforts (such as measured based on a reduction in days sales outstanding, an improvement in working capital, an increase in collections or a reduction in operating expenses). |
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Expenses
The majority of our expenses consist of cost of revenue and operating expenses. The key components of our cost of revenue are employee costs, payments to repair centers, facilities costs, depreciation, legal and professional costs, and travel expenses. Our operating expenses include selling and marketing expenses, general and administrative expenses, foreign exchange gains and losses and amortization of intangible assets. Our non-operating expenses include finance expenses as well as other expenses recorded under “other income, net.”
Cost of Revenue
Employee costs represent the largest component of cost of revenue. In addition to employee salaries, employee costs include costs related to recruitment, training and retention, and share-based compensation expense. Historically, our employee costs have increased primarily due to increases in the number of employees to support our growth and, to a lesser extent, to recruit, train and retain employees. Salary levels in India and our ability to efficiently manage and retain our employees significantly influence our cost of revenue. See “Part I — Item 4. Information on the Company — B. Business Overview — Human Capital.” Regulatory developments may, however, result in wage increases in India and increase our cost of revenue.
For example, the Code on Wages 2019, Industrial Relations Code 2020, Social Security Code 2020 and Occupational Safety, Health & Working Condition Code 2020 received assent from the President of India on September 28, 2020. However, the rules implementing these Acts have not yet been published and the effective date from which these changes are applicable has yet to be announced. Accordingly, while we are unable to ascertain with certainty the financial impact due to these changes, it is possible that our wage costs in India may increase as a result of these changes when they become effective. See “Part I — Item. 3. Key Information. — D. Risk Factors — Risks Related to Our Business — Wage increases may prevent us from sustaining our competitive advantage and may reduce our profit margin.” We seek to mitigate these cost increases through improvements in employee productivity, employee retention and asset utilization.
Our WNS Auto Claims BPM segment includes repair management services, where we arrange for automobile repairs through a network of third party repair centers. This cost is primarily driven by the volume of accidents and the amount of the repair costs related to such accidents. It also includes incremental and direct costs incurred to contract with claimants by WNS Legal Assistance LLP.
Our facilities costs comprise lease rentals, utilities cost, facilities management and telecommunication network cost. Most of our leases for our facilities are long-term agreements and have escalation clauses which provide for increases in rent at periodic intervals. Most of these agreements have clauses that have fixed escalation of lease rentals.
We create capacity in our operational infrastructure ahead of anticipated demand as it takes six to nine months to build up a new site. Hence, our cost of revenue as a percentage of revenue may be higher during periods in which we carry such additional capacity.
Once we are engaged by a client in a new contract, we normally have a transition period to transfer the client’s processes to our delivery centers and accordingly incur costs related to such transfer.
Selling and Marketing Expenses
Our selling and marketing expenses comprise primarily employee costs for sales and marketing personnel, share-based compensation expense, brand building expenses, legal and professional fees, travel expenses, and other general expenses relating to selling and marketing.
Selling and marketing expenses as a proportion of revenue was 5.2% in fiscal 2023 as compared with 4.9% for fiscal 2022. Selling and marketing expenses as a proportion of revenue less repair payments (non-GAAP) was 5.5% in fiscal 2023 as compared with 5.2% for fiscal 2022. Due to the uncertainty of the COVID-19 pandemic, we have limited visibility at this time on its impact on our sales team and selling and marketing expenses, if any, and are unable to forecast whether or to what extent selling and marketing expenses as a proportion of revenue or revenue less repair payments will increase or decrease in fiscal 2024.
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General and Administrative Expenses
Our general and administrative expenses comprise primarily employee costs for senior management and other support personnel, share-based compensation expense, legal and professional fees, travel expenses, and other general expenses not related to cost of revenue and selling and marketing.
General and administrative expenses as a proportion of revenue was 13.8% in fiscal 2023 as compared with 13.6% in fiscal 2022. General and administrative expenses as a proportion of revenue less repair payments (non-GAAP) was 14.6% in fiscal 2023 as compared with 14.7% in fiscal 2022. Due to the uncertainty of the COVID-19 pandemic, we have limited visibility at this time on its impact on our general and administrative expenses, if any, and are unable to forecast whether or to what extent general and administrative expenses in absolute terms will increase or decrease in fiscal 2024.
Foreign Exchange Loss / (Gain), Net
Foreign exchange loss / (gain), net include:
| • | marked to market gains or losses on derivative instruments that do not qualify for “hedge” accounting and are deemed ineffective; |
| • | realized foreign currency exchange gains or losses on settlement of transactions in foreign currency and derivative instruments; and |
| • | unrealized foreign currency exchange gains or losses on revaluation of other assets and liabilities. |
We had a foreign exchange gain of $1.0 million in fiscal 2023 as compared to a gain of $6.0 million in fiscal 2022.
Amortization of Intangible Assets
Amortization of intangible assets is primarily associated with our acquisitions of Fusion in June 2012, Value Edge Research Services Private Limited (“Value Edge”) in June 2016, Denali Sourcing Services Inc. (“Denali”) in January 2017, MTS HealthHelp Inc. and its subsidiaries (“HealthHelp”) in March 2017, Vuram in July 2022, The Smart Cube acquired in December 2022, OptiBuy acquired in December 2022 and amortization of intangible assets associated with business transfers from CEPROCS S.R.L. (“CEPROCS”) in December 2021 and a large insurance company in October 2022.
Other Income, Net
Other income, net comprises interest income, income from investments, gain or loss on sale of assets and other miscellaneous income and expenses.
Finance Expense
Finance expense primarily relates to interest charges payable on our term loans and short-term borrowings, transaction costs and the gains/losses on settlement of related derivative instruments. On adoption of IFRS 16, with effect from April 1, 2019, interest expense on lease liabilities is also reflected in this line item. It also includes changes in the fair value of contingent consideration relating to our acquisitions. We expect our interest payable on our term loans to be higher in fiscal 2024 as compared to fiscal 2023, due to the full year impact of the loan taken to fund our acquisition of The Smart Cube.
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Operating Data
Our profit margin is largely a function of our asset utilization and the rates we are able to recover for our services. One of the most significant components of our asset utilization is our seat utilization rate which is the average number of work shifts per day, out of a maximum of three, for which we are able to utilize our seats. Generally, an improvement in seat utilization rate will improve our profitability unless there are other factors which increase our costs such as an increase in lease rentals, large ramp-ups to build new seats, and increases in costs related to repairs and renovations to our existing or used seats. In addition, an increase in seat utilization rate as a result of an increase in the volume of work will generally result in a lower cost per seat and a higher profit margin as the total fixed costs of our built up seats remain the same while each seat is generating more revenue.
The following table presents certain operating data as at the dates indicated:
| As at March 31, | ||||||||
| 2023 | 2022 | |||||||
| Total headcount |
59,755 | 52,081 | ||||||
| Built up seats(1) |
37,222 | 34,494 | ||||||
| Used seats(1) |
— | — | ||||||
| Seat utilization rate(1) (2) |
— | — | ||||||
Notes:
| (1) | “Built up seats” refers to the total number of production seats (excluding support functions like finance, human resources, administration and seats dedicated for business continuity planning) that are set up in any premises. “Used seats” refers to the number of built up seats that are being used by employees. The remainder would be termed “vacant seats.” The vacant seats would get converted into used seats when we increase headcount. |
The service delivery capacities of our remote-working employees may not be equivalent to their normal capacities when working in our delivery centers.
The “hybrid” model continued to be used in fiscal 2023 and fiscal 2022. Accordingly, the used seats details and seat utilization rate details are not relevant for fiscal 2023 and fiscal 2022.
| (2) | The seat utilization rate is calculated by dividing the average total headcount by the average number of built up seats to show the rate at which we are able to utilize our built up seats. Average total headcount and average number of built up seats are calculated by dividing the aggregate of the total headcount or number of built up seats, as the case may be, as at the beginning and end of the fiscal year by two. |
Our total headcount and built up seats increased from March 31, 2022 to March 31, 2023 primarily due to our acquisitions of Vuram, The Smart Cube and OptiBuy on July 1, 2022, December 16, 2022 and December 14, 2022, respectively.
We expect our total headcount in fiscal 2024 to increase as compared to fiscal 2023 as the impact of an increased flow of business from new and existing clients is expected to continue to increase our hiring requirements in fiscal 2024.
Foreign Exchange
Exchange Rates
We report our financial results in US dollars and our results of operations would be adversely affected if the pound sterling or, to a lesser extent, the Euro or the Australian dollar depreciates against the US dollar, or if the Indian rupee or, to a lesser extent, the Philippine peso or the South African rand appreciates against the US dollar. Although a substantial portion of our revenue and revenue less repair payments (non-GAAP) is denominated in US dollars (59.4% and 62.6%, respectively, in fiscal 2023 and 55.6% and 60.1%, respectively, in fiscal 2022), pound sterling (25.4% and 21.4%, respectively, in fiscal 2023 and 29.5% and 23.8%, respectively, in fiscal 2022), and, to a lesser extent, the Euro (6.4% and 6.8%, respectively, in fiscal 2023 and 5.7% and 6.1%, respectively, in fiscal 2022), the Australian dollars (5.7% and 6.0%, respectively, in fiscal 2023 and 5.7% and 6.2%, respectively, in fiscal 2022), and the South African rand (1.1% and 1.1%, respectively, in fiscal 2023 and 2.0% and 2.1%, respectively, in fiscal 2022), most of our expenses (net of payments to repair centers) are incurred and paid in Indian rupees (46.0% in fiscal 2023 and 45.8% in fiscal 2022) and, to a lesser extent, in the Philippine peso (11.8% in fiscal 2023 and 12.3% in fiscal 2022) and the South African rand (5.2% in fiscal 2023 and 5.7% in fiscal 2022). The exchange rates between these currencies and the US dollar have changed substantially in recent years and may fluctuate substantially in the future.
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The average Indian rupee to US dollar exchange rate was approximately ₹80.33 per $1.00 in fiscal 2023, which represented a depreciation of the Indian rupee of 7.8% as compared with the average exchange rate of ₹74.49 per $1.00 in fiscal 2022, which in turn represented a depreciation of the Indian rupee of 0.3% as compared with the average exchange rate of approximately ₹74.25 per $1.00 in fiscal 2021.
The average pound sterling to US dollar exchange rate was approximately £0.83 per $1.00 in fiscal 2023, which represented a depreciation of the pound sterling of 11.8% as compared with the average exchange rate of approximately £0.73 per $1.00 in fiscal 2022, which in turn represented an appreciation of the pound sterling of 4.6% as compared with the average exchange rate of approximately £0.77 per $1.00 in fiscal 2021.
The average Australian dollar to US dollar exchange rate was approximately A$1.46 per $1.00 in fiscal 2023, which represented a depreciation of the Australian dollar of 7.3% as compared with the average exchange rate of approximately A$1.35 per $1.00 in fiscal 2022, which in turn represented an appreciation of the Australian dollar of 3.0% as compared with the average exchange rate of approximately A$1.39 per $1.00 in fiscal 2021.
The average Euro to US dollar exchange rate was approximately €0.96 per $1.00 in fiscal 2023, which represented a depreciation of the Euro of 10.4% as compared with the average exchange rate of approximately €0.86 per $1.00 in fiscal 2022, which in turn represented a depreciation of the Euro of 0.3% as compared with the average exchange rate of approximately €0.857 per $1.00 in fiscal 2021.
The average South African rand to US dollar exchange rate was approximately R16.98 per $1.00 in fiscal 2023, which represented a depreciation of the South African rand of 14.4% as compared with the average exchange rate of approximately R14.85 per $1.00 in fiscal 2022, which in turn represented an appreciation of the South African rand of 9.3% as compared with the average exchange rate of approximately R16.37 per $1.00 in fiscal 2021.
The average Philippine peso to US dollar exchange rate was approximately PHP55.32 per $1.00 in fiscal 2023, which represented a depreciation of the Philippine peso of 10.5% as compared with the average exchange rate of approximately PHP50.07 per $1.00 in fiscal 2022, which in turn represented a depreciation of the Philippine peso of 2.2% as compared with the average exchange rate of approximately PHP49.00 per $1.00 in fiscal 2021.
The depreciation of the Indian rupee, Philippine peso and the South African rand against the US dollar in fiscal 2023 positively impacted our results of operations whereas the depreciation of the pound sterling, the Euro and the Australian dollar in each case against the US dollar negatively impacted our results of operations during the year. Increases in our cost of revenue and other expenses were partially offset by the positive impact of the depreciation of Indian rupee in fiscal 2023. The depreciation of the Indian rupee and the Philippine peso and the appreciation of the pound sterling and the Australian dollar in each case against the US dollar in fiscal 2022 positively impacted our results of operations whereas the depreciation of the Euro and the appreciation of the South African rand in each case against the US dollar negatively impacted our results of operations during that year. See “Part I — Item 11. Quantitative and Qualitative Disclosures About Market Risk — B. Risk Management Procedures — Components of Market Risk — Exchange Rate Risk.”
We have subsidiaries in several countries and hence, the functional currencies of these entities differ from our reporting currency, the US dollar. The financial statements of these entities are translated to the reporting currency as at the balance sheet date. Adjustments resulting from the translation of these financial statements from functional currency to reporting currency are accumulated and reported as other comprehensive income/(loss), which is a separate component of equity and such exchange differences are recognized in our consolidated statement of income in the period in which such subsidiaries are disposed. Foreign currency transaction gains and losses are recorded as other income or expense.
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Currency Regulation
Our Indian subsidiaries are registered as exporters of BPM services with STPI or Special Economic Zone (“SEZ”). According to the prevailing foreign exchange regulations in India, an exporter of BPM services registered with STPI or SEZ is required to receive its export proceeds in India within a period of nine months from the date of such exports in order to avail itself of the tax and other benefits. In the event that such a registered exporter has received any advance against exports in foreign exchange from its overseas customers, it is required to render the requisite services so that such advances are earned within a period of one year from the date of such receipt. If such a registered exporter does not meet these conditions, it will be required to obtain permission from the Reserve Bank of India to receive and realize such foreign currency earnings.
A majority of the payments we receive from our clients are denominated in pound sterling and US dollars. For most of our clients, our subsidiaries in Mauritius, the Netherlands, Australia, the UK and the US enter into contractual agreements directly with our clients for the provision of BPM services by our Indian subsidiaries, which hold the foreign currency receipts in an export earners’ foreign currency account. All foreign exchange requirements, such as for the import of capital goods, expenses incurred during overseas travel by employees and discharge of foreign exchange expenses or liabilities, can be met using the foreign currency in the export earners’ foreign currency account in India. As and when funds are required by us, the funds in the export earners’ foreign currency account may be transferred to an ordinary rupee-denominated account in India.
There are currently no Jersey, UK or US foreign exchange control restrictions on the payment of dividends on our ordinary shares or on the conduct of our operations.
Income Taxes
We operate in multiple tax jurisdictions including Australia, China, Costa Rica, Canada, France, Germany, India, Ireland, Mauritius, Malaysia, Mexico, the Netherlands, New Zealand, the Philippines, Poland, Portugal, Romania, Singapore, South Africa, Spain, Sri Lanka, Switzerland, Turkey, United Arab Emirates, the UK and the US. As a result, our effective tax rate changes from year to year based on recurring factors such as the geographical mix of income before taxes, state and local taxes, the ratio of permanent items to pre-tax book income and the implementation of various global tax strategies, as well as non-recurring events.
In fiscal 2023, 2022 and 2021, our tax rate in India, the Philippines and Sri Lanka impacted our effective tax rate. We would have incurred approximately $20.7 million, $20.9 million and $11.1 million in additional income tax expense on our combined operations in our SEZ operations in India, the Philippines and Sri Lanka in fiscal 2023, 2022 and 2021 respectively, if the tax holidays and exemptions described below had not been available for the respective periods.
We expect our tax rate in India, the Philippines and Sri Lanka to continue to impact our effective tax rate. Our tax rate in India has been impacted by the reduction in the tax exemption enjoyed by our delivery center operating under the SEZ scheme as discussed below. From fiscal 2016 until fiscal 2023, we started operations in various delivery centers in the Philippines that are eligible for tax exemption benefits expiring between fiscal 2020 and fiscal 2026. Following the expiry of the tax benefits, income generated by the Philippines subsidiary will be taxed at the prevailing special tax rate, which currently is 5.0% on gross profit. As per The Corporate Recovery and Tax Incentives for Enterprises Act (“CREATE”) which is effective from April, 2021, enterprises will be taxed at 5% on gross profit for a fixed period of 10 years. Also, any changes in the regulations relating to work from home arrangements may impact the tax exemption benefits available to our Philippines subsidiary. Our effective tax rate in Sri Lanka had been impacted by the withdrawal of tax exemption on export income in Sri Lanka with effect from April 1, 2018 until December 31, 2019, following which the income from export of service had been subject to tax at 14% on net basis. From January 1, 2020, our operations in Sri Lanka are eligible to claim income tax exemption with respect to the profits earned from export revenue, as more fully described below.
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India
In the past, the majority of our Indian operations were eligible to claim income tax exemption with respect to profits earned from export revenue from operating units registered under the STPI. The benefit was available for a period of 10 years from the date of commencement of operations, but not beyond March 31, 2011. Effective April 1, 2011, upon the expiration of this tax exemption, income derived from our operations in India became subject to the prevailing annual tax rate, which was 34.95% in fiscal 2023, 2022 and 2021.
In 2005, the Government of India implemented the SEZ legislation, with the effect that taxable income of new operations established in designated SEZs may be eligible for a 15-year tax holiday scheme consisting of a complete tax holiday for the initial five years and a partial tax holiday for the subsequent ten years, subject to the satisfaction of certain capital investment conditions in the last five years. From fiscal 2012 until fiscal 2022, the Company started operations in various delivery centers in Mumbai, Pune, Chennai, Gurgaon and Noida, India that were registered under the 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, which are set to expire between fiscal 2022 and fiscal 2024. Following the expiry of the 100% income tax exemption, these operations are eligible for a 50% income tax exemption which are set to expire between fiscal 2026 and fiscal 2034. Such income tax exemption are only eligible for business units and operations set up under the SEZ legislation on or before March 31, 2020.
In addition to these tax holidays, our Indian subsidiaries are also entitled to certain benefits under relevant state legislation and regulations. These benefits include rebates and waivers in relation to payment for transfer of property and registration (including for purchase or lease of premises) and commercial usage of electricity.
The Government of India may enact new tax legislation that could impact the way we are taxed in the future. For example, the change in the law in fiscal 2017 has resulted in any new business units or operation units set up under the SEZ legislation after March 31, 2020 not being eligible for the same income tax holidays that our existing SEZ operations currently enjoy. See “Part I — Item 3. Key Information — D. Risk Factors — Risks Related to Key Delivery Locations — Tax legislation and the results of actions by taxing authorities may have an adverse effect on our operations and our overall tax rate”.
Philippines
From fiscal 2016 until fiscal 2022, our company started operations in various delivery centers in the Philippines which are eligible for tax exemption benefits expiring between 2020 and 2026. Following the expiry of the tax benefits, income generated by the Philippines subsidiary will be taxed at the prevailing special tax rate, which currently is 5.0% on gross profit. As per The Corporate Recovery and Tax Incentives for Enterprises Act (“CREATE”) which is effective from April 2021, enterprises will be taxed at 5% on gross profit for a fixed period of 10 years.
Any changes in the regulations relating to work-from-home arrangements may impact the tax exemption benefits available to our Philippines subsidiary.
Sri Lanka
Our operations in Sri Lanka were eligible to claim income tax exemption with respect to the profits earned from export revenue until fiscal 2018 and have since been taxed at 14% on net basis with effect from April 1, 2018 until December 31, 2019. From January 1, 2020, our operations in Sri Lanka are eligible to claim income tax exemption with respect to the profits earned from export revenue.
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Results of Operations
The following table sets forth certain financial information as a percentage of revenue and revenue less repair payments (non-GAAP) for the periods indicated:
| As a percentage of | ||||||||||||||||
| Revenue | Revenue less repair payments (non-GAAP) |
|||||||||||||||
| Year ended March 31, | Year ended March 31, | |||||||||||||||
| 2023 | 2022 | 2023 | 2022 | |||||||||||||
| Cost of revenue |
65.5 | % | 66.2 | % | 63.6 | % | 63.5 | % | ||||||||
| Gross profit |
34.5 | % | 33.8 | % | 36.4 | % | 36.5 | % | ||||||||
| Operating expenses: |
||||||||||||||||
| Selling and marketing expenses |
5.2 | % | 4.9 | % | 5.5 | % | 5.2 | % | ||||||||
| General and administrative expenses |
13.8 | % | 13.6 | % | 14.6 | % | 14.7 | % | ||||||||
| Foreign exchange loss / (gain), net |
(0.1 | )% | (0.5 | )% | (0.1 | )% | (0.6 | )% | ||||||||
| Amortization of intangible assets |
1.9 | % | 1.0 | % | 2.0 | % | 1.1 | % | ||||||||
| Operating profit |
13.7 | % | 14.8 | % | 14.4 | % | 16.0 | % | ||||||||
| Other income, net |
(1.3 | )% | (1.2 | )% | (1.4 | )% | (1.4 | )% | ||||||||
| Finance expense |
1.5 | % | 1.2 | % | 1.6 | % | 1.3 | % | ||||||||
| Income tax expense |
2.2 | % | 2.9 | % | 2.3 | % | 3.2 | % | ||||||||
| Profit after tax |
11.2 | % | 11.9 | % | 11.8 | % | 12.9 | % | ||||||||
The following table reconciles revenue (a GAAP financial measure) to revenue less repair payments (a non-GAAP financial measure) and sets forth payments to repair centers and revenue less repair payments (non-GAAP) as a percentage of revenue for the periods indicated:
| Year ended March 31, | ||||||||||||||||
| 2023 | 2022 | 2023 | 2022 | |||||||||||||
| (US dollars in millions) | ||||||||||||||||
| Revenue |
$ | 1,224.3 | $ | 1,109.8 | 100.0 | % | 100.0 | % | ||||||||
| Less: Payments to repair centers |
62.2 | 83.0 | 5.1 | % | 7.5 | % | ||||||||||
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| Revenue less repair payments (non-GAAP) |
$ | 1,162.0 | $ | 1,026.8 | 94.9 | % | 92.5 | % | ||||||||
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The following table presents our results of operations for the periods indicated:
| Year ended March 31, | ||||||||
| 2023 | 2022 | |||||||
| (US dollars in millions) | ||||||||
| Revenue |
$ | 1,224.3 | $ | 1,109.8 | ||||
| Cost of revenue(1) |
801.5 | 735.2 | ||||||
|
|
|
|
|
|||||
| Gross profit |
422.7 | 374.6 | ||||||
| Operating expenses: |
||||||||
| Selling and marketing expenses(2) |
63.5 | 53.9 | ||||||
| General and administrative expenses(3) |
169.3 | 151.1 | ||||||
| Foreign exchange loss / (gains), net |
(1.0 | ) | (6.0 | ) | ||||
| Amortization of intangible assets |
23.6 | 11.5 | ||||||
|
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|
|||||
| Operating profit |
167.3 | 164.1 | ||||||
| Other income, net |
(16.0 | ) | (13.9 | ) | ||||
| Finance expense |
18.8 | 13.4 | ||||||
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| Profit before income taxes |
164.5 | 164.5 | ||||||
| Income tax expense |
27.2 | 32.4 | ||||||
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|
|
|||||
| Profit after tax |
$ | 137.3 | $ | 132.1 | ||||
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Notes:
| (1) | Includes share-based compensation expense of $8.1 million in fiscal 2023 and $5.2 million in fiscal 2022. |
| (2) | Includes share-based compensation expense of $6.4 million in fiscal 2023 and $4.9 million in fiscal 2022. |
| (3) | Includes share-based compensation expense of $35.3 million in fiscal 2023 and $34.1 million in fiscal 2022. |
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Fiscal 2023 Compared to Fiscal 2022
Revenue
The following table sets forth our revenue and percentage change in revenue for the periods indicated:
| Year ended March 31, | ||||||||||||||||
| 2023 | 2022 | Change | % Change | |||||||||||||
| (US dollars in millions) | ||||||||||||||||
| Revenue |
$ | 1,224.3 | $ | 1,109.8 | $ | 114.5 | 10.3 | % | ||||||||
The increase in revenue of $114.5 million was primarily attributable to an increase in revenue from existing clients of $49.9 million, and revenue from new clients of $70.1 million (including revenue of $35.6 million from Vuram, The Smart Cube and OptiBuy which we acquired on July 1, 2022, December 16, 2022 and December 14, 2022, respectively), partially offset by a decrease in the hedging gain on our revenue by $5.6 million to a loss of $2.2 million in fiscal 2023 from a gain of $3.5 million in fiscal 2022. The increase in revenue was primarily due to higher revenues in our travel and leisure, diversified businesses, banking and financial services, utilities, hi-tech and professional services and shipping and logistics verticals and partially offset by lower revenues in our healthcare and insurance verticals and a depreciation of the pound sterling, the Euro, the South African rand, and the Australian dollar by an average of 11.8%, 10.4%, 14.4% and 7.3%, respectively, against the US dollar in fiscal 2023, as compared to the respective average exchange rates in fiscal 2022. In particular, revenues in our healthcare vertical were lower in fiscal 2023 as compared to fiscal 2022 as we ceased to provide certain services to a healthcare company in January 2023; this healthcare company was one of our top five customers by revenue contribution in fiscal 2023.
Revenue by Geography
The following table sets forth the composition of our revenue based on the location of our clients in our key geographies for the periods indicated:
| Revenue | As a percentage of revenue |
|||||||||||||||
| Year ended March 31, | ||||||||||||||||
| 2023 | 2022 | 2023 | 2022 | |||||||||||||
| (US dollars in millions) | ||||||||||||||||
| North America (primarily the US) |
$ | 602.5 | $ | 504.3 | 49.2 | % | 45.4 | % | ||||||||
| UK |
351.0 | 363.9 | 28.7 | % | 32.8 | % | ||||||||||
| Europe (excluding the UK) |
86.5 | 67.9 | 7.1 | % | 6.1 | % | ||||||||||
| Australia |
74.7 | 67.4 | 6.1 | % | 6.1 | % | ||||||||||
| South Africa |
13.5 | 22.3 | 1.1 | % | 2.0 | % | ||||||||||
| Rest of world |
96.0 | 84.1 | 7.8 | % | 7.6 | % | ||||||||||
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| Total |
$ | 1,224.3 | $ | 1,109.8 | 100.0 | % | 100.0 | % | ||||||||
|
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The increase in revenue in the North America (primarily the US) region was primarily attributable to higher revenues in our diversified businesses, insurance, travel and leisure, hi-tech and professional services, banking and financial services, healthcare and shipping and logistics verticals, partially offset by a lower revenue in our utilities vertical. The increase in revenue from the Europe (excluding the UK) region was primarily attributable to higher volumes in our travel and leisure, diversified businesses, healthcare, hi-tech and professional services, shipping and logistics, banking and financial services and insurance verticals, partially offset by a lower revenue in our utilities vertical and a depreciation of the Euro against the US dollar by an average of 10.4%, as compared to the average exchange rate in fiscal 2022. The increase in revenue from the rest of world region was primarily attributable to higher revenues in our banking and financial services, shipping and logistics, travel and leisure, hi-tech and professional services, insurance and utilities verticals partially offset by lower revenues in our diversified businesses and healthcare verticals. The increase in revenue from the Australia region was primarily attributable to higher revenues in our travel and leisure, insurance, banking and financial services, diversified businesses, hi-tech and professional services and utilities verticals, partially offset by lower revenues in our shipping and logistics, and healthcare verticals, and a depreciation of the Australian dollar against the US dollar by an average of 7.3%, as compared to the average exchange rate in fiscal 2022. The decrease in revenue from the UK region was primarily attributable to lower revenues in our insurance, healthcare and hi-tech and professional services verticals and a depreciation of the pound sterling against the US dollar by an average of 11.8%, as compared to the average exchange rate in fiscal 2022, partially offset by higher revenues in our utilities, travel and leisure, banking and financial services, diversified businesses and shipping and logistics verticals. The decrease in revenue from the South Africa region was primarily attributable to lower revenues in our diversified businesses, travel and leisure, healthcare and utilities verticals and a depreciation of the South African rand against the US dollar by an average of 14.4%, as compared to the average exchange rate in fiscal 2022, partially offset by higher revenues in our banking and financial services and hi-tech and professional services verticals.
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Revenue Less Repair Payments (non-GAAP)
The following table sets forth our revenue less repair payments (non-GAAP) and percentage change in revenue less repair payments (non-GAAP) for the periods indicated:
| Year ended March 31, | ||||||||||||||||
| 2023 | 2022 | Change | % Change | |||||||||||||
| (US dollars in million) | ||||||||||||||||
| Revenue less repair payments (non-GAAP) |
$ | 1,162.0 | $ | 1,026.8 | $ | 135.2 | 13.2 | % | ||||||||
The increase in revenue less repair payments (non-GAAP) of $135.2 million was primarily attributable to an increase in revenue less repair payments (non-GAAP) from existing clients of $71.6 million, and revenue less repair payments (non-GAAP) from new clients of $69.2 million (including revenue of $35.6 million from Vuram, The Smart Cube and OptiBuy which we acquired on July 1, 2022, December 16, 2022 and December 14, 2022, respectively), partially offset by a decrease in the hedging gain on our revenue by $5.6 million to a loss of $2.2 million in fiscal 2023 from a gain of $3.5 million in fiscal 2022. The increase in revenue less repair payments (non-GAAP) was primarily due to higher revenue less repair payments (non-GAAP) in our travel and leisure, diversified businesses, insurance, banking and financial services, utilities, hi-tech and professional services and shipping and logistics verticals, partially offset by lower revenue less repair payments (non-GAAP) in our healthcare vertical and a depreciation of the pound sterling, the Euro, the South African rand, and the Australian dollar by an average of 11.8%, 10.4%, 14.4% and 7.3%, respectively, against the US dollar in fiscal 2023, as compared to the respective average exchange rates in fiscal 2022. In particular, revenue less repair payments in our healthcare vertical was lower in fiscal 2023 as compared to fiscal 2022 as we ceased to provide certain services to a healthcare company in January 2023; this healthcare company was one of our top five customers by revenue contribution in fiscal 2023.
Revenue Less Repair Payments (non-GAAP) by Geography
The following table sets forth the composition of our revenue less repair payments (non-GAAP) based on the location of our clients in our key geographies for the periods indicated:
| Revenue less repair payments (non-GAAP) |
As a percentage of revenue less repair payments (non-GAAP) |
|||||||||||||||
| Year ended March 31, | ||||||||||||||||
| 2023 | 2022 | 2023 | 2022 | |||||||||||||
| (US dollars in millions) | ||||||||||||||||
| North America (primarily the US) |
$ | 602.5 | $ | 504.3 | 51.8 | % | 49.1 | % | ||||||||
| UK |
288.8 | 280.9 | 24.9 | % | 27.4 | % | ||||||||||
| Europe (excluding the UK) |
86.5 | 67.9 | 7.4 | % | 6.6 | % | ||||||||||
| Australia |
74.7 | 67.4 | 6.4 | % | 6.6 | % | ||||||||||
| South Africa |
13.5 | 22.3 | 1.2 | % | 2.2 | % | ||||||||||
| Rest of world |
96.0 | 84.1 | 8.3 | % | 8.1 | % | ||||||||||
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|
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| Total |
$ | 1,162.0 | $ | 1,026.8 | 100.0 | % | 100.0 | % | ||||||||
|
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|
|
|
|
|
|
|
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The increase in revenue less repair payments (non-GAAP) from the North America (primarily the US) region was primarily attributable to higher revenue less repair payments (non-GAAP) in our diversified businesses, insurance, travel and leisure, hi-tech and professional services, banking and financial services, healthcare, shipping and logistics verticals, partially offset by lower revenue less repair payments (non-GAAP) in our utilities vertical. The increase in revenue less repair payments (non-GAAP) from the Europe (excluding the UK) region was primarily attributable to higher revenue less repair payments (non-GAAP) in our travel and leisure, healthcare, hi-tech and professional services, shipping and logistics, banking and financial services and insurance verticals, partially offset by a lower revenue less repair payments (non-GAAP) in our utilities vertical and a depreciation of the Euro against the US dollar by an average of 10.4%, as compared to the average exchange rate in fiscal 2022. The increase in revenue less repair payments (non-GAAP) from the rest of world region was primarily attributable to higher revenue less repair payments (non-GAAP) in our banking and financial services, shipping and logistics, travel and leisure, hi-tech and professional services, insurance and utilities verticals partially offset by lower revenue less repair payments (non-GAAP) in our diversified businesses and healthcare verticals. The increase in revenue less repair payments (non-GAAP) from the UK region was primarily attributable to higher revenue less repair payments (non-GAAP) in our utilities, travel and leisure, banking and financial services, diversified businesses and shipping and logistics verticals, partially offset by by lower revenue less repair payments (non-GAAP) in our hi-tech and professional services, insurance and healthcare verticals and a depreciation of the pound sterling against the US dollar by an average of 11.8%, as compared to the average exchange rate in fiscal 2022. The increase in revenue less repair payments (non-GAAP) from the Australia region was primarily attributable to higher revenue less repair payments (non-GAAP) in our travel and leisure, insurance, banking and financial services, diversified businesses, hi-tech and professional services and utilities verticals, partially offset by lower revenue less repair payments (non-GAAP) in our shipping and logistics, and healthcare verticals, and a depreciation of the Australian dollar against the US dollar by an average of 7.3%, as compared to the average exchange rate in fiscal 2022. The decrease in revenue less repair payments (non-GAAP) from the South Africa region was primarily attributable to lower revenue less repair payments (non-GAAP) in our diversified businesses, travel and leisure, healthcare and utilities verticals and a depreciation of the South African rand against the US dollar by an average of 14.4%, as compared to the average exchange rate in fiscal 2022, partially offset by higher revenue less repair payments (non-GAAP) in our banking and financial services and hi-tech and professional services verticals.
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Cost of Revenue
The following table sets forth the composition of our cost of revenue for the periods indicated:
| Year ended March 31, | ||||||||||||
| 2023 | 2022 | Change | ||||||||||
| (US dollars in millions) | ||||||||||||
| Employee costs |
$ | 578.3 | $ | 503.7 | $ | 74.5 | ||||||
| Repair payments |
62.2 | 83.0 | (20.7 | ) | ||||||||
| Facilities costs |
67.5 | 56.4 | 11.1 | |||||||||
| Depreciation |
48.7 | 48.6 | 0.1 | |||||||||
| Legal and professional costs |
12.4 | 10.2 | 2.2 | |||||||||
| Travel costs |
7.3 | 3.0 | 4.3 | |||||||||
| Other costs |
25.2 | 30.3 | (5.1 | ) | ||||||||
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|
|
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| Total cost of revenue |
$ | 801.5 | $ | 735.2 | $ | 66.4 | ||||||
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|
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| As a percentage of revenue |
65.5 | % | 66.2 | % | ||||||||
The increase in cost of revenue was primarily due to higher employee costs on account of a higher headcount (including headcount from Vuram, The Smart Cube and OptiBuy, which we acquired on July 1, 2022, December 16, 2022 and December 14, 2022, respectively), wage inflation, higher facilities running costs due to an increase in facilities utilization (as our employees gradually returned to the office); higher travel costs due to increased travel on account of the easing of COVID-19 related travel restrictions in many countries and higher legal and professional costs due to higher cost for recruiting employees. These increases were partially offset by lower repair payments, and a depreciation of the pound sterling, the South Africa rand, Philippine peso and Indian rupee against the US dollar by an average of 11,8%, 14.4%, 10.5% and 7.8%, respectively, in fiscal 2023 as compared to the respective average exchange rates in fiscal 2022, which resulted in a decrease in our cost of revenue by approximately $39.7 million. Further, the cost of revenue associated with COVID-19 related business continuity costs, such as costs arising from towards the provision of accommodation to our employees, rental laptops and WIFI dongles, which are devices that allow remote access via the Internet as we shifted to a “hybrid” model, decreased by $8.9 million to $5.3 million in fiscal 2023 as compared to $14.1 million in fiscal 2022.
Gross Profit
The following table sets forth our gross profit for the periods indicated:
| Year ended March 31, | ||||||||||||
| 2023 | 2022 | Change | ||||||||||
| (US dollars in millions) | ||||||||||||
| Gross profit |
$ | 422.7 | $ | 374.6 | $ | 48.1 | ||||||
| As a percentage of revenue |
34.5 | % | 33.8 | % | ||||||||
| As a percentage of revenue less repair payments (non-GAAP) |
36.4 | % | 36.5 | % | ||||||||
Gross profit as a percentage of revenue increased in fiscal 2023 from fiscal 2022, due to a higher revenue as discussed above.
Gross profit as a percentage of revenue less repair payments (non-GAAP) decreased slightly in fiscal 2023 from fiscal 2022, primarily due to a slightly higher cost of revenue (excluding repair payments) as a percentage of revenue less repair payments (non-GAAP) as discussed above.
During fiscal 2023, our built up seats increased by 7.9% from 34,494 as at the end of fiscal 2022 to 37,222 as at the end of fiscal 2023 due to the expansion of facilities in the Philippines, opening up of new facilities in Indore and Vizag, India and the addition of new facilities in Chennai and Trichy, India due to the acquisition Vuram in July 2022 and the addition of facilities in Poland after we acquired OptiBuy in December 2022. Our total headcount increased by 14.7% from 52,081 to 59,755 during the same period, in line with the increase in revenue generation by such hires and primarily attributable to headcount from Vuram, The Smart Cube and OptiBuy, which we acquired on July 1, 2022, December 16, 2022 and December 14, 2022, respectively.
For further information, see notes (1) and (2) to the table presenting certain operating data in “— Operating Data” above.
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Selling and Marketing Expenses
The following table sets forth the composition of our selling and marketing expenses for the periods indicated:
| Year ended March 31, | ||||||||||||
| 2023 | 2022 | Change | ||||||||||
| (US dollars in millions) | ||||||||||||
| Employee costs |
$ | 51.7 | $ | 46.6 | $ | 5.1 | ||||||
| Other costs |
11.8 | 7.2 | 4.6 | |||||||||
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| Total selling and marketing expenses |
$ | 63.5 | $ | 53.9 | $ | 9.6 | ||||||
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|
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| As a percentage of revenue |
5.2 | % | 4.9 | % | ||||||||
| As a percentage of revenue less repair payments (non-GAAP) |
5.5 | % | 5.2 | % | ||||||||
The increase in our selling and marketing expenses was primarily due to an increase in employee costs due to wage inflation and higher share-based compensation costs and an increase in other costs due to higher marketing costs and higher travel costs. These increases were partially offset by lower legal and professional costs and a depreciation of the pound sterling against the US dollar by an average of 11.8%, in fiscal 2023, as compared to the average exchange rates in fiscal 2022 which resulted in a decrease of selling and marketing expenses by approximately $1.8 million.
General and Administrative Expenses
The following table sets forth the composition of our general and administrative expenses for the periods indicated:
| Year ended March 31, | ||||||||||||
| 2023 | 2022 | Change | ||||||||||
| (US dollars in millions) | ||||||||||||
| Employee costs |
$ | 130.8 | $ | 121.5 | $ | 9.3 | ||||||
| Other costs |
38.6 | 29.6 | 8.9 | |||||||||
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|
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| Total general and administrative expenses |
$ | 169.3 | $ | 151.1 | $ | 18.2 | ||||||
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|
|||||||
| As a percentage of revenue |
13.8 | % | 13.6 | % | ||||||||
| As a percentage of revenue less repair payments (non-GAAP) |
14.6 | % | 14.7 | % | ||||||||
The increase in general and administrative expenses was primarily due to an increase in employee costs due to higher salaries on account of a higher headcount (including headcount from Vuram, The Smart Cube and OptiBuy, which we acquired on July 1, 2022, December 16, 2022 and December 14, 2022, respectively), wage inflation and higher share-based compensation costs; and an increase in other costs due to higher legal and professional costs (including expenses related to our acquisition of Vuram, The Smart Cube and OptiBuy) and higher travel costs. These increases were partially offset by a depreciation of the South African rand, pound sterling, Indian rupee and the Philippine peso against the US dollar by an average of 14.4%, 11.8%, 7.8% and 10.5%, respectively, in fiscal 2023, as compared to the respective average exchange rates in fiscal 2022, which resulted in a decrease of general and administrative expenses by approximately $7.1 million.
Foreign Exchange Loss / (Gain), Net
The following table sets forth our foreign exchange loss / (gain), net for the periods indicated:
| Year ended March 31, | ||||||||||||
| 2023 | 2022 | Change | ||||||||||
| (US dollars in millions) | ||||||||||||
| Foreign exchange loss/ (gain), net |
$ | (1.0 | ) | $ | (6.0 | ) | $ | 4.9 | ||||
We recorded foreign exchange gain of $1.0 million in fiscal 2023, primarily on account of a revaluation gain of $1.0 million as compared to a foreign exchange gain of $6.0 million in fiscal 2022, primarily on account of a revaluation gain of $6.0 million.
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Amortization of Intangible Assets
The following table sets forth our amortization of intangible assets for the periods indicated:
| Year ended March 31, | ||||||||||||
| 2023 | 2022 | Change | ||||||||||
| (US dollars in millions) | ||||||||||||
| Amortization of intangible assets |
$ | 23.6 | $ | 11.5 | $ | 12.1 | ||||||
The increase in amortization of intangible assets was primarily attributable to the amortization of intangibles assets associated with our acquisition of Vuram (which we acquired in Jul 2022), The Smart Cube (which we acquired in December 2022) and OptiBuy (which we acquired in December 2022) and amortization of intangible assets associated with the business transfer from a large insurance company (in October 2022) and CEPROCS. This increase is partially offset by the completion of the amortization of certain intangible assets associated with our Fusion acquisition.
Operating Profit
The following table sets forth our operating profit for the periods indicated:
| Year ended March 31, | ||||||||||||
| 2023 | 2022 | Change | ||||||||||
| (US dollars in millions) | ||||||||||||
| Operating profit |
$ | 167.3 | $ | 164.1 | $ | 3.2 | ||||||
| As a percentage of revenue |
13.7 | % | 14.8 | % | ||||||||
| As a percentage of revenue less repair payments (non-GAAP) |
14.4 | % | 16.0 | % | ||||||||
Operating profit as a percentage of revenue was lower in fiscal 2023 as compared to fiscal 2022 notwithstanding higher revenues in fiscal 2023 due to higher selling and marketing expenses, general and administrative expenses and amortization of intangible assets and lower foreign exchange gains as a percentage of revenue, partially offset by lower cost of revenue as a percentage of revenue.
Operating profit as a percentage of revenue less repair payments (non-GAAP) was lower in fiscal 2022 from fiscal 2021, due to higher cost of revenue (excluding repair payments), higher selling and marketing expenses, higher amortization of intangible assets and lower foreign exchange gains as a percentage of revenue less repair payments (non-GAAP), partially offset by and lower general and administrative expenses as a percentage of revenue less repair payments (non-GAAP).
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Other Income, net
The following table sets forth our other income, net for the periods indicated:
| Year ended March 31, | ||||||||||||
| 2023 | 2022 | Change | ||||||||||
| (US dollars in millions) | ||||||||||||
| Other income, net |
$ | (16.0 | ) | $ | (13.9 | ) | $ | (2.1 | ) | |||
Other income, net was higher in fiscal 2023 as compared with fiscal 2022, primarily due to higher interest yield and higher cash and cash equivalents and investments and an interest income of $2.1 million, received in relation to an income tax refund in fiscal 2023, as compared to interest income of $1.8 million received in relation to income tax refund in fiscal 2022.
Finance Expense
The following table sets forth our finance expense for the periods indicated:
| Year ended March 31, | ||||||||||||
| 2023 | 2022 | Change | ||||||||||
| (US dollars in millions) | ||||||||||||
| Finance expense |
$ | 18.8 | $ | 13.4 | $ | 5.4 | ||||||
Finance expense increased primarily due to higher interest on the right of use assets under IFRS 16, and higher interest on long-term loans taken for general corporate purposes and for the acquisition of The Smart Cube and an increase in the fair value of contingent considerations relating to our acquisitions.
Income Tax Expense
The following table sets forth our income tax expense for the periods indicated:
| Year ended March 31, | ||||||||||||
| 2023 | 2022 | Change | ||||||||||
| (US dollars in millions) | ||||||||||||
| Income tax expense |
$ | 27.2 | $ | 32.4 | $ | (5.2 | ) | |||||
The decrease in income tax expense was primarily due to marginally lower taxable profit and a change in geographical mix of taxable profits in favor of tax exempt jurisdictions and one-time deferred tax asset benefit of $1.7 million due to recognition of previously unrecognized deferred tax assets.
Profit After Tax
The following table sets forth our profit after tax for the periods indicated:
| Year ended March 31, | ||||||||||||
| 2023 | 2022 | Change | ||||||||||
| (US dollars in millions) | ||||||||||||
| Profit after tax |
$ | 137.3 | $ | 132.1 | $ | 5.2 | ||||||
| As a percentage of revenue |
11.2 | % | 11.9 | % | ||||||||
| As a percentage of revenue less repair payments (non-GAAP) |
11.8 | % | 12.9 | % | ||||||||
The decrease in profit after tax as a percentage of revenue as well as a percentage of revenue less repair payments (non-GAAP) was primarily on account of lower operating profit as a percentage of revenue and lower operating profit as a percentage of revenue less repair payments (non-GAAP) and higher finance expense, partially offset by higher other income and lower income tax expense, as explained above.
Fiscal 2022 Compared to Fiscal 2021
For a discussion of our results in fiscal 2022 compared to fiscal 2021, please see “Part I — Item 5. Operating and Financial Review and Prospects — Results of Operations — Fiscal 2022 Compared to Fiscal 2021” contained in our Annual Report on Form 20-F for fiscal 2022 filed with the SEC on May 17, 2022.
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Results by Reportable Segment
For purposes of evaluating operating performance and allocating resources, we have organized our company by operating segments. See Note 28 to our consolidated financial statements included elsewhere in this annual report. For financial statement reporting purposes, we aggregate the segments that meet the criteria for aggregation as set forth in IFRS 8 “Operating Segments” (“IFRS 8”). We have separately reported our Auto Claims BPM segment, as it does not meet the aggregation criteria under IFRS 8. Accordingly, pursuant to IFRS 8, we have two reportable segments: WNS Global BPM and WNS Auto Claims BPM.
WNS Global BPM is delivered out of our delivery centers in Canada, China, Costa Rica, India, Malaysia, the Philippines, Poland, Romania, South Africa, Sri Lanka, Turkey, the UK and the US. This segment includes all of our business activities with the exception of WNS Auto Claims BPM. WNS Auto Claims BPM is our automobile claims management business which is primarily based in the UK and is part of our insurance business unit. See “Part I — Item 4. Information on the Company — B. Business Overview — Business Process Management Service Offerings.” We report WNS Auto Claims BPM as a separate segment for financial statement reporting purposes since a substantial part of our reported revenue in this business consists of amounts invoiced to our clients for payments made by us to third party automobile repair centers, resulting in lower long-term gross margins when measured on the basis of revenue, relative to the WNS Global BPM segment.
Our revenue is generated primarily from providing BPM services.
In our WNS Auto Claims BPM segment, we provide both “fault” and “non-fault” repairs. For “fault” repairs, we provide claims handling and repair management services, where we arrange for automobile repairs through a network of third party repair centers. In our repair management services, where we act as the principal in our dealings with the third party repair centers and our clients, the amounts which we invoice to our clients for payments made by us to third party repair centers are reported as revenue. Where we are not the principal in providing the services, we record revenue from repair services net of repair cost. Since we wholly subcontract the repairs to the repair centers, we evaluate the financial performance of our “fault” repair business based on revenue less repair payments (non-GAAP) to third party repair centers, which is a non-GAAP financial measure. We believe that revenue less repair payments (non-GAAP) for “fault” repairs reflects more accurately the value addition of the BPM services that we directly provide to our clients.
For our “non-fault” repairs business, we generally provide a consolidated suite of accident management services including credit hire and credit repair, and we believe that measurement of such business on a basis that includes repair payments in revenue is appropriate. Revenue including repair payments is therefore used as a primary measure to allocate resources and measure operating performance for accident management services provided in our “non-fault” repairs business. Our “non-fault” repairs business where we provide accident management services accounts for a relatively small portion of our revenue for our WNS Auto Claims BPM segment. In our WNS Auto Claims BPM segment, effective July 1, 2015, WNS Legal Assistance LLP, a subsidiary of WNS Assistance Limited, commenced providing legal services in relation to personal injury claims.
Revenue less repair payments is a non-GAAP financial measure which 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. Our revenue less repair payments (non-GAAP) may not be comparable to similarly titled measures reported by other companies due to potential differences in the method of calculation.
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We allocate resources based on segment revenue less repair payments (non-GAAP) and measures segment performance based on revenue less repair payments (non-GAAP) and to a lesser extent on segment operating income. The accounting policies of our reportable segments are the same as those of our company.
The following table shows revenue and revenue less repair payments (non-GAAP) for our two reportable segments for the periods indicated:
| Year ended March 31, | ||||||||||||||||
| 2023 | 2022 | |||||||||||||||
| (US dollars in millions) | ||||||||||||||||
| WNS Global BPM |
WNS Autoclaims BPM |
WNS Global BPM |
WNS Autoclaims BPM |
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| Segment revenue(1) |
$ | 1,153.3 | $ | 71.8 | $ | 1,014.7 | $ | 96.1 | ||||||||
| Less: Payments to repair centers |
— | 62.2 | — | 83.0 | ||||||||||||
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| Revenue less repair payments (non-GAAP) (1) |
1,153.3 | 9.5 | 1,014.7 | 13.2 | ||||||||||||
| Cost of revenue (excluding payments to repair centers)(2) |
721.9 | 10.1 | 635.7 | 12.4 | ||||||||||||
| Other costs(3) |
188.6 | 1.4 | 156.4 | 3.7 | ||||||||||||
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| Segment operating profit / (loss) |
242.8 | (2.1 | ) | 222.6 | (2.9 | ) | ||||||||||
| Other income, net |
(15.4 | ) | (0.6 | ) | (13.1 | ) | (0.7 | ) | ||||||||
| Finance expense |
18.8 | 0.0 | 13.3 | 0.1 | ||||||||||||
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| Segment profit before income taxes |
239.4 | (1.5 | ) | 222.5 | (2.2 | ) | ||||||||||
| Income tax expense |
27.4 | (0.2 | ) | 32.7 | (0.3 | ) | ||||||||||
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| Segment profit / (loss) |
$ | 212.0 | $ | (1.3 | ) | $ | 189.8 | $ | (1.9 | ) | ||||||
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Notes:
| (1) | Segment revenue and revenue less repair payments (non-GAAP) include inter-segment revenue of $0.7 million and $1.0 million in fiscal 2023 and 2022, respectively. |
| (2) | Cost of revenue includes inter-segment expenses of $0.7 million and $1.0 million in fiscal 2023 and 2022, respectively, and excludes share-based compensation expense of $8.1 million and $5.2 million in fiscal 2023 and 2022, respectively, which are not allocable between our segments. |
| (3) | Other costs include selling and marketing expenses, general and administrative expenses and foreign exchange loss / (gains). Excludes share-based compensation expense of $41.7 million and $39.0 million in fiscal 2023 and 2022, respectively, which are not allocable between our segments. |
WNS Global BPM accounted for 94.1% of our revenue and 99.2% of our revenue less repair payments (non-GAAP) in fiscal 2023, as compared to 91.4% of our revenue and 98.8% of our revenue less repair payments (non-GAAP) in fiscal 2022.
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WNS Global BPM
Segment Revenue
Fiscal 2023 Compared to Fiscal 2022
Revenue in the WNS Global BPM segment increased by 13.7% to $1,153.3 million in fiscal 2023 from $1,014.7 million in fiscal 2022. This increase was primarily attributable to the increase in the volume of transactions executed for existing clients by $75.4 million, revenue from new clients of $69.0 million (including revenue of $35.6 million from Vuram, The Smart Cube and OptiBuy which we acquired on July 1, 2022, December 16, 2022 and December 14, 2022, respectively), partially offset by a decrease in the hedging gain on our revenue by $5.6 million to a loss of $2.2 million in fiscal 2023 from a gain of $3.5 million in fiscal 2022 and a depreciation of the pound sterling, the Euro, the South African rand, and the Australian dollar by an average of 11.8%, 10.4%, 14.4% and 7.3%, respectively, against the US dollar in fiscal 2023, as compared to the respective average exchange rates in fiscal 2022.
Fiscal 2022 Compared to Fiscal 2021
For a discussion of our segment revenue in fiscal 2022 compared to fiscal 2021, please see “Part I — Item 5. Operating and Financial Review and Prospects — Results by Reportable Segment — WNS Global BPM — Segment Revenue — Fiscal 2022 Compared to Fiscal 2021” contained in our Annual Report on Form 20-F for fiscal 2022 filed with the SEC on May 17, 2022.
Segment Operating Profit
Fiscal 2023 Compared to Fiscal 2022
Segment operating profit in the WNS Global BPM segment increased by 9.0% to $242.8 million in fiscal 2023 from $222.6 million in fiscal 2022. The increase was primarily attributable to higher segment revenue, partially offset by higher cost of revenue, higher general and administrative expenses, higher selling and marketing expenses and a lower foreign exchange gain.
Our cost of revenue includes employee costs, facilities costs, legal and professional costs, depreciation, travel costs and other related costs. Employee related costs represent the largest component of our cost of revenue for the WNS Global BPM segment.
Our cost of revenue increased by $86.2 million to $721.9 million in fiscal 2023 from $635.7 million in fiscal 2022, primarily on account of an increase in employee costs due to a higher headcount and wage inflation, higher facilities running costs due to an increase in facilities utilization; higher travel costs due to increased travel on account of the easing of COVID-19 related travel restrictions in many countries and higher legal and professional costs.
These increases were partially offset by a depreciation of the pound sterling, the South Africa rand, Philippine peso and Indian rupee against the US dollar by an average of 11.8%, 14.4%, 10.5% and 7.8%, respectively, in fiscal 2023 as compared to the respective average exchange rates in fiscal 2022, which resulted in a decrease in our cost of revenue by approximately $39.7 million. Further, the cost of revenue associated with COVID-19 related business continuity costs, such as costs arising from towards the provision of accommodation to our employees, rental laptops and WIFI dongles, which are devices that allow remote access via the Internet as we shifted to a “hybrid” model, decreased by $8.9 million to $5.3 million in fiscal 2023 as compared to $14.1 million in fiscal 2022.
Our other costs include selling and marketing expenses, general and administrative expenses and foreign exchange loss or gain. Our other costs increased by $32.2 million to $188.6 million in fiscal 2023 from $156.4 million in fiscal 2022, primarily on account of an increase in general and administrative expenses by $19.2 million, and selling and marketing expenses by $8.2 million and lower foreign exchange gain by $4.9 million to a gain of $1.0 million in fiscal 2023 as compared to a gain of $6.0 million in fiscal 2022.
General and administrative expenses increased by $19.2 million to $132.8 million in fiscal 2023 from $113.7 million in fiscal 2022, primarily due to an increase in employee costs due to higher salaries on account of higher headcount, wage inflation and higher share-based compensation costs; and an increase in other costs due to higher legal and professional costs (including expenses related to our acquisition of Vuram, The Smart Cube and OptiBuy) and higher travel costs. These increases were partially offset by a depreciation of the South African rand, pound sterling Indian rupee and Philippine peso against the US dollar by an average of 14.4%, 11.8%, 7.8% and 10.5%, respectively, in fiscal 2023, as compared to the respective average exchange rates in fiscal 2022, which resulted in a decrease of general and administrative expenses by approximately $7.1 million.
Selling and marketing expenses increased by $8.2 million to $56.9 million in fiscal 2023 from $48.7 million in fiscal 2022, primarily due to an increase in employee costs due to wage inflation; an increase in other costs due to higher marketing costs and higher travel costs. These increases were partially offset by lower legal and professional costs and a depreciation of the pound sterling against the US dollar by an average of 11.8%, in fiscal 2023, as compared to the average exchange rates in fiscal 2022, resulting in an increase of selling and marketing expenses by approximately $1.8 million.
We recorded foreign exchange gain of $1.0 million in fiscal 2023, primarily on account of a revaluation gain of $1.0 million as compared to a foreign exchange gain of $6.0 million in fiscal 2022, primarily on account of a revaluation gain of $6.0 million.
Fiscal 2022 Compared to Fiscal 2021
For a discussion of our segment operating profit in fiscal 2022 compared to fiscal 2021, please see “Part I — Item 5.Operating and Financial Review and Prospects — Results by Reportable Segment — WNS Global BPM — Segment Operating Profit — Fiscal 2022 Compared to Fiscal 2021” contained in our Annual Report on Form 20-F for fiscal 2022 filed with the SEC on May 17, 2022.
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Segment Profit
Fiscal 2023 Compared to Fiscal 2022
Segment profit in the WNS Global BPM segment increased by 11.7% to $212.0 million in fiscal 2023 from $189.8 million in fiscal 2022. The increase in profit was primarily attributable to higher operating profit, lower income tax expenses and higher other income, net, partially offset by higher finance expenses.
The finance expense in fiscal 2023 was $18.8 million as compared to $13.3 million in fiscal 2022 primarily due to higher interest on the right of use assets under IFRS 16, and higher interest on our long-term loans taken for the acquisition of The Smart Cube.
The other income, net increased by $2.3 million in fiscal 2023 to $15.4 million from $13.1 million in fiscal 2022 primarily due to higher interest income associated with an income tax refund of $2.1 million, higher cash and cash equivalents and investments and higher interest yield.
The income tax expense in fiscal 2023 was $27.4 million as compared to $32.7 million in fiscal 2022. The decrease in income tax expense was primarily due to marginally lower taxable profit, a change in geographical mix of taxable profits in favor of tax exempt jurisdictions and a one-time recognition of previously unrecognized deferred tax assets in the amount of $1.7 million.
Fiscal 2022 Compared to Fiscal 2021
For a discussion of our segment profit in fiscal 2022 compared to fiscal 2021, please see “Part I — Item 5. Operating and Financial Review and Prospects — Results by Reportable Segment — WNS Global BPM — Segment Profit — Fiscal 2022 Compared to Fiscal 2021” contained in our Annual Report on Form 20-F for fiscal 2022 filed with the SEC on May 17, 2022.
WNS Auto Claims BPM
Segment Revenue
Fiscal 2023 Compared to Fiscal 2022
Revenue in the WNS Auto Claims BPM segment decreased by $24.4 million to $71.8 million in fiscal 2023 from $96.1 million in fiscal 2022. The decrease was primarily on account of a decrease in revenue from existing clients by $25.5 million and a depreciation of the pound sterling against the US dollar by an average of 11.8% in fiscal 2023 as compared to the average exchange rate in fiscal 2022, partially offset by revenue from new clients of $1.1 million. Payments made to repair centers in fiscal 2023 decreased by $20.7 million to $62.2 million in fiscal 2023 from $83.0 million in fiscal 2022.
Revenue less repair payments (non-GAAP) in this segment decreased by $3.7 million to $9.5 million in fiscal 2023 from $13.2 million in fiscal 2022. The decrease was primarily on account of a decrease in revenue less repair payments (non-GAAP) in this segment from existing clients by $3.9 million and a depreciation of the pound sterling against the US dollar by an average of 11.8% in fiscal 2023 as compared to the average exchange rate in fiscal 2022, partially offset by revenue less repair payments (non-GAAP) in this segment from new clients of $0.3 million.
Fiscal 2022 Compared to Fiscal 2021
For a discussion of our segment revenue in fiscal 2022 compared to fiscal 2021, please see “Part I — Item 5. Operating and Financial Review and Prospects — Results by Reportable Segment — WNS Auto Claims BPM — Segment Revenue — Fiscal 2022 Compared to Fiscal 2021” contained in our Annual Report on Form 20-F for fiscal 2022 filed with the SEC on May 17, 2022.
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Segment Operating Profit
Fiscal 2023 Compared to Fiscal 2022
The segment reported an operating loss of $2.1 million in fiscal 2023 as compared to an operating loss of $2.9 million in fiscal 2022. The lower segment operating loss recorded in fiscal 2023 was primarily due to lower cost of revenue (excluding payments to repair centers), lower general and administrative expenses and lower selling and marketing expenses, partially offset by lower revenue less repair payments (non-GAAP).
Our cost of revenue (excluding payments to repair centers) decreased by $2.3 million to $10.1 million in fiscal 2023 from $12.4 million in fiscal 2022. The decrease in cost of revenue (excluding payments made to repair centers) was primarily on account of a decrease in our employee costs by $1.4 million
Our other costs include selling and marketing expenses, general and administrative expenses, and foreign exchange loss or gain. Our other costs decreased by $2.3 million to $1.4 million in fiscal 2023 from $3.7 million in fiscal 2022, primarily due to a decrease in general and administrative expenses by $2.2 million to $1.2 million in fiscal 2023 from $3.4 million in fiscal 2022.
Fiscal 2022 Compared to Fiscal 2021
For a discussion of our segment operating profit in fiscal 2022 compared to fiscal 2021, please see “Part I — Item 5. Operating and Financial Review and Prospects — Results by Reportable Segment — WNS Auto Claims BPM — Segment Operating Profit — Fiscal 2022 Compared to Fiscal 2021” contained in our Annual Report on Form 20-F for fiscal 2022 filed with the SEC on May 17, 2022.
Segment Profit
Fiscal 2023 Compared to Fiscal 2022
The segment reported a loss of $1.3 million in fiscal 2023 as compared to a loss of $1.9 million in fiscal 2022. This was primarily attributable to lower segment operating loss.
Fiscal 2022 Compared to Fiscal 2021
For a discussion of our segment profit in fiscal 2022 compared to fiscal 2021, please see “Part I — Item 5. Operating and Financial Review and Prospects — Results by Reportable Segment — WNS Auto Claims BPM — Segment Profit — Fiscal 2022 Compared to Fiscal 2021” contained in our Annual Report on Form 20-F for fiscal 2022 filed with the SEC on May 17, 2022.
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Tax Assessment Orders
Transfer pricing regulations to which we are subject require that any international transaction among the WNS group enterprises be on arm’s-length terms. We believe that the international transactions among the WNS group enterprises are on arm’s-length terms. If, however, the applicable tax authorities determine that the transactions among the WNS group enterprises do not meet arm’s-length criteria, we may incur increased tax liability, including accrued interest and penalties. This would cause our tax expense to increase, possibly materially, thereby reducing our profitability and cash flows. We have signed an advance pricing agreement with the Government of India providing for the agreement on transfer pricing matters over certain transactions covered thereunder for a period of five years starting from April 2018. We have filed an application with the Government of India for the renewal of the advance pricing agreement on similar terms for another five years starting from April 2023. The applicable tax authorities may also disallow deductions or tax holiday benefits claimed by us and assess additional taxable income on us in connection with their review of our tax returns.
From time to time, we receive orders of assessment from the Indian tax authorities assessing additional taxable income on us and/or our subsidiaries in connection with their review of our tax returns. We currently have orders of assessment for fiscal 2003 through fiscal 2018 pending before various appellate authorities. These orders assess additional taxable income that could in the aggregate give rise to an estimated ₹560.9 million ($6.8 million based on the exchange rate on March 31, 2023) in additional taxes, including interest of ₹153.1 million ($1.9 million based on the exchange rate on March 31, 2023).
The following sets forth the details of these orders of assessment:
| Entity |
Tax year(s) | Amount demanded (including interest) |
Interest on amount Demanded |
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| (₹ and US dollars in millions) | ||||||||||||||||||||
| Permanent establishment of WNS North America Inc (“WNS NA Inc”) in India |
Fiscal 2003 | ₹ | 0.1 | $ | (0.1 | )(1) | ₹ | 0.1 | $ | (0.1 | )(1) | |||||||||
| Permanent establishment of WNS NA Inc and WNS Global Services UK Limited (“WNS UK”) in India |
Fiscal 2004 | ₹ | 8.1 | $ | (0.1 | )(1) | ₹ | 2.2 | $ | (0.1 | )(1) | |||||||||
| Permanent establishment of WNS NA Inc and WNS UK in India |
Fiscal 2005 | ₹ | 4.1 | $ | (0.1 | )(1) | ₹ | 1.2 | $ | (0.1 | )(1) | |||||||||
| WNS Global Services Private Limited (“WNS Global”) |
Fiscal 2006 | ₹ | 29.8 | $ | (0.4 | )(1) | ₹ | 7.7 | $ | (0.1 | )(1) | |||||||||
| Permanent establishment of WNS NA Inc and WNS UK in India |
Fiscal 2006 | ₹ | 13.2 | $ | (0.2 | )(1) | ₹ | 5.6 | $ | (0.1 | )(1) | |||||||||
| Permanent establishment of WNS NA Inc. and WNS UK in India |
Fiscal 2007 | ₹ | 23.1 | $ | (0.3 | )(1) | ₹ | 5.4 | $ | (0.1 | )(1) | |||||||||
| WNS Global |
Fiscal 2009 | ₹ | 55.2 | $ | (0.7 | )(1) | ₹ | — | $ | — | ||||||||||
| WNS Business Consulting Services Private Limited (“WNS BCS”) |
Fiscal 2010 | ₹ | 1.0 | $ | (0.1 | )(1) | ₹ | 0.3 | $ | (0.1 | )(1) | |||||||||
| Permanent establishment of WNS NA Inc in India |
Fiscal 2011 | ₹ | 31.0 | $ | (0.4 | )(1) | ₹ | 8.2 | $ | (0.1 | )(1) | |||||||||
| WNS Global |
Fiscal 2016 | ₹ | 45.2 | $ | (0.6 | )(1) | ₹ | 18.3 | $ | (0.1 | )(1) | |||||||||
| WNS Global |
Fiscal 2017 | ₹ | 91.9 | $ | (1.0 | )(1) | ₹ | 14.4 | $ | (0.1 | )(1) | |||||||||
| WNS Global |
Fiscal 2018 | ₹ | 258.2 | $ | (2.8 | )(1) | ₹ | 89.7 | $ | (0.9 | )(1) | |||||||||
| Total |
₹ | 560.9 | $ | (6.8 | )(1) | ₹ | 153.1 | $ | (1.9 | )(1) | ||||||||||
Note:
| (1) | Based on the exchange rate as at March 31, 2023. |
The aforementioned orders of assessment allege that the transfer prices we applied to certain of the international transactions between WNS Global or WNS BCS (each of which is one of our Indian subsidiaries), as the case may be, and our other wholly-owned subsidiaries named above were not on arm’s-length terms, disallow a tax holiday benefit claimed by us, deny the set off of brought forward business losses and unabsorbed depreciation and disallow certain expenses claimed as tax deductible by WNS Global or WNS BCS, as the case may be. As at March 31, 2023, we have provided a tax reserve of ₹816.9 million ($9.9 million based on the exchange rate on March 31, 2023) primarily on account of the Indian tax authorities’ denying the set-off of brought forward business losses and unabsorbed depreciation. We have appealed against these orders of assessment before higher appellate authorities.
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In addition, we currently have orders of assessment pertaining to similar issues that have been decided in our favor by appellate authorities, vacating tax demands of ₹6,556.9 million ($79.8 million based on the exchange rate on March 31, 2023) in additional taxes, including interest of ₹2,353.2 million ($28.6 million based on the exchange rate on March 31, 2023). The income tax authorities have filed or may file appeals against these orders at higher appellate authorities.
In case of disputes, the Indian tax authorities may require us to deposit with them all or a portion of the disputed amounts pending resolution of the matters on appeal. Any amount paid by us as deposits will be refunded to us with interest if we succeed in our appeals. We have deposited ₹904.1 million ($11.0 million based on the exchange rate on March 31, 2023) of the disputed amount with the tax authorities and may be required to deposit the remaining portion of the disputed amount with the tax authorities pending final resolution of the respective matters.
As at March 31, 2023, corporate tax returns for fiscal year 2020 and thereafter remain subject to examination by tax authorities in India.
After consultation with our Indian tax advisors and based on the facts of these cases, legal opinions from counsel on certain matters, the nature of the tax authorities’ disallowances and the orders from appellate authorities deciding similar issues in our favor in respect of assessment orders for earlier fiscal years, we believe these orders are unlikely to be sustained at the higher appellate authorities and we intend to vigorously dispute the orders of assessment.
In addition, we currently have orders of assessment outstanding for various years pertaining to pre-acquisition period of newly acquired entities, which assess additional taxable income that could in the aggregate give rise to an estimated ₹63.2 million ($0.8 million based on the exchange rate on March 31, 2023) in additional taxes, including interest of ₹31.1million ($0.4 million based on the exchange rate on March 31, 2023). These orders of assessment disallow tax holiday benefit claimed by the newly acquired entities. The newly acquired entities have appealed against these orders of assessment before higher appellate authorities.
We have received orders of assessment from the VAT, service tax and GST authorities, demanding payment of ₹159.6 million ($1.9 million based on the exchange rate on March 31, 2023) towards VAT, service tax and GST for the period April 1, 2014 to March 31, 2019. The tax authorities have rejected input tax credit on certain types of input services. Based on consultations with our tax advisors, we believe these orders of assessments will more likely than not be vacated by the higher appellate authorities and we intend to dispute the orders of assessments.
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 March 31, 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 Tax Appeal Commission 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.
No assurance can be given, however, that we will prevail in our tax disputes. If we do not prevail, payment of additional taxes, interest and penalties may adversely affect our results of operations, financial condition and cash flows. There can also be no assurance that we will not receive similar or additional orders of assessment in the future.
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Liquidity and Capital Resources
Our capital requirements are principally for the establishment of operating facilities to support our growth and acquisitions, to fund our debt repayment obligations, to fund our acquisitions and to fund the repurchase of ADSs under our share repurchase programs, as described in further detail below, see “— Share Repurchases.” Our sources of liquidity include cash and cash equivalents and cash flow from operations, supplemented by equity and debt financing and bank credit lines as required.
As at March 31, 2023, we had cash and cash equivalents of $127.9 million which were primarily held in South African rand, Indian rupees, Philippine pesos, US dollars and pound sterling. We typically seek to invest our available cash on hand in bank deposits and money market instruments. Our investments include primarily bank deposits, marketable securities and mutual funds which totaled $177.0 million as at March 31, 2023.
As at March 31, 2023, we had $173.4 million debt outstanding. We also had available lines of credit amounting to $139.6 million, all of which were available as at March 31, 2023. These limits can be utilized in accordance with the agreed terms and prevailing interest rates at the time of borrowing. We are continually evaluating the impact of the COVID-19 pandemic on our liquidity position, and we believe that we are able to source additional lines of credit, if required.
In July 2022, WNS (Mauritius) Limited obtained a term loan facility of $80.0 million 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 SOFR plus a margin of 1.20% per annum. WNS (Mauritius) Limited’s obligations under the term loan are guaranteed by WNS. The term loan is secured by a pledge of shares of WNS (Mauritius) Limited held by WNS. The facility agreement for the term loan contains certain covenants, including restrictive covenants relating to our indebtedness and financial covenants relating to our EBITDA to debt service ratio and total net borrowings to EBITDA ratio, each as defined in the facility agreement. The loan matures in July 2027 and the principal is repayable in 10 semi-annual installments of $8.0 million each. On January 9, 2023, we made the first scheduled repayment of $8.0 million.
In December 2022, WNS UK obtained a term loan facility of £83.0 million ($102.4 million based on the exchange rate on March 31, 2023) from The Hongkong and Shanghai Banking Corporation Limited, Hong Kong and Citibank N.A., UK Branch to fund our acquisition of The Smart Cube. The loan bears interest at a rate equivalent to the pound sterling overnight index average (“SONIA”) plus a margin of 1.25% per annum. WNS UK’s obligations under the term loan are guaranteed by WNS. The term loan is secured by a pledge of shares of WNS (Mauritius) Limited held by WNS. The facility agreement for the term loan contains certain covenants, including restrictive covenants relating to our indebtedness and financial covenants relating to our EBITDA to debt service ratio and total net borrowings to EBITDA ratio, each as defined in the facility agreement. The loan matures in December 2027 and the principal is repayable in 10 semi-annual installments of £8.3 million each. The first scheduled repayment date is due in June 2023.
As at March 31, 2023, our Indian subsidiary, WNS Global, had an unsecured line of credit of ₹840 million ($10.2 million based on the exchange rate on March 31, 2023) from The Hongkong and Shanghai Banking Corporation Limited, ₹600 million ($7.3 million based on the exchange rate on March 31, 2023) from BNP Paribas, ₹800 million ($9.8 million based on the exchange rate on March 31, 2023) from Citibank N.A., ₹750 million ($9.1 million based on the exchange rate on March 31, 2023) from Axis Bank, ₹600 million ($7.3 million based on the exchange rate on March 31, 2023) from DBS Bank, ₹600 million ($7.3 million based on the exchange rate on March 31, 2023) from HDFC Bank, ₹600 million ($7.3 million based on the exchange rate on March 31, 2023) from ICICI Bank and ₹600 million ($7.3 million based on the exchange rate on March 31, 2023) from Standard Chartered Bank for working capital purposes. Interest on these lines of credit would be determined on the date of the borrowing. These lines of credit generally can be withdrawn by the relevant lender at any time. As at March 31, 2023, there was no amount utilized from these lines of credit.
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As at March 31, 2023 WNS UK had an working capital facility of £14.0 million ($17.3 million based on the exchange rate on March 31, 2023) from HSBC Bank plc. The working capital facility bears interest at Bank of England base rate plus a margin of 2.45% per annum. Interest is payable on a quarterly basis. The facility is subject to conditions to drawdown and can be withdrawn by the lender at any time by notice to the borrower. As at March 31, 2023, there was no outstanding amount under this facility.
As at March 31, 2023 our South African subsidiary, WNS Global Services SA (Pty) Ltd., had an unsecured line of credit of ZAR 30.0 million ($1.7 million based on the exchange rate on March 31, 2023) from The HSBC Bank plc. for working capital purposes. This facility bears interest at prime rate less a margin of 2.25% per annum. This line of credit can be withdrawn by the lender at any time. As at March 31, 2023, there was no outstanding amount under this facility.
As at March 31, 2023, WNS North America Inc., had an unsecured line of credit of $40.0 million from The HSBC Bank plc. for working capital purposes. This facility bears interest at prime rate or SOFR plus a margin of 1.65% per annum. This line of credit can be withdrawn by the lender at any time. As at March 31, 2023, there was no outstanding amount under this facility.
As at March 31, 2023, WNS Global Services Philippines Inc. had an unsecured line of credit of $15.0 million from The HSBC Bank plc. for working capital purposes. This line of credit can be withdrawn by the lender at any time. As at March 31, 2023, there was no outstanding amount under this facility.
In March 2017, our Mauritius subsidiary, WNS (Mauritius) Limited, obtained a term loan facility for $84.0 million from HSBC Bank (Mauritius) Ltd. and Standard Chartered Bank, UK. The proceeds from this loan facility were used to finance our acquisition of HealthHelp. The loan bore interest at a rate equivalent to the three-month US dollar LIBOR plus a margin of 0.95% per annum. In connection with the term loan, we entered into interest rate swaps with banks to swap the variable portion of the interest based on the three-month US dollar LIBOR to a fixed rate of 1.9635%. WNS (Mauritius) Limited’s obligations under the term loan were guaranteed by WNS. The term loan was secured by a pledge of shares of WNS (Mauritius) Limited held by WNS. The facility agreement for the term loan contained certain covenants, including restrictive covenants relating to our indebtedness and financial covenants relating to our EBITDA to debt service ratio and total borrowings to EBITDA ratio, each as defined in the facility agreement. The loan matured in March 2022 and the principal was repayable in 10 semiannual installments of $8.4 million each. On September 14, 2017, March 14, 2018, September 17, 2018, March 14, 2019, September 16, 2019, March 16, 2020, September 14, 2020, March 15, 2021, September 14, 2021 we made scheduled repayments of $8.4 million each and on March 14, 2022 we repaid the final installment of $8.4 million. As a result of our repayment of the final instalment, HSBC Bank (Mauritius) Limited released the pledge on shares of WNS (Mauritius) Limited.
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As at March 31, 2023, bank guarantees amounting to $0.9 million were provided on behalf of certain of our subsidiaries to regulatory authorities and other third parties.
Based on our current level of operations, we expect that our anticipated cash generated from operating activities, cash and cash equivalents on hand, and use of existing credit facilities will be sufficient to fund our estimated capital expenditures, share repurchases and working capital needs for the next 12 months. However, if our lines of credit were to become unavailable for any reason, we would require additional financing to fund our capital expenditures, share repurchases and working capital needs. We currently expect our capital expenditures needs in fiscal 2024 to be approximately $60.0 million. The geographical distribution, timing and volume of our capital expenditures in the future will depend on new client contracts we may enter into or the expansion of our business under our existing client contracts. Our capital expenditure in fiscal 2023 amounted to $45.0 million and our capital commitments (net of capital advances) as at March 31, 2023 were $17.9 million. Of the capital expenditure incurred in fiscal 2023, approximately $17.9 million was incurred in India, approximately $11.1 million was incurred in the Philippines, approximately $6.8 million was incurred in South Africa, approximately $6.3 million was incurred in the US, approximately $1.6 million was incurred in UK, approximately, $1.3 million was incurred in the rest of the world. Of the capital commitments of $17.9 million, we plan to spend approximately $8.9 million in India, approximately $4.6 million in the Philippines, approximately $3.3 million in South Africa, approximately $0.6 million in the UK and approximately $0.5 million in the rest of the world.
Further, under the current challenging economic and business conditions as discussed under “— Global Economic Conditions” above, there can be no assurance that our business activity would be maintained at the expected level to generate the anticipated cash flows from operations. If the current market conditions deteriorate, we may experience a decrease in demand for our services, resulting in our cash flows from operations being lower than anticipated. If our cash flows from operations are lower than anticipated, including as a result of the ongoing downturn in the market conditions or otherwise, we may need to obtain additional financing to meet our debt repayment obligations and pursue certain of our expansion plans. Further, we may in the future make further acquisitions. If we have significant growth through acquisitions or require additional operating facilities beyond those currently planned to service new client contracts, we may also need to obtain additional financing. We believe in maintaining maximum flexibility when it comes to financing our business. We regularly evaluate our current and future financing needs. Depending on market conditions, we may access the capital markets to strengthen our capital position, and provide us with additional liquidity for general corporate purposes, which may include capital expenditures acquisitions, refinancing of indebtedness and working capital. If current market conditions deteriorate, we may not be able to obtain additional financing or any such additional financing may be available to us on unfavorable terms. An inability to pursue additional opportunities will have a material adverse effect on our ability to maintain our desired level of revenue growth in future periods.
The following table shows our cash flows in fiscal 2023 and 2022:
| Year ended March 31, | ||||||||
| 2023 | 2022 | |||||||
| (US dollars in millions) | ||||||||
| Net cash provided by operating activities |
$ | 205.0 | $ | 187.5 | ||||
| Net cash used in investing activities |
$ | (233.2 | ) | $ | (48.8 | ) | ||
| Net cash provided by / (used in) financing activities |
$ | 63.0 | $ | (127.1 | ) | |||
Cash Flows from Operating Activities
Net cash provided by operating activities increased to $205.0 million in fiscal 2023 from $187.5 million in fiscal 2022. The increase in net cash provided by operating activities was attributable to an increase in profit as adjusted for non-cash and other items by $21.3 million, a decrease in taxes paid by $3.1 million, an increase in interest received by $1.8 million, which was partially offset by an increase in cash outflow on account of working capital changes by $6.1 million and an increase in interest paid on our long-term debt and lease liabilities by $2.6 million.
The profit after tax as adjusted for non-cash and other items, primarily comprised the following: (i) profit after tax of $137.3 million in fiscal 2023 as compared to $132.1 million in fiscal 2022; (ii) depreciation and amortization expense of $73.8 million in fiscal 2023 as compared to $61.6 million in fiscal 2022; (iii) unrealized exchange loss of $2.2 million in fiscal 2023 as compared to an unrealized gain of $4.5 million in fiscal 2022; (iv) share-based compensation expense of $49.7 million in fiscal 2023 as compared to $44.2 million in fiscal 2022; (v) interest expense of $18.6 million in fiscal 2023 as compared to $13.3 million in fiscal 2022; (vi) unrealized gain on derivative instruments of $2.4 million in fiscal 2023 as compared to an unrealized loss of $3.3 million on drivative instruments in fiscal 2022; (vii) income tax expense (current tax and deferred tax) of $27.2 million in fiscal 2023 as compared to $32.4 million in fiscal 2022; (viii) interest income of $5.3 million for fiscal 2023 as compared to $3.8 million for fiscal 2022; (ix) income from marketable securities of $8.0 million in fiscal 2023 as compared to $7.1 million in fiscal 2022; (x) allowances for expected credit losses of $0.8 million for fiscal 2023 as compared to $0.1 million for fiscal 2022.
Cash outflow on account of working capital changes was $39.9 million in fiscal 2023 as compared to $33.8 million in fiscal 2022. This was primarily on account of an increase in cash outflow in relation to other liabilities by $26.9 million, trade payables by $5.4 million and a decrease in cash inflow in relation to other assets by $1.3 million, partially offset by an increase in cash inflow from trade receivables by $27.2 million and decrease in cash outflow in relation to contract liabilities by $0.3 million.
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Cash Flows from Investing Activities
Net cash used in investing activities increased to $233.2 million in fiscal 2023 from $48.8 million in fiscal 2022. This was primarily on account of net cash outflow of $312.8 million towards our acquisitions and business transfer made in fiscal 2023 as compared to $2.9 million towards our acquisitions made in fiscal 2022, cash outflow of $45.0 million in fiscal 2023 towards the purchase of property and equipment (comprising mainly leasehold improvements, furniture and fixtures, office equipment and information technology equipment) and intangible assets (comprising computer software), as compared to $28.3 million in fiscal 2022, partially offset by a net cash inflow of $66.4 million from sale of marketable securities in fiscal 2023 as compared to a net cash outflow of $16.0 million in fiscal 2022; and a net cash inflow (maturity of fixed deposits, net of placements) towards our fixed deposit investments of $37.5 million in fiscal 2023 as compared to net cash outflow (placement of fixed deposits, net of maturities) of $4.4 million in fiscal 2022.
Cash Flows from Financing Activities
Net cash provided by financing activities was $63.0 million in fiscal 2023 as compared to a net cash used in financing activities of $127.1 million in fiscal 2022. This was primarily on account of cash inflow due to proceeds from long term debt (net of repayment of $8.0 million) of $172.9 million in fiscal 2023 as compared to a cash outflow of $16.8 million towards repayment of long-term debt in fiscal 2022, a cash outflow of $81.6 million towards share repurchases in fiscal 2023 as compared to $85.0 million in fiscal 2022 and a cash outflow of $28.1 million towards the principal payment of lease liabilities in fiscal 2023 as compared to $26.2 million in fiscal 2022.
Contractual Obligations
Our principal commitments consist of expected principal cash payments relating to our obligations under operating leases for office space, which represent minimum lease payments for office space, and purchase obligations for property and equipment. The following table sets out our total future contractual obligations as at March 31, 2023 on a consolidated basis:
| Payments Due By Period | ||||||||||||||||||||
| Total | Less than 1 year |
1-3 years | 3-5 years | More than 5 years |
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| (US dollars in millions) | ||||||||||||||||||||
| Trade payables |
$ | 25.4 | $ | 25.4 | $ | — | $ | — | $ | — | ||||||||||
| Long term debt (before netting off debt issuance costs) |
174.4 | 36.5 | 72.9 | 65.0 | — | |||||||||||||||
| Estimated interest payments (1) |
22.0 | 8.4 | 10.7 | 2.9 | ||||||||||||||||
| Lease liabilities |
262.0 | 40.7 | 79.1 | 60.4 | 81.9 | |||||||||||||||
| Purchase obligations (net of capital advances) |
17.9 | 17.9 | — | — | — | |||||||||||||||
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| Total |
$ | 501.7 | $ | 128.8 | $ | 162.8 | $ | 128.3 | $ | 81.9 | ||||||||||
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| 1) | Interest payments are based on effective interest rate as of March 31, 2023. |
Research and Development
We have committed, and expect to continue to commit in the future, a portion of our resources to research and development. We are investing substantially in Triange, our “research, data, analytics and AI” practice, to strengthen our offerings to enable business growth and digital transformation for our clients. We collobarate with clients on their data driven transformation journey and enhance the returns on their analytics investments through our cloud-based AI/ML driven offerings and platforms with next-gen technologies.
Trend Information
Please refer to “—Results of Operations” for a discussion of the most recent trends in our services, sales and expenses by the end of fiscal 2023. In addition, please refer to discussions included therein for a discussion of known trends, uncertainties, demands, commitments or events that we believe are reasonably likely to have a material effect on our net sales or revenues, income from continuing operations, profitability, liquidity or capital resources, or that would cause reported financial information to be not necessarily indicative of our future operating results or financial condition.
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Critical Accounting Estimates
The discussion and analysis of our financial condition and results of operations are based on our consolidated financial statements included elsewhere in this annual report which have been prepared in accordance with IFRS, as issued by the IASB. Note 2 to our consolidated financial statements included elsewhere in this annual report describes our significant accounting policies and is an essential part of our consolidated financial statements.
We believe the following to be critical accounting estimates. By “critical accounting estimates,” we mean policies that are both important to our financial condition and financial results and require critical management judgments and estimates. Although we believe that our judgments and estimates are appropriate, actual future results may differ from our estimates.
| i. | Revenue recognition |
Our determination of whether BPM services are considered distinct performance obligations that should be accounted for separately versus together may require significant judgment.
We provide automobile claims handling services, wherein we enter into contracts with its clients to process all their claims over the contract period and the fees are determined either on a per claim basis or as a fixed payment for the contract period. Where the contracts are on a per claim basis, we invoice the client at the inception of the claim process. We estimate the processing period for the claims and recognize revenue over the estimated processing period. This processing period generally ranges between one to two months. The processing time may be greater for new clients and the estimated service period is adjusted accordingly. The processing period is estimated based on historical experience and other relevant factors, if any.
| ii. | Current income taxes |
The major tax jurisdictions for us are India, the Philippines, South Africa, UK, and US, though we also file tax returns in other foreign jurisdictions. Significant judgments are involved in determining the provision for income taxes including judgment on whether tax positions are probable of being sustained in tax assessments. A tax assessment can involve complex issues, which can only be resolved over extended time periods. The recognition of taxes that are subject to certain legal or economic limits or uncertainties is assessed individually by management based on the specific facts and circumstances.
| iii. | Deferred income taxes |
The assessment of the probability of future taxable profit in which deferred tax assets can be utilized is based on our latest approved budget forecast, which is adjusted for significant non-taxable profit and expenses and specific limits to the use of any unused tax loss or credit. The tax rules in the numerous jurisdictions in which we operate are also carefully taken into consideration. If a positive forecast of taxable profit indicates the probable use of a deferred tax asset, especially when it can be utilized without a time limit, that deferred tax asset is usually recognized in full. The recognition of deferred tax assets that are subject to certain legal or economic limits or uncertainties is assessed individually by management based on the specific facts and circumstances.
| iv. | Impairment |
An impairment loss is recognized for the amount by which an asset’s or cash-generating unit’s carrying amount exceeds its recoverable amount. To determine the recoverable amount, management estimates expected future cash flows from each asset or cash-generating unit and determines a suitable interest rate in order to calculate the present value of those cash flows. In the process of measuring expected future cash flows management makes assumptions about future operating results. These assumptions relate to future events and circumstances. The actual results may vary, and may cause significant adjustments to our assets within the next financial year. The calculation of impairment loss involves significant estimates and assumptions which include revenue and earnings multiples, growth rates and net margins used to calculate projected future cash flows, risk-adjusted discount rate and future economic and market conditions.
In most cases, determining the applicable discount rate involves estimating the appropriate adjustment to market risk and the appropriate adjustment to asset-specific risk factors.
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| v. | Valuation of derivative financial instruments |
Management uses appropriate valuation techniques, such as binomial lattice model, in measuring the fair value of derivative financial instruments, where active market quotes are not available. In applying the valuation techniques, management makes maximum use of market inputs, and uses estimates and assumptions that are, as far as possible, consistent with observable data that market participants would use in pricing the instrument. Where applicable data is not observable, management uses its best estimate about the assumptions that market participants would make. These estimates may vary from the actual prices that would be achieved in an arm’s length transaction at the reporting date.
| vi. | Accounting for defined benefit plans |
In accounting for pension and post-retirement benefits, several statistical and other factors that attempt to anticipate future events are used to calculate plan expenses and liabilities. These factors include expected return on plan assets, discount rate assumptions and rate of future compensation increases. To estimate these factors, actuarial consultants also use estimates such as withdrawal, turnover, and mortality rates which require significant judgment. The actuarial assumptions used by us may differ materially from actual results in future periods due to changing market and economic conditions, regulatory events, judicial rulings, higher or lower withdrawal rates, or longer or shorter participant life spans.
| vii. | Share-based compensation expense |
The share-based compensation expense is determined based on our estimate of equity instruments that will eventually vest and valuation using the Monte-Carlo simulation and the binomial lattice model.
| viii. | Business combinations |
Business combinations are accounted for using the acquisition method under the provisions of IFRS 3 (Revised), “Business Combinations.”
The cost of an acquisition is measured at the fair value of the assets transferred, equity instruments issued, and liabilities incurred at the date of acquisition. The cost of the acquisition also includes the fair value of any contingent consideration. Identifiable tangible and intangible assets acquired, and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair value on the date of acquisition. Significant estimates are required to be made in determining the value of contingent consideration and intangible assets.
| xi. | Impairment of non-derivative financial assets |
We apply the forward-looking ECL model for recognizing impairment loss on financial assets that are measured at amortized cost or at fair value through other comprehensive income (“FVOCI”). Loss allowance for trade receivables and unbilled revenue with no significant financing component are measured at an amount equal to lifetime ECL. We apply the simplified approach for determining the lifetime ECL allowance using our historical credit loss experience adjusted for factors that are specific to the debtor.
For all other financial assets, we recognize lifetime ECL when there has been a significant increase in credit risk since initial recognition. However, if the credit risk on the financial instruments has not increased significantly since the initial recognition, we measure the loss allowance for that financial instrument equal to 12-month ECL. The impairment assessment is performed annually and the amount of ECL (or reversal) that is required to adjust the loss allowance at the reporting date is recognized as an impairment gain/loss under “General and administrative expenses” in the consolidated statement of income.
| xii. | Leases |
We determine the lease term as the non-cancellable period of a lease including any option to extend or terminate the lease, if the use of such option is reasonably certain. We make an assessment on the expected lease term on a lease-by-lease basis and thereby assesses whether it is reasonably certain that any options to extend or terminate the contract will be exercised. In evaluating the lease term, we consider factors such as any significant leasehold improvements undertaken over the lease term, costs relating to the termination of the lease and the importance of the underlying asset to operations, taking into account the location of the underlying asset and the availability of suitable alternatives. The lease term in future periods is reassessed to ensure that the lease term reflects the current economic circumstances. We have applied an incremental borrowing rate for the purpose of computing lease liabilities based on the rate prevailing in respective geographies.
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Share Repurchases
In March 2018, our shareholders authorized a share repurchase program for the repurchase of up to 3,300,000 of our ADSs, at a price range of $10 to $100 per ADS. Pursuant to the terms of the repurchase program, our ADSs may be purchased in the open market from time to time for 36 months from March 30, 2018, the date the shareholders resolution approving the repurchase program was passed.
In fiscal 2019 and fiscal 2020, we purchased 1,101,300 ADSs and 1,098,700 ADSs in the open market for a total consideration of $56.4 million (including transaction costs) and $63.7 million (including transaction costs), respectively. In fiscal 2021, we paid $0.1 million towards cancellation fees for ADSs in relation to the repurchase of 1,100,000 ADSs in fiscal 2020. In fiscal 2021, we purchased the remaining 1,100,000 ADSs in the open market for a total consideration of $78.6 million (including transaction costs) and completed the authorized repurchases under the above-mentioned share repurchase program, which was authorized in March 2018. We funded the repurchases under the repurchase program with cash on hand. The shares underlying the repurchased ADSs are held as treasury shares. In addition, in fiscal 2022, we cancelled, 4,400,000 ADSs that were held as treasury shares for an aggregate cost of $134.2 million. The effect of cancellation of these treasury shares was recognized in share capital amounting to $0.6 million and in share premium amounting to $133.6 million, in compliance with Jersey Law. There was no effect on the total shareholders’ equity as a result of this cancellation.
In fiscal 2021, our shareholders authorized another share repurchase program for the repurchase of up to 3,300,000 ADSs, at a price range of $10 to $110 per ADS. Pursuant to the terms of the repurchase program, our ADSs may be purchased in the open market from time to time for 36 months from April 1, 2021, the date the shareholders resolution approving the repurchase program was passed. We are not obligated under the repurchase program to repurchase a specific number of ADSs, and the repurchase program may be suspended at any time at our discretion. We intend to hold the shares underlying any such repurchased ADSs as treasury shares.
In fiscal 2022, we purchased 1,100,000 ADSs in the open market for a total consideration of $85.0 million (including transaction costs) under the above-mentioned share repurchase program. We funded the repurchases under the repurchase program with cash on hand.
In fiscal 2022, we cancelled 2,200,000 ADSs that were held as treasury shares for an aggregate cost of $163.7 million (including share cancellation charges $0.1 million). The effect of the cancellation of these treasury shares was recognized in share capital amounting to $0.3 million and in share premium amounting to $163.4 million, in compliance with Jersey law. There was no effect on the total shareholders’ equity as a result of this cancellation.
In fiscal 2023, we purchased 1,100,000 ADSs in the open market for a total consideration of $81.6 million (including transaction costs) under the above-mentioned share repurchase program. We funded the repurchases under the repurchase program with cash on hand.
In fiscal 2023, based on authorization from the Board of Directors, we cancelled 1,100,000 ADSs that were held as treasury shares for an aggregate cost of $81.7 million (including share cancellation charges $0.1 million). The effect of the cancellation of these treasury shares was recognized in share capital amounting to $0.1 million and in share premium amounting to $81.6 million, in compliance with Jersey law. There was no effect on the total shareholders’ equity as a result of this cancellation.
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New accounting pronouncements not yet adopted
Certain new standards, interpretations and amendments to existing standards have been published that are mandatory for our accounting periods beginning on or after April 1, 2023 or later periods. Those which are considered to be relevant to our 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.
We are currently evaluating the impact of these amendments on our consolidated financial statements.
| ii. | In February 2021, the IASB issued “Disclosure of Accounting Policies (Amendments to IAS 1 and IFRS Practice Statement 2)” in relation to determining which accounting policies are to be disclosed in the financial statements. These amendments: |
| • | require an entity to disclose its material accounting policy information instead of its significant accounting policies. |
| • | clarify that accounting policy information may be material because of its nature, even if the related amounts are immaterial; and also clarifies if users of an entity’s financial statements would need it to understand other material information in the financial statements; |
| • | clarify that accounting policy information is material; and |
| • | clarify that if an entity discloses immaterial accounting policy information, such information shall not obscure material accounting policy information. |
The amendments are effective for annual periods beginning on or after January 1, 2023 and are to be applied prospectively. Early application is permitted.
These amendments will not have a material impact on our consolidated financial statements.
| iii. | In February 2021, the IASB issued “Disclosure of Accounting Estimates (Amendments to IAS 8)” in relation to distinction between accounting policies and accounting estimates. These amendments: |
| • | replace the definition of change in accounting estimates with a definition of accounting estimate as “monetary amounts in financial statements that are subject to measurement uncertainty”; |
| • | clarify that a change in accounting estimate that results from new information or new developments is not the correction of an error. In addition, the effects of a change in an input or a measurement technique used to develop an accounting estimate are changes in accounting estimates if they do not result from the correction of prior period errors; and |
| • | state that a change in an accounting estimate may affect only the current period’s profit or loss, or the profit or loss of both the current period and future periods. It also requires that the effect of the change relating to the current period is recognized as income or expense in the current period and the effect, if any, on future periods is recognized as income or expense in those future periods. |
The amendments are effective for annual periods beginning on or after January 1, 2023 and are to be applied prospectively. Early application is permitted.
These amendments will not have a material impact on our consolidated financial statements.
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| iv. | In May 2021, the IASB issued ‘Deferred Tax related to Assets and Liabilities arising from a Single Transaction (Amendments to IAS 12)’ to clarify the accounting for deferred tax on transactions such as leases and decommissioning obligations. These amendments clarify that the initial recognition exemption does not apply to transactions in which equal amounts of deductible and taxable temporary differences arise on initial recognition. |
The Company is required to apply the amendments to transactions that occur on or after the beginning of the earliest comparative period presented. The Company is required, at the beginning of the earliest comparative period presented, recognize deferred tax for all temporary differences related to leases and decommissioning obligations and recognize the cumulative effect of initially applying the amendments as an adjustment to the opening balance of retained earnings at that date.
The amendments are effective for annual reporting periods beginning on or after January 1, 2023. Early adoption is permitted.
These amendments will not have a material impact on our consolidated financial statements.
| v. | In September 2022, the IASB issued ‘Lease Liability in a Sale and Leaseback (Amendments to IFRS 16)’ with amendments to clarify: |
| • | the requirement 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. We are currently evaluating the impact of these amendments on our consolidated financial statements.
| vi. | 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 12 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. We are currently evaluating the impact of these amendments on our consolidated financial statements.
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ITEM 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES
A. Directors and Executive Officers
Our Board of Directors consists of nine directors. The following table sets forth the name, age (as at March 31, 2023) and position of each of our directors and executive officers as at the date hereof.
| Name |
Age | |||||||
| Directors |
||||||||
| Timothy L. Main (1)(2) |
65 | Non-Executive Chairman | ||||||
| Jason Liberty (3) |
47 | Director | ||||||
| John Freeland (1)(2) |
69 | Director | ||||||
| Keshav R. Murugesh |
59 | Director and Group Chief Executive Officer | ||||||
| Françoise Gri (1)(4) |
65 | Director | ||||||
| Keith Haviland (5) |
64 | Director | ||||||
| Mario P. Vitale (5) |
67 | Director | ||||||
| Lan Tu (2)(6) |
55 | Director | ||||||
| Diane de Saint Victor (2)(5) |
68 | Director | ||||||
| Executive Officers |
||||||||
| Keshav R. Murugesh |
59 | Group Chief Executive Officer | ||||||
| Sanjay Puria |
50 | Group Chief Financial Officer | ||||||
| Gautam Barai |
48 | Chief Operating Officer | ||||||
| Swaminathan Rajamani |
46 | Chief People Officer | ||||||
Notes:
| (1) | Member of our Compensation Committee. |
| (2) | Member of our Nominating and Corporate Governance Committee. |
| (3) | Chairman of our Audit Committee with effect from January 1, 2023. |
| (4) | Chairman of our Nominating and Corporate Governance Committee. |
| (5) | Member of our Audit Committee. |
| (6) | Chairman of our Compensation Committee. |
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Summarized below is relevant biographical information covering at least the past five years for each of our directors and executive officers.
Directors
Timothy L Main was appointed to the WNS Board in June 2021, and he also serves on WNS’ Compensation and NCG Committee. In September 2021, he was appointed as the Non-Executive Chairman of the Board. Currently, Mr. Main serves on the Board of Quest Diagnostics as Chair of the Cybersecurity Committee and a member of the Audit & Finance and Governance committees. He has spent his entire career in the B2B services or outsourcing environment, including more than 25 years at Jabil, a leading provider of manufacturing services with a global operational footprint. He was the non-executive Chairman of the Board of Directors and a member of the Cyber Committee at Jabil Inc. During his tenure as Chief Executive Officer of Jabil, he led the company’s transformation and growth to a USD 17.6 billion, 141,000 employee organization through organic growth and strategic acquisitions. He comes with a rich experience and distinguished track record in international operations, corporate governance, vision and strategy, and technology-led growth. Mr.Main holds degrees from Michigan University and the Thunderbird School of Global Management. The business address of Mr. Main is 515, Madison Avenue, 8th Floor, New York, NY 10022.
John Freeland was appointed to our Board of Directors in September 2014. Currently, Mr. Freeland is the Chairman and founder of JF Manufacturing LLC and the founder of JF Fitness of North America. He is on the Board of Trout River Lumber, LLC and Scout Logic, Inc and also serves as an advisory partner of Next Horizon Capital (Erstwhile North Star Capital Investors). He was on the Board of Compuware Corporation during the year 2014. He brings over 36 years of experience to WNS. He was also the Chief Executive Officer of Symphony Information Resources, Inc. from October 2007 to May 2012, a leading global provider of information, insights and decision solutions. In his previous roles, he was President – Worldwide Operations for salesforce.com and a Managing Partner at Accenture in the areas of global Insurance and global Customer Relationship Management. During his 26-year career at Accenture, he was also appointed a member of Accenture’s executive committee. Mr. Freeland has a Bachelor of Arts degree in Economics and a Master of Business Administration from Columbia University. The business address of Mr. Freeland is 435 East 52nd Street, Apartment 8B, NY, NY 10022, USA.
Keshav R. Murugesh was appointed as our Group Chief Executive Officer and director in February 2010. Mr. Murugesh is based out of UK since March 18, 2022. As CEO he leads the transformation of WNS’ business model across the years resulting in the Company being recognised as a Digital led Business Transformation leader with clients investing heavily in Domain, Digital and Data to Insights. Prior to joining WNS, Mr. Murugesh was the Chief Executive Officer of Syntel Inc., a Nasdaq-listed information technology company. He holds a Bachelor of Commerce degree and is a Fellow of The Institute of Chartered Accountants of India. Prior to Syntel, he worked in various capacities with ITC Limited, an affiliate of BAT Plc. between 1989 and 2002. He also serves as Honorary Co -Chief Mentor and Non-executive member of Project Management Committee (PMG) for “KALPATARU” CoE on Industry 4.0. Presently, he is an Executive Council member of the National Association of Software and Service Companies (“NASSCOM”). He is also a Charter Member of the Board of Trustees for TiE Mumbai, which is a non-profit organisation focusing on fostering entrepreneurship though mentoring, networking, funding and incubation and a member on advisory board of Atlas Skilltech University, a self-financed academic university. Previously, he held the position of Chairman and a Director at the Data Security Council of India, a not-for-profit, industry body on data protection in India set up by NASSCOM (from 2019 to2020) and Vice-Chairman of the Executive Council of NASSCOM . He was the Chairman of the Audit Committee of NASSCOM (from 2017 to 2018) of which he stepped off on being elected Vice Chairman and the Honorary Chairman of The Confederation of Indian Industry – Western India’s Education Committee (from 2017-to 2018). He has also served as a former chairman of the BPM Council at NASSCOM. NASSCOM is the industry association for the IT-BPM sector in India. He is on the Board of WNS Cares Foundation, a company that focuses on WNS’s CSR arm and sustainability initiatives. He was the Chairman of SIFE (Students in Free Enterprise) India, which is a global organization involved in educational outreach projects in partnership with businesses across the globe, from 2005 to 2011. The business address of Mr. Murugesh is Malta House, 36-38 Piccadilly, W1J 0DP, London, United Kingdom.
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Françoise Gri was appointed to our Board of Directors in May 2015. Ms. Gri brings over 31 years of international business experience to WNS, most recently as Chief Executive Officer of Pierre & Vacances-Center Parcs Group, a European leader in local tourism. In her previous roles, she was Executive Vice President – France, and then for all of Southern Europe, at Manpower, Inc., a workforce solutions company which she joined in 2007. During her 26-year career at IBM, she served in various executive positions, being at last as the President and Country GM for IBM France. She is a chairperson of Omnes Education erstwhile known as INSEEC U, which is a private multidisciplinary higher education and research institution, and a member of the Board of Directors and chairperson of the Risk Committee at Credit Agricole. She is also on the board of Francaise Des Jeux, Credit Agricole Investment Banking and acts as an independent lead director at Edenred. Ms. Gri has a Master of Science degree in Computer Engineering from Ecole Nationale Superieure d’Informatique et Mathematiques Appliquees ENSIMAG in Grenoble, France. The business address of Ms. Gri is 91 Boulevard Raspail 75006 Paris.
Keith Haviland was appointed to our Board of Directors in July 2017. He brings significant global technology and business experience to WNS, including strategic vision, executive leadership, operational execution and C-suite relationships. He spent 23 years with Accenture where he was a key founder of their offshore business model and technology global delivery network, creating Accenture’s centres in India and other locations. He later becoming responsible for all client –facing technology services including consulting, systems integration and outsourcing. He finished his tenure at Accenture in 2013 as Senior Managing Director of Technology Services and a member of their Global Leadership Council. Currently, Keith is an Emmy nominated and award winning film producer and the founder of Haviland Digital Limited, a company dedicated to creating award-winning intelligent film, television and digital media. He also serves on the board of several private companies viz Mission Control Productions Limited, Caravan Media Limited, 35 Yard Development Limited and Tin Goose Films Ltd. Mr. Haviland received a Master of Arts degree from Gonville and Caius College, Cambridge University in Mathematics and Management Science and is Fellow of the British Computer Society, a Fellow of the Institution of Engineering and Technology and a Liveryman of the Worshipful Company of Information Technologists. The business address of Mr. Haviland is 8 Albany Park Road, Kingston Upon Thames, London, KT2 5SW, United Kingdom.
Mario P. Vitale was appointed to our Board of Directors in October 2017. He has over 41 years of experience in the insurance industry. Currently, Mr. Vitale serves as the Chief Executive Officer of Resilience Cyber Insurance Solutions, a startup of a cyber-insurance platform for insurance. Most recently he was also a member of the advisory board of Kalepa Insurance and Director of Growthsource Academy, a non-profit organization. He also serves as the Trustee of St John’s University College of Insurance and as a Director on the Board of Broad Street Partners, an insurance brokerage Services Company. He was the Chief Executive Officer of Aspen Insurance, a leading specialty insurer. In his previous roles, he has been the Chief Executive Officer of Zurich Insurance Group’s Global Corporate business in North America from October 2006 to March 2011 and the Chief Executive Officer of Willis North America from January 2000 to October 2006. He was the Chairman of the Board of Blue Marble, a micro-insurance company from February 2016 to April 2017. The business address of Mr. Vitale is 1300 S Miami Ave, Unit 3705,Miami FL 33130 United States.
Jason Liberty was appointed to our Board of Directors in February 2020. Mr. Liberty is a Chairman of our Audit Committee. Mr. Liberty brings over 25 years of finance experience and deep domain expertise in the travel and leisure vertical. Currently, Mr. Liberty is the Director, President and Chief Executive Officer for Royal Caribbean Cruises Ltd (“Royal Caribbean”). Since joining Royal Caribbean in 2005, Mr. Liberty has had many roles, most recently as Executive Vice President and Chief Financial Officer. In his former role he was responsible for overseeing their finance and accounting, strategy, shared service operations, technology, supply chain, port operations, legal and risk management functions. Before joining Royal Caribbean Cruises Ltd. in 2005, he was a senior manager with KPMG, LLP. Mr. Liberty earned his MBA from University of North Carolina at Chapel- Hill, Kenan-Flagler Business School. The business address of Mr. Liberty is 1050, Caribbean Way, Miami FL33131.
Lan Tu was appointed to the WNS Board in February 2022 and serves as a Chairperson of Compensation and a member of NCG Committees. Currently, Ms. Tu is the Senior Independent Director on the board of Shawbrook Bank Ltd and Shawbrook group PLC and a member of the nominations, remuneration, risk and audit committees. She also serves as a director and the Vice Chair on the Board of King’s College London and is a member of its Remuneration, Audit and Risk, and Staff and Culture Strategy Committees as well. Lan brings more than 31 years of diverse business experience to WNS, especially in strategic growth and financial services. Most recently, she served as the first CEO of Virgin Money Investments and as a Non-Executive Director at Arrow Global Group plc. Lan’s prior experience includes serving as the Chief Strategy Officer at Abrdn plc. She spent 12 years at American Express in a variety of roles. She began her career at McKinsey & Company in its London office. Lan holds an MBA degree from Harvard Business School and a Joint Honors BSc. degree from King’s College London. The business address of Ms. Tu is 1 Blakemore Villas, Blakemore Gardens, London SW13 9EH, United Kingdom.
Diane de Saint Victor was appointed to the WNS Board in April 2023 and also serves on our Audit and NCG Committees. She brings decades of transformative business experience to WNS, including deep expertise in ESG and digital compliance, international law, talent management, and government relations. She has held senior-level roles with companies across varied industries during her career including global industrial, consumer goods, and financial services firms. Most recently, Diane was an Executive Committee Member of ABB, a Switzerland based technology leader in electrification and automation, where she led the global legal function as General Counsel. Prior to joining ABB, she held executive positions at Airbus Group, SCA Hygiene, Honeywell International, General Electric, and GE Healthcare. Diane currently serves as a non-executive director on the boards of Imperial Brands, C&A AG, and Transocean. She has previously held the position of non-executive director on the Barclays board. She holds a Business Law and an International Law Degree from Paris, France Law School’. The business address of Ms Diane Baarerstrasse 63, 6300 Zug (Switzerland).
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Executive Officers
Keshav R. Murugesh is our Group Chief Executive Officer. Please see “— Directors” above for Mr. Murugesh’s biographical information.
Sanjay Puria serves as our Group Chief Financial Officer. He is based out of Mumbai, India and leads WNS’s global finance, information technology and procurement services functions. Presently, he serves on the Board of WNS Cares Foundation. Mr. Puria has over 24 years of experience, out of which over 20 years have been in the offshore services industry. He is a veteran at WNS, having managed several key finance functions including corporate strategy, mergers and acquisitions, financial planning and analysis, and strategic business development before taking over as the Group Chief Financial Officer. Prior to WNS, he was at the helm of operations for a global provider of integrated information technology and knowledge process outsourcing solutions, where his role centered around managing acquisitions, joint ventures, complex and multi-year contracts, strategizing on geographical expansion, revenue and cost management, pricing and commercials and implementation of LEAN initiatives. Mr. Puria is also Member of NASSCOM BPM Council, a not-for-profit industry association for IT-BPM sector in India. Mr. Puria is a Chartered Accountant from the Institute of Chartered Accountants of India and has passed the Certified Public Accountant examination from the American Institute of Certified Public Accountants. The business address of Mr. Puria is Gate 4, Godrej & Boyce Complex, Pirojshanagar, Vikhroli, (West) Mumbai 400 079, India.
Gautam Barai served as our Chief Operating Officer (COO) and has stepped down effective May 15, 2023. During his tenure, he was based out of Mumbai and was responsible for operations, sales, client relations, technology and capability creation across the organization. He began his tenure at WNS leading operations for the Aviva business in 2009, and helped to grow our insurance vertical before becoming the leader of the banking and financial services, insurance and healthcare business units. Prior to this, he was Chief Business Officer at WNS from May 2018 to January 2019. Before joining WNS, Mr. Barai was Senior Vice President—Business Executive Operations at Bank of America. Prior to Bank of America, he served as Senior Vice President and Head of BPO at Countrywide Financial Corporation. At Countrywide, he was instrumental in setting up and managing BPO operations in both India and Costa Rica. He holds Masters of Business Administration degrees from Columbia University and London Business School. The business address of Mr. Barai was Gate 4, Godrej & Boyce Complex, Pirojshahnagar, Vikhroli (West), Mumbai 400079, India.
Swaminathan Rajamani is our Chief People Officer. Presently, he serves on the Board of WNS Cares Foundation. He leads WNS’s Human Resources function and is responsible for the entire gamut of people-oriented processes. Prior to joining WNS, he was with CA Technologies, where he served as Vice President — Human Resources and was the Country Head — HR for India. He has also served as Head of HR Operations at Syntel and thereafter, for a short while, was its Global HR Head. Prior to Syntel, he had a long tenure at GE spanning multiple roles such as Master Black Belt — HR and Assistant Vice President and Head — Operations for HR, Customer Research and Operational Analytics, apart from other roles in mergers and acquisitions. He is a certified Change Acceleration Coach and a keen practitioner of Six Sigma. He has a Masters in Social Work degree from the University of Madras. The business address of Mr. Rajamani is No. 143, Campus 1A, RMZ Millenia Business Park North Veeranam Rd, Perungudi, Kandanchavadi, Chennai, Tamil Nadu.
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B. Compensation
Compensation Discussion and Analysis
Compensation Objectives
Our compensation philosophy is to align employee compensation with our business objectives, so that compensation is used as a strategic tool that helps us recruit, motivate and retain highly talented individuals who are committed to our core values: clients first, integrity, respect, collaboration, learning and excellence. We believe that our compensation programs are integral to achieving our goal of “One WNS One Goal — Outperform!”
Our Compensation Committee is responsible for reviewing the overall goals and objectives of our executive compensation programs, as well as our compensation plans, and making changes to such goals, objectives and plans. Our Compensation Committee bases our executive compensation programs on the following objectives, which guide us in establishing and maintaining all of our compensation programs:
| • | Pay Differentiation: Based on the Job Responsibility, Individual Performance and Company Performance. As employees progress to higher levels in our company, their ability to directly impact our results and strategic initiatives increases. Therefore, as employees progress, an increasing proportion of their pay is linked to company performance and tied to creation of shareholder value. |
| • | Pay for Performance. Our compensation is designed to pay for performance and thus we provide higher compensation for strong performance and, conversely, lower compensation for poor performance and/or where company performance falls short of expectations. Our compensation programs are designed to ensure that successful, high-performing employees remain motivated and committed during periods of temporary downturns in our performance. |
| • | Balanced in Focus on Long-Term versus Short-Term Goals. As part of our compensation philosophy, we believe that equity-based compensation should be higher for employees with greater levels of responsibility and influence on our long-term results. Therefore, a significant portion of these individuals’ total compensation is dependent on our long-term share price appreciation. In addition, our compensation philosophy seeks to incentivize our executives to focus on achieving short-term performance goals in a manner that supports and encourages long-term success and profitability. |
| • | Competitive Value of the Job in the Marketplace. In order to attract and retain a highly skilled work force in a global market space, we remain competitive with the pay of other employers who compete with us for talent in relevant markets. |
| • | Easy to understand. We believe that all aspects of executive compensation should be clearly, comprehensibly and promptly disclosed to employees in order to effectively motivate them. Employees need to easily understand how their efforts can affect their pay, both directly through individual performance accomplishments and indirectly through contributions to achieving our strategic, financial and operational goals. We also believe that compensation for our employees should be administered uniformly across our company with clear-cut objectives and performance metrics to eliminate the potential for individual supervisor bias. |
Our Compensation Committee also considers risk when developing our compensation programs and believes that the design of our compensation programs should not encourage excessive or inappropriate risk taking.
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Components of Executive Compensation
The compensation of our executive officers consists of the following five primary components:
| • | Base salary or, in the case of executive officers based in India, fixed compensation; |
| • | Cash bonus or variable incentive; |
| • | Equity incentive grants of RSUs; |
| • | Other benefits and perquisites; and |
| • | Severance benefits. |
The following is a discussion of our considerations in determining each of the compensation components for our executive officers.
Base Salary or Fixed Compensation
Base salary is a fixed element of our executives’ annual cash compensation, which is not tied to any performance criteria. We consider base salary an important part of an executive’s compensation and our Compensation Committee reviews each executive officer’s base salary annually as well as at the time of a promotion or other change in responsibility. Any base salary adjustments are usually approved early in the fiscal year, effective as at April 1, or as set out in the relevant employment agreement. The specific amount of base salary for each executive officer depends on the executive’s role, scope of responsibilities, experience and skills. Market practices are also considered in setting base salaries. Base salaries are intended to assist us in attracting executives and recognizing differing levels of responsibility and contribution among executives.
Cash Bonus or Variable Incentive
In addition to base salary, annual cash bonuses are another important piece of total compensation for our executive officers. Annual bonus opportunities are intended to support the achievement of our business strategies by tying a meaningful portion of compensation to the achievement of established objectives for the year. These objectives are discussed in more detail below. Annual bonus opportunities also are a key tool in attracting highly sought-after executives, and cash bonuses add a variable component to our overall compensation structure.
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Equity Incentive Grants of RSUs
Our equity-based incentive program, through which we grant RSUs, is a key element of the total compensation for our executive officers. This equity-based incentive program is intended to attract and retain highly qualified individuals, align their long-term interests with those of our shareholders, avoid short-term focus and effectively execute our long-term business strategies. Our equity-based compensation is subject to multi-year vesting requirements by which executives’ gains can either be realized through (i) the achievement of set performance criteria and continued employment through the vesting period, or, simply, (ii) continued employment through the vesting period.
We believe that our executive officers should also own and hold our equity to further align their interests with the long-term interests of our shareholders and further promote our commitment to sound corporate governance practices. To achieve this, we have adopted share ownership guidelines, pursuant to which each executive officer is required to achieve their respective target share ownership level over a period of five years. For further details see “Part I – Item 6E. Share Ownership – Share Ownership Guidelines.”
Other Benefits and Perquisites
We provide benefits and perquisites to our executive officers that are generally available to and consistent with those provided to our other employees in the country in which the executive officer is located. We believe these benefits are consistent with the objectives of our compensation philosophy and allow our executive officers to work more efficiently. Such benefits and perquisites are intended to enhance the competitiveness of our overall compensation program. Such benefits normally include medical, accidental and life insurance coverage, retirement benefits, club membership, reimbursement of telephone expenses, a car and related maintenance expenses, leased residential accommodation and other miscellaneous benefits which are customary in the location where the executive officer resides and are generally available to other employees in the country. All executive officers are covered by the directors’ and officers’ liability insurance policy maintained by us.
Severance Benefits
Under the terms of our employment agreements, we are sometimes obligated to pay severance or other enhanced benefits to our executive officers upon termination of their employment.
Our executive officers globally have enhanced levels of benefits based on their job level, seniority and probable loss of employment after a change in control. Executive officers generally are paid severance for a longer period as compared to other employees.
| • | Accelerated vesting of equity awards. All granted but unvested share options and RSUs would vest immediately and become exercisable (in the case of share options) by our executive officers subject to certain conditions set out in the applicable equity incentive plans or their individual employment agreements. |
| • | Severance and notice payment. Eligible terminated executive officers would receive severance and notice payments as reflected in their individual employment agreements. |
| • | Benefit continuation. Eligible terminated executive officers would receive basic employee benefits such as medical and life insurance and other perquisites as reflected in their individual employment agreements. |
In addition, we provide change in control severance protection to certain executive officers. Our Compensation Committee believes that such protection is intended to preserve employee morale and productivity and encourage retention in the face of the disruptive impact of an actual or rumored change in control. In addition, for executive officers, the program is intended to align executive officers’ and shareholders’ interests by enabling executive officers to consider corporate transactions that are in the best interests of our shareholders and other constituents without undue concern over whether the transactions may jeopardize the executive officers’ own interest or employment.
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Our Assessment Process
Our Compensation Committee has established a number of processes to assist it in ensuring that our executive compensation programs are achieving their objectives. Our Compensation Committee typically reviews each component of compensation at least every 12 months with the goal of allocating compensation between long-term and currently paid compensation and between cash and non-cash compensation, and combining the compensation elements for each executive in a manner we believe best fulfills the objectives of our compensation programs.
Our Compensation Committee is responsible for reviewing the performance of each of our executive officers, approving the compensation level of each of our executive officers, establishing criteria for the grant of equity awards for each of our executive officers and approving such equity grants. Each of these tasks is generally performed annually by our Compensation Committee.
There are no predetermined individual or corporate performance factors or goals that are used by our Compensation Committee to establish the amounts or mix of any elements of compensation for the executive officers. Our Compensation Committee works closely with our Group Chief Executive Officer, discussing with him our company’s overall performance and his evaluation of and compensation recommendations for our executive officers. From time to time, our Compensation Committee also seeks the advice and recommendations of an external compensation consultant to benchmark certain components of our compensation practices against those of its peers. The companies selected for such benchmarking include companies in similar industries and generally of similar sizes and market capitalizations. Where compensation information is not available for any specific position an executive officer holds for companies that provide business and technology services, our Compensation Committee reviews data corresponding to the most comparable position and also considers the comparative experience of executives.
Our Compensation Committee then utilizes its judgment and experience in making all compensation determinations. Our Compensation Committee’s determination of compensation levels is based upon what the members of the committee deem appropriate, considering information such as the factors listed above, as well as input from our Group Chief Executive Officer and, from time to time, information and advice provided by an independent compensation consultant.
Other processes that our Compensation Committee has established to assist in ensuring that our compensation programs operate in line with their objectives are:
| • | Assessment of Company Performance: Our Compensation Committee uses financial performance measures to determine a significant portion of the size of payouts under our cash bonus program. The financial performance measures, adopted on improving both top line (which refers to our revenue less repair payments (non-GAAP) as described in “Part I — Item 5. Operating and Financial Review and Prospects — Overview”) and bottom line (which refers to our adjusted net income (“ANI”) (non-GAAP), which is calculated as our profit excluding impairment of goodwill, share-based compensation expense and amortization of intangible assets including the tax effect thereon) and other measures, such as our adjusted operating margin are pre-established by our Compensation Committee annually. When the pre-determined financial measures are achieved, executive officers receive amounts that are set for these targets. These measures reflect targets that are intended to be aggressive but attainable. The remainder of an individual’s payout under our cash bonus program is determined by the achievement of individual performance objectives. |
| • | Assessment of Individual Performance: Individual performance has a strong impact on the compensation of all employees, including our executive officers. The evaluation of an individual’s performance determines a portion of the size of payouts under our cash bonus program and also influences any changes in base salary. Our Compensation Committee, along with our Group Chief Executive Officer, set the respective performance objectives for the fiscal year for the executive officers. The performance objectives are initially proposed by our Group Chief Executive Officer and modified, as appropriate, by our Compensation Committee based on the performance assessment conducted for the preceding fiscal year and also looking at goals for the current fiscal year. Every evaluation metric is supplemented with key performance indicators. At the end of the fiscal year, our Group Chief Executive Officer discusses individuals’ respective achievement of the pre-established objectives as well as their contribution to our company’s overall performance and other leadership accomplishments. This evaluation is shared with our Compensation Committee. After the discussion, our Compensation Committee, in discussion with our Group Chief Executive Officer, assigns a corresponding numerical performance rating that translates into specific payouts under our cash bonus program and also influences any changes in base salary. |
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The Compensation Committee approves awards under our cash bonus or variable incentive program consistent with the achievement of applicable goals.
The Committee on occasion makes exceptions to payments in strict accordance with achievement of goals based on unusual or extraordinary circumstances. Executive officers must be on the payroll of our company on the last day of the fiscal year, March 31, to be eligible for payment under our cash bonus or variable incentive program.
Compensation decisions are designed to promote our fundamental business objectives and strategy. Our Compensation Committee periodically reviews matters such as succession planning, management performance and the business environment and considers such matters in making compensation decisions.
Benchmarking and Use of Compensation Consultant in Fiscal 2023
During fiscal 2023, our Compensation Committee reviewed compensation programs for our executive officers against publicly available compensation data, which was compiled directly by our external compensation consultant. The companies selected by our external compensation consultant for its survey for benchmarking our executive officers’ compensation included companies in similar industries and generally of similar sizes and market capitalizations.
The list of peer companies against which we benchmarked the compensation of our Group Chief Executive Officer and named executive officers in fiscal 2023 included the following:
| Peer Group Companies for Named Executive Officers other than the Group Chief Executive Officer* | ||||
| Accenture (BPM) | FirstSource Solutions | Mphasis | ||
| Capgemini (IT/ BPM) | Genpact Limited | Tata Consultancy Services (BPM) | ||
| Cognizant Technologies | HCL Technologies | Teleperformance | ||
| Conduent | ICICI Bank | Wipro Technologies (BPM) | ||
| EXL Services Holding Inc. | Infosys (BPM) | |||
| Peer Group Companies for the Group Chief Executive Officer | ||||
| Cognizant Technologies | Genpact Limited | Teleperformance | ||
| Conduent | HCL Technologies | Wipro Technologies (BPM) | ||
| EXL Services Holding Inc. | ||||
| * | Different subsets of the peer group were used for different named executive officers depending on the officer’s position and geographic location. |
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Our Compensation Committee used the data derived by our external compensation consultant primarily to ensure that our executive compensation programs are competitive. A selected subset of peer companies from those listed above that were found most closely comparable as benchmark for a particular position were considered to arrive at the compensation benchmark review of individual executive officers. Where compensation information was not publicly disclosed for a specific management position in the relevant industry, our Compensation Committee reviewed data corresponding to the most comparable position and also considered the comparative experience of the relevant executive officers.
There is enough flexibility in the existing compensation programs to respond and adjust to the evolving business environment. Accordingly, an individual’s compensation elements could be changed by our Compensation Committee based on changes in job responsibilities of the executive. In addition to input from our external compensation consultant’s survey, our Compensation Committee also took into consideration our performance and industry indicators in deciding our compensation for fiscal 2023.
Based on the elements listed above and in line with our compensation philosophy, in fiscal 2023 our Compensation Committee adjusted our executive officers compensation as described in “—Executive Compensation for Fiscal 2023” below.
Executive Compensation for Fiscal 2023
Total Compensation of Executive Officers
The following table sets forth the total compensation paid or proposed to be paid to each of our Group Chief Executive Officer, Group Chief Financial Officer and other named executive officers for services rendered in fiscal 2023 (excluding grants of RSUs which are described below).
| Name |
Base salary(1) | Benefits | Bonus | Total | ||||||||||||
| Keshav R. Murugesh |
$ | 844,732 | $ | 232,050 | $ | 1,630,428 | $ | 2,707,210 | ||||||||
| Sanjay Puria |
$ | 404,343 | $ | 27,380 | $ | 651,615 | $ | 1,083,338 | ||||||||
| Gautam Barai |
$ | 432,368 | $ | 35,210 | $ | 811,559 | $ | 1,279,138 | ||||||||
| Swaminathan Rajamani |
$ | 385,377 | $ | 24,504 | $ | 621,996 | $ | 1,031,877 | ||||||||
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| Total |
$ | 2,066,821 | $ | 319,145 | $ | 3,715,598 | $ | 6,101,564 | ||||||||
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Note:
| (1) | Base salary does not include amount contributed towards provident fund which is set out in the table under “— Other Benefits and Perquisites.” |
Base Salary or Fixed Compensation
In reviewing base salaries for executive officers, our Compensation Committee reviewed compensation programs for our executive officers against publicly available compensation data compiled by our external compensation consultant and considered local market conditions, market data, the executive officer’s experience and responsibilities, the perceived risk of having to replace the named executive officer and the fact that the executive officers in fiscal 2023 had satisfactorily performed against their prior year’s individual performance objectives.
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Our Compensation Committee has made the following determinations on the executive officers base salary:
| • | Mr. Keshav R. Murugesh’s base salary was revised from $813,754 to $895,129. The salary revision was effective February 19, 2023. |
| • | Mr. Sanjay Puria’s base salary (including employer contribution towards Provident Fund (Retirement Benefit)) was revised from $ 342,606 to $ 411,127 in fiscal 2023. The salary revision was effective April 1, 2022. |
| • | Mr. Gautam Barai’s base salary (including employer contribution towards Provident Fund (Retirement Benefit) was revised from $ 361,294 to $ 436,044 in fiscal 2023. The salary revision was effective April 1, 2022. |
| • | Mr. Swaminathan Rajamani’s base salary (including employer contribution towards Provident Fund (Retirement Benefit) was revised from $ 311,460 to $ 392,440 in fiscal 2023. The salary revision effective April 1, 2022. |
Cash Bonus or Variable Incentive
Our Compensation Committee believes that the executive officers must work as a team and focus primarily on company goals rather than solely on individual goals. Our Compensation Committee believes that enhancing the long-term value of our company requires increased revenue (both from existing and new clients), improved contribution and increased ANI (non-GAAP). Finally our Compensation Committee believes it must also reward and encourage individual performance and therefore assigned certain weightages of the variable incentive to company and individual objectives, including achievement of targets for our revenue less repair payments (non-GAAP), ANI (non-GAAP), adjusted operating margin (non-GAAP) and certain individual goals for various executive officers. Such bonuses are typically paid in April and/or May each year. The aggregate amount of all cash bonuses to be paid for fiscal 2023 does not exceed the aggregate cash bonus pool approved by our Compensation Committee for fiscal 2023. Each of our executive officers’ variable incentive packages for fiscal 2023 are as described below:
Our Compensation Committee set Mr. Murugesh’s target variable incentive, or cash bonus, at $1,028,696 for 100% achievement of objectives. Our Compensation Committee assigned as Mr. Murugesh’s performance objectives the achievement of targets for our revenue less repair payments (non-GAAP) and ANI (non-GAAP), and individual performance objectives. Mr. Murugesh earned 158.5% of his target variable incentive amount on an overall basis.
Our Compensation Committee set Mr. Puria’s target variable incentive for 2023 at $411,127 for 100% achievement of objectives. Our Compensation Committee assigned as Mr. Puria’s performance objectives the achievement of targets for our revenue less repair payments (non-GAAP) and ANI (non-GAAP), and individual performance objectives. Based on actual performance against these various objectives, Mr. Puria earned 158.5% of his target variable incentive amount on an overall basis.
Our Compensation Committee set Mr. Barai’s target variable incentive for 2023 at $436,044 for 100% achievement of objectives. Our Compensation Committee assigned as Mr. Barai’s performance objectives the achievement of targets for our revenue less repair payments (non-GAAP), ANI (non-GAAP), adjusted operating margin (non-GAAP), adjusted gross contribution (non-GAAP), and individual performance objectives. Based on actual performance against these objectives, Mr. Barai earned 186.1% of his target variable incentive amount on an overall basis.
Our Compensation Committee set Mr. Swaminathan’s target variable incentive for 2023 at $392,440 for 100% achievement of objectives. Our Compensation Committee assigned as Mr. Swaminathan’s performance objectives the achievement of targets for our revenue less repair payments (non-GAAP) and ANI (non-GAAP), and individual performance objectives. Based on actual performance against these various objectives, Mr. Swaminathan earned 158.5% of his target variable incentive amount on an overall basis.
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Equity Incentive Grants of RSUs
During fiscal 2023, we continued the equity incentive scheme which has a vesting schedule linked to continued employment with our company through vesting date, achievement of financial performance targets and achievement of total shareholder return performance targets.
Consistent with our philosophy on equity grants to our executive officers, we awarded the following number of RSUs to our executive officers during fiscal 2023:
| Name |
Date of grant | Total RSUs granted for fiscal 2023 |
Weighted average grant date fair value ($) (1) |
|||||||||
| Keshav R. Murugesh |
April 21, 2022 | 176,250 | (2) | 84.00 | ||||||||
| August 1, 2022 | 235,000 | (4) | 29.60 | |||||||||
| Sanjay Puria |
April 21, 2022 | 24,000 | (3) | 84.00 | ||||||||
| August 1, 2022 | 28,400 | (4) | |
29.60 |
| |||||||
| Gautam Barai |
April 21, 2022 | 28,650 | (3) | 84.00 | ||||||||
| August 1, 2022 | 33,800 | (4) | |
29.60 |
| |||||||
| Swaminathan Rajamani |
April 21, 2022 | 21,000 | (3) | 84.00 | ||||||||
| August 1, 2022 | 27,200 | (4) | |
29.60 |
| |||||||
Notes:
| (1) | The amounts shown under this column reflect the dollar amount of the weighted average grant date fair value of equity-based RSUs granted during the year. |
| (2) | The RSUs granted (comprising a base award and an additional award of up to 50% of the base award granted for the achievement of specified performance criteria) vests according to the following schedule: 3.75% of the base award vests quarterly on the completion of each of the first eight quarters following the grant date, subject to the grantee’s continued employment with our company through the vesting date; 2.50% of the base award vests quarterly on the completion of each of the following four quarters, subject to the grantee’s continued employment with our company through the vesting date; and 60% of the base award vests on the third anniversary of the grant date, subject to the grantee’s continued employment with our company through the vesting date and the achievement of conditions relating to our Company’s financial and total shareholder’s return performance as determined by our Compensation Committee. The grantee will be eligible for additional RSUs of up to 50% of the base award on the third anniversary of the grant date, subject to the grantee’s continued employment with our company through the vesting date and the achievement of conditions relating to our Company’s financial and total shareholder’s return performance as determined by our Compensation Committee. The fair value of RSUs based on service and achievement of financial performance is generally the market price of our shares on the date of grant and for total shareholder’s return performance based RSUs, it is determined using the Monte-Carlo simulation. |
| (3) | The RSUs granted (comprising a base award and an additional award of up to 50% of the base award granted for the achievement of specified performance criteria) vest according to the following schedule: 3.33% of the base award vests quarterly on the completion of each of the first twelve quarters following the grant date, subject to the grantee’s continued employment with our company through the vesting date; and 60% of the base award vests on the third anniversary of the grant date, subject to the grantee’s continued employment with our company through the vesting date and the achievement of conditions relating to our Company’s financial and total shareholder’s return performance as determined by our Compensation Committee. The grantee will be eligible for additional RSUs of up to 50% of the base award on the third anniversary of the grant date, subject to the grantee’s continued employment with our company through the vesting date and the achievement of conditions relating to our Company’s financial and total shareholder’s return performance as determined by our Compensation Committee. The fair value of RSUs based on service and achievement of financial performance is generally the market price of our shares on the date of grant and for total shareholder’s return performance based RSUs, it is determined using the Monte-Carlo simulation. |
| (4) | During the year ended March 31, 2023, the Company granted RSUs to drive higher growth, based on performance and market conditions along with service conditions. The RSUs 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 3 years and 2 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. |
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Other Benefits and Perquisites
The retirement plans, health and welfare benefits provided to executive officers are the same plans and benefits available to all other employees of our company.
All directors and officers, including executive officers, are covered by the directors’ and officers’ liability insurance policy maintained by our company.
Additional perquisites provided to our executive officers in fiscal 2023 are summarized below:
| Name |
Provident Fund |
Insurance benefits |
Tax Reimbursement |
Club Membership |
Other Benefits | Total | ||||||||||||||||||
| Keshav R. Murugesh |
$ | 98,835 | $ | 49,201 | $ | 14,795 | $ | 34,926 | $ | 34,293 | $ | 232,050 | ||||||||||||
| Sanjay Puria |
$ | 19,734 | $ | 4,531 | $ | 3,115 | $ | — | $ | — | $ | 27,380 | ||||||||||||
| Gautam Barai |
$ | 27,564 | $ | 4,531 | $ | 3,115 | $ | — | $ | — | $ | 35,210 | ||||||||||||
| Swaminathan Rajamani |
$ | 18,837 | $ | 2,552 | $ | 3,115 | $ | — | $ | — | $ | 24,504 | ||||||||||||
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|
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|
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| Total |
$ | 164,970 | $ | 60,815 | $ | 24,140 | $ | 34,926 | $ | 34,293 | $ | 319,144 | ||||||||||||
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Non-executive Director Compensation for Fiscal 2023
Total Compensation of Non-executive Directors
The following table sets forth the compensation paid or proposed to be paid to our non-executive directors for services rendered in fiscal 2023 (excluding grants of RSUs which are described below):
| Name |
Retainership Fees |
Retainership fees for Board/Committee Chairman |
Total | |||||||||
| Gareth Williams |
$ | 56,250 | $ | 15,000 | (1) | $ | 71,250 | |||||
| John Freeland |
$ | 75,000 | $ | — | $ | 75,000 | ||||||
| Michael Menezes |
$ | 56,250 | $ | 22,500 | (2) | $ | 78,750 | |||||
| Françoise Gri |
$ | 75,000 | $ | 15,000 | (3) | $ | 90,000 | |||||
| Keith Haviland |
$ | 75,000 | $ | — | $ | 75,000 | ||||||
| Mario P. Vitale |
$ | 75,000 | $ | — | $ | 75,000 | ||||||
| Jason Liberty |
$ | 75,000 | $ | 7,500 | (4) | $ | 82,500 | |||||
| Timothy L Main |
$ | 160,000 | $ | — | $ | 160,000 | ||||||
| Lan Tu |
$ | 75,000 | $ | 5,000 | (5) | $ | 80,000 | |||||
|
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|
|
|
|
|
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| Total |
$ | 722,500 | $ | 65,000 | $ | 787,500 | ||||||
|
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Notes:
| (1) | Fee paid to Mr. Gareth Williams for serving as Chairman of our Compensation Committee till December 31, 2022 in fiscal 2023. |
| (2) | Fee paid to Mr. Michael Menezes for serving as Chairman of our Audit Committee till December 31, 2022 in fiscal 2023. |
| (3) | Fee paid to Ms. Françoise Gri for serving as Chairperson of our Nominating and Corporate Governance Committee in fiscal 2023. |
| (4) | Fee paid to Mr. Jason Liberty for serving as Chairman of our Audit Committee effective January 1, 2023 in fiscal 2023. |
| (5) | Fees paid to Ms. Lan Tu as Chairperson of our Compensation Committee effective January 1, 2023 in fiscal 2023. |
Equity Incentive Grants of RSUs to Non-executive Directors
The following table sets forth information concerning RSUs awarded to our non-executive directors in fiscal 2023 with a vesting period of one year. No options were granted in fiscal 2023.
| Name |
Date of grant | Total RSUs granted for fiscal 2023 |
Grant date fair value ($) (1) |
|||||||||
| Lan Tu |
21-Apr-22 | 1,835 | 84.00 | |||||||||
| 19-Jul-22 | 1,900 | 77.71 | ||||||||||
| Timothy Main |
19-Jul-22 | 3,540 | 77.71 | |||||||||
| Michael Menezes |
19-Jul-22 | 1,900 | 77.71 | |||||||||
| Gareth Williams |
19-Jul-22 | 1,900 | 77.71 | |||||||||
| John Freeland |
19-Jul-22 | 1,900 | 77.71 | |||||||||
| Francoise Gri |
19-Jul-22 | 1,900 | 77.71 | |||||||||
| Keith Haviland |
19-Jul-22 | 1,900 | 77.71 | |||||||||
| Mario Vitale |
19-Jul-22 | 1,900 | 77.71 | |||||||||
| Jason Liberty |
19-Jul-22 | 1,900 | 77.71 | |||||||||
Note:
| (1) | The amounts shown under this column reflect the dollar amount of the aggregate grant date fair value of equity-based RSUs granted during the year. The fair value of RSUs is generally the market price of our shares on the date of grant. |
Future grants of awards will continue to be determined by our Board of Directors or our Compensation Committee under the 2016 Incentive Award Plan.
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Employment Agreement of our Executive Director
We entered into an employment agreement with Mr. Keshav R. Murugesh in February 2010, to serve as our Group Chief Executive Officer. The agreement was amended with effect from February 19, 2013, February 19, 2014, February 19, 2017 and March 18, 2022, in each case to revise Mr. Murugesh’s compensation (including share grants). The agreement provides for Mr. Murugesh’s appointment for an initial five-year term, which is renewed automatically for three additional successive terms of three years each (up to Mr. Murugesh attains the age of 60 years), unless either we or Mr. Murugesh elects not to renew the term. Mr. Murugesh’s term of appointment under the current agreement expires in August 2023 when Mr. Murugesh attains the age of 60 years.
We entered into a new employment agreement with Mr. Murugesh effective April 1, 2022 and his employment shall continue, until August 17, 2025.
Under the terms of the current agreement, Mr. Murugesh is entitled to receive compensation, health and other benefits and perquisites commensurate with his position. Pursuant to the current agreement, Mr. Murugesh will be eligible to receive annually such number of RSUs to be computed based on our average share price (taking the daily US dollar closing price) during March of the fiscal year preceding the date of such determination and the value of such grant shall not be less than eight times the sum of his annual base salary. Mr. Murugesh is entitled to receive additional performance-based grants for meeting additional performance-based criteria, the value of such grant being up to 50% of eight times the sum of his annual base salary. Any grants of RSUs to Mr. Murugesh will be made pursuant to and in accordance with our 2016 Incentive Award Plan.
If Mr. Murugesh’s employment is terminated by us without cause or by Mr. Murugesh for good reason (each as defined in the current agreement) or is terminated for any reason other than those specified in the current agreement (including, without limitation, expiration of his employment period or we elect not to extend his employment), he would be entitled to all accrued and unpaid salary, accrued and unused vacation and any unreimbursed expenses, his base salary for a period of 12 months from the effective date of termination which will be paid in monthly installments and his target bonus for the year in which the termination occurs, both of which will be paid immediately.
Further, where Mr. Murugesh’s employment is terminated for reasons of death, disability or retirement as specified in the current agreement, he would be entitled to all accrued and unpaid salary and bonus, accrued and unused vacation, any unreimbursed expenses and vested benefits and other amounts due to him under our employee benefit plans.
With respect to share options and RSUs:
If Mr. Murugesh’s employment is terminated by us without cause all share options and RSUs granted in the fiscal years 2020-21, 2021-22 and 2022-23 (excluding the grant made in August 2022) would become exercisable on a fully accelerated basis. Further, all share options and RSUs granted in the fiscal years 2023-24 and 2024-25 would vest in accordance with the vesting schedule.
If Mr. Murugesh’s employment is terminated by Mr. Murugesh for good reason (as defined in the employment agreement), all share options and RSUs granted in the fiscal years 2020-21, 2021-22, 2022-23, 2023-24 and 2024-25 would become exercisable on a fully accelerated basis.
If Mr. Murugesh’s employment is terminated due to death, disability all share options and RSUs granted in the fiscal years 2020-21, 2021-22, 2022-23, 2023-24 and 2024-25 would become exercisable on a fully accelerated basis.
If Mr. Murugesh’s employment is terminated by us for cause (as defined in the employment agreement) or by Mr. Murugesh due to resignation (as defined in the employment agreement), no share options and RSUs would be accelerated.
If Mr. Murugesh’s employment is terminated for any other reason other than the one specified above, all share options and RSUs granted in the fiscal years 2020-21, 2021-22, 2022-23, 2023-24 and 2024-25 would become exercisable on a fully accelerated basis.
If we experience a change in control (as defined in our 2006 Incentive Award Plan for awards granted under that plan or as defined in our 2016 Incentive Award Plan for awards granted under that plan) while Mr. Murugesh is employed under the current agreement, all of the share options and RSUs granted to Mr. Murugesh under the current agreement will vest and the share options and RSUs would become exercisable on a fully accelerated basis.
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Employee Benefit Plans
2006 Incentive Award Plan
We adopted our 2006 Incentive Award Plan on June 1, 2006. The purpose of the 2006 Incentive Award Plan was to promote the success and enhance the value of our company by linking the personal interests of the directors, employees and consultants of our company and our subsidiaries to those of our shareholders and by providing these individuals with an incentive for outstanding performance. The 2006 Incentive Award Plan was further intended to provide us with the ability to motivate, attract and retain the services of these individuals. On February 13, 2009, we adopted the amended and restated 2006 Incentive Award Plan. The amended and restated 2006 Incentive Award Plan reflects, among other changes to our 2006 Incentive Award Plan, an increase in the number of ordinary shares and ADSs available for grant under the plan from 3.0 million to 4.0 million shares/ADSs, subject to specified adjustments under the plan. On September 13, 2011, we adopted the second amended and restated 2006 Incentive Award Plan that reflects an increase in the number of ordinary shares and ADSs available for granted under the plan to 6.2 million shares/ADSs, subject to specified adjustments under the plan. On September 25, 2013, we adopted the third amended and restated 2006 Incentive Award Plan that reflects an increase in the number of ordinary shares and ADSs available for grant under the plan to 8.6 million shares/ADSs, subject to specified adjustments under the plan. On May 31, 2016, our 2006 Incentive Award Plan expired pursuant to its terms.
Shares Available for Awards
Subject to certain adjustments set forth in the 2006 Incentive Award Plan, the maximum number of shares that could be issued or awarded under the 2006 Incentive Award Plan was equal to the sum of (x) 8,600,000 shares, (y) any shares that remained available for issuance under our 2002 Stock Incentive Plan (which was adopted on July 3, 2002 and terminated upon the effective date of our 2006 Incentive Award Plan), and (z) any shares subject to awards under the 2002 Stock Incentive Plan which terminated, expired or lapsed for any reason or were settled in cash on or after the effective date of our 2006 Incentive Award Plan. As at the date of termination of the 2002 Stock Incentive Plan on July 25, 2006, the day immediately preceding the date of pricing of our initial public offering, an aggregate of 6,082,042 of our ordinary shares had been authorized for grant under the 2002 Stock Incentive Plan. The maximum number of shares which could be subject to awards granted to any one grantee during any calendar year was 500,000 shares and the maximum amount that could be paid to a grantee in cash during any calendar year with respect to cash-based awards was $10,000,000. To the extent that an award terminated or was settled in cash, any shares subject to the award would again be available for the grant. Any shares tendered or withheld to satisfy the grant or exercise price or tax withholding obligation with respect to any award would not be available for subsequent grant. Except as described below with respect to independent directors, no determination was made as to the types or amounts of awards that would be granted to specific individuals pursuant to the 2006 Incentive Award Plan.
Administration. The 2006 Incentive Award Plan is administered by our Board of Directors, which may delegate its authority to a committee. We anticipate that our Compensation Committee will administer the 2006 Incentive Award Plan, except that our Board of Directors will administer the plan with respect to awards granted to our independent directors. The plan administrator determined eligibility, the types and sizes of awards, the price and timing of awards and the acceleration or waiver of any vesting restriction, provided that the plan administrator would not have the authority to accelerate vesting or waive the forfeiture of any performance-based awards.
Eligibility. Our employees, consultants and directors and those of our subsidiaries were eligible to be granted awards, except that only employees of our company and our qualifying corporate subsidiaries were eligible to be granted options that are intended to qualify as “incentive share options” under Section 422 of the United States Internal Revenue Code of 1986, as amended (the “Code”).
Awards
Options: The plan administrator was able to grant options on shares. The per share option exercise price of all options granted pursuant to the 2006 Incentive Award Plan would not be less than 100% of the fair market value of a share on the date of grant. No incentive share option could be granted to a grantee who owned more than 10% of our outstanding shares unless the exercise price was at least 110% of the fair market value of a share on the date of grant. To the extent that the aggregate fair market value of the shares subject to an incentive share option became exercisable for the first time by any option holder during any calendar year exceeded $100,000, such excess would be treated as a non-qualified option. The plan administrator would determine the methods of payment of the exercise price of an option, which could include cash, shares or other property acceptable to the plan administrator (and could involve a cashless exercise of the option). The plan administrator designated in the award agreement evidencing each share option grant whether such share option would be exercisable for shares or ADSs. The award agreement could, in the sole discretion of the plan administrator, permit the option holder to elect, at the time of exercise, whether to receive shares or ADSs in respect of the exercised share option or a portion thereof. The term of options granted under the 2006 Incentive Award Plan could not exceed ten years from the date of grant. However, the term of an incentive share option granted to a person who owns more than 10% of our outstanding shares on the date of grant could not exceed five years. Under the 2006 Incentive Award Plan, the number of awards to be granted to our independent directors was determined by our Board of Directors or our Compensation Committee.
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Restricted Shares. The plan administrator could grant shares subject to various restrictions, including restrictions on transferability, limitations on the right to vote and/or limitations on the right to receive dividends.
Share Appreciation Rights. The plan administrator could grant share appreciation rights representing the right to receive payment of an amount equal to the excess of the fair market value of a share on the date of exercise over the fair market value of a share on the date of grant. The term of share appreciation rights granted could not exceed ten years from the date of grant. The plan administrator could elect to pay share appreciation rights in cash, in shares or in a combination of cash and shares.
Performance Shares and Performance Share Units. The plan administrator could grant awards of performance shares denominated in a number of shares and/or awards of performance share units denominated in unit equivalents of shares and/or units of value, including dollar value of shares. These awards could be linked to performance criteria measured over performance periods as determined by the plan administrator.
Share Payments. The plan administrator could grant share payments, including payments in the form of shares or options or other rights to purchase shares. Share payments could be based upon specific performance criteria determined by the plan administrator on the date such share payments were made or on any date thereafter.
Deferred Shares. The plan administrator could grant awards of deferred shares linked to performance criteria determined by the plan administrator. Shares underlying deferred share awards would not be issued until the deferred share awards have vested, pursuant to a vesting schedule or upon the satisfaction of any vesting conditions or performance criteria set by the plan administrator. Recipients of deferred share awards generally have no rights as shareholders with respect to such deferred shares until the shares underlying the deferred share awards have been issued.
Restricted Share Units. The plan administrator could grant RSUs, subject to various vesting conditions. On the maturity date, we will transfer to the grantee one unrestricted, fully transferable share for each vested RSU scheduled to be paid out on such date. The plan administrator specified the purchase price, if any, to be paid by the grantee for such shares. Generally, a grantee will have to be employed by us on the date of payment of vested RSUs to be eligible to receive the payment of shares issuable upon vesting of the RSUs.
Performance Bonus Awards. The plan administrator could grant a cash bonus payable upon the attainment of performance goals based on performance criteria and measured over a performance period determined appropriate by the plan administrator. Any such cash bonus paid to a “covered employee” within the meaning of Section 162(m) of the Code could be a performance-based award as described below.
Performance-Based Awards. The plan administrator could grant awards other than options and share appreciation rights to employees who are or may be “covered employees,” as defined in Section 162(m) of the Code, that are intended to be performance-based awards within the meaning of Section 162(m) of the Code in order to preserve the deductibility of these awards for federal income tax purposes. Grantees are only entitled to receive payment for performance-based awards for any given performance period to the extent that pre-established performance goals set by the plan administrator for the period are satisfied. The plan administrator determined the type of performance-based awards to be granted, the performance period and the performance goals. Generally, a grantee will have to be employed by us on the date the performance-based award is paid to be eligible for a performance-based award for any period.
Adjustments. In the event of certain changes in our capitalization, the plan administrator has broad discretion to adjust awards, including without limitation, (i) the aggregate number and type of shares that could be issued under the 2006 Incentive Award Plan, (ii) the terms and conditions of any outstanding awards, and (iii) the grant or exercise price per share for any outstanding awards under such plan to account for such changes. The plan administrator also has the authority to cash out, terminate or provide for the assumption or substitution of outstanding awards in the event of a corporate transaction.
Change in Control. In the event of a change in control of our company in which outstanding awards are not assumed by the successor, such awards will generally become fully exercisable and all forfeiture restrictions on such awards will lapse. Upon, or in anticipation of, a change in control, the plan administrator may cause any awards outstanding to terminate at a specific time in the future and give each grantee the right to exercise such awards during such period of time as the plan administrator, in its sole discretion, determines.
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Vesting of Full Value Awards. Full value awards (generally, any award other than an option or share appreciation right) will vest over a period of at least three years (or, in the case of vesting based upon attainment of certain performance goals, over a period of at least one year). However, full value awards that result in the issuance of an aggregate of up to 5% to the total issuable shares under the 2006 Incentive Award Plan may be granted without any minimum vesting periods. In addition, full value awards may vest on an accelerated basis in the event of a grantee’s death, disability, or retirement, or in the event of our change in control or other special circumstances.
Non-transferability. Awards granted under the 2006 Incentive Award Plan are generally not transferable.
Withholding. We have the right to withhold, deduct or require a grantee to remit to us an amount sufficient to satisfy federal, state, local or foreign taxes (including the grantee’s employment tax obligations) required by law to be withheld with respect to any tax concerning the grantee as a result of the 2006 Incentive Award Plan.
Termination or Amendment. On May 31, 2016, our 2006 Incentive Award Plan expired pursuant to its terms.
Outstanding Awards. As at March 31, 2023, RSUs to purchase an aggregate of 157,115 ordinary shares were outstanding, out of which RSUs to purchase 58,639 ordinary shares were held by all our directors and executive officers as a group. There is no purchase price for the RSUs.
RSU Grants Outside of our Plans
On June 1, 2016, June 14, 2016 and July 13, 2016, we issued an aggregate of 44,284 restricted share units to certain of our employees and directors pursuant to an exemption from registration under the United States federal securities laws. We did not seek shareholder approval for these issuances as they are not required under the laws of Jersey.
2016 Incentive Award Plan
We adopted our 2016 Incentive Award Plan on September 27, 2016. The purpose of the 2016 Incentive Award Plan is to promote the success and enhance the value of our company by linking the personal interests of the directors, employees, and consultants of our company and our subsidiaries to those of our shareholders and by providing such individuals with an incentive for outstanding performance to generate superior returns to our shareholders. The 2016 Incentive Award Plan is further intended to provide us with flexibility in our ability to motivate, attract, and retain the services of these individuals, upon whose judgment, interest, and special effort the successful conduct of our company’s operation is largely dependent. On September 27, 2018, we adopted the first amended and restated 2016 Incentive Award Plan, which reflects an increase in the number of ordinary shares and ADSs available for grant under the plan from 2.5 million to 3.9 million shares/ADSs, subject to specified adjustments under the plan. On September 24, 2020, we adopted the second amended and restated 2016 Incentive Award Plan which reflects an increase in the number of ordinary shares and ADSs available for grant under the plan from 3.9 million to 6.1 million shares/ADSs subject to specific adjustments under the plan. On July 15, 2021, we adopted the Third amended and restated plan which reflects deletion of reload provisions.
Shares Available for Awards: Subject to certain adjustments set forth in the 2016 Incentive Award Plan, the maximum number of shares and ADSs, in the aggregate, which may be issued or transferred pursuant to awards under the 2016 Incentive Award Plan is equal to the sum of (x) 6,100,000 shares, and (y) any shares or ADSs which immediately prior to the expiration of the 2006 Incentive Award Plan were available for issuance or transfer as new awards under the 2006 Incentive Award Plan, and (z) any shares or ADSs subject to awards under the 2006 Incentive Award Plan which terminate, expire, forfeit, lapse for any reason or are settled in cash on or after the effective date of the 2016 Incentive Award Plan. Immediately prior to the expiration of the 2006 Incentive Award Plan, 1,112,825 shares were available for issuance or transfer as new awards thereunder. To the extent that an award terminates, expires, or lapses for any reason, or is settled in cash, any shares or ADSs subject to the award shall again be available for the grant of an award pursuant to the 2016 Incentive Award Plan. Any shares or ADSs tendered or withheld to satisfy the grant or exercise price or tax withholding obligation pursuant to any award shall not subsequently be available for grant of an award pursuant to the 2016 Incentive Award Plan.
Administration. The 2016 Incentive Award Plan is administered by our Board of Directors, which may delegate its authority to a committee. We anticipate that our Compensation Committee will administer the 2016 Incentive Award Plan, except that our Board of Directors will administer the plan with respect to awards granted to our independent directors. The plan administrator will determine eligibility, the types and sizes of awards, the price and timing of awards and the acceleration or waiver of any vesting restriction, provided that the plan administrator will not have the authority to accelerate vesting or waive the forfeiture of any performance-based awards.
Eligibility. Our employees, consultants and directors and those of our subsidiaries are eligible to be granted awards, except that only employees of our company and our qualifying corporate subsidiaries are eligible to be granted options that are intended to qualify as “incentive share options” under Section 422 of the Code.
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Awards
Options: The plan administrator may grant options on shares. The per share option exercise price of all options granted pursuant to the 2016 Incentive Award Plan will not be less than 100% of the fair market value of a share on the date of grant. No incentive share option may be granted to a grantee who owns more than 10% of our outstanding shares unless the exercise price is at least 110% of the fair market value of a share on the date of grant. To the extent that the aggregate fair market value of the shares subject to an incentive share option become exercisable for the first time by any option holder during any calendar year exceeds $100,000, such excess will be treated as a non-qualified option. The plan administrator will determine the methods of payment of the exercise price of an option, which may include cash, shares or other property acceptable to the plan administrator (and may involve a cashless exercise of the option). The plan administrator shall designate in the award agreement evidencing each share option grant whether such share option shall be exercisable for shares or ADSs. The award agreement may, in the sole discretion of the plan administrator, permit the option holder to elect, at the time of exercise, whether to receive shares or ADSs in respect of the exercised share option or a portion thereof. The term of options granted under the 2016 Incentive Award Plan may not exceed ten years from the date of grant. However, the term of an incentive share option granted to a person who owns more than 10% of our outstanding shares on the date of grant may not exceed five years. Under the 2016 Incentive Award Plan, the number of awards to be granted to our independent directors will be determined by our Board of Directors or our Compensation Committee.
Restricted Shares. The plan administrator may grant shares subject to various restrictions, including restrictions on transferability, limitations on the right to vote and/or limitations on the right to receive dividends.
Share Appreciation Rights. The plan administrator may grant share appreciation rights representing the right to receive payment of an amount equal to the excess of the fair market value of a share on the date of exercise over the fair market value of a share on the date of grant. The term of share appreciation rights granted may not exceed ten years from the date of grant. The plan administrator may elect to pay share appreciation rights in cash, in shares or in a combination of cash and shares.
Performance Shares and Performance Share Units. The plan administrator may grant awards of performance shares denominated in a number of shares and/or awards of performance share units denominated in unit equivalents of shares and/or units of value, including dollar value of shares. These awards may be linked to performance criteria measured over performance periods as determined by the plan administrator.
Share Payments. The plan administrator may grant share payments, including payments in the form of shares or options or other rights to purchase shares. Share payments may be based upon specific performance criteria determined by the plan administrator on the date such share payments are made or on any date thereafter.
Deferred Shares. The plan administrator may grant awards of deferred shares linked to performance criteria determined by the plan administrator. Shares underlying deferred share awards will not be issued until the deferred share awards have vested, pursuant to a vesting schedule or upon the satisfaction of any vesting conditions or performance criteria set by the plan administrator. Recipients of deferred share awards generally will have no rights as shareholders with respect to such deferred shares until the shares underlying the deferred share awards have been issued.
Restricted Share Units. The plan administrator may grant RSUs, subject to various vesting conditions. On the maturity date, we will transfer to the grantee one unrestricted, fully transferable share for each vested RSU scheduled to be paid out on such date. The plan administrator will specify the purchase price, if any, to be paid by the grantee for such shares. Generally, a grantee will have to be employed by us on the date of payment of vested RSUs to be eligible to receive the payment of shares issuable upon vesting of the RSUs.
Performance Bonus Awards. The plan administrator may grant a cash bonus payable upon the attainment of performance goals based on performance criteria and measured over a performance period determined appropriate by the plan administrator. Any such cash bonus paid to a “covered employee” within the meaning of Section 162(m) of the Code may be a performance-based award as described below.
Performance-Based Awards. The plan administrator may grant awards other than options and share appreciation rights to employees who are or may be “covered employees,” as defined in Section 162(m) of the Code, that are intended to be performance-based awards within the meaning of Section 162(m) of the Code in order to preserve the deductibility of these awards for federal income tax purposes. Grantees are only entitled to receive payment for performance-based awards for any given performance period to the extent that pre-established performance goals set by the plan administrator for the period are satisfied. The plan administrator will determine the type of performance-based awards to be granted, the performance period and the performance goals. Generally, a grantee will have to be employed by us on the date the performance-based award is paid to be eligible for a performance-based award for any period.
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Adjustments. In the event of certain changes in our capitalization, the plan administrator has broad discretion to adjust awards, including without limitation, (i) the aggregate number and type of shares that may be issued under the 2006 Incentive Award Plan, (ii) the terms and conditions of any outstanding awards, and (iii) the grant or exercise price per share for any outstanding awards under such plan to account for such changes. The plan administrator also has the authority to cash out, terminate or provide for the assumption or substitution of outstanding awards in the event of a corporate transaction.
Change in Control. In the event of a change in control of our company in which outstanding awards are not assumed by the successor, such awards will generally become fully exercisable and all forfeiture restrictions on such awards will lapse. Upon, or in anticipation of, a change in control, the plan administrator may cause any awards outstanding to terminate at a specific time in the future and give each grantee the right to exercise such awards during such period of time as the plan administrator, in its sole discretion, determines.
Vesting of Full Value Awards. Full value awards (generally, any award other than an option or share appreciation right) will vest over a period of at least three years (or, in the case of vesting based upon attainment of certain performance goals, over a period of at least one year). However, full value awards that result in the issuance of an aggregate of up to 5% to the total issuable shares under the 2016 Incentive Award Plan may be granted without any minimum vesting periods. In addition, full value awards may vest on an accelerated basis in the event of a grantee’s death, disability, or retirement, or in the event of our change in control or other special circumstances.
Non-transferability. Awards granted under the 2016 Incentive Award Plan are generally not transferable.
Withholding. We have the right to withhold, deduct or require a grantee to remit to us an amount sufficient to satisfy federal, state, local or foreign taxes (including the grantee’s employment tax obligations) required by law to be withheld with respect to any tax concerning the grantee as a result of the 2016 Incentive Award Plan.
Termination or Amendment. An award of performance shares, performance share units, deferred shares, share payments and RSUs shall only vest or be exercisable or payable while the grantee is an employee, consultant or a member of the Board, as applicable; provided, however , that the Committee in its sole and absolute discretion may provide that an award of performance shares, performance share units, share payments, deferred shares or RSUs may vest or be exercised or paid subsequent to a termination of employment or service, as applicable, or following a change in control of the Company, or because of the grantee’s retirement, death or disability, or otherwise; provided, however , that, to the extent required to preserve tax deductibility under Section 162(m) of the Code, any such provision with respect to performance shares or performance share units that are intended to constitute qualified performance-based compensation shall be subject to the requirements of Section 162(m) of the Code that apply to qualified performance-based compensation.
Outstanding Awards. As at March 31, 2023, RSUs to purchase an aggregate of 3,612,469 ordinary shares were outstanding, out of which RSUs to purchase 1,581,898 ordinary shares were held by all our directors and executive officers as a group. The weighted average grant date fair value of RSUs granted during fiscal 2023, 2022 and 2021 was $83.70, $74.14 and $43.26 per ADS, respectively. There is no purchase price for the RSUs.
Other Employee Benefits
We also maintain other employee benefit plans in the form of certain statutory and incentive plans covering substantially all of our employees. In fiscal 2023, the total amount accrued by us to provide for pension, retirement or similar benefits was $16.7 million.
Provident Fund
In accordance with Indian, Philippines and Sri Lankan laws, all of our employees in these countries are entitled to receive benefits under the respective government provident fund, a defined contribution plan to which both we and the employee contribute monthly at a pre-determined rate (for India and Sri Lanka, currently 12% of the employee’s base salary and for the Philippines, 100 Philippine peso per month for every employee). These contributions are made to the respective government provident fund and we have no further obligation under this fund apart from our monthly contributions. We contributed an aggregate of $12.7 million, $11.6 million and $9.4 million in each of fiscal 2023, 2022 and 2021, respectively, to the government provident fund.
US Savings Plan
Eligible employees in the US participate in a savings plan (the “US Savings Plan”), pursuant to Section 401(k) of the Code. The US Savings Plan allows our employees to defer a portion of their annual earnings on a pre-tax basis through voluntary contributions there under. The US Savings Plan provides that we can make optional contributions up to the maximum allowable limit under the Code. We contributed an aggregate of $2.3 million, $2.1 million and $1.8 million in each of fiscal 2023, 2022 and 2021, respectively, to the US Savings Plan.
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UK Pension Scheme
Eligible employees in the UK contribute to a defined contribution pension scheme operated in the UK. The assets of the scheme are held separately from ours in an independently administered fund. The pension expense represents contributions payable to the fund by us. We contributed an aggregate of $1.2 million, $0.8 million and $0.9 million in each of fiscal 2023, 2022 and 2021, respectively, to the UK pension scheme.
Gratuity
In accordance with Indian, the Philippines and Sri Lankan laws, we provide for gratuity liability pursuant to a defined benefit retirement plan covering all our employees in India, the Philippines and Sri Lanka. Our gratuity plan provides for a lump sum payment to eligible employees on retirement, death, incapacitation or on termination of employment (provided such employee has worked for at least five years with our company) which is computed on the basis of employee’s salary and length of service with us (subject to a maximum of approximately $24,340 per employee in India). In India, we provide the gratuity benefit through determined contributions pursuant to a non-participating annuity contract administered and managed by the Life Insurance Corporation of India (“LIC”) and Aviva Life Insurance Company Private Limited (“ALICPL”). Under this plan, the obligation to pay gratuity remains with us although LIC and ALICPL administer the plan. We contributed an aggregate of $2.6 million, $2.4 million and $1.0 million in fiscal 2023, 2022 and 2021, respectively, to LIC and ALICPL.
Our Sri Lankan subsidiary, Philippines subsidiary and two Indian subsidiaries have unfunded gratuity obligations.
Compensated Absence
Our liability for compensated absences, is determined on the basis of an actuarial valuation using the projected unit credit method and is charged to income in the year in which they accrue.
C. Board Practices
Composition of the Board of Directors
Our Memorandum and Articles of Association provide that our Board of Directors consists of not less than three directors and such maximum number as our directors may determine from time to time. Our Board of Directors currently consists of nine directors. Each of Messrs. Main, Freeland, Vitale, Haviland , Liberty, Ms. Gri , Ms. Tu and Ms. de Saint Victor satisfies the “independence” requirements of the NYSE rules.
All directors hold office until the expiry of their term of office, their resignation or removal from office for gross negligence or criminal conduct by a resolution of our shareholders or until they cease to be directors by virtue of any provision of law or they are disqualified by law from being directors or they become bankrupt or make any arrangement or composition with their creditors generally or they become of unsound mind. The term of office of the directors is divided into three classes:
| • | Class I, whose term will expire at the annual general meeting to be held in fiscal 2026; |
| • | Class II, whose term will expire at the annual general meeting to be held in fiscal 2024; and |
| • | Class III, whose term will expire at the annual general meeting to be held in fiscal 2025. |
Our directors are classified as follows:
| • | Class I: Mr. Mario P. Vitale , Mr. Tim Main and Ms. Lan Tu; |
| • | Class II: Mr. Keshav R. Murugesh and Mr. Keith Haviland and Ms. Diane de Saint Victor; and |
| • | Class III: Ms. Françoise Gri, Mr. John Freeland and Mr. Jason Liberty. |
The appointments of Messrs. Keith Haviland and Keshav Murugesh and Ms. Diane de Saint Victor will expire at the next annual general meeting, which we expect to hold in September 2023. Messrs. Haviland and Murugesh and Ms. de Saint Victor have expressed their willingness to be re-elected and, accordingly, we propose to seek shareholders’ approval for their re-election at the next annual general meeting.
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At each annual general meeting after the initial classification or special meeting in lieu thereof, the successors to directors whose terms will then expire serve from the time of election until the third annual meeting following election or special meeting held in lieu thereof. Any additional directorships resulting from an increase in the number of directors will be distributed among the three classes so that, as nearly as possible, each class will consist of one-third of the directors. This classification of the Board of Directors may have the effect of delaying or preventing changes in control of management of our company.
There are no family relationships among any of our directors or executive officers. The employment agreement governing the services of one of our directors provides for benefits upon termination of employment as described above.
Our Board of Directors held five meetings and two board calls in fiscal 2023.
Board Leadership Structure and Board Oversight of Risk
Different individuals currently serve in the roles of Chairman of the Board and Group Chief Executive Officer of our company. Our Board believes that splitting the roles of Chairman of the Board and Group Chief Executive Officer is currently the most appropriate leadership structure for our company. This leadership structure will bring in greater efficiency as a result of vesting two important leadership roles in separate individuals and increased independence for the Board of Directors.
Board’s Role in Risk Oversight
Our Board of Directors is primarily responsible for overseeing our risk management processes. The Board of Directors receives and reviews periodic reports from the Head of Risk Management and Audit as considered appropriate regarding our company’s assessment of risks. The Board of Directors focuses on the most significant risks facing our company and our company’s general risk management strategy, and also ensures that risks undertaken by our company are consistent with the Board’s appetite for risk. While the Board oversees our company’s risk management, management is responsible for day-to-day risk management processes. We believe this division of responsibilities is the most effective approach for addressing the risks facing our company and that our Board leadership structure supports this approach.
The Audit Committee has special responsibilities with respect to financial risks, and regularly reports to the full Board of Directors on these issues. Among other responsibilities, the Audit Committee reviews our company’s policies with respect to contingent liabilities and risks that may be material to our company, our company’s policies and procedures designed to promote compliance with laws, regulations, and internal policies and procedures, and major legislative and regulatory developments which could materially impact our company.
The Compensation Committee also plays a role in risk oversight as it relates to our company’s compensation policies and practices. Among other responsibilities, the Compensation Committee designs and evaluates our company’s executive compensation policies and practices so that our company’s compensation programs promote accountability among employees and the interests of employees are properly aligned with the interests of our shareholders.
Committees of the Board
Our Board of Directors has three standing committees: an Audit Committee, a Compensation Committee and a Nominating and Corporate Governance Committee.
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Audit Committee
The Audit Committee comprises four directors: Mr. Jason Liberty (Chairman), Mr. Keith Haviland, Mr. Mario P. Vitale and Ms. Diane de Saint Victor. Each of Messrs. Haviland, Liberty and Vitale and Ms. de Saint Victor satisfies the “independence” requirements of Rule 10A-3 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and the NYSE listing standards. The principal duties and responsibilities of our Audit Committee are as follows:
| • | to serve as an independent and objective party to monitor our financial reporting process and internal control systems; |
| • | to review and appraise the audit efforts of our independent accountants and exercise ultimate authority over the relationship between us and our independent accountants; and |
| • | to provide an open avenue of communication among the independent accountants, financial and senior management and the Board of Directors. |
The Audit Committee has the power to investigate any matter brought to its attention within the scope of its duties. It also has the authority to retain counsel and advisors to fulfill its responsibilities and duties. Mr. Liberty serves as our Audit Committee financial expert, within the requirements of the rules promulgated by the Commission relating to listed-company audit committees.
We have posted our Audit Committee charter on our website at www.wns.com. Information contained in our website does not constitute a part of this annual report.
The Audit Committee held five meetings in fiscal 2023.
Compensation Committee
The Compensation Committee comprises four directors: Ms. Lan Tu (Chairperson), Messrs. John Freeland and Timothy L Main and Ms Francoise Gri. Each of Messrs. Freeland and Main and Ms.Gri and Ms. Tu satisfies the “independence” requirements of the NYSE listing standards. The scope of this committee’s duties includes determining the compensation of our executive officers and other key management personnel. The Compensation Committee also administers the 2006 Incentive Award Plan and the 2016 Incentive Award Plan, reviews performance appraisal criteria and sets standards for and decides on all employee shares options allocations when delegated to do so by our Board of Directors.
We have posted our Compensation Committee charter on our website at www.wns.com. Information contained in our website does not constitute a part of this annual report.
The Compensation Committee held four meetings in fiscal 2023.
Nominating and Corporate Governance Committee
The Nominating and Corporate Governance Committee comprises five directors: Ms. Françoise Gri (Chairperson), Ms. Lan Tu, Ms. Diane de Saint Victor and Messrs. Timothy L Main and John Freeland. Each of Ms. Gri, Ms. Tu, Ms. de Saint Victor and Messrs. Main and Freeland satisfies the “independence” requirements of the NYSE listing standards. The principal duties and responsibilities of the nominating and governance committee are as follows:
| • | to assist the Board of Directors by identifying individuals qualified to become board members and members of board committees, to recommend to the Board of Directors nominees for the next annual meeting of shareholders, and to recommend to the Board of Directors nominees for each committee of the Board of Directors; |
| • | to monitor our corporate governance structure; and |
| • | to periodically review and recommend to the Board of Directors any proposed changes to the corporate governance guidelines applicable to us. |
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We have posted our Nominating and Corporate Governance Committee charter on our website at www.wns.com. Information contained in our website does not constitute a part of this annual report.
The Nominating and Corporate Governance Committee uses its judgment to identify well qualified individuals who are willing and able to serve on our Board of Directors. Pursuant to its charter, the Nominating and Corporate Governance Committee may consider a variety of criteria in recommending candidates for election to our board, including an individual’s personal and professional integrity, ethics and values; experience in corporate management, such as serving as an officer or former officer of a publicly held company, and a general understanding of marketing, finance and other elements relevant to the success of a publicly-traded company in today’s business environment; experience in our company’s industry and with relevant social policy concerns; experience as a board member of another publicly held company; academic expertise in an area of our company’s operations; and practical and mature business judgment, including ability to make independent analytical inquiries.
The Nominating and Corporate Governance Committee considers director nominees with a diverse range of backgrounds, skills, national origins, values, experiences and occupations.
The Nominating and Corporate Governance Committee held four meetings in fiscal 2023.
Executive Sessions
Our non-executive directors meet regularly in executive session without executive directors or management present. The purpose of these executive sessions is to promote open and candid discussion among the non-executive directors. Our non-executive directors held four executive sessions in fiscal 2023.
Shareholders and other interested parties may communicate directly with the presiding director or with our non-executive directors as a group by writing to the following address: WNS (Holdings) Limited, Attention: Non-Executive Directors, Gate 4, Godrej & Boyce Complex, Pirojshanagar, Vikhroli (W), Mumbai 400 079, India.
D. Employees
For a description of our employees, see “Part I — Item 4. Information on the Company — Business Overview — Human Capital.”
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Share Ownership
The following table sets forth information with respect to the beneficial ownership of our ordinary shares by each of our directors and by all our directors and executive officers as a group as at March 31, 2023. As used in this table, beneficial ownership means the sole or shared power to vote or direct the voting or to dispose of or direct the sale of any security. A person is deemed to be the beneficial owner of securities that can be acquired within 60 days upon the exercise of any option, warrant or right. Ordinary shares subject to options, warrants or rights that are currently exercisable or exercisable within 60 days are deemed outstanding for computing the ownership percentage of the person holding the options, warrants or rights, but are not deemed outstanding for computing the ownership percentage of any other person. The amounts and percentages as at March 31, 2023 are based on an aggregate of 48,360,817 ordinary shares outstanding as at that date.
| Number of Ordinary Shares Beneficially Owned |
||||||||
| Name |
Number | Percent | ||||||
| Directors |
||||||||
| Timothy L. Main |
14,240 | 0.029 | ||||||
| Françoise Gri |
21,655 | 0.045 | ||||||
| Keith Haviland |
15,450 | 0.032 | ||||||
| John Freeland |
43,153 | 0.089 | ||||||
| Jason Liberty |
7,484 | 0.015 | ||||||
| Mario Vitale |
11,990 | 0.025 | ||||||
| Lan Tu |
1,835 | 0.004 | ||||||
| Keshav R. Murugesh |
655,749 | 1.356 | ||||||
| Executive Officers |
||||||||
| Sanjay Puria |
40,468 | 0.084 | ||||||
| Gautam Barai |
81,592 | 0.169 | ||||||
| Swaminathan Rajamani |
78,082 | 0.161 | ||||||
| All our directors and executive officers as a group (11 persons as at March 31, 2023) |
971,698 | 2.009 | ||||||
Notes:
| (1) | Timothy L Main holds 10,000 shares in the form of ADSs. |
| (2) | Of the 43,153 shares beneficially owned by Mr. John Freeland, 17,750 shares are in the form of ADSs. |
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As at March 31, 2023, there were no options held by our directors and executive officers. The following table sets forth information concerning RSUs held by our directors and executive officers as at March 31, 2023:
| RSU Summary | ||||||||||||||||
| Name |
Number of shares underlying unexercised RSUs held that have vested but unexercised |
Number of shares underlying unexercised RSUs to be vested within 60 days after Mar 31, 2023 |
Vesting dates | Number of shares underlying unexercised RSUs held that have not vested |
||||||||||||
| Non-executive Directors |
||||||||||||||||
| John Freeland |
— | — | — | 1,900 | ||||||||||||
| Francoise Gri |
— | — | — | 1,900 | ||||||||||||
| Keith Haviland |
— | — | — | 1,900 | ||||||||||||
| Mario Vitale |
— | — | — | 1,900 | ||||||||||||
| Jason Liberty |
— | — | — | 1,900 | ||||||||||||
| Timothy L. Main |
— | — | — | 3,540 | ||||||||||||
| Thi Nhuoc Lan Tu |
— | 1,835 | 21-Apr-23 | 1,900 | ||||||||||||
| Executive Officers |
||||||||||||||||
| Keshav R. Murugesh |
478,397 | 168,315 | 22-Apr-23 | 532,726 | ||||||||||||
| 4,631 | 21-Apr-23 | |||||||||||||||
| 4,406 | 21-Apr-23 | |||||||||||||||
| Sanjay Puria |
20,271 | 19,074 | 22-Apr-23 | 70,793 | ||||||||||||
| 590 | 21-Apr-23 | |||||||||||||||
| 533 | 21-Apr-23 | |||||||||||||||
| Gautam Barai |
61,076 | 19,285 | 22-Apr-23 | 80,544 | ||||||||||||
| 594 | 21-Apr-23 | |||||||||||||||
| 637 | 21-Apr-23 | |||||||||||||||
| Swaminathan Rajamani |
61,120 | 16,001 | 22-Apr-23 | 63,495 | ||||||||||||
| 494 | 21-Apr-23 | |||||||||||||||
| 467 | 21-Apr-23 | |||||||||||||||
Share Ownership Guidelines
In July 2014, our Board of Directors adopted a share ownership policy, which was amended in January 2015 and effective from April 1, 2015, outlining the share ownership guidelines for, among other employees, our directors and executive officers. Our share ownership policy was further amended for other employees and executive officers effective July 2019. We believe that this policy further aligns the interests of our directors and executive officers with the long-term interests of our shareholders and promotes our commitment to sound corporate governance practices.
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Under our amended policy, each of our non-executive directors must hold at least the amount of vested shares of our company by the fifth anniversary of such director’s initial election to the Board as shown in the table below:
| Position |
Share Ownership Guidelines | |
| For Non-Executive Directors (except Chairman of the Board) |
3.0 x value of annual share grant in $ | |
| For the Chairman of the Board |
4.0 x value of annual share grant in $ |
In the event a non-executive director holds at least the required valued of our ordinary shares during the required time period, but the value of the director’s shares decreases below the shareholding requirement due to a decline in the price of our ADSs, the director shall be deemed to have complied with this policy so long as the director does not sell any shares.
Our amended policy provides that our executive officers are required to hold a multiple of their annual base salary in shares of our company as shown in the table below.
| Position |
Share Ownership Guidelines | |
| Group Chief Executive Officer |
4.0 x annual base salary | |
| Chief Operating Officer |
2.0 x annual base salary | |
| Group Chief Financial Officer |
2.0 x annual base salary | |
| Chief People Officer |
2.0 x annual base salary |
Executive officers have five years to achieve the specified ownership level according to the following build-up schedule: achieving a share ownership level equivalent to 5%, 15%, 30%, 60% and 100% of their specified ownership level in the first, second, third, fourth and fifth year, respectively.
For our Group Chief Financial Officer, our Compensation Committee changed the share ownership level from 1.5 times to 2 times his annual base salary. The additional ownership level of 0.5 times his annual base salary was to be attained over the period of five years in the same ratio as outlined above.
For our Chief Operating Officer and Chief People Officer, our Compensation Committee changed the share ownership level from 1 time to 2 times his annual base salary. The additional ownership level of 1 time his annual base salary was to be attained over the period of five years in the same ratio as outlined above.
Shares owned by immediate family members and any trust for the benefit only of the executive officer/director or his or her family members are included in the determination of such executive officer/director’s share ownership level.
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ITEM 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS
A. Major Shareholders
The following table sets forth information regarding beneficial ownership of our ordinary shares as at March 31, 2023 held by each person who is known to us to have a 5.0% or more beneficial share ownership based on an aggregate of 48,360,817 ordinary shares outstanding as at that date. Beneficial ownership is determined in accordance with the rules of the Commission and includes shares over which the indicated beneficial owner exercises voting and/or investment power or receives the economic benefit of ownership of such securities. Ordinary shares subject to options currently exercisable or exercisable within 60 days are deemed outstanding for the purposes of computing the percentage ownership of the person holding the options but are not deemed outstanding for the purposes of computing the percentage ownership of any other person.
| Name of Beneficial Owner |
Number of Shares Beneficially Owned |
Percentage Beneficially Owned (1) |
||||||
| FMR LLC (2) |
4,895,598 | 10.1 | % | |||||
| Nalanda India Fund Limited (3) |
4,122,196 | 8.5 | % | |||||
| Macquarie Group Limited (4) |
2,467,875 | 5.1 | % | |||||
Notes:
| (1) | Based on an aggregate of 48,360,817 ordinary shares outstanding as at March 31, 2023. |
| (2) | Information is based on Amendment No. 20 to a report on Schedule 13G jointly filed with the Commission on February 9, 2023 by FMR LLC and Abigail P. Johnson. FMR LLC and Abigail P. Johnson filed Amendment No. 20 to a report on Schedule 13G jointly filed with the Commission on February 9, 2023 reporting beneficial ownership of 4,895,598 shares as at December 30, 2023. Abigail P. Johnson is a Director, the Chairman and the Chief Executive Officer of FMR LLC. According to this Amendment No. 20, members of the Johnson family, including Abigail P. Johnson, are the predominant owners, directly or through trusts, of Series B voting common shares of FMR LLC, representing 49% of the voting power of FMR LLC. The Johnson family group and all other Series B shareholders have entered into a shareholders’ voting agreement under which all Series B voting common shares will be voted in accordance with the majority vote of Series B voting common shares. Accordingly, through their ownership of voting common shares and the execution of the shareholders’ voting agreement, members of the Johnson family may be deemed, under the US Investment Company Act of 1940, to form a controlling group with respect to FMR LLC. |
| (3) | Information is based on Amendment No. 5 to a report on Schedule 13G filed with the Commission on February 14, 2019 by Nalanda India Fund Limited. |
| (4) | Information is based on a Form 13F for the quarter ended December 31, 2022 filed with the Commission on February 21, 2023 by Macquarie Group Limited. |
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The following summarizes the significant changes in the percentage ownership held by our major shareholders during the past three years:
| • | Waddell & Reed Financial, Inc. (“WDR”) reported its beneficial ownership of our ordinary shares to be 11.6% (based on the then number of our ordinary shares reported as outstanding) in Amendment No. 9 to a report on Schedule 13G filed with the Commission on February 14, 2020 and 10.6% based on the then number of our ordinary shares reported as outstanding at that time) in Amendment No. 10 to a report on Schedule 13G filed with the Commission on February 12, 2021. On April 30, 2021, WDR filed a current report on Form 8-K with the Commission announcing the completion of its acquisition by Macquarie Management Holdings, Inc. and became a wholly owned subsidiary of Macquarie Management Holdings, Inc. |
| • | Macquarie Group Limited reported its beneficial ownership of our ordinary shares to be 5.32% (based on the then number of our ordinary shares reported as outstanding) in a report on Schedule 13G filed with the Commission on February 14, 2022 and 0.12% (based on the then number of our ordinary share reported as outstanding) in an amendment to a report on Schedule 13G filed with the Commission on July 11, 2022. Macquarie Management Holdings, Inc., which was described in this report on Schedule 13G as being owned by Macquarie Group Limited and a joint filer of the report, reported that it had no beneficial ownership of our ordinary shares. On February 21, 2023, Macquarie Group Limited filed a Form 13F with the Commission and reported that it had beneficial ownership of 2,467,875 of our ordinary shares as at December 31, 2022, which represented 5.1% of our then ordinary shares. |
| • | Grandeur reported its beneficial ownership of our ordinary shares to be 5.15% (based on the then number of our ordinary shares reported as outstanding) in a report on Schedule 13G filed with the Commission on February 17, 2021, 5.88% (based on the then number of ordinary shares reported as outstanding) in a report on Schedule 13G filed with the Commission on February 14, 2022, and 2.58% (based on the then number of ordinary shares reported as outstanding) in a report on Schedule 13G filed with the Commission on February 13, 2023. |
None of our major shareholders have different voting rights from our other shareholders.
As at March 31, 2023, 48,142,457 of our ordinary shares, representing 99.6% of our outstanding ordinary shares, were held as ADSs by Deutsche Bank Trust Company Americas, the depositary for our ADS holders. We are aware of 13 record shareholders being a US citizen or an entity incorporated in the US, including the depository, as at March 31, 2023. Since certain of these ordinary shares and ADSs were held by brokers or other nominees, the number of record holders in the US may not be representative of the number of beneficial holders or where the beneficial holders are resident. All holders of our ordinary shares are entitled to the same voting rights.
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B. Related Party Transactions
(Amounts in thousands)
The following is a description of our related party transactions, determined in accordance with the rules and regulations promulgated under the Exchange Act that were either material to us or the related party.
Mr. Keshav Murugesh is a member of the Executive Council at NASSCOM. During fiscal 2023, we paid membership and subscription charges and sponsorship fees for various events conducted by NASSCOM amounting to $64.
See also “Part I — Item 6. Directors, Senior Management and Employees — B. Compensation — Employment Agreement of our Executive Director” for a description of our employment agreement with Mr. Keshav R. Murugesh, our Group Chief Executive Officer and director.
C. Interests of Experts and Counsel
Not applicable.
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ITEM 8. FINANCIAL INFORMATION
A. Consolidated Statements and Other Financial Information
Please see “Part III — Item 18. Financial Statements” for a list of the financial statements filed as part of this annual report.
Tax Assessment Orders
Transfer pricing regulations to which we are subject require that any international transaction among the WNS group enterprises be on arm’s-length terms. We believe that the international transactions among the WNS group enterprises are on arm’s-length terms. If, however, the applicable tax authorities determine that the transactions among the WNS group enterprises do not meet arm’s-length criteria, we may incur increased tax liability, including accrued interest and penalties. This would cause our tax expense to increase, possibly materially, thereby reducing our profitability and cash flows. We have signed an advance pricing agreement with the Government of India providing for the agreement on transfer pricing matters over certain transactions covered thereunder for a period of five years starting from April 2018. We have filed an application with the Government of India for the renewal of the advance pricing agreement on similar terms for another five years starting from April 2023. The applicable tax authorities may also disallow deductions or tax holiday benefits claimed by us and assess additional taxable income on us in connection with their review of our tax returns.
From time to time, we receive orders of assessment from the Indian tax authorities assessing additional taxable income on us and/or our subsidiaries in connection with their review of our tax returns. We currently have orders of assessment for fiscal 2003 through fiscal 2018 pending before various appellate authorities. These orders assess additional taxable income that could in the aggregate give rise to an estimated ₹560.9 million ($6.8 million based on the exchange rate on March 31, 2023) in additional taxes, including interest of ₹153.1 million ($1.9 million based on the exchange rate on March 31, 2023).
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The following sets forth the details of these orders of assessment:
| Entity |
Tax year(s) | Amount demanded (including interest) |
Interest on amount Demanded |
|||||||||||||||||
| (₹ and US dollars in millions) | ||||||||||||||||||||
| Permanent establishment of WNS North America Inc (“WNS NA Inc”) in India |
Fiscal 2003 | ₹ | 0.1 | $ | (0.1 | )(1) | ₹ | 0.1 | $ | (0.1 | )(1) | |||||||||
| Permanent establishment of WNS NA Inc and WNS Global Services UK Limited (“WNS UK”) in India |
Fiscal 2004 | ₹ | 8.1 | $ | (0.1 | )(1) | ₹ | 2.2 | $ | (0.1 | )(1) | |||||||||
| Permanent establishment of WNS NA Inc and WNS UK in India |
Fiscal 2005 | ₹ | 4.1 | $ | (0.1 | )(1) | ₹ | 1.2 | $ | (0.1 | )(1) | |||||||||
| WNS Global Services Private Limited (“WNS Global”) |
Fiscal 2006 | ₹ | 29.8 | $ | (0.4 | )(1) | ₹ | 7.7 | $ | (0.1 | )(1) | |||||||||
| Permanent establishment of WNS NA Inc and WNS UK in India |
Fiscal 2006 | ₹ | 13.2 | $ | (0.2 | )(1) | ₹ | 5.6 | $ | (0.1 | )(1) | |||||||||
| Permanent establishment of WNS NA Inc. and WNS UK in India |
Fiscal 2007 | ₹ | 23.1 | $ | (0.3 | )(1) | ₹ | 5.4 | $ | (0.1 | )(1) | |||||||||
| WNS Global |
Fiscal 2009 | ₹ | 55.2 | $ | (0.7 | )(1) | ₹ | — | $ | — | ||||||||||
| WNS Business Consulting Services Private Limited (“WNS BCS”) |
Fiscal 2010 | ₹ | 1.0 | $ | (0.1 | )(1) | ₹ | 0.3 | $ | (0.1 | )(1) | |||||||||
| Permanent establishment of WNS NA Inc in India |
Fiscal 2011 | ₹ | 31.0 | $ | (0.4 | )(1) | ₹ | 8.2 | $ | (0.1 | )(1) | |||||||||
| WNS Global |
Fiscal 2016 | ₹ | 45.2 | $ | (0.6 | )(1) | ₹ | 18.3 | $ | (0.1 | )(1) | |||||||||
| WNS Global |
Fiscal 2017 | ₹ | 91.9 | $ | (1.0 | )(1) | ₹ | 14.4 | $ | (0.1 | )(1) | |||||||||
| WNS Global |
Fiscal 2018 | ₹ | 258.2 | $ | (2.8 | )(1) | ₹ | 89.7 | $ | (0.9 | )(1) | |||||||||
| Total |
₹ | 560.9 | $ | (6.8 | )(1) | ₹ | 153.1 | $ | (1.9 | )(1) | ||||||||||
Note:
| (1) | Based on the exchange rate as at March 31, 2023. |
The aforementioned orders of assessment allege that the transfer prices we applied to certain of the international transactions between WNS Global or WNS BCS (each of which is one of our Indian subsidiaries), as the case may be, and our other wholly-owned subsidiaries named above were not on arm’s-length terms, disallow a tax holiday benefit claimed by us, deny the set off of brought forward business losses and unabsorbed depreciation and disallow certain expenses claimed as tax deductible by WNS Global or WNS BCS, as the case may be. As at March 31, 2023, we have provided a tax reserve of ₹816.9 million ($9.9 million based on the exchange rate on March 31, 2023) primarily on account of the Indian tax authorities’ denying the set-off of brought forward business losses and unabsorbed depreciation. We have appealed against these orders of assessment before higher appellate authorities.
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In addition, we currently have orders of assessment pertaining to similar issues that have been decided in our favor by appellate authorities, vacating tax demands of ₹6,556.9 million ($79.8 million based on the exchange rate on March 31, 2023) in additional taxes, including interest of ₹2,353.2 million ($28.6 million based on the exchange rate on March 31, 2023). The income tax authorities have filed or may file appeals against these orders at higher appellate authorities. In case of disputes, the Indian tax authorities may require us to deposit with them all or a portion of the disputed amounts pending resolution of the matters on appeal. Any amount paid by us as deposits will be refunded to us with interest if we succeed in our appeals. We have deposited ₹904.1 million ($11.0 million based on the exchange rate on March 31, 2023) of the disputed amount with the tax authorities and may be required to deposit the remaining portion of the disputed amount with the tax authorities pending final resolution of the respective matters.
As at March 31, 2023, corporate tax returns for fiscal year 2020 and thereafter remain subject to examination by tax authorities in India.
After consultation with our Indian tax advisors and based on the facts of these cases, legal opinions from counsel on certain matters, the nature of the tax authorities’ disallowances and the orders from appellate authorities deciding similar issues in our favor in respect of assessment orders for earlier fiscal years, we believe these orders are unlikely to be sustained at the higher appellate authorities and we intend to vigorously dispute the orders of assessment.
In addition, we currently have orders of assessment outstanding for various years pertaining to pre-acquisition period of newly acquired entities, which assess additional taxable income that could in the aggregate give rise to an estimated ₹63.2 million ($0.8 million based on the exchange rate on March 31, 2023) in additional taxes, including interest of ₹31.1million ($0.4 million based on the exchange rate on March 31, 2023). These orders of assessment disallow tax holiday benefit claimed by the newly acquired entities. The newly acquired entities have appealed against these orders of assessment before higher appellate authorities.
We have received orders of assessment from the VAT, service tax and GST authorities, demanding payment of ₹159.6 million ($1.9 million based on the exchange rate on March 31, 2023) towards VAT, service tax and GST for the period April 1, 2014 to March 31, 2019. The tax authorities have rejected input tax credit on certain types of input services. Based on consultations with our tax advisors, we believe these orders of assessments will more likely than not be vacated by the higher appellate authorities and we intend to dispute the orders of assessments.
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 March 31, 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 Tax Appeal Commission 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.
No assurance can be given, however, that we will prevail in our tax disputes. If we do not prevail, payment of additional taxes, interest and penalties may adversely affect our results of operations, financial condition and cash flows. There can also be no assurance that we will not receive similar or additional orders of assessment in the future.
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Dividend Policy
Subject to the provisions of the 1991 Law and our Articles of Association, we may by ordinary resolution declare dividends to be paid to our shareholders according to their respective rights. Any dividends we may declare must not exceed the amount recommended by our Board of Directors. Our Board may declare and pay an interim dividend or dividends, including a dividend payable at a fixed rate, if paying an interim dividend or dividends appears to the Board to be justified. See “Part I — Item 10. Additional Information — B. Memorandum and Articles of Association.” We can only declare dividends if our directors who are to authorize the distribution make a prior statement that, having made full enquiry into our affairs and prospects, they have formed the opinion that:
| • | immediately following the date on which the distribution is proposed to be made, we will be able to discharge our liabilities as they fall due; and |
| • | having regard to our prospects and to the intentions of our directors with respect to the management of our business and to the amount and character of the financial resources that will in their view be available to us, we will be able to continue to carry on business and we will be able to discharge our liabilities as they fall due until the expiry of the period of 12 months immediately following the date on which the distribution is proposed to be made or until we are dissolved under Article 150 of the 1991 Law, whichever first occurs. |
We have never declared or paid any dividends on our ordinary shares. Any future determination to pay cash dividends will be at the discretion of our Board of Directors and will be dependent upon our results of operations and cash flows, our financial position and capital requirements, general business conditions, legal, tax, regulatory and any contractual restrictions on the payment of dividends and any other factors our Board of Directors deems relevant at the time.
Subject to the deposit agreement governing the issuance of our ADSs, holders of ADSs will be entitled to receive dividends paid on the ordinary shares represented by such ADSs.
B. Significant Changes
None
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ITEM 9. THE OFFER AND LISTING
A. Offer and Listing Details
Our ADSs, commenced trading on the NYSE on July 26, 2006 under the symbol “WNS”. The ADSs were issued by our depositary, Deutsche Bank Trust Company Americas, pursuant to a deposit agreement. The number of our outstanding ordinary shares (including the ordinary shares underlying ADSs) as at March 31, 2023 was 48,360,817.As at March 31, 2023, there were 48,142,457 ADSs outstanding (representing 48,142,457 ordinary shares).
B. Plan of Distribution
Not applicable.
C. Markets
Our ADSs are listed on the NYSE under the symbol “WNS.”
D. Selling Shareholders
Not applicable.
E. Dilution
Not applicable.
F. Expenses of the Issue
Not applicable.
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ITEM 10. ADDITIONAL INFORMATION
A. Share Capital
Not applicable.
B. Memorandum and Articles of Association
General
We were incorporated in Jersey, Channel Islands, as a private limited company (with registered number 82262) on February 18, 2002 pursuant to the 1991 Law. We converted from a private limited company to a public limited company on January 4, 2006 when we acquired more than 30 shareholders as calculated in accordance with Article 17A of the 1991 Law. We gave notice of this to the JFSC in accordance with Article 17(3) of the 1991 Law on January 12, 2006.
The address of our secretary, Mourant Secretaries (Jersey) Limited, and share registrar, Mourant Governance Services (Jersey) Limited is 22 Grenville Street, St Helier, Jersey JE4 8PX. Our share register is maintained at the premises of Mourant Governance Services (Jersey) Limited.
Our activities are regulated by our Memorandum and Articles of Association. We adopted an amended and restated Memorandum and Articles of Association by special resolution of our shareholders passed on May 22, 2006. This amended and restated Memorandum and Articles of Association came into effect immediately prior to the completion of our initial public offering in July 2006. The material provisions of our amended and restated Memorandum and Articles of Association are described below. In addition to our Memorandum and Articles of Association, our activities are regulated by (among other relevant legislation) the 1991 Law. Our Memorandum of Association states our company name, that we are a public company, that we are a par value company, our authorized share capital and that the liability of our shareholders is limited to the amount (if any) unpaid on their shares. Below is a summary of some of the provisions of our Articles of Association. It is not, nor does it purport to be, complete or to identify all of the rights and obligations of our shareholders. The summary is qualified in its entirety by reference to our Memorandum and Articles of Association. See “Part III — Item 19. Exhibits — Exhibit 1.1” and “Part III — Item 19. Exhibits — Exhibit 1.2.”
The rights of shareholders described in this section are available only to persons who hold our certificated shares. ADS holders do not hold our certificated shares and therefore are not directly entitled to the rights conferred on our shareholders by our Articles of Association or the rights conferred on shareholders of a Jersey company by the 1991 Law, including, without limitation: the right to receive dividends and the right to attend and vote at shareholders meetings; the rights described in “— Other Jersey Law Considerations — Mandatory Purchases and Acquisitions” and “— Other Jersey Law Considerations — Compromises and Arrangements,” the right to apply to a Jersey court for an order on the grounds that the affairs of a company are being conducted in a manner which is unfairly prejudicial to the interests of its shareholders; and the right to apply to the JFSC to have an inspector appointed to investigate the affairs of a company. ADS holders are entitled to receive dividends and to exercise the right to vote only in accordance with the deposit agreement.
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Share Capital
As at March 31, 2023, the authorized share capital is £6,100,000, divided into 60,000,000 ordinary shares of 10 pence each and 1,000,000 preferred shares of 10 pence each. As at March 31, 2023, 2022 and 2021, we had 48,360,817, 48,849,907 and 49,402,203 shares (excluding 1,100,000 treasury shares), respectively. The decrease in the number of ordinary shares outstanding during the last three fiscal years resulted from share repurchases pursuant to our share repurchase programs, partially offset by the issuance of ordinary shares pursuant to our three share-based incentive plans: our 2002 Stock Incentive Plan, our 2006 Incentive Award Plan (as amended and restated) and our 2016 Incentive Award Plan (as amended and restated). Other than pursuant to our incentive award plans, we have not issued any shares for consideration other than cash. There are no preferred shares outstanding.
Pursuant to Jersey law and our Memorandum and Articles of Association, our Board of Directors by resolution may establish one or more classes of preferred shares having such number of shares, designations, dividend rates, relative voting rights, liquidation rights and other relative participation, optional or other special rights, qualifications, limitations or restrictions as may be fixed by the board without any further shareholder approval. Such rights, preferences, powers and limitations as may be established could also have the effect of discouraging an attempt to obtain control of us. None of our shares have any redemption rights.
Capacity
Under the 1991 Law, the doctrine of ultra vires in its application to companies is abolished and accordingly the capacity of a Jersey company is not limited by anything in its memorandum or articles or by any act of its members.
Changes in Capital or our Memorandum and Articles of Association
Subject to the 1991 Law and our Articles of Association, we may by special resolution at a general meeting:
| • | increase our authorized or paid-up share capital; |
| • | consolidate and divide all or any part of our shares into shares of a larger amount than is fixed by our Memorandum of Association; |
| • | sub-divide all or any part of our shares into shares of smaller amount than is fixed by our Memorandum of Association; |
| • | convert any of our issued or unissued shares into shares of another class; |
| • | convert all our issued par value shares into no par value shares and vice versa; |
| • | convert any of our paid-up shares into stock, and reconvert any stock into any number of paid-up shares of any denomination; |
| • | convert any of our issued limited shares into redeemable shares which can be redeemed; |
| • | cancel shares which, at the date of passing of the resolution, have not been taken or agreed to be taken by any person, and diminish the amount of the authorized share capital by the amount of the shares so cancelled; |
| • | reduce our issued share capital; or |
| • | alter our Memorandum or Articles of Association. |
General Meetings of Shareholders
We may at any time convene general meetings of shareholders. We hold an annual general meeting for each fiscal year. Under the 1991 Law, no more than 18 months may elapse between the date of one annual general meeting and the next.
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Our Articles of Association provide that annual general meetings and meetings calling for the passing of a special resolution require 21 days’ notice of the place, day and time of the meeting in writing to our shareholders. Any other general meeting requires no less than 14 days’ notice in writing. Our directors may, at their discretion, and upon a request made in accordance with the 1991 Law by shareholders holding not less than one tenth of our total voting rights our directors shall, convene a general meeting. Our business may be transacted at a general meeting only when a quorum of shareholders is present. Two shareholders entitled to attend and to vote on the business to be transacted (or a proxy for a shareholder or a duly authorized representative of a corporation which is a shareholder) and holding shares conferring not less than one-third of the total voting rights, constitute a quorum provided that if at any time all of our issued shares are held by one shareholder, such quorum shall consist of the shareholder present in person or by proxy.
The annual general meetings deal with and dispose of all matters prescribed by our Articles of Association and by the 1991 Law including:
| • | the consideration of our annual financial statements and report of our directors and auditors; |
| • | the election of directors (if necessary); |
| • | the appointment of auditors and the fixing of their remuneration; |
| • | the sanction of dividends; and |
| • | the transaction of any other business of which notice has been given. |
Failure to hold an annual general meeting is an offence by our company and our directors under the 1991 Law and carries a potential fine of up to £10,000 for our company and each director.
Voting Rights
Subject to any special terms as to voting on which any shares may have been issued or may from time to time be held, at a general meeting, every shareholder who is present in person (including any corporation present by its duly authorized representative) shall on a show of hands have one vote and every shareholder present in person or by proxy shall on a poll have one vote for each share of which he is a holder. In the case of joint holders only one of them may vote and in the absence of election as to who is to vote, the vote of the senior who tenders a vote, whether in person or by proxy, shall be accepted to the exclusion of the votes of the other joint holders.
A shareholder may appoint any person (whether or not a shareholder) to act as his proxy at any meeting of shareholders (or of any class of shareholders) in respect of all or a particular number of the shares held by him. A shareholder may appoint more than one person to act as his proxy and each such person shall act as proxy for the shareholder for the number of shares specified in the instrument appointing the person a proxy. If a shareholder appoints more than one person to act as his proxy, each instrument appointing a proxy shall specify the number of shares held by the shareholder for which the relevant person is appointed his proxy. Each duly appointed proxy has the same rights as the shareholder by whom he was appointed to speak at a meeting and vote at a meeting in respect of the number of shares held by the shareholder for which the relevant proxy is appointed his proxy.
For the purpose of determining shareholders entitled to notice of or to vote at any meeting of shareholders or any adjournment thereof or in order to make a determination of shareholders for any other proper purpose, our directors may fix in advance a date as the record date for any such determination of shareholders.
Shareholder Resolutions
An ordinary resolution requires the affirmative vote of a simple majority (that is, more than 50%) of our shareholders entitled to vote in person (or by corporate representative in case of a corporate entity) or by proxy at a general meeting.
A special resolution requires the affirmative vote of a majority of not less than two-thirds of our shareholders entitled to vote in person (or by corporate representative in the case of a corporate entity) or by proxy at a general meeting.
Our Articles of Association prohibit the passing of shareholder resolutions by written consent to remove an auditor or to remove a director before the expiry of his term of office.
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Dividends
Subject to the provisions of the 1991 Law and of the Articles of Association, we may, by ordinary resolution, declare dividends to be paid to shareholders according to their respective rights and interests in our distributable reserves. However, no dividend shall exceed the amount recommended by our directors.
Subject to the provisions of the 1991 Law, we may declare and pay an interim dividend or dividends, including a dividend payable at a fixed rate, if an interim dividend or dividends appears to us to be justified by our distributable reserves.
Except as otherwise provided by the rights attached to any shares, all dividends shall be declared and paid according to the amounts paid up (as to both par and any premium) otherwise than in advance of calls, on the shares on which the dividend is paid. All dividends unclaimed for a period of ten years after having been declared or become due for payment shall, if the directors so resolve, be forfeited and shall cease to remain owing by us and shall henceforth belong to us absolutely.
We may, with the authority of an ordinary resolution, direct that payment of any dividend declared may be satisfied wholly or partly by the distribution of assets, and in particular of paid-up shares or debentures of any other company, or in any one or more of those ways.
We may also with the prior authority of an ordinary resolution, and subject to such conditions as we may determine, offer to holders of shares the right to elect to receive shares, credited as fully paid, instead of the whole, or some part, to be determined by us, of any dividend specified by the ordinary resolution.
For the purposes of determining shareholders entitled to receive a dividend or distribution, our directors may fix a record date for any such determination of shareholders. A record date for any dividend or distribution may be on or at any time before any date on which such dividend or distribution is paid or made and on or at any time before or after any date on which such dividend or distribution is declared.
Ownership Limitations
Our Articles of Association and the 1991 Law do not contain limits on the number of shares that a shareholder may own.
Transfer of Shares
Every shareholder may transfer all or any of his shares by instrument of transfer in writing in any usual form or in any form approved by us. The instrument must be executed by or on behalf of the transferor and, in the case of a transfer of a share which is not fully paid up, by or on behalf of the transferee. The transferor is deemed to remain the holder until the transferee’s name is entered in the register of shareholders.
We may, in our absolute discretion and without giving any reason, refuse to register any transfer of a share or renunciation of a renounceable letter of allotment unless:
| • | it is in respect of a share which is fully paid-up; |
| • | it is in respect of only one class of shares; |
| • | it is in favor of a single transferee or not more than four joint transferees; |
| • | it is duly stamped, if so required; and |
| • | it is delivered for registration to our registered office for the time being or another place that we may from time to time determine accompanied by the certificate for the shares to which it relates and any other evidence as we may reasonably require to prove the right of the transferor or person renouncing to make the transfer or renunciation. |
Share Register
We maintain our register of members in Jersey. It is open to inspection during business hours by shareholders without charge and by other persons upon payment of a fee not exceeding £5. Any person may obtain a copy of our register of members upon payment of a fee not exceeding £0.50 per page and providing a declaration under oath as required by the 1991 Law.
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Variation of Rights
If at any time our share capital is divided into different classes of shares, the special rights attached to any class, unless otherwise provided by the terms of issue of the shares of that class, may be varied or abrogated with the consent in writing of the holders of the majority of the issued shares of that class, or with the sanction of an ordinary resolution passed at a separate meeting of the holders of shares of that class, but not otherwise. To every such separate meeting all the provisions of our Articles of Association and of the 1991 Law relating to general meetings or to the proceedings thereat shall apply, mutatis mutandis, except that the necessary quorum shall be two persons holding or representing at least one-third in nominal amount of the issued shares of that class but so that if at any adjourned meeting of such holders a quorum as above defined is not present, those holders who are present in person shall be a quorum.
The special rights conferred upon the holders of any class of shares issued with preferred or other special rights shall be deemed to be varied by the reduction of the capital paid up on such shares and by the creation of further shares ranking in priority thereto, but shall not (unless otherwise expressly provided by our Articles of Association or by the conditions of issue of such shares) be deemed to be varied by the creation or issue of further shares ranking after or pari passu therewith. The rights conferred on holders of ordinary shares shall be deemed not to be varied by the creation, issue or redemption of any preferred or preference shares.
Capital Calls
We may, subject to the provisions of our Articles of Association and to any conditions of allotment, from time to time make calls upon the members in respect of any monies unpaid on their shares (whether on account of the nominal value of the shares or by way of premium) provided that (except as otherwise fixed by the conditions of application or allotment) no call on any share shall be payable within 14 days of the date appointed for payment of the last preceding call, and each member shall (subject to being given at least 14 clear days’ notice specifying the time or times and place of payment) pay us at the time or times and place so specified the amount called on his shares.
If a member fails to pay any call or installment of a call on or before the day appointed for payment thereof, we may serve a notice on him requiring payment of so much of the call or installment as is unpaid, together with any interest (at a rate not exceeding 10% per annum to be determined by us) which may have accrued and any expenses which may have been incurred by us by reason of such non-payment. The notice shall name a further day (not earlier than 14 days from the date of service thereof) on or before which and the place where the payment required by the notice is to be made, and shall state that in the event of non-payment at or before the time and at the place appointed, the shares on which the call was made will be liable to be forfeited.
Borrowing Powers
Our Articles of Association contain no restrictions on our power to borrow money or to mortgage or charge all or any part of our undertaking, property and assets.
Issue of Shares and Pre-emptive Rights
Subject to the provisions of the 1991 Law and to any special rights attached to any shares, we may allot or issue shares with those preferred, deferred or other special rights or restrictions regarding dividends, voting, return of capital or other matters as our directors from time to time determine. We may issue shares that are redeemable or are liable to be redeemed at our option or the option of the holder in accordance with our Articles of Association. Subject to the provisions of the 1991 Law, the unissued shares at the date of adoption of our Articles of Association and shares created thereafter shall be at the disposal of our directors. We cannot issue shares at a discount to par value. Securities, contracts, warrants or other instruments evidencing any preferred shares, option rights, securities having conversion or option rights or obligations may also be issued by the directors without the approval of the shareholders or entered into by us upon a resolution of the directors to that effect on such terms, conditions and other provisions as are fixed by the directors, including, without limitation, conditions that preclude or limit any person owning or offering to acquire a specified number or percentage of shares in us in issue, other shares, option rights, securities having conversion or option rights or obligations of us or the transferee of such person from exercising, converting, transferring or receiving the shares, option rights, securities having conversion or option rights or obligations.
There are no pre-emptive rights for the transfer of our shares either within the 1991 Law or our Articles of Association.
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Directors’ Powers
Our business shall be managed by the directors who may exercise all of the powers that we are not by the 1991 Law or our Articles of Association required to exercise in a general meeting. Accordingly, the directors may (among other things) borrow money, mortgage or charge all of our property and assets (present and future) and issue securities.
Meetings of the Board of Directors
A director may, and the secretary on the requisition of a director shall, at any time, summon a meeting of the directors by giving to each director and alternate director not less than 24 hours’ notice of the meeting provided that any meeting may be convened at shorter notice and in such manner as each director or his alternate director shall approve provided further that unless otherwise resolved by the directors notices of directors’ meetings need not be in writing.
Subject to our Articles of Association, our Board of Directors may meet for the conducting of business, adjourn and otherwise regulate its proceedings as it sees fit. The quorum necessary for the transaction of business may be determined by the Board of Directors and unless otherwise determined shall be three persons, each being a director or an alternate director of whom two shall not be executive directors. Where more than three directors are present at a meeting, a majority of them must not be executive directors in order for the quorum to be constituted at the meeting. A duly convened meeting of the Board of Directors at which a quorum is present is necessary to exercise all or any of the board’s authorities, powers and discretions.
Our Board of Directors may from time to time appoint one or more of their number to be the holder of any executive office on such terms and for such periods as they may determine. The appointment of any director to any executive office shall be subject to termination if he ceases to be a director. Our Board of Directors may entrust to and confer upon a director holding any executive office any of the powers exercisable by the directors, upon such terms and conditions and with such restrictions as they think fit, and either collaterally with or to the exclusion of their own powers and may from time to time revoke, withdraw, alter or vary all or any of such powers.
Remuneration of Directors
Our directors shall be entitled to receive by way of fees for their services as directors any sum that we may, by ordinary resolution in general meeting from time to time determine. That sum, unless otherwise directed by the ordinary resolution by which it is voted, shall be divided among the directors in the manner that they agree or, failing agreement, equally. The remuneration (if any) of an alternate director shall be payable out of the remuneration payable to the director appointing him as may be agreed between them. The directors shall be repaid their traveling and other expenses properly and necessarily expended by them in attending meetings of the directors or members or otherwise on our affairs.
If any director shall be appointed agent or to perform extra services or to make any special exertions, the directors may remunerate such director therefor either by a fixed sum or by commission or participation in profits or otherwise or partly one way and partly in another as they think fit, and such remuneration may be either in addition to or in substitution for his above mentioned remuneration.
Directors’ Interests in Contracts
Subject to the provisions of the 1991 Law, a director may hold any other office or place of profit under us (other than the office of auditor) in conjunction with his office of director and may act in a professional capacity to us on such terms as to tenure of office, remuneration and otherwise as we may determine and, provided that he has disclosed to us the nature and extent of any of his interests which conflict or may conflict to a material extent with our interests at the first meeting of the directors at which a transaction is considered or as soon as practical after that meeting by notice in writing to the secretary or has otherwise previously disclosed that he is to be regarded as interested in a transaction with a specific person, a director notwithstanding his office (1) may be a party to, or otherwise interested in, any transaction or arrangement with us or in which we are otherwise interested, (2) may be a director or other officer of, or employed by, or a party to any transaction or arrangement with, or otherwise interested in, anybody corporate promoted by us or in which we are otherwise interested, and (3) shall not, by reason of his office, be accountable to us for any benefit which he derives from any such office or employment or from any such transaction or arrangement or from any interest in any such body corporate and no such transaction or arrangement shall be liable to be avoided on the ground of any such interest or benefit.
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Restrictions on Directors’ Voting
A director, notwithstanding his interest, may be counted in the quorum present at any meeting at which any contract or arrangement in which he is interested is considered and, subject as provided above, he may vote in respect of any such contract or arrangement. A director, notwithstanding his interest, may be counted in the quorum present at any meeting at which he is appointed to hold any office or place of profit under us, or at which the terms of his appointment are arranged, but the director may not vote on his own appointment or the terms thereof or any proposal to select that director for re-election.
Number of Directors
Our board shall determine the maximum and minimum number of directors provided that the minimum number of directors shall be not less than three.
Directors’ Appointment, Resignation, Disqualification and Removal
Our board is divided into three classes that are, as nearly as possible, of equal size. Each class of directors (other than initially) is elected for a three-year term of office but the terms are staggered so that the term of only one class of directors expires at each annual general meeting. Any additional directorships resulting from an increase in the number of directors will be distributed among the three classes so that, as nearly as possible, each class will consist of one-third of the directors. This classification of the Board of Directors may have the effect of delaying or preventing changes in control of management of our company. Our Board of Directors shall have power (unless they determine that any vacancy should be filled by us in general meeting) at any time and from time to time to appoint any person to be a director, either to fill any vacancy or as an addition to the existing directors. A vacancy for these purposes only will be deemed to exist if a director dies, resigns, ceases or becomes prohibited or disqualified by law from acting as a director, becomes bankrupt or enters into an arrangement or composition with his creditors, becomes of unsound mind or is removed by us from office for gross negligence or criminal conduct by ordinary resolution. A vacancy for these purposes will not be deemed to exist upon the expiry of the term of office of a director. At any general meeting at which a director retires or at which a director’s period of office expires we shall elect, by ordinary resolution of the general meeting, a director to fill the vacancy, unless our directors resolve to reduce the number of directors in office. Where the number of persons validly proposed for election or re-election as a director is greater than the number of directors to be elected, the persons receiving the most votes (up to the number of directors to be elected) shall be elected as directors and an absolute majority of the votes cast shall not be a pre-requisite to the election of such directors.
The directors shall hold office until they resign, they cease to be a director by virtue of a provision of the 1991 Law, they become disqualified by law or the terms of our Articles of Association from being a director, they become bankrupt or make any arrangement or composition with their creditors generally or they become of unsound mind or they are removed from office by us for gross negligence or criminal conduct by ordinary resolution in general meeting.
A director is not required to hold any of our shares.
Capitalization of Profits and Reserves
Subject to our Articles of Association, we may, upon the recommendation of our directors, by ordinary resolution resolve to capitalize any of our undistributed profits (including profits standing to the credit of any reserve account), any sum standing to the credit of any reserve account as a result of the sale or revaluation of an asset (other than goodwill) and any sum standing to the credit of our share premium account or capital redemption reserve.
Any sum which is capitalized shall be appropriated among our shareholders in the proportion in which such sum would have been divisible amongst them had the same been applied in paying dividends and applied in (1) paying up the amount (if any) unpaid on the shares held by the shareholders, or (2) issuing to shareholders, fully paid shares (issued either at par or a premium) or (subject to our Articles of Association) our debentures.
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Unclaimed Dividends
Any dividend which has remained unclaimed for a period of 10 years from the date of declaration thereof shall, if the directors so resolve, be forfeited and cease to remain owing by us and shall thenceforth belong to us absolutely.
Indemnity, Limitation of Liability and Officers Liability Insurance
Insofar as the 1991 Law allows and, to the fullest extent permitted thereunder, we may indemnify any person who was or is involved in any manner (including, without limitation, as a party or a witness), or is threatened to be made so involved, in any threatened, pending or completed investigation, claim, action, suit or proceeding, whether civil, criminal, administrative or investigative including, without limitation, any proceeding by or in the right of ours to procure a judgment in our favor, but excluding any proceeding brought by such person against us or any affiliate of ours by reason of the fact that he is or was an officer, secretary, servant, employee or agent of ours, or is or was serving at our request as an officer, secretary, servant, employee or agent of another corporation, partnership, joint venture, trust or other enterprise against all expenses (including attorney’s fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by him in connection with such proceeding. Such indemnification shall be a contract right and shall include the right to receive payment in advance of any expenses incurred by the indemnified person in connection with such proceeding, provided always that this right is permitted by the 1991 Law.
Subject to the 1991 Law, we may enter into contracts with any officer, secretary, servant, employee or agent of ours and may create a trust fund, grant a security interest, make a loan or other advancement or use other means (including, without limitation, a letter of credit) to ensure the payment of such amounts as may be necessary to effect indemnification as provided in the indemnity provisions in our Articles of Association.
Our directors are empowered to arrange for the purchase and maintenance in our name and at our expense of insurance cover for the benefit of any current or former officer of ours, our secretary and any current or former agent, servant or employee of ours against any liability which is incurred by any such person by reason of the fact that he is or was an officer of ours, our secretary or an agent, servant or employee of ours.
Subject to the 1991 Law, the right of indemnification, loan or advancement of expenses provided in our Articles of Association is not exclusive of any other rights to which a person seeking indemnification may otherwise be entitled, under any statute, memorandum or articles of association, agreement, vote of shareholders or disinterested directors or otherwise, both as to action in his official capacity and as to action in another capacity while holding such office. The provisions of our Articles of Association inure for the benefit of the heirs and legal representatives of any person entitled to indemnity under our Articles of Association and are applicable to proceedings commenced or continuing after the adoption of our Articles of Association whether arising from acts or omissions occurring before or after such adoption.
If any provision or provisions of our Articles of Association relative to indemnity are held to be invalid, illegal or unenforceable for any reason whatsoever: (i) the validity, legality and enforceability of the remaining provisions thereof shall not in any way be affected or impaired; and (ii) to the fullest extent possible, the provisions of our Articles of Association relative to indemnity shall be construed so as to give effect to the intent manifested by the provision held invalid, illegal or unenforceable.
Nothing in our Articles of Association prohibits us from making loans to officers, our secretary, servants, employees or agents to fund litigation expenses prior to such expenses being incurred.
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Distribution of Assets on a Winding-up
Subject to any particular rights or limitations attached to any shares, if we are wound up, our assets available for distribution among our shareholders shall be applied first in repaying to our shareholders the amount paid up (as to both par and any premium) on their shares respectively, and if such assets shall be more than sufficient to repay to our shareholders the whole amount paid up (as to both par and any premium) on their shares, the balance shall be distributed among our shareholders in proportion to the amount which at the time of the commencement of the winding up had been actually paid up (as to both par and any premium) on their shares respectively.
If we are wound up, we may, with the approval of a special resolution and any other sanction required by the 1991 Law, divide the whole or any part of our assets among our shareholders in specie and our liquidator or, where there is no liquidator, our directors, may, for that purpose, value any assets and determine how the division shall be carried out as between our shareholders or different classes of shareholders. Similarly, with the approval of a special resolution and subject to any other sanction required by the 1991 Law, all or any of our assets may be vested in trustees for the benefit of our shareholders.
Other Jersey Law Considerations
Purchase of Own Shares
The 1991 Law provides that we may, with the sanction of a special resolution and subject to certain conditions, purchase any of our shares which are fully paid.
We may fund the purchase of our own shares from any source provided that our directors are satisfied that immediately after the date on which the purchase is made, we will be able to discharge our liabilities as they fall due and that having regard to (i) our prospects and to the intentions of our directors with respect to the management of our business and (ii) the amount and character of the financial resources that will in their view be available to us, we will be able to (a) continue to carry on our business and (b) discharge our liabilities as they fall due until the expiry of the period of 12 months immediately following the date on which the purchase was made or until we are dissolved, whichever occurs first.
We cannot purchase our shares if, as a result of such purchase, only redeemable shares would be in issue. Any shares that we purchase (other than shares that are, immediately after being purchased, held as treasury shares) are treated as cancelled upon purchase.
Mandatory Purchases and Acquisitions
The 1991 Law provides that where a person (which we refer to as the “offeror”) makes an offer to acquire all of the shares (or all of the shares of any class of shares) (other than treasury shares and any shares already held by the offeror and its associates at the date of the offer), if the offeror has by virtue of acceptances of the offer acquired or contracted to acquire not less than 90% in nominal value of the shares (or class of shares) to which the offer relates, the offeror by notice may compulsorily acquire the remaining shares. A holder of any such shares may apply to the Jersey court for an order that the offeror not be entitled to purchase the holder’s shares or that the offeror purchase the holder’s shares on terms different to those of the offer.
Where, prior to the expiry of the offer period, the offeror has by virtue of acceptances of the offer acquired or contracted to acquire not less than 90% in nominal value of all of the shares of the target company (other than treasury shares and any shares already held by the offeror and its associates at the date of the offer), the holder of any shares (or class of shares) to which the offer relates who has not accepted the offer may require the offeror to acquire those shares. In such circumstances, each of the offeror and the holder of the shares are entitled to apply to the Jersey court for an order that the offeror purchase the holder’s shares on terms different to those of the offer.
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Compromises and Arrangements
Where a compromise or arrangement is proposed between a company and its creditors, or a class of them, or between the company and its shareholders, or a class of them, the Jersey court may on the application of the company or a creditor or member of it or, in the case of a company being wound up, of the liquidator, order a meeting of the creditors or class of creditors, or of the shareholders of the company or class of shareholders (as the case may be), to be called in a manner as the court directs.
If a majority in number representing 3/4ths in value of the creditors or class of creditors, or 3/4ths of the voting rights of shareholders or class of shareholders (as the case may be), present and voting either in person or by proxy at the meeting agree to a compromise or arrangement, the compromise or arrangement, if sanctioned by the court, is binding on all creditors or the class of creditors or on all the shareholders or class of shareholders, and also on the company or, in the case of a company in the course of being wound up, on the liquidator and contributories of the company.
No Pre-Emptive Rights
Neither our Articles of Association nor the 1991 Law confers any pre-emptive rights on our shareholders.
No Mandatory Offer Requirements
In some countries, the trading and securities legislation contains mandatory offer requirements when shareholders have reached certain share ownership thresholds. There are no mandatory offer requirements under Jersey legislation. The Companies (Takeovers and Mergers Panel) (Jersey) Law 2009 empowers the Minister for Economic Development in Jersey (the “Minister”) to appoint a Panel on Takeovers and Mergers (the “Jersey Panel”) as the body responsible for regulating takeovers and mergers of companies incorporated in Jersey. The Minister has appointed the UK Panel on Takeovers and Mergers (the “UK Panel”) to carry out the functions of the Jersey Panel. The Jersey Panel will be empowered to promulgate rules regulating takeovers and mergers of Jersey companies (the “Jersey Code”). The rules applicable to the regulation of takeovers and mergers promulgated by the UK Panel as set out in The City Code on Takeovers and Mergers (the “UK Code”) have been adopted as the Jersey Code. Rule 9 of the UK Code contains rules relative to mandatory offers. However, the UK Code only applies to (i) offers for Jersey companies if any of their securities are admitted to trading on a regulated market in the United Kingdom or any stock exchange in the Channel Islands or the Isle of Man and (ii) to public or certain private Jersey companies which are considered by the Panel to have their place of central management and control in the United Kingdom, the Channel Islands or the Isle of Man. As none of our securities are listed on a regulated market in the United Kingdom or on any stock exchange in the Channel Islands or the Isle of Man and as we are not centrally managed and controlled in the United Kingdom, the Channel Islands or the Isle of Man, it is not anticipated that the UK Code (which has been adopted as the Jersey Code) will apply to us.
In 2012, the UK Panel published consultation paper ‘PCP 2012/3: Companies subject to the Takeover Code’, which sought views on proposed amendments to the rules for determining the companies that are subject to the UK Code. No changes have yet been made to the UK Code on the basis of that consultation. It is possible that future changes to the rules for determining the companies that are subject to the UK Code, made on the basis of that consultation or otherwise, could result in the UK Code (which has been adopted as the Jersey Code) applying to us.
Non-Jersey Shareholders
There are no limitations imposed by Jersey law or by our Articles of Association on the rights of non-Jersey shareholders to hold or vote on our ordinary shares or securities convertible into our ordinary shares.
Rights of Minority Shareholders
Under Article 141 of the 1991 Law, a shareholder may apply to court for relief on the ground that our affairs are being conducted or have been conducted in a manner which is unfairly prejudicial to the interests of our shareholders generally or of some part of our shareholders (including at least the shareholder making the application) or that an actual or proposed act or omission by us (including an act or omission on our behalf) is or would be so prejudicial. What amounts to unfair prejudice is not defined in the 1991 Law. There may also be a common law personal actions available to our shareholders.
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Under Article 143 of the 1991 Law (which sets out the types of relief a court may grant in relation to an action brought under Article 141 of the 1991 Law), the court may make an order regulating our affairs, requiring us to refrain from doing or continuing to do an act complained of, authorizing civil proceedings and providing for the purchase of shares by us or by any of our other shareholders.
Jersey Law and our Memorandum and Articles of Association
The content of our Memorandum and Articles of Association reflects the requirements of the 1991 Law. Jersey company law draws very heavily from company law in England and there are various similarities between the 1991 Law and English company law. However, the 1991 Law is considerably more limited in content than English company law and there are some notable differences between English and Jersey company law. There are, for example, no provisions under Jersey law (as there are under English law):
| • | controlling possible conflicts of interests between us and our directors, such as loans by us or directors, and contracts between us and our directors other than a duty on our directors to disclose an interest in any transaction to be entered into by us or any of our subsidiaries which to a material extent conflicts with our interest; |
| • | specifically requiring particulars to be shown in our accounts of the amount of loans to officers or directors’ emoluments and pensions, although these would probably be required to be shown in our accounts in conformity to the requirement that accounts must be prepared in accordance with generally accepted accounting principles; |
| • | requiring us to file details of charges other than charges of Jersey realty; or |
| • | as regards statutory pre-emption provisions in relation to further issues of shares. |
Comparison of Shareholders’ Rights
We are incorporated under the laws of Jersey, Channel Islands. The following discussion summarizes certain material differences between the rights of holders of our ordinary shares and the rights of holders of the common stock of a typical corporation incorporated under the laws of the State of Delaware which result from differences in governing documents and the laws of Jersey, Channel Islands and Delaware. The rights of holders of our ADSs differ in certain respects from those of holders of our ordinary shares.
This discussion does not purport to be a complete statement of the rights of holders of our ordinary shares under applicable law in Jersey, Channel Islands and our Memorandum and Articles of Association or the rights of holders of the common stock of a typical corporation under applicable Delaware law and a typical certificate of incorporation and bylaws.
| Corporate Law Issue |
Delaware Law |
Jersey Law | ||
| Special Meetings of Shareholders | Shareholders of a Delaware corporation generally do not have the right to call meetings of shareholders unless that right is granted in the certificate of incorporation or by-laws. However, if a corporation fails to hold its annual meeting within a period of 30 days after the date designated for the annual meeting, or if no date has been designated for a period of 13 months after its last annual meeting, the Delaware Court of Chancery may order a meeting to be held upon the application of a shareholder. | Under the 1991 Law, directors shall, notwithstanding anything in a Jersey company’s articles of association, call a general meeting on a shareholders’ requisition. A shareholders’ requisition is a requisition of shareholders holding not less than one-tenth of the total voting rights of the shareholders of the company who have the right to vote at the meeting requisitioned. Failure to call an annual general meeting in accordance with the requirements of the 1991 Law is a criminal offense on the part of a Jersey company and its directors. The JFSC may, on the application of any officer, secretary or shareholder call, or direct the calling of, an annual general meeting. |
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| Corporate Law Issue |
Delaware Law |
Jersey Law | ||
| Interested Director Transactions | Interested director transactions are not voidable if (i) the material facts as to the interested director’s relationship or interests are disclosed or are known to the Board of Directors and the board in good faith authorizes the transaction by the affirmative vote of a majority of the disinterested directors, (ii) the material facts are disclosed or are known to the shareholders entitled to vote on such transaction and the transaction is specifically approved in good faith by vote of the majority of shares entitled to vote on the matter or (iii) the transaction is fair as to the corporation as of the time it is authorized, approved or ratified by the Board of Directors, a committee or the shareholders. | A director of a Jersey company who has an interest in a transaction entered into or proposed to be entered into by the company or by a subsidiary which conflicts or may conflict with the interests of the company and of which the director is aware, must disclose the interest to the company. Failure to disclose an interest entitles the company or a member to apply to the court for an order setting aside the transaction concerned and directing that the director account to the company for any profit. A transaction is not voidable and a director is not accountable notwithstanding a failure to disclose if the transaction is confirmed by special resolution and the nature and extent of the director’s interest in the transaction are disclosed in reasonable detail in the notice calling the meeting at which the resolution is passed. Without prejudice to its power to order that a director account for any profit, a court shall not set aside a transaction unless it is satisfied that the interests of third parties who have acted in good faith thereunder would not thereby be unfairly prejudiced and the transaction was not reasonable and fair in the interests of the company at the time it was entered into. |
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| Corporate Law Issue |
Delaware Law |
Jersey Law | ||
| Cumulative Voting | Delaware law does not require that a Delaware corporation provide for cumulative voting. However, the certificate of incorporation of a Delaware corporation may provide that shareholders of any class or classes or of any series may vote cumulatively either at all elections or at elections under specified circumstances. | There are no provisions in the 1991 Law relating to cumulative voting. | ||
| Approval of Corporate Matters by Written Consent | Unless otherwise specified in a Delaware corporation’s certificate of incorporation, action required or permitted to be taken by shareholders at an annual or special meeting may be taken by shareholders without a meeting, without notice and without a vote, if consents in writing setting forth the action, are signed by shareholders with not less than the minimum number of votes that would be necessary to authorize the action at a meeting. All consents must be dated. No consent is effective unless, within 60 days of the earliest dated consent delivered to the corporation, written consents signed by a sufficient number of holders to take action are delivered to the corporation. | Insofar as the memorandum or articles of a Jersey company do not make other provision in that behalf, anything which may be done at a meeting of the company (other than remove an auditor) or at a meeting of any class of its shareholders may be done by a resolution in writing signed by or on behalf of each shareholder who, at the date when the resolution is deemed to be passed, would be entitled to vote on the resolution if it were proposed at a meeting. A resolution shall be deemed to be passed when the instrument, or the last of several instruments, is last signed or on such later date as is specified in the resolution. | ||
| Business Combinations | With certain exceptions, a merger, consolidation or sale of all or substantially all the assets of a Delaware corporation must be approved by the Board of Directors and a majority of the outstanding shares entitled to vote thereon. | A sale or disposal of all or substantially all the assets of a Jersey company must be approved by the Board of Directors and, only if the Articles of Association of the company require, by the shareholders in general meeting. A merger involving a Jersey company must be generally documented in a merger agreement which must be approved by special resolution of that company. | ||
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| Corporate Law Issue |
Delaware Law |
Jersey Law | ||
| Limitations on Directors Liability | A Delaware corporation may include in its certificate of incorporation provisions limiting the personal liability of its directors to the corporation or its shareholders for monetary damages for many types of breach of fiduciary duty. However, these provisions may not limit liability for any breach of the director’s duty of loyalty, acts or omissions not in good faith or that involve intentional misconduct or a knowing violation of law, the authorization of unlawful dividends, or unlawful share purchase or redemption, or any transaction from which a director derived an improper personal benefit. Moreover, these provisions would not be likely to bar claims arising under US federal securities laws. | The 1991 Law does not contain any provisions permitting Jersey companies to limit the liability of directors for breach of fiduciary duty. Any provision, whether contained in the articles of association of, or in a contract with, a Jersey company or otherwise, whereby the company or any of its subsidiaries or any other person, for some benefit conferred or detriment suffered directly or indirectly by the company, agrees to exempt any person from, or indemnify any person against, any liability which by law would otherwise attach to the person by reason of the fact that the person is or was an officer of the company is void (subject to what is said below). | ||
| Indemnification of Directors and Officers | A Delaware corporation may indemnify a director or officer of the corporation against expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement actually and reasonably incurred in defense of an action, suit or proceeding by reason of his or her position if (i) the director or officer acted in good faith and in a manner he or she reasonably believed to be in or not opposed to the best interests of the corporation and (ii) with respect to any criminal action or proceeding, the director or officer had no reasonable cause to believe his or her conduct was unlawful. | The prohibition referred to above does not apply to a provision for exempting a person from or indemnifying the person against (a) any liabilities incurred in defending any proceedings (whether civil or criminal) (i) in which judgment is given in the person’s favor or the person is acquitted, (ii) which are discontinued otherwise than for some benefit conferred by the person or on the person’s behalf or some detriment suffered by the person, or (iii) which are settled on terms which include such benefit or detriment and, in the opinion of a majority of the directors of the company (excluding any director who conferred such benefit or on whose behalf such benefit was conferred or who suffered such detriment), the person was substantially successful on the merits in the person’s resistance to the proceedings, (b) any liability incurred otherwise than to the company if the person acted in good faith with a view to the best interests of the company, (c) any liability incurred in connection with an application made to the court for relief from liability for negligence, default, breach of duty or breach of trust under Article 212 of the 1991 Law in which relief is granted to the person by the court or (d) any liability against which the company normally maintains insurance for persons other than directors. | ||
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| Corporate Law Issue |
Delaware Law |
Jersey Law | ||
| Appraisal Rights | A shareholder of a Delaware corporation participating in certain major corporate transactions may, under certain circumstances, be entitled to appraisal rights pursuant to which the shareholder may receive cash in the amount of the fair value of the shares held by that shareholder (as determined by a court) in lieu of the consideration the shareholder would otherwise receive in the transaction. | The 1991 Law does not confer upon shareholders any appraisal rights. | ||
| Shareholder Suits | Class actions and derivative actions generally are available to the shareholders of a Delaware corporation for, among other things, breach of fiduciary duty, corporate waste and actions not taken in accordance with applicable law. In such actions, the court has discretion to permit the winning party to recover attorneys’ fees incurred in connection with such action. | Under Article 141 of the 1991 Law, a shareholder may apply to court for relief on the ground that a company’s affairs are being conducted or have been conducted in a manner which is unfairly prejudicial to the interests of its shareholders generally or of some part of its shareholders (including at least the shareholder making the application) or that an actual or proposed act or omission by the company (including an act or omission on its behalf) is or would be so prejudicial. There may also be common law personal actions available to shareholders. Under Article 143 of the 1991 Law (which sets out the types of relief a court may grant in relation to an action brought under Article 141 of the 1991 Law), the court may make an order regulating the affairs of a company, requiring a company to refrain from doing or continuing to do an act complained of, authorizing civil proceedings and providing for the purchase of shares by a company or by any of its other shareholders. | ||
| Inspection of Books and Records | All shareholders of a Delaware corporation have the right, upon written demand under oath stating the purpose thereof, to inspect or obtain copies of the corporation’s shares ledger and its other books and records for any proper purpose. | The register of shareholders and books containing the minutes of general meetings or of meetings of any class of shareholders of a Jersey company must during business hours be open to the inspection of a shareholder of the company without charge. The register of directors and secretaries must during business hours (subject to such reasonable restrictions as the company may by its articles or in general meeting impose, but so that not less than two hours in each business day be allowed for inspection) be open to the inspection of a shareholder or director of the company without charge. | ||
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| Corporate Law Issue |
Delaware Law |
Jersey Law | ||
| Amendments to Charter | Amendments to the certificate of incorporation of a Delaware corporation require the affirmative vote of the holders of a majority of the outstanding shares entitled to vote thereon or such greater vote as is provided for in the certificate of incorporation; a provision in the certificate of incorporation requiring the vote of a greater number or proportion of the directors or of the holders of any class of shares than is required by Delaware corporate law may not be amended, altered or repealed except by such greater vote. | The memorandum and articles of association of a Jersey company may only be amended by special resolution (being a two-third majority if the articles of association of the company do not specify a greater majority) passed by shareholders in general meeting or by written resolution signed by all the shareholders entitled to vote. |
Transfer Agent and Registrar
The transfer agent and registrar for our ADSs is Deutsche Bank Trust Company Americas.
C. Material Contracts
Except as disclosed below, we are not currently, nor have we been for the past two years, party to any material contract, other than contracts entered into in the ordinary course of business.
(1) Employment Agreement effective April 1, 2022 between Keshav R. Murugesh and WNS Global Services Private Limited, and as amended thereafter.
Please see “Part I — Item 6. Directors, Senior Management and Employees — B. Compensation — Employment Agreement of our Executive Director.”
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D. Exchange Controls
There are currently no Jersey or United Kingdom foreign exchange control restrictions on the payment of dividends on our ordinary shares or on the conduct of our operations. Jersey is in a monetary union with the United Kingdom. There are currently no limitations under Jersey law or our Articles of Association prohibiting persons who are not residents or nationals of United Kingdom from freely holding, voting or transferring our ordinary shares in the same manner as United Kingdom residents or nationals.
Exchange Rates
Substantially all of our revenue is denominated in pound sterling or US dollars and large part of our expenses, other than payments to repair centers, are incurred and paid in Indian rupees. We report our financial results in US dollars. The exchange rates among the Indian rupee, the pound sterling and the US dollar have changed substantially in recent years and may fluctuate substantially in the future. The results of our operations are affected as the Indian rupee and the pound sterling appreciate or depreciate against the US dollar and, as a result, any such appreciation or depreciation will likely affect the market price of our ADSs in the US.
The following table sets forth, for the periods indicated, information concerning the exchange rates between Indian rupees and US dollars based on the spot rate released by the Federal Reserve Board:
| Fiscal year: |
Period End(1) | Average(2) | High | Low | ||||||||||||
| 2019 |
₹ | 69.16 | ₹ | 69.87 | ₹ | 74.33 | ₹ | 64.92 | ||||||||
| 2020 |
75.39 | 70.89 | 76.37 | 68.40 | ||||||||||||
| 2021 |
73.14 | 74.25 | 76.95 | 72.37 | ||||||||||||
| 2022 |
75.87 | 74.50 | 77.07 | 72.42 | ||||||||||||
| 2023 |
82.19 | 80.30 | 82.97 | 75.31 | ||||||||||||
| 2024 (until May 12, 2023) |
82.17 | 81.95 | 82.33 | 81.65 | ||||||||||||
Notes:
| (1) | The spot rate at each period end and the average rate for each period may differ from the exchange rates used in the preparation of consolidated financial statements included elsewhere in this annual report. |
| (2) | Represents the average of the daily exchange rates during the period. |
The following table sets forth, for the periods indicated, information concerning the exchange rates between Indian rupees and US dollars based on the spot rate released by the Federal Reserve Board:
| Month: |
High | Low | ||||||
| November 2022 |
₹ | 82.76 | ₹ | 80.72 | ||||
| December 2022 |
82.93 | 81.17 | ||||||
| January 2023 |
82.86 | 80.99 | ||||||
| February 2023 |
82.97 | 81.73 | ||||||
| March 2023 |
82.84 | 81.77 | ||||||
| April 2023 |
82.33 | 81.65 | ||||||
| May 2023 (until May 12, 2023) |
82.17 | 81.73 | ||||||
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The following table sets forth, for the periods indicated, information concerning the exchange rates between the pound sterling and US dollars based on the spot rate released by the Federal Reserve Board:
| Fiscal year: |
Period End(1) | Average(2) | High | Low | ||||||||||||
| 2019 |
£ | 0.77 | £ | 0.76 | £ | 0.80 | £ | 0.70 | ||||||||
| 2020 |
0.80 | 0.79 | 0.87 | 0.75 | ||||||||||||
| 2021 |
0.73 | 0.72 | 0.73 | 0.72 | ||||||||||||
| 2022 |
0.76 | 0.73 | 0.77 | 0.70 | ||||||||||||
| 2023 |
0.81 | 0.83 | 0.93 | 0.76 | ||||||||||||
| 2024 (until May 12, 2023) |
0.80 | 0.80 | 0.81 | 0.79 | ||||||||||||
Notes:
| (1) | The spot rate at each period end and the average rate for each period may differ from the exchange rates used in the preparation of consolidated financial statements included elsewhere in this annual report. |
| (2) | Represents the average of the daily exchange rates during the period. |
The following table sets forth, for the periods indicated, information concerning the exchange rates between the pound sterling and US dollars based on the spot rate released by the Federal Reserve Board:
| Month: |
High | Low | ||||||
| November 2022 |
£ | 0.89 | £ | 0.83 | ||||
| December 2022 |
0.83 | 0.81 | ||||||
| January 2023 |
0.84 | 0.81 | ||||||
| February 2023 |
0.84 | 0.81 | ||||||
| March 2023 |
0.84 | 0.81 | ||||||
| April 2023 |
0.81 | 0.79 | ||||||
| May 2023 (until May 12, 2023) |
0.80 | 0.79 | ||||||
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E. Taxation
Jersey Tax Consequences
General
Jersey tax considerations
The following summary of the anticipated treatment of the company and holders of ordinary shares (other than residents of Jersey) is based on Jersey taxation law and practice as it is understood to apply at the date of this annual report. It does not constitute legal or tax advice and does not address all aspects of Jersey tax law and practice. Holders of our ordinary shares (or ADSs) should consult their professional advisers on the implications of acquiring, buying, holding, selling or otherwise disposing of ordinary shares (or ADSs) under the laws of the jurisdictions in which they may be liable to taxation. Shareholders (and holders of ADSs) should be aware that tax laws, rules and practice and their interpretation may change.
Taxation of the company
Jersey taxation legislation provides that the general basic rate of income tax on the profits of companies regarded as resident in Jersey or having a permanent establishment in Jersey will be 0% and that only a limited number of companies active in specific sectors (not applicable to us) shall be subject to income tax at a rate of more than 0%.
Under the Income Tax (Jersey) Law 1961, we are regarded as tax resident in Jersey but, not being a financial services company nor a specified utility company for the purposes of Jersey taxation legislation, are subject to the general basic rate of income tax on profits of 0%.
If the company derives any income from the ownership, disposal or exploitation of land in Jersey or the importation into Jersey or supplying in Jersey of hydrocarbon oil, such income will be subject to Jersey income tax at the rate of 20%. It is not expected that the company will derive any such income.
A 5% goods and services tax is generally paid in Jersey on the sale or exchange of goods and services in Jersey. All businesses with a 12-month taxable turnover in excess of £300,000 must, by Jersey law, register for this tax unless they are an international services entity (“ISE”). For so long as the company is an ISE within the meaning of the Goods and Services (Jersey) Law 2007, having satisfied the requirements of the Goods and Services Tax (International Services Entities) (Jersey) Regulations 2008, as amended, a supply of goods or services made by or to the company shall not be a taxable supply for the purposes of Jersey law.
Taxation of holders of ordinary shares and ADSs
The company will be entitled to pay dividends to holders of ordinary shares and ADSs without any withholding or deduction for, or on account of, Jersey tax. The holders of ordinary shares and ADSs (other than residents of Jersey) will not be subject to any tax in Jersey in respect of the holding, sale or other disposition of such ordinary shares or ADSs.
Foreign Account Tax Compliance Act (“FATCA”)
Pursuant to U.S. Foreign Account Tax Compliance Act, commonly known as FATCA, certain payments of (or attributable to) US-source income could be subject to 30% withholding tax unless the company agrees to adopt certain reporting and withholding requirements if the Company is treated as a financial institution (“FI”) as defined under FATCA. Although we do not currently believe we are an FI and would use reasonable efforts to avoid the imposition of such withholding tax if we were to be treated as an FI, no assurance can be given that we will be able to do so.
On December 13, 2013, the Chief Minister of Jersey signed the US-Jersey Intergovernmental Agreement (“US IGA”), which imposes certain due diligence and reporting requirements on Jersey FIs. Where applicable information regarding shareholders, their ultimate beneficial owners and/or controlling persons, and their investment in and returns from the company, may need to be reported to the local States of Jersey tax authority.
Following the US implementation of FATCA, the UK introduced their own information reporting regime with certain Crown Dependencies and Overseas Territories such as Jersey. On October 22, 2013 the Chief Minister of Jersey signed the UK-Jersey IGA (“UK IGA”). The application of this UK FATCA regime is similar to US FATCA except that it imposes disclosure requirements in respect of certain shareholders who are, or are entities that are controlled by one or more, residents of the UK.
Both the US and UK IGAs are implemented through Jersey’s domestic legislation, in accordance with guidance notes which are published in draft form and updated on a regular basis. The first reporting deadline under the US IGA was June 30, 2015 and that under the UK IGA was June 30, 2016. Reporting is due annually thereafter with UK FATCA merging fully into Common Reporting Standard (“CRS”) over the coming years.
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Common Reporting Standard
The Organization for Economic Co-operation and Development (“OECD”) has developed a Common Reporting Standard (the “CRS”) and model competent authority agreement (the “Multilateral Agreement”) to enable the multilateral and automatic exchange of financial account information. This global standard was modelled largely on the US FATCA regime but with some notable differences. Over 100 jurisdictions have committed to implementing the CRS or have already implemented the CRS (including the UK and Jersey). The first exchanges of information under the CRS occurred in 2017. Pursuant to the Multilateral Agreement, certain disclosure requirements may be imposed in respect of certain shareholders who are, or are entities that are controlled by one or more, residents of any of the signatory jurisdictions. Where applicable, information that would need to be disclosed will include certain information about shareholders, their ultimate beneficial owners and/or controllers, and their investment in and returns from the company. The US is not a participant in the regime.
Stamp duty
No stamp duty is payable in Jersey on the issue or inter vivos transfer of ordinary shares or ADSs.
Upon the death of a holder of ordinary shares or ADSs, a grant of probate or letters of administration will be required to transfer ordinary shares or ADSs of the deceased person to the extent that the ordinary shares or ADSs are considered moveable estate situated in Jersey, except that, where the deceased person was domiciled outside of Jersey at the time of death, the company may (at its discretion) dispense with this requirement where the value of the deceased’s movable estate in Jersey does not exceed £10,000.
Upon the death of a holder of ordinary shares or ADSs (and to the extent that the ordinary shares or ADSs are considered movable estate situated in Jersey), Jersey probate stamp duty will be payable on the registration in Jersey of a grant of probate or letters of administration, which will be required in order to transfer or otherwise deal with:
| (A) | (where the deceased person was domiciled in Jersey at the time of death) the deceased person’s personal estate wherever situated (including any ordinary shares or ADSs to the extent that the ordinary shares or ADSs are considered movable estate situated in Jersey) if the net value of such personal estate exceeds £10,000; or |
| (B) | (if the deceased person was domiciled outside of Jersey at the time of death) the deceased person’s personal estate situated in Jersey (including any ordinary shares or ADSs to the extent that the ordinary shares or ADSs are considered movable estate situated in Jersey) if the net value of such personal estate exceeds £10,000. |
The rate of probate stamp duty payable is:
| (A) | (where the net value of the deceased person’s relevant personal estate does not exceed £100,000) 0.5% of the net value of the deceased person’s relevant personal estate; |
| (B) | (where the net value of the deceased person’s relevant personal estate exceeds £100,000) £500 for the first £100,000 plus 0.75% of the net value of the deceased person’s relevant personal estate which exceeds £100,000; or |
| (C) | (where the net value of the deceased person’s relevant personal estate exceeds £13,360,000) the sum of £100,000. |
In addition, application and other fees may be payable. Jersey does not otherwise levy taxes upon capital, inheritances, capital gains or gifts, nor are there any other estate duties.
US Federal Income Taxation
The following discussion describes certain material US federal income tax consequences to US Holders (defined below) under present law of an investment in the ADSs or ordinary shares. This summary applies only to US Holders that hold the ADSs or ordinary shares as capital assets and that have the US dollar as their functional currency. This discussion is based on the tax laws of the US as in effect on the date of this annual report and on US Treasury regulations in effect or, in some cases, proposed, as at the date of this annual report, as well as judicial and administrative interpretations thereof available on or before such date. All of the foregoing authorities are subject to change, which change could apply retroactively and could affect the tax consequences described below.
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The following discussion does not address the Medicare contribution tax on net investment income or any state, local or non-US tax or any other tax consequences other than US federal income tax consequences. Furthermore, this summary does not address the tax consequences to any particular investor or to persons in special tax situations, such as:
| • | banks; |
| • | certain financial institutions; |
| • | insurance companies; |
| • | broker dealers; |
| • | traders that elect to mark-to-market; |
| • | tax-exempt entities; |
| • | persons liable for alternative minimum tax; |
| • | real estate investment trusts; |
| • | regulated investment companies; |
| • | US expatriates; |
| • | persons holding ADSs or ordinary shares as part of a straddle, hedging, conversion or integrated transaction; |
| • | entities treated as partnerships or other pass-through entities, or persons holding ADSs or ordinary shares through such entities; or |
| • | persons that actually or constructively own 10% or more of our stock by vote or by value; |
| • | persons who acquired ADSs or ordinary shares pursuant to the exercise of any employee share option or otherwise as compensation; or |
| • | persons who are subject to special tax accounting rules as a result of any item of gross income with respect to the ADSs or ordinary shares being taken into account in an applicable financial statement. |
US HOLDERS OF OUR ADSs OR ORDINARY SHARES ARE URGED TO CONSULT THEIR TAX ADVISORS ABOUT THE APPLICATION OF THE US FEDERAL TAX RULES TO THEIR PARTICULAR CIRCUMSTANCES AS WELL AS THE STATE AND LOCAL AND NON-US TAX CONSEQUENCES TO THEM OF THE PURCHASE, OWNERSHIP AND DISPOSITION OF OUR ADSs OR ORDINARY SHARES.
The discussion below of the US federal income tax consequences to “US Holders” will apply to you if you are a beneficial owner of ADSs or ordinary shares and you are, for US federal income tax purposes:
| • | an individual who is a citizen or resident of the US; |
| • | an entity taxable as a corporation organized in or under the laws of the United States, any State thereof or the District of Columbia; |
| • | an estate whose income is subject to US federal income taxation regardless of its source; or |
| • | a trust that (1) is subject to the primary supervision of a court within the United States and the control of one or more US persons for all substantial decisions of the trust or (2) has a valid election in effect under applicable US Treasury regulations to be treated as a US person. |
If you are a partner in an entity treated as a partnership that holds ADSs or ordinary shares, your tax treatment will depend on your status and the activities of such entity.
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The discussion below assumes that the representations contained in the deposit agreement are true and that the obligations in the deposit agreement and any related agreement will be complied with in accordance with their terms. If you hold ADSs, you should be treated as the holder of the underlying ordinary shares represented by those ADSs for US federal income tax purposes. The US Treasury has expressed concerns that intermediaries in the chain of ownership between the holder of an ADS and the issuer of the security underlying the ADS may be taking actions that are inconsistent with the beneficial ownership of the underlying security (for example, pre-releasing ADSs to persons that do not have the beneficial ownership of the securities underlying the ADSs). Accordingly, the creditability of any foreign taxes paid and the availability of the reduced tax rate for any dividends received by certain non-corporate US Holders, including individuals US Holders (as discussed below), could be affected by actions taken by intermediaries in the chain of ownership between the holders of ADSs and us if as a result of such actions the holders of ADSs are not properly treated as beneficial owners of the underlying ordinary shares.
Distributions
Subject to the rules applicable to PFICs, discussed below, the gross amount of distributions made by us with respect to the ADSs or ordinary shares (including the amount of any taxes withheld therefrom) generally will be includable in your gross income in the year received (or deemed received) as dividend income to the extent that such distributions are paid out of our current or accumulated earnings and profits as determined under US federal income tax principles. To the extent the amount of the distribution exceeds our current and accumulated earnings and profits (as determined under US federal income tax principles), such excess amount will be treated first as a tax-free return of your tax basis in your ADSs or ordinary shares, and then, to the extent such excess amount exceeds your tax basis in your ADSs or ordinary shares, as capital gain. We do not intend to calculate our earnings and profits under US federal income tax principles. Therefore, a US Holder should expect that a distribution will be treated as a dividend for US federal income tax purposes. No dividends received deduction will be allowed for US federal income tax purposes with respect to dividends paid by us.
With respect to non-corporate US Holders, including individual US Holders, under current law dividends may be “qualified dividend income” that is taxed at the lower applicable capital gains rate provided that (1) we are neither a PFIC nor treated as such with respect to you (as discussed below) for either our taxable year in which the dividend is paid or the preceding taxable year, (2) certain holding period and other requirements are met, and (3) the ADSs or ordinary shares, as applicable, are readily tradable on an established securities market in the US. Under US Internal Revenue Service (“IRS”) authority, common shares, or ADSs representing such shares, are considered to be readily tradable on an established securities market in the US if they are listed on the NYSE, as our ADSs are. However, based on existing guidance, it is not entirely clear whether any dividends you receive with respect to the ordinary shares will be taxed as qualified dividend income, because the ordinary shares are not themselves listed on US exchange. You should consult your tax advisors regarding the availability of the lower rate for dividends paid with respect to ADSs or ordinary shares, including the effects of any change in law after the date of this annual report.
The amount of any distribution paid in a currency other than the US dollar (a foreign currency) will be equal to the US dollar value of such foreign currency on the date such distribution is received by the depositary, in the case of ADSs, or by you, in the case of ordinary shares, regardless of whether the payment is in fact converted into US dollars at that time. Gain or loss, if any, realized on the sale or other disposition of such foreign currency will be US source ordinary income or loss, subject to certain exceptions and limitations. If such foreign currency is converted into US dollars on the date of receipt, a US Holder generally should not be required to recognize foreign currency gain or loss in respect of the dividend. The amount of any distribution of property other than cash will be the fair market value of such property on the date of distribution.
Subject to certain exceptions, for foreign tax credit purposes, dividends distributed by us with respect to ADSs or ordinary shares generally will constitute foreign source income. The limitation on foreign taxes eligible for credit is calculated separately with respect to specific classes of income. For this purpose, dividends distributed by us with respect to the ADSs or ordinary shares will generally constitute “passive category income.” To the extent the dividends would be taxable as qualified dividend income with respect to non-corporate US Holders, including individual US Holders (subject to the discussion above), the amount of the dividends taken into account for purposes of calculating the foreign tax credit limitation will in general be limited to the gross amount of the dividend, multiplied by the reduced tax rate applicable to qualified dividend income and divided by the highest tax rate normally applicable to dividends. Recently issued US Treasury regulations add various further limitations on the use of foreign tax credits. You are urged to consult your tax advisors regarding the foreign tax credit limitation and source of income rules with respect to distributions on the ADSs or ordinary shares.
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Sale or Other Disposition of ADSs or Ordinary Shares
Subject to the PFIC rules discussed below, upon a sale or other taxable disposition of ADSs or ordinary shares, you generally will recognize capital gain or loss for US federal income tax purposes in an amount equal to the difference between the US dollar value of the amount realized and your adjusted tax basis in such ADSs or ordinary shares. If the consideration you receive for the ADSs or ordinary shares is not paid in US dollars, the amount realized will be the US dollar value of the payment received determined by reference to the spot rate of exchange on the date of the sale or other disposition. However, if the ADSs or ordinary shares, as applicable, are treated as traded on an “established securities market” and you are either a cash basis taxpayer or an accrual basis taxpayer that has made a special election (which must be applied consistently from year to year and cannot be changed without the consent of the IRS), you will determine the US dollar value of the amount realized in a foreign currency by translating the amount received at the spot rate of exchange on the settlement date of the sale. An accrual basis taxpayer that does not make the special election will recognize exchange gain or loss to the extent attributable to the difference between the exchange rates on the sale date and the settlement date, and such exchange gain or loss generally will constitute US-source ordinary income or loss. Your initial tax basis in your ADSs or ordinary shares will equal the US dollar value of the cost of such ADSs or ordinary shares, as applicable. If you use foreign currency to purchase ADSs or ordinary shares, the cost of such ADSs or ordinary shares will be the US dollar value of the foreign currency purchase price determined by reference to the spot rate of exchange on the date of purchase. However, if the ADSs or ordinary shares, as applicable, are treated as traded on an established securities market, for US federal income tax purposes, and you are either a cash basis taxpayer or an accrual basis taxpayer who has made the special election described above, you will determine the US dollar value of the cost of such ADSs or ordinary shares, as applicable, by translating the amount paid at the spot rate of exchange on the settlement date of the purchase.
Subject to certain exceptions and limitations, gain or loss on a sale or other taxable disposition of ADSs or ordinary shares generally will be capital gain or loss and will be treated as long-term capital gain or loss, if your holding period in the ADSs or ordinary shares exceeds one year. Subject to the PFIC rules discussed below and other limitations, if you are a non-corporate US Holder, including an individual US Holder, any long-term capital gain will be subject to US federal income tax at preferential rates. The deductibility of capital losses is subject to significant limitations. Any such gain or loss recognized by a US Holder will generally be treated as U.S. source.
Passive Foreign Investment Company
A non-US corporation is considered a PFIC for any taxable year if either:
| • | at least 75% of its gross income for such year is passive income, or |
| • | at least 50% of its value of assets (determined on the basis of a quarterly average) during such year is attributable to assets that produce or are held for the production of passive income. |
We will be treated as owning our proportionate share of the assets and earning our proportionate share of the income of any other corporation in which we own, directly or indirectly, 25% or more (by value) of the stock.
Based on our financial statements and relevant market price of our ADSs and ordinary shares, we believe that we should not be treated as a PFIC with respect to our most recently closed taxable year. If we were treated as a PFIC for any year during which you held ADSs or ordinary shares, we will continue to be treated as a PFIC for all succeeding years during which you hold ADS or ordinary shares, absent a special election as discussed below. The application of the PFIC rules is subject to uncertainty in several respects, and we cannot assure you we will not be a PFIC for any taxable year.
If we are a PFIC for any taxable year during which you hold ADSs or ordinary shares, you will be subject to special tax rules with respect to any “excess distribution” you receive and any gain you recognize from a sale or other disposition (including a pledge) of the ADSs or ordinary shares, unless you make a “mark-to-market” or qualified electing fund (“QEF”) election (if available) as discussed below. Distributions you receive in a taxable year that are greater than 125% of the average annual distributions you received during the shorter of the three preceding taxable years or your holding period for the ADSs or ordinary shares will be treated as an excess distribution.
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Under these special tax rules:
| • | the excess distribution or gain will be allocated ratably over your holding period for the ADSs or ordinary shares, |
| • | the amount allocated to the current taxable year, and any taxable year prior to the first taxable year in which we became a PFIC, will be treated as ordinary income, and |
| • | the amount allocated to each other year will be subject to tax at the highest tax rate in effect for that year and the interest charge normally applicable to underpayments of tax will be imposed on the resulting tax attributable to each such year. |
The tax liability for amounts allocated to years prior to the year of disposition or “excess distribution” cannot be offset by any net operating losses for such years, and gains (but not losses) realized on the sale of the ADSs or ordinary shares cannot be treated as capital, even if you hold the ADSs or ordinary shares as capital assets.
In addition, if we are a PFIC, to the extent any of our subsidiaries are also PFICs, you may be deemed to own shares in such subsidiaries that are directly or indirectly owned by us in that proportion which the value of the shares you own so bears to the value of all of our shares, and may be subject to the adverse tax consequences described above with respect to the shares of such subsidiaries you would be deemed to own.
If we are a PFIC, you may avoid taxation under the rules described above by making a QEF election to include your share of our income on a current basis in any taxable year that we are a PFIC, provided we agree to furnish you annually with certain tax information. However, we do not presently intend to prepare or provide such information.
Alternatively, if the ADSs are “marketable stock” (as defined below), you can avoid taxation under the unfavorable PFIC rules described above in respect of the ADSs by making a mark-to-market election in respect of the ADSs by the due date (determined with regard to extensions) for your tax return in respect of your first taxable year during which we are treated as a PFIC. If you make a mark-to-market election for the ADSs or ordinary shares, you will include in income in each of your taxable years during which we are a PFIC an amount equal to the excess, if any, of the fair market value of the ADSs or ordinary shares as at the close of your taxable year over your adjusted basis in such ADSs or ordinary shares. You are allowed a deduction for the excess, if any, of the adjusted basis of the ADSs or ordinary shares over their fair market value as at the close of the taxable year. However, deductions are allowable only to the extent of any net mark-to-market gains on the ADSs or ordinary shares included in your income for prior taxable years. Amounts included in your income under a mark-to-market election, as well as gain on the actual sale or other disposition of the ADSs or ordinary shares, are treated as ordinary income. Ordinary loss treatment also applies to the deductible portion of any mark-to-market loss on the ADSs or ordinary shares, as well as to any loss realized on the actual sale or disposition of the ADSs or ordinary shares, to the extent that the amount of such loss does not exceed the net mark-to-market gains previously included for such ADSs or ordinary shares. Your basis in the ADSs or ordinary shares will be adjusted to reflect any such income or loss amounts. Further, distributions would be taxed as described above under “— Distributions,” except the preferential dividend rates with respect to “qualified dividend income” would not apply. You will not be required to recognize mark-to-market gain or loss in respect of your taxable years during which we were not at any time a PFIC.
The mark-to-market election is available only for “marketable stock,” which is stock that is traded in other than de minimis quantities on at least 15 days during each calendar quarter on a qualified exchange, including the NYSE, or other market, as defined in the applicable US Treasury regulations. Our ADSs are listed on the NYSE and consequently, if you hold ADSs the mark-to-market election would be available to you, provided the ADSs are traded in sufficient quantities. US Holders of ADSs or ordinary shares should consult their tax advisors as to whether the ADSs or ordinary shares would qualify for the mark-to-market election.
You also generally can make a “deemed sale” election in respect of any time we cease being a PFIC, in which case you will be deemed to have sold, at fair market value, your ADSs or ordinary shares (and shares of our PFIC subsidiaries, if any, that you are deemed to own) on the last day of our taxable year immediately prior to our taxable year in respect of which we are not a PFIC. If you make this deemed sale election, you generally would be subject to the unfavorable PFIC rules described above in respect of any gain realized on such deemed sale, but as long as we are not a PFIC for future years, you would not be subject to the PFIC rules for those future years.
If you hold ADSs or ordinary shares in any year in which we or any of our subsidiaries are a PFIC, you would be required to file an annual information report with the US Internal Revenue Service, for each entity that is a PFIC, regarding distributions received on the ADSs or ordinary shares and any gain realized on the disposition of the ADSs or ordinary shares. You should consult your tax advisors regarding the potential application of the PFIC rules to your ownership of ADSs or ordinary shares and the elections discussed above.
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US Information Reporting and Backup Withholding
Dividend payments with respect to ADSs or ordinary shares and proceeds from the sale, exchange or redemption of ADSs or ordinary shares may be subject to information reporting to the IRS and US backup withholding. Backup withholding will not apply, however, to a US Holder who furnishes a correct taxpayer identification number and makes any other required certification or who is otherwise exempt from backup withholding and establishes such exempt status. US Holders should consult their tax advisors regarding the application of the US information reporting and backup withholding rules.
Backup withholding is not an additional tax. Amounts withheld as backup withholding may be credited against your US federal income tax liability, and you may obtain a refund of any excess amounts withheld under the backup withholding rules by timely filing the appropriate claim for refund with the IRS and furnishing any required information.
Additional Reporting Requirements
Certain US holders who are individuals (and certain entities) that own “specified foreign financial assets” with an aggregate value in excess of certain amounts are generally required to file an information report with respect to such assets with their tax returns. “Specified foreign financial assets” include any financial accounts maintained by foreign financial institutions, as well as any of the following, but only if they are not held in accounts maintained by financial institutions: (i) stocks and securities issued by non-US persons, (ii) financial instruments and contracts held for investment that have non-US issuers or counterparties, and (iii) interests in foreign entities. Under certain circumstances, an entity may be treated as an individual for purposes of these rules. Our ADSs or ordinary shares may be subject to these rules. US Holders should consult their tax advisers regarding the application of this requirement to their ownership of our shares.
F. Dividends and Paying Agents
Not applicable.
G. Statement by Experts
Not applicable.
H. Documents on Display
Publicly filed documents concerning our company which are referred to in this annual report may be inspected and copied at the public reference facilities maintained by the Commission at 100 F Street, N.E., Washington, D.C. 20549. Copies of these materials can also be obtained from the Public Reference Room at the Commission’s principal office, 100 F Street, N.E., Washington D.C. 20549, after payment of fees at prescribed rates.
The Commission maintains a website at www.sec.gov that contains reports, proxy and information statements and other information regarding registrants that make electronic filings through its Electronic Data Gathering, Analysis, and Retrieval (“EDGAR”) system. We have made all our filings with the Commission using the EDGAR system.
I. Subsidiary Information
For more information on our subsidiaries, please see “Part I—Item 4. Information on the Company — C. Organizational Structure.”
J. Annual Report to Security Holders
Not applicable.
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ITEM 11. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
A. General
Market risk is attributable to all market sensitive financial instruments including foreign currency receivables and payables. The value of a financial instrument may change as a result of changes in the interest rates, foreign currency exchange rates, commodity prices, equity prices and other market changes that affect market risk sensitive instruments.
Our exposure to market risk is primarily a function of our revenue generating activities and any future borrowings in foreign currency. The objective of market risk management is to avoid excessive exposure of our earnings to losses. Most of our exposure to market risk arises from our revenue and expenses that are denominated in different currencies.
The following risk management discussion and the estimated amounts generated from analytical techniques are forward-looking statements of market risk assuming certain market conditions. Our actual results in the future may differ materially from these projected results due to actual developments in the global financial markets.
B. Risk Management Procedures
We manage market risk through our treasury operations. Our senior management and our Board of Directors approve our treasury operations’ objectives and policies. The activities of our treasury operations include management of cash resources, implementation of hedging strategies for foreign currency exposures, implementation of borrowing strategies and monitoring compliance with market risk limits and policies. Our Foreign Exchange Committee, comprising the Chairman of the Board, our Group Chief Executive Officer and our Group Chief Financial Officer, is the approving authority for all our hedging transactions.
Components of Market Risk
Exchange Rate Risk
Our exposure to market risk arises principally from exchange rate risk. Although substantially all of our revenue less repair payments (non-GAAP) is denominated in pound sterling and US dollars, approximately 46.0% of our expenses (net of payments to repair centers made as part of our WNS Auto Claims BPM segment) in fiscal 2023 were incurred and paid in Indian rupees. The exchange rates between each of the pound sterling, the Indian rupee, the Australian dollar, the South African rand and the Philippine peso, on the one hand, and the US dollar, on the other hand, have changed substantially in recent years and may fluctuate substantially in the future. See “Part I — Item 5 Operating and Financial Review Prospects — Foreign Exchange — Exchange Rates.”
Our exchange rate risk primarily arises from our foreign currency-denominated receivables. Based upon our level of operations in fiscal 2023, a sensitivity analysis shows that a 10% appreciation or depreciation in the pound sterling against the US dollar would have increased or decreased revenue by approximately $30.5 million and increased or decreased revenue less repair payments (non-GAAP) by approximately $24.3 million in fiscal 2023, a 10% appreciation or depreciation in the Australian dollar against the US dollar would have increased or decreased revenue and revenue less repair payments (non-GAAP) by approximately $6.9 million in fiscal 2023, and a 10% appreciation or depreciation in the South African rand against the US dollar would have increased or decreased revenue and revenue less repair payments (non-GAAP) by approximately $1.3 million in fiscal 2023. Similarly, a 10% appreciation or depreciation in the Indian rupee against the US dollar would have increased or decreased our expenses incurred and paid in Indian rupee in fiscal 2023 by approximately $47.9 million, a 10% appreciation or depreciation in the South African rand against the US dollar would have increased or decreased our expenses incurred and paid in South African rand in fiscal 2023 by approximately $5.0 million and a 10% appreciation or depreciation in the Philippine peso against the US dollar would have increased or decreased our expenses incurred and paid in Philippine peso in fiscal 2023 by approximately $11.6 million.
To protect against foreign exchange gains or losses on forecasted revenue and inter-company revenue, we have instituted a foreign currency cash flow hedging program. We hedge a part of our forecasted revenue and inter-company revenue denominated in foreign currencies with forward contracts and options.
Interest Rate Risk
Our exposure to interest rate risk arises from our borrowings that have a floating rate of interest, which is linked to various reference rates including the Bank of England base rate, prime rate, the US dollar LIBOR and SOFR. We manage this risk by maintaining an appropriate mix of fixed and floating rate borrowings and through the use of interest rate swap contracts. The costs of floating rate borrowings may be affected by fluctuations in the interest rates. In connection with the term loan facilities entered into in fiscal 2017, we entered into interest rate swap agreements with the banks in fiscal 2017. These swap agreements effectively convert the term loans from a variable US dollar LIBOR interest rate to a fixed rate, thereby managing our exposure to changes in market interest rates under the term loans. There was no amount outstanding under these swap agreements as at March 31, 2023.
We monitor our positions and do not anticipate non-performance by the counterparties. We intend to selectively use interest rate swaps, options and other derivative instruments to manage our exposure to interest rate movements. These exposures are reviewed by appropriate levels of management on a periodic basis. We do not enter into hedging agreements for speculative purposes.
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ITEM 12. DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES
A. Debt Securities
Not applicable.
B. Warrants and Rights
Not applicable.
C. Other Securities
Not applicable.
D. American Depositary Shares
Our ADR facility is maintained with Deutsche Bank Trust Company Americas, (the “Depositary”), pursuant to a Deposit Agreement, dated as at July 18, 2006, among us, our Depositary and the holders and beneficial owners of ADSs. We use the term “holder” in this discussion to refer to the person in whose name an ADR is registered on the books of the Depositary.
In accordance with the Deposit Agreement, the Depositary may charge fees up to the amounts described below:
| Type of Service |
Fees | |||
| 1. | Issuance of ADSs, including upon the deposit of ordinary shares or to any person to whom an ADS distribution is made pursuant to share dividends or other free distributions of shares, bonus distributions, share splits or other distributions (except where converted to cash) | $5.00 per 100 ADSs (or any portion thereof) | ||
| 2. | Surrender of ADSs for cancellation and withdrawal of ordinary shares underlying such ADSs (including cash distributions made pursuant to a cancellation or withdrawal) | $5.00 per 100 ADSs (or any portion thereof) | ||
| 3. | Distribution of cash proceeds, including cash dividends or sale of rights and other entitlements, not made pursuant to a cancellation or withdrawal | $2.00 per 100 ADSs (or any portion thereof) | ||
| 4. | Issuance of ADSs upon the exercise of rights | $5.00 per 100 ADSs (or any portion thereof) | ||
| 5. | Operations and maintenance costs in administering the ADSs (provided that the total fees assessed under this item, combined with the total fees assessed under item 3 above, should not exceed $0.02 per ADS in any calendar year) | $0.02 per ADS per calendar year | ||
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In addition, holders or beneficial owners of our ADS, persons depositing ordinary shares for deposit and persons surrendering ADSs for cancellation and withdrawal of deposited securities will be required to pay the following charges:
| • | taxes (including applicable interest and penalties) and other governmental charges; |
| • | registration fees for the registration of ordinary shares or other deposited securities with applicable registrar and applicable to transfers of ordinary shares or other deposited securities in connection with the deposit or withdrawal of ordinary shares or other deposited securities; |
| • | certain cable, telex, facsimile and electronic transmission and delivery expenses; |
| • | expenses and charges incurred by the Depositary in the conversion of foreign currency into US dollars; |
| • | fees and expenses incurred by the Depositary in connection with compliance with exchange control regulations and other regulatory requirements applicable to ordinary shares, deposited securities, ADSs and ADRs; |
| • | fees and expenses incurred by the Depositary in connection with the delivery of deposited securities; and |
| • | any additional fees, charges, costs or expenses that may be incurred by the Depositary from time to time. |
In the case of cash distributions, the applicable fees, charges, expenses and taxes will be deducted from the cash being distributed. In the case of distributions other than cash, such as share dividends, the distribution generally will be subject to appropriate adjustments for the deduction of the applicable fees, charges, expenses and taxes. In certain circumstances, the Depositary may dispose of all or a portion of such distribution and distribute the net proceeds of such sale to the holders of ADS, after deduction of applicable fees, charges, expenses and taxes.
If the Depositary determines that any distribution in property is subject to any tax or other governmental charge which the Depositary is obligated to withhold, the Depositary may withhold the amount required to be withheld and may dispose of all or a portion of such property in such amounts and in such manner as the Depositary deems necessary and appropriate to pay such taxes or charges and the Depositary will distribute the net proceeds of any such sale after deduction of such taxes or charges to the holders of ADSs entitled to the distribution.
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PART II
ITEM 13. DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES
None.
ITEM 14. MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS
Not applicable.
ITEM 15. CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures
As required by Rules 13a-15 and 15d-15 under the Exchange Act, management has evaluated, with the participation of our Group Chief Executive Officer and Group Chief Financial Officer, the effectiveness of our disclosure controls and procedures as at the end of the period covered by this annual report. Disclosure controls and procedures refer to controls and other procedures designed to ensure that information required to be disclosed in the reports we file or submit under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the rules and forms of the Commission. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by us in our reports that we file or submit under the Exchange Act is accumulated and communicated to management, including our Group Chief Executive Officer and Group Chief Financial Officer, as appropriate to allow timely decisions regarding our required disclosure.
Based on the foregoing, our Group Chief Executive Officer and Group Chief Financial Officer have concluded that, as at March 31, 2023, our disclosure controls and procedures were effective and provide a reasonable level of assurance.
Management’s Report on Internal Control over Financial Reporting
Management is responsible for establishing and maintaining adequate internal control over financial reporting.
Internal control over financial reporting refers to a process designed by, or under the supervision of, our Group Chief Executive Officer and Group Chief Financial Officer and effected by our Board of Directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles and includes those policies and procedures that:
| • | pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of our assets; |
| • | provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that our receipts and expenditures are being made only in accordance with authorizations of our management and members of our Board of Directors; and |
| • | provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of our assets that could have a material effect on our financial statements. |
Management recognizes that there are inherent limitations in the effectiveness of any system of internal control over financial reporting, including the possibility of human error and the circumvention or override of internal control. Accordingly, even effective internal control over financial reporting can provide only reasonable assurance with respect to financial statement preparation, and may not prevent or detect all misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate due to changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Management assessed the effectiveness of internal control over financial reporting as at March 31, 2023, based on the criteria established in the 2013 Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. The scope of management’s assessment of the effectiveness of internal control over financial reporting includes all of WNS’ consolidated operations except for the acquired operations of:
| • | Vuram Technology Solutions Private Limited and its subsidiaries, acquired in July 2022; |
| • | The Smart Cube Limited and its subsidiaries, acquired in December 2022; and |
| • | OptiBuy sp. z o.o and its subsidiaries, acquired in December 2022 |
whose financial statements collectively reflected total assets and revenues constituting 3.7% and 2.9%, respectively, of our assets and revenue in our consolidated financial statements as at and for the year ended March 31, 2023.
Based on the above criteria, and as a result of this assessment, management concluded that, as at March 31, 2023, our internal control over financial reporting was effective in providing reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.
The effectiveness of our internal control over financial reporting as at March 31, 2023, has been audited by Grant Thornton Bharat LLP, an independent registered public accounting firm, as stated in their report set out below.
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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Board of Directors and Shareholders
WNS (Holdings) Limited
Opinion on internal control over financial reporting
We have audited the internal control over financial reporting of WNS (Holdings) Limited and subsidiaries (the “Company”) as of March 31, 2023, based on criteria established in the 2013 Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”). In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of March 31, 2023, based on criteria established in the 2013 Internal Control—Integrated Framework issued by COSO.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the consolidated financial statements of the Company as of and for the year ended March 31, 2023, and our report dated May 16, 2023 expressed an unqualified opinion on those consolidated financial statements.
Basis for opinion
The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Control over Financial Reporting (“Management’s Report”). Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.
Our audit of, and opinion on, the Company’s internal control over financial reporting does not include the internal control over financial reporting of Vuram Technology Solutions Private Limited and its subsidiaries (“Vuram”), The Smart Cube Limited and its subsidiaries (“The Smart Cube”) and OptiBuy sp. Z.o.o. and its subsidiaries (“OptiBuy”), wholly owned subsidiaries of WNS (Holdings) Limited, whose consolidated financial statements reflect total assets and revenues constituting 3.7% and 2.9%, respectively, of the related consolidated financial statement amounts as of and for the year ended March 31, 2023. As indicated in Management’s Report, Vuram, The Smart Cube and OptiBuy were acquired on July 01, 2022, December 16, 2022 and December 14, 2022 respectively. Management’s assessment on the effectiveness of the Company’s internal control over financial reporting excluded internal control over financial reporting of Vuram, The Smart Cube and OptiBuy.
Definition and limitations of internal control over financial reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
/s/ GRANT THORNTON BHARAT LLP
Gurugram, India
May 16, 2023
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Changes in Internal Control over Financial Reporting
Management has evaluated, with the participation of our Group Chief Executive Officer and Group Chief Financial Officer, whether any changes in our internal control over financial reporting that occurred during the period covered by this annual report on Form 20-F have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. Based on the evaluation we conducted, management has concluded that no such changes have occurred.
ITEM 16A. AUDIT COMMITTEE FINANCIAL EXPERT
Our Audit Committee members are Messrs. Jason Liberty (Chairman), Keith Haviland, Mario P. Vitale and Ms. Diane de Saint Victor. Each of Messrs. Liberty, Havilland and Vitale and Ms. Diane is an independent director pursuant to the applicable rules of the Commission and the NYSE. See “Part I — Item 6. Directors, Senior Management and Employees — A. Directors and Executive Officers” for the experience and qualifications of the members of the Audit Committee. Our Board of Directors has determined that Mr. Liberty qualifies as an “audit committee financial expert” as defined in Item 16A of Form 20-F.
ITEM 16B. CODE OF ETHICS
We have adopted a Code of Business Ethics and Conduct that is applicable to all of our directors, senior management and employees. The Code of Business Ethics and Conduct was amended in October 2016 and July 2018 to refresh our core purposes and values and July 2019 to change the limit on the gift value in line with market standards, in October 2021 to update new link to report the violations to the Policy and in July 2022 to reflect changes in the limit on the client gifting and entertainment guidelines We have posted the code on our website at www.wns.com. Information contained in our website does not constitute a part of this annual report. We will also make available a copy of the Code of Business Ethics and Conduct to any person, without charge, if a written request is made to our General Counsel at our principal executive offices at Gate 4, Godrej & Boyce Complex, Pirojshanagar, Vikhroli (W), Mumbai 400 079, India.
ITEM 16C. PRINCIPAL ACCOUNTANT FEES AND SERVICES
Principal Accountant Fees and Services
Grant Thornton Bharat LLP served as our independent public accountant for fiscal 2023. The following table shows the fees we paid or accrued for audit and other services provided by Grant Thornton Bharat LLP and Grant Thornton member firms for fiscal 2023 and 2022.
| Fiscal | ||||||||
| 2023 | 2022 | |||||||
| Audit fees |
$ | 821,400 | $ | 635,105 | ||||
|
|
|
|
|
|||||
| Total |
$ | 821,400 | $ | 635,105 | ||||
|
|
|
|
|
|||||
Notes:
Audit fees: This category consists of fees billed for the audit of financial statements, quarterly review of financial statements and other audit services, which are normally provided by the independent auditors in connection with statutory and accounting matters that arose during, or as a result of, the audit or the review of interim financial statements and include the group audit; statutory audits required by non-US jurisdictions; consents and attest services.
Audit Committee Pre-approval Process
Our Audit Committee reviews and pre-approves the scope and the cost of all audit and permissible non-audit services performed by our independent auditor. All of the services provided by Grant Thornton Bharat LLP and Grant Thornton member firms during the last fiscal year have been pre-approved by our Audit Committee.
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ITEM 16D. EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES
Not applicable.
ITEM 16E. PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS
In March 2018, our shareholders authorized a share repurchase program for the repurchase of up to 3,300,000 of our ADSs, each representing one ordinary share, at a price range of $10 to $100 per ADS. Pursuant to the terms of the share repurchase program, our ADSs may be purchased in the open market from time to time for 36 months from March 30, 2018, the date the shareholders resolution approving the repurchase program was passed.
In fiscal 2019 and fiscal 2020, we purchased 1,101,300 ADSs and 1,098,700 ADSs, respectively, in the open market for a total consideration of $56.4 million and $63.7 million (including transaction costs of $0.01 million), respectively. In fiscal 2021, we paid $0.1 million towards cancellation fees for ADSs in relation to the repurchase of 1,100,000 ADSs in fiscal 2020. In fiscal 2021, we purchased the remaining 1,100,000 ADSs in the open market for a total consideration of $78.6 million (including transaction costs of $0.01 million) and completed the above-mentioned share repurchase program, which was authorized in March 2018. We funded the repurchases under the repurchase program with cash on hand. The shares underlying the repurchased ADSs are held as treasury shares.
In fiscal 2021, our shareholders authorized another share repurchase program for the repurchase of up to 3,300,000 ADSs, at a price range of $10 to $110 per ADS. Pursuant to the terms of the repurchase program, our ADSs may be purchased in the open market from time to time for 36 months from April 1, 2021, the date the shareholders resolution approving the repurchase program was passed. We are not obligated under the repurchase program to repurchase a specific number of ADSs, and the repurchase program may be suspended at any time at our discretion. We intend to hold the shares underlying any such repurchased ADSs as treasury shares.
In fiscal 2022, we purchased 1,100,000 ADSs in the open market for a total consideration of $85.0 million (including transaction costs) under the above-mentioned share repurchase program. We funded the repurchases under the repurchase program with cash on hand. In fiscal 2022, we cancelled 2,200,000 ADSs that were held as treasury shares for an aggregate cost of $163.7 million (including share cancellation charges $0.1 million). The effect of the cancellation of these treasury shares was recognized in share capital amounting to $0.3 million and in share premium amounting to $163.4 million, in compliance with Jersey law. There was no effect on the total shareholders’ equity as a result of this cancellation.
In fiscal 2023, we purchased 1,100,000 ADSs in the open market for a total consideration of $81.6 million (including transaction costs) under the above-mentioned share repurchase program. We funded the repurchases under the repurchase program with cash on hand. In fiscal 2023, based on authorization from the Board of Directors, we cancelled 1,100,000 ADSs that were held as treasury shares for an aggregate cost of $81.7 million (including share cancellation charges $0.1 million). The effect of the cancellation of these treasury shares was recognized in share capital amounting to $0.1 million and in share premium amounting to $81.6 million, in compliance with Jersey law. There was no effect on the total shareholders’ equity as a result of this cancellation.
The table below sets forth the details of ADSs repurchased during fiscal 2023, April 2023 and May 2023 (till May 16, 2023) under the above mentioned share repurchase programs:
| Period |
No. of ADSs Purchased |
Average price paid per ADS (in $) |
Total number of ADSs purchased as part of publicly announced plans or programs |
Approximate US dollar value (in thousands) of ADSs that may yet be repurchased under the program (assuming purchase price of $110 per ADS) |
||||||||||||
| April 1 to April 30, 2022 |
— | — | — | 242,000 | ||||||||||||
| May 1 to May 31, 2022 |
129,409 | 72.33 | 129,409 | 227,765 | ||||||||||||
| June 1 to June 30, 2022 |
612,209 | 72.51 | 612,209 | 160,422 | ||||||||||||
| July 1 to July 31, 2022 |
358,382 | 77.77 | 358,382 | 121,000 | ||||||||||||
| August 1 to August 31, 2022 |
— | — | — | 121,000 | ||||||||||||
| September 1 to September 30, 2022 |
— | — | — | 121,000 | ||||||||||||
| October 1 to October 31, 2022 |
— | — | — | 121,000 | ||||||||||||
| November 1 to November 30, 2022 |
— | — | — | 121,000 | ||||||||||||
| December 1 to December 31, 2022 |
— | — | — | 121,000 | ||||||||||||
| January 1 to January 31, 2023 |
— | — | — | 121,000 | ||||||||||||
| February 1 to February 28, 2023 |
— | — | — | 121,000 | ||||||||||||
| March 1 to March 31, 2023 |
— | — | — | 121,000 | ||||||||||||
| April 1 to April 30, 2023 |
— | — | — | 121,000 | ||||||||||||
| May 1 to May 16, 2023 |
— | — | — | 121,000 | ||||||||||||
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ITEM 16F. CHANGE IN REGISTRANT’S CERTIFYING ACCOUNTANT
Not applicable.
ITEM 16G. CORPORATE GOVERNANCE
Our Corporate Governance Guidelines were last amended in July 2021. We have posted our amended Corporate Governance Guidelines on our website at www.wns.com. Information contained in our website does not constitute a part of this annual report.
Messrs. Timothy L Main and John Freeland and Ms. Françoise Gri and Ms.Lan Tu are members of our Board of Directors and they serve on our Nominating and Corporate Governance Committee and Compensation Committee. Ms. Diane de Saint Victor also serves on our Nominating and Corporate Governance Committee. Messrs.Jason Liberty, Keith Haviland and Mario P. Vitale and Ms. Diane de Saint Victor serve on our Audit Committee. Each of Messrs. Main , Freeland, Liberty, Haviland and Vitale and Ms. Gri and Ms. Tu and Ms. de Saint Victor satisfies the “independence” requirements of the NYSE listing standards and the “independence” requirements of Rule 10A-3 of the Exchange Act.
We are not aware of any significant differences between our corporate governance practices and those required to be followed by US issuers under the NYSE listing standards. As a foreign private issuer, we are exempt from the rules under the Exchange Act governing the furnishing and content of proxy statements, including disclosure relating to any conflicts of interests concerning the issuer’s compensation consultants, and our directors, senior management and principal shareholders are exempt from the reporting and “short-swing profit” recovery provisions contained in Section 16 of the Exchange Act.
ITEM 16H. MINE SAFETY DISCLOSURE
Not applicable.
ITEM 16I. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS
Not applicable.
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PART III
ITEM 17. FINANCIAL STATEMENTS
See “Part III — Item 18. Financial Statements” for a list of our consolidated financial statements included elsewhere in this annual report.
ITEM 18. FINANCIAL STATEMENTS
The following statements are filed as part of this annual report, together with the report of the independent registered public accounting firm:
| • | Report of Independent Registered Public Accounting Firm |
| • | Consolidated Statements of Financial Position as at March 31, 2023 and 2022 |
| • | Consolidated Statements of Income for the years ended March 31, 2023, 2022 and 2021 |
| • | Consolidated Statements of Comprehensive Income for the years ended March 31, 2023, 2022 and 2021 |
| • | Consolidated Statements of Changes in Equity for the years ended March 31, 2023, 2022 and 2021 |
| • | Consolidated Statements of Cash Flows for the years ended March 31, 2023, 2022 and 2021 |
| • | Notes to Consolidated Financial Statements |
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ITEM 19. EXHIBITS
The following exhibits are filed as part of this annual report:
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| ** | Filed herewith. |
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SIGNATURES
The registrant hereby certifies that it meets all of the requirements for filing on Form 20-F and that it has duly caused and authorized the undersigned to sign this annual report on its behalf.
Date: May 16, 2023
| WNS (HOLDINGS) LIMITED | ||
| By: | /s/ Keshav R. Murugesh | |
| Name: | Keshav R. Murugesh | |
| Title: | Group Chief Executive Officer | |
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F-2 |
||||
F-3 |
||||
F-4 |
||||
F-5 |
||||
F-6 |
||||
F-8 |
||||
F-9 |
| • | We understood the revenue recognition process of the Company and evaluated related significant accounting policies for its appropriateness in accordance with the requirements of IFRS 15, Revenue from Contracts with Customers (‘IFRS 15’). |
| • | We evaluated the design and tested the operating effectiveness of internal controls related to the evaluation of customer agreements and determination of revenue recognition in accordance with IFRS 15. |
| • | We selected samples for customer agreements and performed the following procedures: |
| • | Obtained and read contract source documents for each selection, including master agreements, and other documents that were part of the agreement. |
| • | Tested management’s identification of significant terms in the customer agreements for completeness as relevant for revenue recognition under IFRS 15. |
| • | Tested the appropriateness of management’s application of accounting policies along with their use of judgements, in the determination of revenue recognition including identification and satisfaction of performance obligations and measurement of variable considerations, as per terms of the agreements based on verification of supporting documents and records maintained by the Company in this respect. |
| • | Understood and tested the design and operating effectiveness of internal controls over the valuation of the acquired assets and liabilities including identifiable intangible assets, including management’s internal controls over the selection and review of key estimates and assumptions used in projected financial information; |
| • | Obtained an understanding of the terms and conditions of the business purchase agreements and business transfer agreement to evaluate management’s assessment of the business, purchase consideration, acquisition date and acquired assets and liabilities in such business combinations in accordance with IFRS 3; |
| • | Assessed the competence and objectivity of the management’s valuation expert involved for valuation of the acquired assets and liabilities including identifiable intangible assets. Read the valuation reports and obtained underlying workings in order to ensure mathematical accuracy of the valuations; |
| • | Assessed the reasonableness of management’s financial and future cash flow projections used by management’s valuation expert in discounted cash flow model for purchase price allocation as well as by management for estimating liability for contingent consideration, by comparing such projections to historical results, market data and approved business plans. Further, performed independent sensitivity analysis on underlying assumptions to determine estimation uncertainty involved; |
| • | In addition, we involved valuation expert with specialized skills and knowledge, who assisted in: |
| • | Evaluating the appropriateness of valuation methodology used; |
| • | Evaluating the discount rate used in the Company’s discounted cash flow model by comparing it against a discount rate range that was independently developed using publicly available data for comparable entities; and |
| • | Evaluating the terminal value growth rate used in the Company’s discounted cash flow model by comparing it against the long term expected growth rate and inflation rate of the economy and other relevant macro-economic factors. |
| • | Evaluated the appropriateness and adequacy of disclosures given in the consolidated financial statements, including disclosure of significant estimates and judgements, in accordance with applicable accounting standards. |
As at |
||||||||||
Notes |
March 31, 2023 |
March 31, 2022 |
||||||||
ASSETS |
||||||||||
Current assets: |
||||||||||
Cash and cash equivalents |
5 | $ | $ | |||||||
Investments |
6 | |||||||||
Trade receivables, net |
7 | |||||||||
Unbilled revenue |
7 | |||||||||
Funds held for clients |
||||||||||
Derivative assets |
14 | |||||||||
Contract assets |
20 | |||||||||
Prepayments and other current assets |
8 | |||||||||
Total current assets |
||||||||||
Non-current assets: |
||||||||||
Goodwill |
9 | |||||||||
Intangible assets |
10 | |||||||||
Property and equipment |
11 | |||||||||
Right-of-use |
12 | |||||||||
Derivative assets |
14 | |||||||||
Deferred tax assets |
25 | |||||||||
Investments |
6 | |||||||||
Contract assets |
20 | |||||||||
Other non-current assets |
8 | |||||||||
Total non-current assets |
||||||||||
TOTAL ASSETS |
$ |
$ |
||||||||
LIABILITIES AND EQUITY |
||||||||||
Current liabilities: |
||||||||||
Trade payables |
$ | $ | ||||||||
Provisions and accrued expenses |
16 | |||||||||
Derivative liabilities |
14 | |||||||||
Pension and other employee obligations |
15 | |||||||||
Current portion of long-term debt |
13 | |||||||||
Contract liabilities |
17 | |||||||||
Current taxes payable |
25 | |||||||||
Lease liabilities |
12 | |||||||||
Other liabilities |
18 | |||||||||
Total current liabilities |
||||||||||
Non-current liabilities: |
||||||||||
Derivative liabilities |
14 | |||||||||
Pension and other employee obligations |
15 | |||||||||
Long-term debt |
13 | |||||||||
Contract liabilities |
17 | |||||||||
Lease liabilities |
12 | |||||||||
Other non-current liabilities |
18 | |||||||||
Deferred tax liabilities |
25 | |||||||||
Total non-current liabilities |
||||||||||
TOTAL LIABILITIES |
$ |
$ |
||||||||
Shareholders’ equity: |
||||||||||
Share capital (ordinary shares $ |
19 | |||||||||
Share premium |
||||||||||
Retained earnings |
||||||||||
Other reserves |
||||||||||
Other components of equity |
( |
) | ( |
) | ||||||
Total shareholders’ equity |
||||||||||
TOTAL LIABILITIES AND EQUITY |
$ |
$ |
||||||||
Year ended March 31, |
||||||||||||||
Notes |
2023 |
2022 |
2021 |
|||||||||||
| Revenue |
20 | $ | $ | $ | ||||||||||
| Cost of revenue |
21 | |||||||||||||
| |
|
|
|
|
|
|||||||||
| Gross profit |
||||||||||||||
| Operating expenses: |
||||||||||||||
| Selling and marketing expenses |
21 | |||||||||||||
| General and administrative expenses |
21 | |||||||||||||
| Foreign exchange (gain)/loss, net |
( |
) | ( |
) | ||||||||||
| Amortization of intangible assets |
10 | |||||||||||||
| |
|
|
|
|
|
|||||||||
| Operating profit |
||||||||||||||
| Other income, net |
23 | ( |
) | ( |
) | ( |
) | |||||||
| Finance expense |
22 | |||||||||||||
| |
|
|
|
|
|
|||||||||
| Profit before income taxes |
||||||||||||||
| Income tax expense |
25 | |||||||||||||
| |
|
|
|
|
|
|||||||||
| Profit after tax |
$ | $ | $ | |
||||||||||
| |
|
|
|
|
|
|||||||||
| Earnings per ordinary share |
26 | |||||||||||||
| |
|
|
|
|
|
|||||||||
| Basic |
$ | $ | $ | |||||||||||
| |
|
|
|
|
|
|||||||||
| Diluted |
$ | $ | $ | |||||||||||
| |
|
|
|
|
|
|||||||||
Year ended March 31, |
||||||||||||||||
Notes |
2023 |
2022 |
2021 |
|||||||||||||
| Profit after tax |
$ | $ | $ | |||||||||||||
| Other comprehensive income/(loss), net of taxes |
||||||||||||||||
| Items that will not be reclassified to profit or loss: |
||||||||||||||||
| Pension adjustment, net of tax |
( |
) | ( |
) | ||||||||||||
| Items that will be reclassified subsequently to profit or loss: |
||||||||||||||||
| Changes in fair value of cash flow hedges: |
||||||||||||||||
| Current period gain/(loss) |
( |
) | ||||||||||||||
| Net change in time value of option contracts designated as cash flow hedges |
( |
) | ( |
) | ||||||||||||
| Reclassification to profit or loss |
( |
) | ( |
) | ||||||||||||
| Foreign currency translation (loss)/gain |
( |
) | ( |
) | ||||||||||||
| Income tax benefit/(expense) relating to above |
25 | ( |
) | ( |
) | |||||||||||
| |
|
|
|
|
|
|||||||||||
| $ | ( |
) | $ | ( |
) | $ | ||||||||||
| |
|
|
|
|
|
|||||||||||
| Total other comprehensive (loss)/income, net of taxes |
$ | ( |
) | $ | ( |
) | $ | |||||||||
| |
|
|
|
|
|
|||||||||||
| Total comprehensive income |
$ | $ | $ | |||||||||||||
| |
|
|
|
|
|
|||||||||||
Other components of equity |
||||||||||||||||||||||||||||||||||||||||
Foreign currency |
Cash flow |
Total |
||||||||||||||||||||||||||||||||||||||
Share capital |
Share |
Retained |
translation |
hedging |
Pension |
Treasury shares |
shareholders’ |
|||||||||||||||||||||||||||||||||
Number |
Par value |
premium |
earnings |
reserve |
reserve |
Adjustments |
Number |
Amount |
equity |
|||||||||||||||||||||||||||||||
| Balance as at April 1, 2020 |
$ | $ | $ | $ | ( |
) | $ | $ | $ | |||||||||||||||||||||||||||||||
| Shares issued for exercised options and RSUs (Refer Note 24) |
( |
) | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||
| Transaction charges on cancellation of treasury shares (Refer Note 19) |
— | — | ( |
) | — | — | — | — | — | — | ( |
) | ||||||||||||||||||||||||||||
| Purchase of treasury shares (Refer Note 19) |
— | — | — | — | — | — | — | ( |
) | ( |
) | |||||||||||||||||||||||||||||
| Share-based compensation expense (Refer Note 24) |
— | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||
| Excess tax benefits relating to share-based options and RSUs (Refer Note 25) |
— | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
| Transactions with owners |
— | — | — | — | ( |
) | ( |
) | ||||||||||||||||||||||||||||||||
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
| Profit after tax |
— | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||
| Other comprehensive income/(loss), net of taxes |
— | — | — | — | ( |
) | ( |
) | — | — | ||||||||||||||||||||||||||||||
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
| Total comprehensive income/(loss) for the period |
— | — | — | ( |
) | ( |
) | — | — | |||||||||||||||||||||||||||||||
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
| Balance as at March 31, 2021 |
$ | $ | $ | $ | ( |
) | $ | ( |
) | $ | $ | ( |
) | $ | ||||||||||||||||||||||||||
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Other components of equity |
||||||||||||||||||||||||||||||||||||||||||||
Foreign |
||||||||||||||||||||||||||||||||||||||||||||
currency |
Cash flow |
Total |
||||||||||||||||||||||||||||||||||||||||||
Share capital |
Share |
Retained |
Other |
translation |
hedging |
Pension |
Treasury shares |
shareholders’ |
||||||||||||||||||||||||||||||||||||
Number |
Par value |
Premium |
earnings |
reserves* |
reserve |
reserve |
adjustments |
Number |
Amount |
equity |
||||||||||||||||||||||||||||||||||
| Balance as at April 1, 2021 |
$ | $ | $ | $ | ( |
) | $ | ( |
) | $ | $ | ( |
) | $ | ||||||||||||||||||||||||||||||
| Shares issued for exercised options and RSUs (Refer Note 24) |
( |
) | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||
| Purchase of treasury shares (Refer Note 19) |
— | — | — | — | — | — | — | — | ( |
) | ( |
) | ||||||||||||||||||||||||||||||||
| Cancellation of treasury shares (Refer Note 19) |
( |
) | ( |
) | ( |
) | — | — | — | — | — | ( |
) | — | ||||||||||||||||||||||||||||||
| Share-based compensation expense (Refer Note 24) |
— | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||
| Excess tax benefits relating to share-based options and RSUs |
— | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||
| Transfer to other reserves |
— | — | — | ( |
) | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||
| Transfer from other reserves on utilization |
— | — | — | ( |
) | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
| Transactions with owners |
( |
) | ( |
) | ( |
) | ( |
) | — | — | — | ( |
) | ( |
) | |||||||||||||||||||||||||||||
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
| Profit after tax |
— | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||
| Other comprehensive income/(loss), net of taxes |
— | — | — | — | — | ( |
) | — | — | ( |
) | |||||||||||||||||||||||||||||||||
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
| Total comprehensive income/(loss) for the period |
— | — | — | — | ( |
) | — | — | ||||||||||||||||||||||||||||||||||||
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
| Balance as at March 31, 2022 |
|
$ | $ | $ | $ | $ | ( |
) | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
Other components of equity |
||||||||||||||||||||||||||||||||||||||||||||
Foreign |
||||||||||||||||||||||||||||||||||||||||||||
currency |
Cash flow |
Total |
||||||||||||||||||||||||||||||||||||||||||
Share capital |
Share |
Retained |
Other |
translation |
hedging |
Pension |
Treasury shares |
shareholders’ |
||||||||||||||||||||||||||||||||||||
Number |
Par value |
Premium |
earnings |
reserves* |
reserve |
reserve |
adjustments |
Number |
Amount |
equity |
||||||||||||||||||||||||||||||||||
| Balance as at April 1, 2022 |
$ | $ | $ | $ | $ | ( |
) | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||
| Shares issued for exercised options and RSUs (Refer Note 24) |
( |
) | — | — | — | — | — | — | — | ( |
) | |||||||||||||||||||||||||||||||||
| Purchase of treasury shares (Refer Note 19) |
— | — | — | — | — | — | — | — | ( |
) | ( |
) | ||||||||||||||||||||||||||||||||
| Cancellation of treasury shares (Refer Note 19) |
( |
) | ( |
) | ( |
) | — | — | — | — | — | ( |
) | |||||||||||||||||||||||||||||||
| Share-based compensation expense (Refer Note 24) |
— | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||
| Excess tax benefits relating to share-based options and RSUs |
— | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||
| Transfer to other reserves |
— | — | — | ( |
) | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||
| Transfer from other reserves on utilization |
— | — | — | ( |
) | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
| Transactions with owners |
( |
) | ( |
) | ( |
) | ( |
) | — | — | — | — | ( |
) | ||||||||||||||||||||||||||||||
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
| Profit after tax |
— | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||
| Other comprehensive income/(loss), net of taxes |
— | — | — | — | — | ( |
) | ( |
) | ( |
) | — | — | ( |
) | |||||||||||||||||||||||||||||
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
| Total comprehensive income/(loss) for the period |
— | — | — | — | ( |
) | ( |
) | ( |
) | — | — | ||||||||||||||||||||||||||||||||
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
| Balance as at March 31, 2023 |
$ | $ | $ | $ | $ | ( |
) | $ | ( |
) | $ | |
$ | |
$ | |||||||||||||||||||||||||||||
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
| * | 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). |
Year ended March 31, |
||||||||||||||||
Notes |
2023 |
2022 |
2021 |
|||||||||||||
| Cash flows from operating activities: |
||||||||||||||||
| Profit after tax |
$ | $ | $ | |||||||||||||
| Adjustments to reconcile profit after tax to net cash generated from operating activities: |
||||||||||||||||
| Depreciation and amortization |
||||||||||||||||
| Share-based compensation expense |
24 | |||||||||||||||
| Amortization of debt issue cost |
22 | |||||||||||||||
| Allowances for expected credit losses (“ECL”) |
7 | ( |
) | ( |
) | |||||||||||
| Unrealized exchange (gain)/loss, net |
( |
) | ||||||||||||||
| Income tax expense |
25 | |||||||||||||||
| Interest expense |
22 | |||||||||||||||
| Interest income |
23 | ( |
) | ( |
) | ( |
) | |||||||||
| Income from marketable securities |
23 | ( |
) | ( |
) | ( |
) | |||||||||
| (Gain)/loss on sale of property and equipment |
( |
) | ( |
) | ||||||||||||
| Rent concession |
( |
) | ( |
) | ||||||||||||
| Excess tax benefit from share-based compensation expense |
25 | ( |
) | ( |
) | ( |
) | |||||||||
| Unrealized loss/(gain) on derivative instruments |
( |
) | ( |
) | ||||||||||||
| Changes in operating assets and liabilities: |
||||||||||||||||
| Trade receivables and unbilled revenue |
( |
) | ( |
) | ||||||||||||
| Other assets |
( |
) | ( |
) | ||||||||||||
| Trade payables |
( |
) | ( |
) | ( |
) | ||||||||||
| Contract liabilities |
( |
) | ( |
) | ( |
) | ||||||||||
| Other liabilities |
||||||||||||||||
| |
|
|
|
|
|
|||||||||||
| Cash generated from operating activities before interest and income taxes |
||||||||||||||||
| Income taxes paid |
( |
) | ( |
) | ( |
) | ||||||||||
| Interest paid |
( |
) | ( |
) | ( |
) | ||||||||||
| Interest received |
||||||||||||||||
| |
|
|
|
|
|
|||||||||||
| Net cash provided by operating activities |
||||||||||||||||
| |
|
|
|
|
|
|||||||||||
| Cash flows from investing activities: |
||||||||||||||||
| Acquisition of CEPROCS, net of cash acquired |
4(e) | ( |
) | |||||||||||||
| Acquisition of MOL IPS, net of cash acquired |
4(f) | ( |
) | ( |
) | |||||||||||
| Acquisition of Vuram, net of cash acquired |
4(d) | ( |
) | — | — | |||||||||||
| Acquisition of OptiBuy, net of cash acquired |
4(b) | ( |
) | — | — | |||||||||||
| Acquisition of The Smart Cube, net of cash acquired |
4(a) | ( |
) | — | — | |||||||||||
| Payment for business transfer (from a large insurance company) |
4(c) | ( |
) | — | — | |||||||||||
| Payment for property and equipment and intangible assets |
( |
) | ( |
) | ( |
) | ||||||||||
| Proceeds from sale of property and equipment |
||||||||||||||||
| Investment in fixed deposits |
( |
) | ( |
) | ( |
) | ||||||||||
| Proceeds from maturity of fixed deposits |
||||||||||||||||
| Marketable securities (purchased)/sold, net (short-term) |
( |
) | ( |
) | ||||||||||||
| Profit on sale of marketable securities |
||||||||||||||||
| Proceeds from redemption of marketable securities (long-term) |
||||||||||||||||
| |
|
|
|
|
|
|||||||||||
| Net cash used in investi ng activities |
( |
) |
( |
) |
( |
) | ||||||||||
| |
|
|
|
|
|
|||||||||||
| Cash flows from financing activities: |
||||||||||||||||
| Payment for repurchase of shares |
( |
) | ( |
) | ( |
) | ||||||||||
| Transaction charges on cancellation of treasury shares |
( |
) | ( |
) | ( |
) | ||||||||||
| Proceeds from long-term debt |
||||||||||||||||
| Repayment of long-term debt |
( |
) | ( |
) | ( |
) | ||||||||||
| Principal payment for lease liabilities |
( |
) | ( |
) | ( |
) | ||||||||||
| Excess tax benefit from share-based compensation expense |
25 | |||||||||||||||
| Payment of transaction charges towards exercise of RSUs |
( |
) | ||||||||||||||
| Proceeds from short-term borrowings |
||||||||||||||||
| Payment of debt issuance cost |
( |
) | ||||||||||||||
| Repayment of short-term borrowings |
( |
) | ||||||||||||||
| |
|
|
|
|
|
|||||||||||
| Net cash provided by/(used in) financing activities |
( |
) |
( |
) | ||||||||||||
| |
|
|
|
|
|
|||||||||||
| Exchange difference on cash and cash equivalents |
( |
) | ( |
) | ||||||||||||
| Net change in cash and cash equivalents |
||||||||||||||||
| Cash and cash equivalents at the beginning of the year |
||||||||||||||||
| |
|
|
|
|
|
|||||||||||
| Cash and cash equivalents at the end of the year |
5 | $ |
$ |
$ |
||||||||||||
| |
|
|
|
|
|
|||||||||||
| Non-cash transactions: |
||||||||||||||||
| Investing activities |
||||||||||||||||
| (i) Liability towards property and equipment and intangible assets purchased on credit |
$ | $ | $ | |||||||||||||
| (ii) Contingent consideration payable towards acquisitions |
18 | — | — | |||||||||||||
| (iii) Deferred consideration payable towards acquisitions |
4(f) | |||||||||||||||
| (iv) Payable upon achievement of target |
4(b) | — | — | |||||||||||||
Opening balance April 1, 2022 |
Cash flows, net of debt issuance cost paid |
Non-cash changes |
Closing balance March 31, 2023 |
|||||||||||||||||
Amortization of debt issuance cost |
Translation |
|||||||||||||||||||
| Long-term debt (including current portion) |
$ | $ | $ | $ | $ | |||||||||||||||
Non-cash changes |
||||||||||||||||
Opening balance April 1, 2021 |
Cash flows |
Amortization of debt issuance cost |
Closing balance March 31, 2022 |
|||||||||||||
| Long-term debt (including current portion) |
$ | $ | ( |
) | $ | $ | ||||||||||
| * | |
a. |
Basis of preparation |
b. |
Basis of measurement |
| a. | Derivative financial instruments; |
| b. | Share-based payment transactions; |
| c. | Marketable securities and investments in mutual funds; |
| d. | Investments in fixed maturity plans (“FMPs”); and |
| e. | Contingent consideration. |
c. |
Use of estimates and judgments |
i. |
Revenue recognition |
ii. |
Current income taxes |
iii. |
Deferred income taxes |
iv. |
Impairment |
v. |
Valuation of derivative financial instruments |
vi. |
Accounting for defined benefit plans |
vii. |
Share-based compensation expense |
viii. |
Business combinations |
xi. |
Impairment of non-derivative financial assets |
xii. |
Leases |
d. |
Basis of consolidation |
i. |
Business combinations |
ii. |
Transactions eliminated on consolidation |
e. |
Functional and presentation currency |
f. |
Foreign currency transactions and translation |
i. |
Transactions in foreign currency |
ii. |
Foreign operations |
g. |
Financial instruments — initial recognition and subsequent measurement |
| • | Non-derivative financial assets at amortized cost or at fair value through profit or loss (“FVTPL”). |
| • | Non-derivative financial liabilities at FVTPL or at amortized cost. |
| • | Derivative financial instruments under the category of financial assets or financial liabilities at FVTPL or at FVOCI. |
i. |
Non-derivative financial assets |
a) |
Financial assets at amortized cost |
| i) | the asset is held within a business model whose objective is to hold assets in order to collect contractual cash flows; and |
| ii) | the contractual terms of the instrument give rise on specified dates to cash flows that are solely payment of principal and interest on the principal amount outstanding. |
b) |
Financial assets at FVTPL |
ii. |
Non-derivative financial liabilities |
iii. |
Derivative financial instruments and hedge accounting |
iv. |
Offsetting of financial instruments |
v. |
Fair value of financial instruments |
vi. |
Impairment of non-derivative financial assets |
h. |
Equity and share capital |
i. |
Share capital, share premium and treasury shares |
ii. |
Retained earnings |
iii. |
Other components of equity |
i. |
Cash and cash equivalents |
j. |
Investments |
i. |
Marketable securities and mutual funds |
ii. |
Investments in fixed maturity plans |
iii. |
Investments in fixed deposits |
k. |
Funds held for clients |
l. |
Property and equipment |
| Asset description |
Asset life (in years) |
|||
| Buildings |
||||
| Computers and software |
||||
| Furniture, fixtures and office equipment |
||||
| Vehicles |
||||
| Leasehold improvements |
||||
m. |
Goodwill |
n. |
Intangible assets |
| Asset description |
Weighted average amortization period (in months) |
|||
| Customer contracts |
||||
| Customer relationships |
||||
| Covenant not-to-compete |
||||
| Trade names |
||||
| Technology |
||||
| Software |
||||
| Service mark |
||||
o. |
Impairment of intangible assets and goodwill |
p. |
Employee benefits |
i. |
Defined contribution plans |
ii. |
Defined benefit plan |
iii. |
Compensated absences |
q. |
Share-based payments |
r. |
Provisions and accrued expenses |
s. |
Revenue recognition |
| a) | per full-time-equivalent arrangements, which typically involve billings based on the number of full-time employees (or equivalent) deployed on the execution of the business process outsourced; |
| b) | per transaction arrangements, which typically involve billings based on the number of transactions processed (such as the number of e-mail responses, or airline coupons or insurance claims processed); |
| c) | subscription arrangements, which typically involve billings based on per member per month, based on contractually agreed rates; |
| d) | fixed-price arrangements, which typically involve billings based on achievements of pre-defined deliverables or milestones; |
| e) | outcome-based arrangements, which typically involve billings based on the business result achieved by our clients through our service efforts (such as measured based on a reduction in days sales outstanding, improvement in working capital, increase in collections or a reduction in operating expenses); or |
| f) | other pricing arrangements, including cost-plus arrangements, which typically involve billing the contractually agreed direct and indirect costs and a fee based on the number of employees deployed under the arrangement. |
| a) | the Company has the primary responsibility for providing the services, |
| b) | the Company negotiates labor rates with repair centers, and |
| c) | the Company is responsible for timely and satisfactory completion of repairs. |
t. |
Leases |
u. |
Finance expense |
v. |
Income taxes |
i. |
Current income tax |
ii. |
Deferred income tax |
w. |
Earnings per share |
x. |
Government grants |
| i. | In January 2020, the IASB issued amendments to IAS 1 “ Presentation of Financial Statements 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. |
| ii. | In February 2021, the IASB issued “Disclosure of Accounting Policies (Amendments to IAS 1 and IFRS Practice Statement 2)” in relation to determining which accounting policies are to be disclosed in the financial statements. These amendments: |
| • | require an entity to disclose its material accounting policy information instead of its significant accounting policies. |
| • | clarify that accounting policy information may be material because of its nature, even if the related amounts are immaterial; and also clarifies if users of an entity’s financial statements would need it to understand other material information in the financial statements; |
| • | clarify that accounting policy information is material; and |
| • | clarify that if an entity discloses immaterial accounting policy information, such information shall not obscure material accounting policy information. |
| iii. | In February 2021, the IASB issued “Disclosure of Accounting Estimates (Amendments to IAS 8)” in relation to distinction between accounting policies and accounting estimates. These amendments: |
| • | replace the definition of change in accounting estimates with a definition of accounting estimate as “monetary amounts in financial statements that are subject to measurement uncertainty”; |
| • | clarify that a change in accounting estimate that results from new information or new developments is not the correction of an error. In addition, the effects of a change in an input or a measurement technique used to develop an accounting estimate are changes in accounting estimates if they do not result from the correction of prior period errors; and |
| • | state that a change in an accounting estimate may affect only the current period’s profit or loss, or the profit or loss of both the current period and future periods. It also requires that the effect of the change relating to the current period is recognized as income or expense in the current period and the effect, if any, on future periods is recognized as income or expense in those future periods. |
| iv. | In May 2021, the IASB issued “Deferred Tax related to Assets and Liabilities arising from a Single Transaction (Amendments to IAS 12)” to clarify the accounting for deferred tax on transactions such as leases and decommissioning obligations. These amendments clarify that the initial recognition exemption does not apply to transactions in which equal amounts of deductible and taxable temporary differences arise on initial recognition. |
| v. | 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. |
| vi. | 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. |
a) |
The Smart Cube Limited |
Amount |
||||
| Cash |
$ | |||
| Trade receivables |
||||
| Unbilled revenue |
||||
| Prepayment and other current assets |
||||
| Property and equipment |
||||
| Right-of-use assets |
||||
| Intangible assets |
||||
| - Customer relationships |
||||
| - Customer contracts |
||||
| - Covenant not-to-compete |
||||
| - Software |
||||
| Non-current assets |
||||
| Deferred tax assets |
||||
| Current liabilities |
( |
) | ||
| Non-current liabilities |
( |
) | ||
| Lease liabilities |
( |
) | ||
| Deferred tax liabilities |
( |
) | ||
| |
|
|||
| Net assets acquired |
||||
| Less: Purchase consideration |
( |
) | ||
| |
|
|||
| Goodwill on acquisition |
$ |
|||
| |
|
|||
b) |
OptiBuy sp. z.o.o. |
Amount |
||||
| Cash |
$ | |||
| Trade receivables |
||||
| Prepayment and other current assets |
||||
| Property and equipment |
||||
| Right-of-use assets |
||||
| Intangible assets |
||||
| - Customer relationships |
||||
| - Customer contracts |
||||
| - Covenant not-to-compete |
||||
| - Software |
||||
| Non-current assets |
||||
| Deferred tax assets |
||||
| Current liabilities |
( |
) | ||
| Non-current liabilities |
( |
) | ||
| Lease liabilities |
( |
) | ||
| Deferred tax liabilities |
( |
) | ||
| |
|
|||
| Net assets acquired |
||||
| Less: Purchase consideration |
( |
) | ||
| |
|
|||
| Goodwill on acquisition |
$ |
|||
| |
|
|||
c) |
Payment for business transfer (from a large insurance company) |
Amount |
||||
| Intangible assets |
||||
| - Customer contracts |
$ | |||
| Deferred tax liabilities |
( |
) | ||
| |
|
|||
| Net assets acquired |
||||
| Less: Purchase consideration |
( |
) | ||
| |
|
|||
| Goodwill on acquisition |
$ |
|||
| |
|
|||
d) |
Vuram Technology Solutions Private Limited |
Amount |
||||
| Cash |
$ | |||
| Investments |
||||
| Trade receivables |
||||
| Unbilled revenue |
||||
| Prepayment and other current assets |
||||
| Property and equipment |
||||
| Right-of-use |
||||
| Intangible assets |
||||
| - Customer relationships |
||||
| - Customer contracts |
||||
| - Covenant not-to-compete |
||||
| - Software & Trade name |
||||
| Non-current assets |
||||
| Deferred tax assets |
||||
| Current liabilities |
( |
) | ||
| Non-current liabilities |
( |
) | ||
| Lease liabilities |
( |
) | ||
| Deferred tax liabilities |
( |
) | ||
| |
|
|||
| Net assets acquired |
||||
| Less: Purchase consideration |
( |
) | ||
| |
|
|||
| Goodwill on acquisition |
$ |
|||
| |
|
|||
e) |
Payment for business transfer (‘CEPROCS’) |
f) |
MOL Information Processing Services (I) Private Limited (“MOL IPS”) |
Amount |
||||
Total assets |
$ | |||
Less: Total liabilities |
( |
) | ||
Net assets acquired |
||||
Less: Purchase consideration |
( |
) | ||
Goodwill on acquisition |
$ |
|||
As at |
||||||||
March 31, |
March 31, |
|||||||
2023 |
2022 |
|||||||
Cash and bank balances |
$ | $ | ||||||
Short-term deposits with banks* |
||||||||
Total |
$ |
$ |
||||||
As at |
||||||||
March 31, |
March 31, |
|||||||
2023 |
2022 |
|||||||
Investments in marketable securities and mutual funds |
$ | $ | ||||||
Investment in fixed deposits |
||||||||
Total |
$ |
$ |
||||||
As at |
||||||||
March 31, 2023 |
March 31, 2022 |
|||||||
Current investments |
$ | $ | |
|||||
Non-current investments |
||||||||
Total |
$ |
$ |
||||||
As at |
||||||||
March 31, |
March 31, |
|||||||
2023 |
2022 |
|||||||
| Trade receivables and unbilled revenue* |
$ | $ | ||||||
| Less: Allowances for ECL |
( |
) | ( |
) | ||||
| |
|
|
|
|||||
| Total |
$ |
$ |
||||||
| |
|
|
|
|||||
Year ended March 31, |
||||||||||||
2023 |
2022 |
2021 |
||||||||||
| Balance at the beginning of the year |
$ | $ | $ | |
||||||||
| Charged to consolidated statement of income |
||||||||||||
| Write-offs, net of collections |
( |
) | ( |
) | ( |
) | ||||||
| Reversals |
( |
) | ( |
) | ( |
) | ||||||
| Translation adjustment |
( |
) | ( |
) | ||||||||
| |
|
|
|
|
|
|||||||
| Balance at the end of the year |
$ |
$ |
$ |
|||||||||
| |
|
|
|
|
|
|||||||
As at |
||||||||
March 31, 2023 |
March 31, 2022 |
|||||||
| Current: |
||||||||
| Service tax and other tax receivables |
$ | $ | ||||||
| Employee receivables |
||||||||
| Advances to suppliers |
||||||||
| Prepaid expenses |
||||||||
| Other assets |
||||||||
| |
|
|
|
|||||
| Total |
$ |
$ |
||||||
| |
|
|
|
|||||
| Non-current: |
||||||||
| Deposits |
$ | $ | ||||||
| Income tax assets |
||||||||
| Service tax and other tax receivables |
||||||||
| Other assets |
||||||||
| |
|
|
|
|||||
| Total |
$ |
$ |
||||||
| |
|
|
|
|||||
As at |
||||||||
March 31, 2023 |
March 31, 2022 |
|||||||
| Gross carrying amount |
$ | $ | |
|||||
| Accumulated impairment of goodwill |
( |
) | ( |
) | ||||
| |
|
|
|
|||||
| Total |
$ |
$ |
||||||
| |
|
|
|
|||||
WNS |
WNS Auto |
|||||||||||
Global BPM |
Claims BPM |
Total |
||||||||||
| Balance as at April 1, 2021 |
$ | $ | $ | |||||||||
| Goodwill arising on acquisitions (Refer Note 4(e), 4(f)) |
||||||||||||
| Translation adjustment |
( |
) | ( |
) | ( |
) | ||||||
| |
|
|
|
|
|
|||||||
| Balance as at March 31, 2022 |
$ |
$ |
$ |
|||||||||
| |
|
|
|
|
|
|||||||
| Goodwill arising on acquisitions (Refer Note 4(a), 4(b), 4(c), 4(d)) |
||||||||||||
| Translation adjustment |
( |
) | ( |
) | ( |
) | ||||||
| |
|
|
|
|
|
|||||||
| Balance as at March 31, 2023 |
$ |
$ | $ | |||||||||
| |
|
|
|
|
|
|||||||
WNS |
WNS Auto |
|||||||||||
Global BPM |
Claims BPM |
Total |
||||||||||
Balance as at April 1, 2021 |
$ | $ | $ | |||||||||
Translation adjustment |
( |
) | ( |
) | ||||||||
Balance as at March 31, 2022 |
$ |
$ |
$ |
|||||||||
Translation adjustment |
( |
) | ( |
) | ||||||||
Balance as at March 31, 2023 |
$ |
$ |
$ |
|||||||||
As at |
||||||||
March 31, |
March 31, |
|||||||
2023 |
2022 |
|||||||
Vuram |
$ | $ | ||||||
The Smart Cube |
||||||||
HealthHelp |
||||||||
Research and Analytics |
||||||||
Denali |
||||||||
OptiBuy |
||||||||
Insurance |
||||||||
WNS Global BPM* |
||||||||
South Africa |
||||||||
Technology services |
||||||||
$ |
$ |
|||||||
* |
Excludes South Africa, Research and Analytics, Technology services, Denali, HealthHelp, Vuram, The Smart Cube, OptiBuy and Insurance goodwill. |
| a) | Estimated cash flows for |
| b) | Terminal value arrived by extrapolating last forecasted year cash flows to perpetuity using long-term growth rates. These long-term growth rates take into consideration external macro-economic sources of data. Such long-term growth rate considered does not exceed that of the relevant business and industry sector. |
| c) | The discount rates used are based on weighted average cost of capital of a comparable market participant, which are adjusted for specific country risks. |
CGU’s |
||||||||||||||||||||||||||||||||||||||||
WNS Global BPM* |
South Africa |
Denali |
Research and Analytics |
HealthHelp |
Technology services |
Vuram |
Insurance |
Smart Cube |
Optibuy |
|||||||||||||||||||||||||||||||
Discount rate |
% | % | % | % | % | % | % | % | % | % | ||||||||||||||||||||||||||||||
Perpetual growth rate |
% | % | % | % | % | % | % | % | % | % | ||||||||||||||||||||||||||||||
CGU’s |
||||||||||||||||||||||||
WNS Global BPM* |
South Africa |
Denali |
Research and Analytics |
HealthHelp |
Technology services |
|||||||||||||||||||
Discount rate |
% | % | % | % | % | % | ||||||||||||||||||
Perpetual growth rate |
% | % | % | % | % | % | ||||||||||||||||||
| * | Excludes South Africa, Research and Analytics, Technology services, Denali, HealthHelp, Vuram, The Smart Cube, OptiBuy and Insurance CGUs. |
| 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 |
$ | $ | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||
| Additions |
— | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||
| On acquisitions (Refer Note 4(a), 4(b), 4(c), 4(d)) |
— | — | — | — | ||||||||||||||||||||||||||||||||||||
| Translation adjustments |
( |
) | ( |
) | ( |
) | ( |
) | ( |
) | — | ( |
) | — | ( |
) | ( |
) | ||||||||||||||||||||||
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
| Balance as at March 31, 2023 |
$ | $ | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
| Accumulated amortization |
||||||||||||||||||||||||||||||||||||||||
| Balance as at April 1, 2022 |
$ | $ | $ | $ | $ | $ | $ | $ | — | $ | $ | |||||||||||||||||||||||||||||
| Amortization |
— | — | — | — | ||||||||||||||||||||||||||||||||||||
| Translation adjustments |
( |
) | ( |
) | ( |
) | ( |
) | ( |
) | — | ( |
) | — | ( |
) | ( |
) | ||||||||||||||||||||||
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
| Balance as at March 31, 2023 |
$ | $ | $ | $ | $ | $ | $ | $ | — | $ | $ | |||||||||||||||||||||||||||||
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
| Net carrying value as at March 31, 2023 |
$ |
$ |
$ |
— |
$ |
$ |
$ |
— |
$ |
$ |
$ |
$ |
||||||||||||||||||||||||||||
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
| Gross carrying value |
Customer Contracts |
Customer Relationships |
Intellectual Property and Other rights |
Trade names |
Technology |
Leasehold Benefits |
Covenant not-to- compete |
Service mark |
Software |
Total |
||||||||||||||||||||||||||||||
| Balance as at April 1, 2021 |
$ | $ | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||
| Additions |
— | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||
| On acquisitions (Refer Note 4(e), 4(f)) |
— | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||
| Translation adjustments |
( |
) | ( |
) | ( |
) | ( |
) | ( |
) | — | ( |
) | — | ( |
) | ( |
) | ||||||||||||||||||||||
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
| Balance as at March 31, 2022 |
$ | $ | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
| Accumulated amortization |
||||||||||||||||||||||||||||||||||||||||
| Balance as at April 1, 2021 |
$ | $ | $ | $ | $ | $ | $ | $ | — | $ | $ | |||||||||||||||||||||||||||||
| Amortization |
— | — | — | — | ||||||||||||||||||||||||||||||||||||
| Translation adjustments |
( |
) | ( |
) | ( |
) | ( |
) | ( |
) | — | ( |
) | — | ( |
) | ( |
) | ||||||||||||||||||||||
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
| Balance as at March 31, 2022 |
$ | $ | $ | $ | $ | $ | $ | $ | — | $ | $ | |||||||||||||||||||||||||||||
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
| Net carrying value as at March 31, 2022 |
$ |
$ |
$ |
— |
$ |
— |
$ |
$ |
— |
$ |
— |
$ |
$ |
$ |
||||||||||||||||||||||||||
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Balance life |
||||
(in months) |
||||
| Customer relationships |
||||
| Customer contracts |
||||
| Trade names |
||||
| Covenant not-to-compete |
||||
| Technology |
||||
| Software |
||||
Amount |
||||
| 2024 |
$ | |||
| 2025 |
||||
| 2026 |
||||
| 2027 |
||||
| 2028 |
||||
| Thereafter |
||||
| |
|
|||
| $ | * | |||
| |
|
|||
| * | |
| Gross carrying value |
Building |
Computers and software |
Furniture, fixtures and office equipment |
Vehicles |
Leasehold improvements |
Total |
||||||||||||||||||
| Balance as at April 1, 2022 |
$ | $ | $ | $ | $ | $ | ||||||||||||||||||
| Additions |
— | — | ||||||||||||||||||||||
| On acquisitions (Refer Note 4(a), 4(b), 4(d)) |
— | |||||||||||||||||||||||
| Disposals/retirements |
— | ( |
) | ( |
) | ( |
) | ( |
) | |||||||||||||||
| Translation adjustments |
( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||
| |
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Balance as at March 31, 2023 |
$ | $ | $ | $ | $ | $ | ||||||||||||||||||
| |
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Accumulated depreciation |
||||||||||||||||||||||||
| Balance as at April 1, 2022 |
$ | $ | $ | $ | $ | $ | ||||||||||||||||||
| Depreciation |
||||||||||||||||||||||||
| Disposals/retirements |
— | ( |
) | ( |
) | ( |
) | ( |
) | |||||||||||||||
| Translation adjustments |
( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||
| |
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Balance as at March 31, 2023 |
$ | $ | $ | $ | $ | $ | ||||||||||||||||||
| |
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Capital work-in-progress |
— | — | — | — | — | |||||||||||||||||||
| |
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Net carrying value as at March 31, 2023 |
$ |
$ |
$ |
$ |
$ |
$ |
||||||||||||||||||
| |
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Gross carrying value |
Building |
Computers and software |
Furniture, fixtures and office equipment |
Vehicles |
Leasehold improvements |
Total |
||||||||||||||||||
| Balance as at April 1, 2021 |
$ | $ | $ | $ | $ | $ | ||||||||||||||||||
| Additions |
— | — | ||||||||||||||||||||||
| On acquisitions (Refer Note 4(e), 4(f)) |
— | |||||||||||||||||||||||
| Disposals/retirements |
— | ( |
) | ( |
) | ( |
) | ( |
) | ( |
) | |||||||||||||
| Translation adjustments |
( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||
| |
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Balance as at March 31, 2022 |
$ | $ | $ | $ | $ | $ | ||||||||||||||||||
| |
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Accumulated depreciation |
||||||||||||||||||||||||
| Balance as at April 1, 2021 |
$ | $ | $ | $ | $ | $ | ||||||||||||||||||
| Depreciation |
||||||||||||||||||||||||
| Disposals/retirements |
— | ( |
) | ( |
) | ( |
) | ( |
) | ( |
) | |||||||||||||
| Translation adjustments |
( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||
| |
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Balance as at March 31, 2022 |
$ | $ | $ | $ | $ | $ | ||||||||||||||||||
| |
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Capital work-in-progress |
||||||||||||||||||||||||
| |
|
|||||||||||||||||||||||
| Net carrying value as at March 31, 2022 |
$ |
|||||||||||||||||||||||
| |
|
|||||||||||||||||||||||
| Gross carrying value |
Premises |
Computers |
Equipment |
Motor vehicles |
Total |
|||||||||||||||
| Balance as at April 1, 2022 |
$ | $ | $ | $ | $ | |||||||||||||||
| Additions |
— | — | ||||||||||||||||||
| On acquisition (Refer Note 4(a), 4(b), 4(d)) |
— | — | ||||||||||||||||||
| Terminations/modifications |
( |
) | — | ( |
) | |||||||||||||||
| Translation adjustments |
( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ||||||||||
| |
|
|
|
|
|
|
|
|
|
|||||||||||
| Balance as at March 31, 2023 |
$ | $ | — | $ | $ | $ | ||||||||||||||
| |
|
|
|
|
|
|
|
|
|
|||||||||||
| Accumulated depreciation |
||||||||||||||||||||
| Balance as at April 1, 2022 |
$ | $ | $ | $ | $ | |||||||||||||||
| Depreciation |
— | |||||||||||||||||||
| Terminations/modifications |
( |
) | ( |
) | — | ( |
) | ( |
) | |||||||||||
| Translation adjustments |
( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ||||||||||
| |
|
|
|
|
|
|
|
|
|
|||||||||||
| Balance as at March 31, 2023 |
$ | $ | — | $ | $ | $ | ||||||||||||||
| |
|
|
|
|
|
|
|
|
|
|||||||||||
| Net carrying value as at March 31, 2023 |
$ |
$ |
— |
$ |
$ |
$ |
||||||||||||||
| |
|
|
|
|
|
|
|
|
|
|||||||||||
| Gross carrying value |
Premises |
Computers |
Equipment |
Motor vehicles |
Total |
|||||||||||||||
| Balance as at April 1, 2021 |
$ | $ | $ | $ | $ | |||||||||||||||
| Additions |
— | — | ||||||||||||||||||
| On acquisition (Refer Note 4(e), (f)) |
— | — | — | |||||||||||||||||
| Terminations/modifications |
— | — | — | |||||||||||||||||
| Translation adjustments |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||
| |
|
|
|
|
|
|
|
|
|
|||||||||||
| Balance as at March 31, 2022 |
$ | $ | $ | $ | $ | |||||||||||||||
| |
|
|
|
|
|
|
|
|
|
|||||||||||
| Accumulated depreciation |
||||||||||||||||||||
| Balance as at April 1, 2021 |
$ | $ | $ | $ | $ | |||||||||||||||
| Depreciation |
||||||||||||||||||||
| Terminations/modifications |
( |
) | — | — | — | ( |
) | |||||||||||||
| Translation adjustments |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||
| |
|
|
|
|
|
|
|
|
|
|||||||||||
| Balance as at March 31, 2022 |
$ | $ | $ | $ | $ | |||||||||||||||
| |
|
|
|
|
|
|
|
|
|
|||||||||||
| Net carrying value as at March 31, 2022 |
$ |
$ |
— |
$ |
$ |
$ |
||||||||||||||
| |
|
|
|
|
|
|
|
|
|
|||||||||||
| Lease liabilities |
March 31, 2023 |
March 31, 2022 |
||||||
| Opening balance |
$ | $ | ||||||
| Cash outflows |
||||||||
| Principal payment of lease liabilities |
( |
) | ( |
) | ||||
| Interest payment on lease liabilities |
( |
) | ( |
) | ||||
| Non-cash adjustments |
||||||||
| On acquisition (Refer Note 4(a), 4(b), 4(d), 4(e), 4(f)) |
||||||||
| Additions |
||||||||
| Terminations/modifications |
||||||||
| Interest accrued |
||||||||
| Rent concessions |
— | ( |
) | |||||
| Translation adjustments |
( |
) | ( |
) | ||||
| |
|
|
|
|||||
| Closing balance |
$ |
$ |
||||||
| |
|
|
|
|||||
As at |
||||||||
| Tenure |
March 31, 2023 |
March 31, 2022 |
||||||
| Less than 1 year |
$ | $ | ||||||
| 1-3 years |
||||||||
| 3-5 years |
||||||||
| More than 5 years |
||||||||
| |
|
|
|
|||||
| Total |
$ |
$ |
||||||
| |
|
|
|
|||||
Final maturity (financial year) |
As at |
|||||||||||||||
| Currency |
Interest rate |
March 31, 2023 |
March 31, 2022 |
|||||||||||||
| US dollars |
% | |||||||||||||||
| Sterling Pound |
% | |||||||||||||||
| |
|
|
|
|||||||||||||
| Total |
||||||||||||||||
| Less: Debt issuance cost |
( |
|||||||||||||||
| Total |
||||||||||||||||
| |
|
|
|
|||||||||||||
| Current portion of long-term debt |
$ | $ | ||||||||||||||
| Long-term debt |
$ | $ | ||||||||||||||
Financial assets at amortized cost |
Financial assets at FVTPL |
Financial assets at FVOCI |
Total carrying value |
Total fair value |
||||||||||||||||
| Cash and cash equivalents |
$ | $ | — | $ | — | $ | $ | |||||||||||||
| Investment in fixed deposits |
— | — | ||||||||||||||||||
| Investments in marketable securities and mutual funds |
— | — | ||||||||||||||||||
| Trade receivables |
— | — | ||||||||||||||||||
| Unbilled revenue (1) |
— | — | ||||||||||||||||||
| Funds held for clients |
— | — | ||||||||||||||||||
| Prepayments and other assets (2) |
— | — | ||||||||||||||||||
| Other non-current assets (3) |
— | — | ||||||||||||||||||
| Derivative assets |
— | |||||||||||||||||||
| |
|
|
|
|
|
|
|
|
|
|||||||||||
| Total carrying value |
$ |
$ |
$ |
$ |
$ |
|||||||||||||||
| |
|
|
|
|
|
|
|
|
|
|||||||||||
Financial liabilities at amortized cost |
Financial liabilities at FVTPL |
Financial liabilities at FVOCI |
Total carrying value |
Total fair Value |
||||||||||||||||
| Trade payables |
$ | $ | — | $ | — | $ | $ | |||||||||||||
| Long-term debt (4) |
— | — | ||||||||||||||||||
| Other employee obligations (5) |
— | — | ||||||||||||||||||
| Provisions and accrued expenses |
— | — | ||||||||||||||||||
| Lease liabilities |
— | — | ||||||||||||||||||
| Other liabilities (6) |
— | |||||||||||||||||||
| Derivative liabilities |
— | |||||||||||||||||||
| |
|
|
|
|
|
|
|
|
|
|||||||||||
| Total carrying value |
$ |
$ |
$ |
$ |
$ |
|||||||||||||||
| |
|
|
|
|
|
|
|
|
|
|||||||||||
| (1) | Excluding non-financial assets $ |
| (2) | Excluding non-financial assets $ |
| (3) | Excluding non-financial assets $ |
| (4) | Excluding non-financial asset (unamortized debt issuance cost) $ |
| (5) | Excluding non-financial liabilities $ |
| (6) | Excluding non-financial liabilities $ |
Financial assets at amortized cost |
Financial assets at FVTPL |
Financial assets at FVOCI |
Total carrying value |
Total fair value |
||||||||||||||||
| Cash and cash equivalents |
$ | $ | — | $ | — | $ | $ | |||||||||||||
| Investment in fixed deposits |
— | — | ||||||||||||||||||
| Investments in marketable securities and mutual funds |
— | |
— | |||||||||||||||||
| Trade receivables |
|
— | — | |||||||||||||||||
| Unbilled revenue (1) |
— | — | ||||||||||||||||||
| Funds held for clients |
— | — | ||||||||||||||||||
| Prepayments and other assets (2) |
— | — | ||||||||||||||||||
| Other non-current assets (3) |
— | — | ||||||||||||||||||
| Derivative assets |
— | |
||||||||||||||||||
| |
|
|
|
|
|
|
|
|
|
|||||||||||
| Total carrying value |
$ |
$ |
$ |
$ |
$ |
|||||||||||||||
| |
|
|
|
|
|
|
|
|
|
|||||||||||
Financial liabilities at amortized cost |
Financial liabilities at FVTPL |
Financial liabilities at FVOCI |
Total carrying value |
Total fair Value |
||||||||||||||||
| Trade payables |
$ | $ | — | $ | — | $ | $ | |||||||||||||
| Other employee obligations (4) |
— | — | ||||||||||||||||||
| Provisions and accrued expenses |
— | — | ||||||||||||||||||
| Lease liabilities |
— | — | ||||||||||||||||||
| Other liabilities (5) |
— | — | ||||||||||||||||||
| Derivative liabilities |
— | |||||||||||||||||||
| |
|
|
|
|
|
|
|
|
|
|||||||||||
| Total carrying value |
$ |
$ |
$ |
$ |
$ |
|||||||||||||||
| |
|
|
|
|
|
|
|
|
|
|||||||||||
| (1) | Excluding non-financial assets $ |
| (2) | Excluding non-financial assets $ |
| (3) | Excluding non-financial assets $ |
| (4) | Excluding non-financial liabilities $ |
| (5) | Excluding non-financial liabilities $ |
| 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 |
$ | $ | — | $ | $ | ( |
) | $ | — | $ | ||||||||||||||
| |
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Total |
$ |
$ |
— |
$ |
$ |
( |
) |
$ |
— |
$ |
||||||||||||||
| |
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| 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 |
$ | $ | — | $ | $ | ( |
) | $ | — | $ | ||||||||||||||
| |
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Total |
$ |
$ |
— |
$ |
$ |
( |
) |
$ |
— |
$ |
||||||||||||||
| |
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
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 |
$ | $ | — | $ | $ | ( |
) | $ | — | $ | ||||||||||||||
Total |
$ |
$ |
— |
$ |
$ |
( |
) |
$ |
— |
$ |
||||||||||||||
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 |
$ | $ | — | $ | $ | ( |
) | $ | — | $ | ||||||||||||||
Total |
$ |
$ |
— |
$ |
$ |
( |
) |
$ |
— |
$ |
||||||||||||||
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 |
$ | $ | — | $ | $ | — | ||||||||||
Investments in marketable securities and mutual funds |
— | |||||||||||||||
Financial assets at FVOCI |
||||||||||||||||
Foreign exchange contracts |
— | — | ||||||||||||||
Total assets |
$ |
$ |
$ |
$ |
— |
|||||||||||
Liabilities |
||||||||||||||||
Financial liabilities at FVTPL |
||||||||||||||||
Foreign exchange contracts |
$ | $ | — | $ | $ | — | ||||||||||
Contingent consideration |
— | — | ||||||||||||||
Financial liabilities at FVOCI |
||||||||||||||||
Foreign exchange contracts |
— | — | ||||||||||||||
Total liabilities |
$ |
$ |
— |
$ |
$ |
|||||||||||
Fair value measurement at reporting date using |
||||||||||||||||
| Description |
March 31, 2022 |
Quoted prices in active markets for identical assets (Level 1) |
Significant other observable inputs (Level 2) |
Significant unobservable inputs (Level 3) |
||||||||||||
| Assets |
||||||||||||||||
| Financial assets at FVTPL |
||||||||||||||||
| Foreign exchange contracts |
$ | $ | — | $ | $ | — | ||||||||||
| Investments in marketable securities and mutual funds |
— | |||||||||||||||
| Financial assets at FVOCI |
||||||||||||||||
| Foreign exchange contracts |
— | — | ||||||||||||||
| |
|
|
|
|
|
|
|
|||||||||
| Total assets |
$ |
$ |
$ |
$ |
— |
|||||||||||
| |
|
|
|
|
|
|
|
|||||||||
| Liabilities |
||||||||||||||||
| Financial liabilities at FVTPL |
||||||||||||||||
| Foreign exchange contracts |
$ | $ | — | $ | $ | — | ||||||||||
| Financial liabilities at FVOCI |
||||||||||||||||
| Foreign exchange contracts |
— | — | ||||||||||||||
| Interest rate swaps |
— | — | ||||||||||||||
| |
|
|
|
|
|
|
|
|||||||||
| Total liabilities |
$ |
$ |
— |
$ |
$ |
— |
||||||||||
| |
|
|
|
|
|
|
|
|||||||||
For the year ended |
||||||||
March 31, 2023 |
March 31, 2022 |
|||||||
| Balance at the beginning of the year |
$ | $ | — | |||||
| On acquisitions (Refer Note 4(a), 4(b), 4(d)) |
||||||||
| Payable upon achievement of target (Refer Note 4(b)) |
( |
) | — | |||||
| Finance expense recognized in the consolidated statement of income |
— | |||||||
| Translation |
— | |||||||
| |
|
|
|
|||||
| Balance at the end of the year |
$ |
$ |
— |
|||||
| |
|
|
|
|||||
As at |
||||||||
March 31, 2023 |
March 31, 2022 |
|||||||
| Forward contracts (Sell) |
||||||||
| In US dollars |
$ | $ | ||||||
| In Pound Sterling |
||||||||
| In Euro |
||||||||
| In Australian dollars |
||||||||
| Others |
||||||||
| |
|
|
|
|||||
$ |
$ |
|||||||
| |
|
|
|
|||||
| Option contracts (Sell) |
||||||||
| In US dollars |
$ | $ | ||||||
| In Pound Sterling |
||||||||
| In Euro |
||||||||
| In Australian dollars |
||||||||
| |
|
|
|
|||||
$ |
$ |
|||||||
| |
|
|
|
|||||
Year ended March 31, |
||||||||||||
2023 |
2022 |
2021 |
||||||||||
| Revenue |
$ | ( |
) | $ | $ | |||||||
| Foreign exchange gain/(loss), net |
— | ( |
) | |||||||||
| Finance expense |
— | ( |
) | ( |
) | |||||||
| Income tax related to amounts reclassified into consolidated statement of income |
( |
) | ( |
) | ||||||||
| |
|
|
|
|
|
|||||||
| Total |
$ |
( |
) |
$ |
$ |
|||||||
| |
|
|
|
|
|
|||||||
As at March 31, 2023 |
||||||||||||||||||||||||||||
US Dollar |
Pound Sterling |
Indian Rupees |
Australian Dollar |
Euro |
Other currencies |
Total |
||||||||||||||||||||||
| Cash and cash equivalents |
$ | — | $ | |||||||||||||||||||||||||
| Trade receivables |
||||||||||||||||||||||||||||
| Unbilled revenue |
— | — | ||||||||||||||||||||||||||
| Prepayments and other current assets |
||||||||||||||||||||||||||||
| Other non-current assets |
— | — | — | — | ||||||||||||||||||||||||
| Trade payables |
( |
) | ( |
) | ( |
) | — | ( |
) | ( |
) | ( |
) | |||||||||||||||
| Provisions and accrued expenses |
( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||||
| Pension and other employee obligations |
( |
) | ( |
) | — | — | ( |
) | ( |
) | ( |
) | ||||||||||||||||
| Lease liabilities |
— | — | — | — | ( |
) | ( |
) | ( |
) | ||||||||||||||||||
| Other liabilities |
( |
) | ( |
) | — | — | ( |
) | ( |
) | ( |
) | ||||||||||||||||
| Non-current liabilities |
( |
) | — | — | — | ( |
) | — | ( |
) | ||||||||||||||||||
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
| Net assets/ (liabilities) |
$ |
( |
) | ( |
) | ( |
) | $ |
||||||||||||||||||||
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
As at March 31, 2022 |
||||||||||||||||||||||||||||
US Dollar |
Pound Sterling |
Indian Rupees |
Australian Dollar |
Euro |
Other currencies |
Total |
||||||||||||||||||||||
| Cash and cash equivalents |
$ | — | $ | |||||||||||||||||||||||||
| Investment |
— | — | — | — | — | |||||||||||||||||||||||
| Trade receivables |
||||||||||||||||||||||||||||
| Unbilled revenue |
— | — | ||||||||||||||||||||||||||
| Prepayments and other current assets |
— | |||||||||||||||||||||||||||
| Other non-current assets |
— | — | — | — | ||||||||||||||||||||||||
| Trade payables |
( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||||
| Provisions and accrued expenses |
( |
) | ( |
) | ( |
) | — | ( |
) | ( |
) | ( |
) | |||||||||||||||
| Pension and other employee obligations |
— | ( |
) | — | — | ( |
) | ( |
) | ( |
) | |||||||||||||||||
| Lease liabilities |
— | — | — | — | ( |
) | ( |
) | ( |
) | ||||||||||||||||||
| Other liabilities |
— | ( |
) | — | — | ( |
) | — | ( |
) | ||||||||||||||||||
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
| Net assets/ (liabilities) |
$ |
( |
) |
( |
) |
( |
) |
$ |
||||||||||||||||||||
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Year ended March 31, |
||||||||||||
2023 |
2022 |
2021 |
||||||||||
| Revenue from top customer |
% | % | % | |||||||||
| Revenue from top five customers |
% | % | % | |||||||||
As at March 31, 2023 |
||||||||||||||||
Less than 1 Year |
1-2 years |
2-5 years |
Total |
|||||||||||||
| Trade payables |
$ | $ | — | $ | — | $ | ||||||||||
| Long-term debt (includes current portion) (1) |
||||||||||||||||
| Provisions and accrued expenses |
— | — | ||||||||||||||
| Other liabilities |
||||||||||||||||
| Other employee obligations |
— | — | ||||||||||||||
| Derivative financial instruments |
— | |||||||||||||||
| |
|
|
|
|
|
|
|
|||||||||
| Total (2) (3) |
$ |
$ |
$ |
$ |
||||||||||||
| |
|
|
|
|
|
|
|
|||||||||
| (1) | Before netting off debt issuance cost of $ |
| (2) | For contractual maturities of lease liabilities refer note 12. |
| (3) | Non-financial liabilities are explained in the financial instruments categories table above. |
As at March 31, 2022 |
||||||||||||||||
Less than 1 Year |
1-2 years |
2-5 years |
Total |
|||||||||||||
| Trade payables |
$ | $ | — | $ | — | $ | ||||||||||
| Provisions and accrued expenses |
— | — | ||||||||||||||
| Other liabilities |
— | — | ||||||||||||||
| Other employee obligations |
— | — | ||||||||||||||
| Derivative financial instruments |
— | |||||||||||||||
| |
|
|
|
|
|
|
|
|||||||||
| Total (1) (2) |
$ |
$ |
$ |
$ |
||||||||||||
| |
|
|
|
|
|
|
|
|||||||||
| (1) | For contractual maturities of lease liabilities refer note 12. |
| (2) | Non-financial liabilities are explained in the financial instruments categories table above. |
As at |
||||||||
March 31, 2023 |
March 31, 2022 |
|||||||
| Cash and cash equivalents |
$ | $ | ||||||
| Investments |
||||||||
| Long-term debt (includes current portion) (1) |
( |
) | — | |||||
| |
|
|
|
|||||
| Net cash position |
$ |
$ |
||||||
| |
|
|
|
|||||
| (1) | Before netting off debt issuance cost of $ |
As at |
||||||||
March 31, 2023 |
March 31, 2022 |
|||||||
Current: |
||||||||
Salaries and bonus |
$ | $ | ||||||
Pension |
||||||||
Withholding taxes on salary and statutory payables |
||||||||
Total |
$ |
$ |
||||||
Non-current: |
||||||||
Pension and other obligations |
$ | $ | ||||||
Total |
$ |
$ |
||||||
Year ended March 31, |
||||||||||||
2023 |
2022 |
2021 |
||||||||||
Salaries and bonus |
$ | $ | $ | |||||||||
Employee benefit plans: |
||||||||||||
Defined contribution plan |
||||||||||||
Defined benefit plan |
||||||||||||
Share-based compensation expense (Refer Note 24) |
||||||||||||
Total |
$ |
$ |
$ |
|||||||||
Year ended March 31, |
||||||||||||
2023 |
2022 |
2021 |
||||||||||
Cost of revenue |
$ | $ | $ | |||||||||
Selling and marketing expenses |
||||||||||||
General and administrative expenses |
||||||||||||
Total |
$ |
$ |
$ |
|||||||||
Year ended March 31, |
||||||||||||
2023 |
2022 |
2021 |
||||||||||
India |
$ | $ | $ | |||||||||
United States |
||||||||||||
United Kingdom |
||||||||||||
South Africa |
||||||||||||
Sri Lanka |
||||||||||||
Philippines |
||||||||||||
Total |
$ |
$ |
$ |
|||||||||
Year ended March 31, |
||||||||||||
2023 |
2022 |
2021 |
||||||||||
Service cost |
$ | $ | $ | |||||||||
Interest on the net defined benefit liability |
||||||||||||
Net gratuity cost |
$ |
$ |
$ |
|||||||||
As at |
||||||||
March 2023 |
March 2022 |
|||||||
Change in projected benefit obligations |
||||||||
Obligation at beginning of the year |
$ | $ | ||||||
Foreign currency translation |
( |
) | ( |
) | ||||
Service cost |
||||||||
Interest cost |
||||||||
Benefits paid |
( |
) | ( |
) | ||||
Business combinations |
||||||||
Actuarial (gain)/loss |
||||||||
From changes in demographic assumptions |
( |
) | ( |
) | ||||
From changes in financial assumptions |
( |
) | ||||||
From actual experience compared to assumptions |
( |
) | ||||||
Benefit obligation at end of the year |
$ |
$ |
||||||
Change in plan assets |
||||||||
Plan assets at beginning of the year |
$ | $ | ||||||
Foreign currency translation |
( |
) | ( |
) | ||||
Expected return on plan assets |
||||||||
Actual contributions |
||||||||
Benefits paid |
( |
) | ( |
) | ||||
Business combinations |
||||||||
Actuarial gain |
||||||||
Plan assets at end of the year |
$ |
$ |
||||||
Accrued pension liability |
||||||||
Current |
$ | $ | ||||||
Non-current |
||||||||
Net amount recognized |
$ |
$ |
||||||
Present value of funded defined benefit obligation |
$ | $ | ||||||
Fair value of plan assets |
( |
) | ( |
) | ||||
Present value of unfunded defined benefit obligation |
$ | $ | ||||||
Weighted average duration of defined benefit obligation (both funded and unfunded) |
||||||||
Year ended March 31, |
||||||||||||
2023 |
2022 |
2021 |
||||||||||
| Discount rate: |
||||||||||||
| India |
||||||||||||
| Philippines |
||||||||||||
| Sri Lanka |
||||||||||||
| Rate of increase in compensation level |
||||||||||||
| Expected rate of return on plan assets |
||||||||||||
India |
Philippines |
Sri Lanka |
||||||||||
| Discount rate: |
||||||||||||
| Increase in discount rate by 1% |
( |
)% | ( |
)% | ( |
)% | ||||||
| Decrease in discount rate by 1% |
% | % | % | |||||||||
| Rate of increase in compensation level: |
||||||||||||
| Increase in salary escalation rate by 1% |
% | % | % | |||||||||
| Decrease in salary escalation rate by 1% |
( |
)% | ( |
)% | ( |
)% | ||||||
Amount |
||||
| 2024 |
$ | |||
| 2025 |
||||
| 2026 |
||||
| 2027 |
||||
| 2028 |
||||
| Thereafter |
||||
| |
|
|||
$ |
||||
| |
|
|||
As at |
||||||||
March 31, 2023 |
March 31, 2022 |
|||||||
| Accrued expenses |
$ | $ | ||||||
| |
|
|
|
|||||
| Total |
$ |
$ |
||||||
| |
|
|
|
|||||
As at |
||||||||
March 31, 2023 |
March 31, 2022 |
|||||||
| Current: |
||||||||
| Payments in advance of services |
$ | $ | ||||||
| Advance billings |
||||||||
| Others |
||||||||
| |
|
|
|
|||||
| Total |
$ |
$ |
||||||
| |
|
|
|
|||||
| Non-current: |
||||||||
| Payments in advance of services |
$ | $ | ||||||
| Advance billings |
||||||||
| Others |
||||||||
| |
|
|
|
|||||
| Total |
$ |
$ |
||||||
| |
|
|
|
|||||
As at |
||||||||
March 31, 2023 |
March 31, 2022 |
|||||||
Current: |
||||||||
Withholding taxes and value added tax payables |
$ | $ | ||||||
Contingent consideration (Refer Note 4(a), 4(b) & 4(d)) |
||||||||
Other liabilities |
||||||||
Total |
$ |
$ |
||||||
Non-current: |
||||||||
Contingent consideration (Refer Note 4(a), 4(b) & 4(d)) |
||||||||
Other liabilities |
||||||||
Total |
$ |
$ |
||||||
Year ended March 31, |
||||||||||||
2023 |
2022 |
2021 |
||||||||||
Industry-specific |
$ | $ | $ | |||||||||
Finance and accounting |
||||||||||||
Customer experience services |
||||||||||||
Research and analytics |
||||||||||||
Auto claims |
||||||||||||
Others |
||||||||||||
Total |
$ |
$ |
$ |
|||||||||
Year ended March 31, |
||||||||||||
2023 |
2022 |
2021 |
||||||||||
Insurance* |
$ | $ | $ | |||||||||
Healthcare |
||||||||||||
Diversified businesses including manufacturing, retail, CPG, media and entertainment, and telecom |
||||||||||||
Travel and leisure |
||||||||||||
Shipping and logistics |
||||||||||||
Hi-tech and professional services |
||||||||||||
Banking and financial services |
||||||||||||
Utilities |
||||||||||||
Total |
$ |
$ |
$ |
|||||||||
| * | Includes revenue disclosed under the Auto Claims BPM segment in Note 28. |
Year ended March 31, |
||||||||||||
2023 |
2022 |
2021 |
||||||||||
Full-time-equivalent |
$ | $ | $ | |||||||||
Transaction* |
||||||||||||
Subscription |
||||||||||||
Fixed price |
||||||||||||
Others |
||||||||||||
Total |
$ |
$ |
$ |
|||||||||
| * | Includes revenue disclosed under the Auto Claims BPM segment in Note 28. |
Year ended March 31, |
||||||||||||
2023 |
2022 |
2021 |
||||||||||
| India |
$ | $ | $ | |
||||||||
| United States (1) |
||||||||||||
| Philippines |
||||||||||||
| UK (2)(3) |
||||||||||||
| South Africa |
||||||||||||
| Sri Lanka |
||||||||||||
| China |
||||||||||||
| Romania |
||||||||||||
| Spain |
||||||||||||
| Poland |
||||||||||||
| Costa Rica |
||||||||||||
| Australia |
||||||||||||
| Malaysia |
||||||||||||
| |
|
|
|
|
|
|||||||
| Total |
$ |
$ |
$ |
|||||||||
| |
|
|
|
|
|
|||||||
(1) |
|
(2) |
|
(3) |
Includes revenue disclosed under the Auto Claims BPM segment in Note 28. |
As at |
||||||||||||||||
March 31, 2023 |
||||||||||||||||
Sales Commission |
Transition activities |
Upfront payment / Others |
Total |
|||||||||||||
| Opening balance |
$ | $ | $ | $ | ||||||||||||
| Additions during the year |
||||||||||||||||
| Amortization/recognition during the year |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
| Impairment loss recognized during the year |
( |
) | ( |
) | ||||||||||||
| Translation adjustments |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
| |
|
|
|
|
|
|
|
|||||||||
| Closing balance |
$ |
$ |
$ |
$ |
||||||||||||
| |
|
|
|
|
|
|
|
|||||||||
As at |
||||||||||||||||
March 31, 2022 |
||||||||||||||||
Sales Commission |
Transition activities |
Upfront payment / Others |
Total |
|||||||||||||
| Opening balance |
$ | $ | $ | $ | ||||||||||||
| Additions during the year |
||||||||||||||||
| Amortization/recognition during the year |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
| Impairment loss recognized during the year |
( |
) | ( |
) | ||||||||||||
| Translation adjustments |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
| |
|
|
|
|
|
|
|
|||||||||
| Closing balance |
$ |
$ |
$ |
$ |
||||||||||||
| |
|
|
|
|
|
|
|
|||||||||
As at |
||||||||
March 31, 2023 |
March 31, 2022 |
|||||||
| Contract liabilities: |
||||||||
| Payments in advance of services |
$ | $ | |
|||||
| Advance billings |
||||||||
| Others |
||||||||
| |
|
|
|
|||||
| Total |
$ |
$ |
||||||
| |
|
|
|
|||||
As at |
||||||||
March 31, 2023 |
March 31, 2022 |
|||||||
| Payments in advance of services |
$ | $ | ||||||
| Advance billings |
||||||||
| Others |
||||||||
| |
|
|
|
|||||
| Total |
$ |
$ |
||||||
| |
|
|
|
|||||
As at March 31, 2023 |
||||||||||||||||||||
Less than 1 Year |
1-2 years |
2-5 years |
More than 5 years |
Total |
||||||||||||||||
| Transaction price allocated to remaining performance obligations |
$ | $ | $ | $ | $ | |||||||||||||||
As at March 31, 2022 |
||||||||||||||||||||
Less than 1 Year |
1-2 years |
2-5 years |
More than 5 years |
Total |
||||||||||||||||
| Transaction price allocated to remaining performance obligations |
$ | $ | $ | $ | $ | |||||||||||||||
| (i) | contracts with an original expected length of one year or less; and |
| (ii) | contracts for which the Company recognizes revenue at the amount to which the Company has the right to invoice for services performed. |
Year ended March 31, |
||||||||||||
2023 |
2022 |
2021 |
||||||||||
| Employee cost |
$ | $ | $ | |||||||||
| Repair payments |
||||||||||||
| Facilities cost |
||||||||||||
| Depreciation |
||||||||||||
| Legal and professional expenses |
||||||||||||
| Travel expenses |
||||||||||||
| Others |
||||||||||||
| |
|
|
|
|
|
|||||||
| Total cost of revenue, selling and marketing and general and administrative expenses |
$ |
$ |
$ |
|||||||||
| |
|
|
|
|
|
|||||||
Year ended March 31, |
||||||||||||
2023 |
2022 |
2021 |
||||||||||
| Interest expense on lease liabilities |
$ | |
$ | $ | ||||||||
| Interest expense |
||||||||||||
| Loss/(gain) on interest rate swaps |
||||||||||||
| |
|
|
|
|
|
|||||||
| Total |
$ |
$ |
$ |
|||||||||
| |
|
|
|
|
|
|||||||
Year ended March 31, |
||||||||||||
2023 |
2022 |
2021 |
||||||||||
| Net gain arising on financial assets designated as FVTPL |
$ | $ | $ | |||||||||
| Interest income |
||||||||||||
| Others, net |
||||||||||||
| |
|
|
|
|
|
|||||||
| Total |
$ |
$ |
$ |
|||||||||
| |
|
|
|
|
|
|||||||
Year ended March 31, |
||||||||||||
2023 |
2022 |
2021 |
||||||||||
| Share-based compensation expense recorded in: |
$ | $ | $ | |||||||||
| Cost of revenue |
||||||||||||
| Selling and marketing expenses |
||||||||||||
| General and administrative expenses |
||||||||||||
| |
|
|
|
|
|
|||||||
| Total share-based compensation expense |
$ |
$ |
$ |
|||||||||
| |
|
|
|
|
|
|||||||
| (i) | Movements in the number of RSUs dependent on non-market performance condition outstanding under the 2006 Incentive Award Plan and the 2016 Incentive Award Plan and their related weighted average fair values are as follow: |
Shares |
Weighted average fair value |
Aggregate intrinsic value |
||||||||||
Outstanding as at March 31, 2021 |
$ | $ | ||||||||||
Granted |
||||||||||||
Exercised |
( |
) | ||||||||||
Forfeited |
( |
) | ||||||||||
Outstanding as at March 31, 2022 |
$ | $ | ||||||||||
Granted |
||||||||||||
Exercised |
( |
) | ||||||||||
Forfeited |
( |
) | ||||||||||
Outstanding as at March 31, 2023 |
$ | $ | ||||||||||
RSUs exercisable |
$ | $ | ||||||||||
| (ii) | The 2006 Incentive Award Plan and the 2016 Incentive Award Plan also allow for the grant of RSUs based on the market price of the Company’s shares achieving a specified target over a period of time. The fair value of market-based share awards is determined using Monte-Carlo simulation. |
Shares |
Weighted average fair value |
Aggregate intrinsic value |
||||||||||
Outstanding as at March 31, 2021 |
$ | $ | ||||||||||
Exercised |
( |
) | ||||||||||
Outstanding as at March 31, 2022 |
$ | $ | ||||||||||
Exercised |
( |
) | ||||||||||
Outstanding as at March 31, 2023 |
$ | |||||||||||
RSUs exercisable |
$ | $ | ||||||||||
| a. | for RSUs granted in April 2014, the vesting date has been extended to the fifth anniversary of the grant date (i.e. April 2019). |
| b. | for RSUs granted in April 2015, the vesting date has been extended to the fourth anniversary of the grant date (i.e. April 2019). |
| c. | for RSUs granted in April 2016, the vesting date has been extended to the fourth anniversary of the grant date (i.e. April 2020). |
| (iii) | RSUs related to total shareholder’s return (“TSR”) |
Shares |
Weighted Average fair value |
Aggregate Intrinsic value |
||||||||||
Outstanding as at March 31, 2021 |
$ | $ | ||||||||||
Granted |
||||||||||||
Exercised |
( |
) | ||||||||||
Forfeited |
( |
) | ||||||||||
Lapsed |
( |
) | ||||||||||
Outstanding as at March 31, 2022 |
$ | $ | ||||||||||
Granted |
||||||||||||
Exercised |
( |
) | ||||||||||
Forfeited |
( |
) | ||||||||||
Lapsed |
( |
) | ||||||||||
Outstanding as at March 31, 2023 |
||||||||||||
RSUs exercisable |
$ | $ | ||||||||||
Shares |
Weighted average fair value |
Aggregate intrinsic value |
||||||||||
Outstanding as at March 31, 2021 |
$ | $ | ||||||||||
Granted |
||||||||||||
Exercised |
( |
) | ||||||||||
Forfeited |
( |
) | ||||||||||
Outstanding as at March 31, 2022 |
$ | $ | ||||||||||
Granted |
||||||||||||
Exercised |
( |
) | ||||||||||
Forfeited |
( |
) | ||||||||||
Outstanding as at March 31, 2023 |
||||||||||||
PSUs exercisable |
$ | $ | ||||||||||
Year ended March 31, |
||||||||||||
2023 |
2022 |
2021 |
||||||||||
| Domestic |
$ | ( |
) | $ | ( |
) | $ | ( |
) | |||
| Foreign |
||||||||||||
| |
|
|
|
|
|
|||||||
| Profit before income taxes |
$ |
$ |
$ |
|||||||||
| |
|
|
|
|
|
|||||||
Year ended March 31, |
||||||||||||
2023 |
2022 |
2021 |
||||||||||
| Current taxes |
||||||||||||
| Domestic taxes |
$ | $ | — | $ | — | |||||||
| Foreign taxes |
||||||||||||
| |
|
|
|
|
|
|||||||
| |
|
|
|
|
|
|||||||
| Deferred taxes |
||||||||||||
| Domestic taxes |
— | — | ||||||||||
| Foreign taxes |
( |
) | ( |
) | ( |
) | ||||||
| |
|
|
|
|
|
|||||||
| ( |
) | ( |
) | ( |
) | |||||||
| |
|
|
|
|
|
|||||||
| Income tax expense |
$ |
$ |
$ |
|||||||||
| |
|
|
|
|
|
|||||||
Year ended March 31, |
||||||||||||
2023 |
2022 |
2021 |
||||||||||
| Current taxes: |
||||||||||||
| Excess tax deductions related to share-based payments |
( |
) | ( |
) | ( |
) | ||||||
| |
|
|
|
|
|
|||||||
| $ | ( |
) | $ | ( |
) | $ | ( |
) | ||||
| |
|
|
|
|
|
|||||||
| Deferred taxes: |
||||||||||||
| Excess tax deductions related to share-based payments |
( |
) | ( |
) | ( |
) | ||||||
| |
|
|
|
|
|
|||||||
| $ | ( |
) | $ | ( |
) | $ | ( |
) | ||||
| |
|
|
|
|
|
|||||||
| Total income tax recognized directly in equity |
$ |
( |
) |
$ |
( |
) |
$ |
( |
) | |||
| |
|
|
|
|
|
|||||||
Year ended March 31, |
||||||||||||
2023 |
2022 |
2021 |
||||||||||
| Current taxes |
||||||||||||
| Deferred taxes: |
||||||||||||
| Unrealized gain/(loss) on cash flow hedging derivatives |
( |
) | ||||||||||
| Pension liability |
( |
) | ||||||||||
| |
|
|
|
|
|
|||||||
| Total income tax recognized directly in other comprehensive income |
$ |
( |
) |
$ |
$ |
|||||||
| |
|
|
|
|
|
|||||||
Year ended March 31, |
||||||||||||
2023 |
2022 |
2021 |
||||||||||
| Profit before income taxes |
$ | $ | $ | |||||||||
| Income tax expense at tax rates applicable to individual entities |
||||||||||||
| Effect of: |
||||||||||||
| Items not deductible for tax |
||||||||||||
| Exempt income |
( |
) | ( |
) | ( |
) | ||||||
| Losses in respect of which deferred tax asset not recognized due to uncertainty and ineligibility to carry forward |
||||||||||||
| Recognition of unutilized tax benefits / Unrecognized losses utilized |
( |
) | ( |
) | ( |
) | ||||||
| Temporary difference that will reverse during tax holiday period |
— | |||||||||||
| Change in tax rate and law |
( |
) | ( |
) | ||||||||
| State taxes |
||||||||||||
| Employment related tax incentive |
( |
) | ( |
) | ( |
) | ||||||
| Others, net |
( |
) | ( |
) | ( |
) | ||||||
| |
|
|
|
|
|
|||||||
| Income tax expense |
$ |
$ |
$ |
|||||||||
| |
|
|
|
|
|
|||||||
Opening Balance |
Additions due to acquisition |
Recognized in statement of income |
Recognized in equity |
Recognized in/ Reclassified from other comprehensive income |
Foreign currency translation |
Closing balance |
||||||||||||||||||||||
Deferred tax assets: |
||||||||||||||||||||||||||||
Property and equipment |
$ | $ | $ | ( |
) | $ | — | $ | — | $ | ( |
) | $ | |||||||||||||||
Net operating loss carry forward |
( |
) | — | — | ( |
) | ||||||||||||||||||||||
Accruals deductible on actual payment |
( |
) | — | ( |
) | ( |
) | |||||||||||||||||||||
Share-based compensation expense |
— | — | ( |
) | ||||||||||||||||||||||||
Others |
( |
) | — | — | ( |
) | ||||||||||||||||||||||
Total deferred tax assets |
$ |
$ |
$ |
$ |
$ |
( |
) |
$ |
( |
) |
$ |
|||||||||||||||||
Deferred tax liabilities: |
||||||||||||||||||||||||||||
Intangible assets |
( |
) | — | — | ( |
) | ||||||||||||||||||||||
Unrealized gain/(loss) on cash flow hedging and investments |
— | ( |
) | — | ( |
) | ( |
) | ( |
) | ||||||||||||||||||
Others |
— | ( |
) | — | — | ( |
) | |||||||||||||||||||||
Total deferred tax liabilities |
$ |
$ |
$ |
( |
) |
$ |
— |
$ |
( |
) |
$ |
( |
) |
$ |
||||||||||||||
Net deferred tax assets/(liabilities) |
$ |
$ |
( |
) |
$ |
$ |
$ |
$ |
( |
) |
$ |
|||||||||||||||||
Opening Balance |
Additions due to acquisition |
Recognized in statement of income |
Recognized in equity |
Recognized in/ Reclassified from other comprehensive income |
Foreign currency translation |
Closing balance |
||||||||||||||||||||||
Deferred tax assets: |
||||||||||||||||||||||||||||
Property and equipment |
$ | $ | $ | $ | — | $ | — | $ | ( |
) | $ | |||||||||||||||||
Net operating loss carry forward |
— | ( |
) | — | — | ( |
) | |||||||||||||||||||||
Accruals deductible on actual payment |
— | ( |
) | ( |
) | |||||||||||||||||||||||
Share-based compensation expense |
— | — | ( |
) | ||||||||||||||||||||||||
Others |
— | ( |
) | — | — | ( |
) | |||||||||||||||||||||
Total deferred tax assets |
$ |
$ |
$ |
$ |
$ |
( |
) |
$ |
( |
) |
$ |
|||||||||||||||||
Deferred tax liabilities: |
||||||||||||||||||||||||||||
Intangible assets |
— | — | ( |
) | ||||||||||||||||||||||||
Unrealized gain/(loss) on cash flow hedging and investments |
— | ( |
) | — | ( |
) | ||||||||||||||||||||||
Others |
— | — | — | ( |
) | |||||||||||||||||||||||
Total deferred tax liabilities |
$ |
$ |
$ |
$ |
— |
$ |
$ |
( |
) |
$ |
||||||||||||||||||
Net deferred tax assets/(liabilities) |
$ |
$ |
$ |
$ |
$ |
( |
) |
$ |
( |
) |
$ |
|||||||||||||||||
Opening Balance |
Additions due to acquisition |
Recognized in statement of income |
Recognized in equity |
Recognized in/ Reclassified from other comprehensive income |
Foreign currency translation |
Closing balance |
||||||||||||||||||||||
Deferred tax assets: |
||||||||||||||||||||||||||||
Property and equipment |
$ | $ | — | $ | $ | — | $ | — | $ | $ | ||||||||||||||||||
Net operating loss carry forward |
— | — | — | |||||||||||||||||||||||||
Accruals deductible on actual payment |
— | ( |
) | — | ||||||||||||||||||||||||
Share-based compensation expense |
— | — | ||||||||||||||||||||||||||
Minimum alternate tax |
— | ( |
) | — | — | |||||||||||||||||||||||
Others |
— | — | — | |||||||||||||||||||||||||
Total deferred tax assets |
$ |
$ |
— |
$ |
$ |
$ |
$ |
$ |
||||||||||||||||||||
Deferred tax liabilities: |
||||||||||||||||||||||||||||
Intangible assets |
— | — | ||||||||||||||||||||||||||
Unrealized gain/(loss) on cash flow hedging and investments |
— | ( |
) | — | ( |
) | ||||||||||||||||||||||
Others |
— | — | — | |||||||||||||||||||||||||
Total deferred tax liabilities |
$ |
$ |
— |
$ |
$ |
— |
$ |
$ |
$ |
|||||||||||||||||||
Net deferred tax assets/(liabilities) |
$ |
$ |
— |
$ |
$ |
$ |
( |
) |
$ |
$ |
||||||||||||||||||
As at |
||||||||
March 31, 2023 |
March 31, 2022 |
|||||||
Deferred tax assets |
||||||||
Deferred tax liabilities |
( |
) | ( |
) | ||||
Net deferred tax assets |
$ |
$ |
||||||
Year ended March 31, |
||||||||||||
2023 |
2022 |
2021 |
||||||||||
| Numerator: |
||||||||||||
| Profit after tax |
$ | $ | $ | |||||||||
| Denominator: |
||||||||||||
| Basic weighted average ordinary shares outstanding |
||||||||||||
| Dilutive impact of equivalent share-based options and RSUs |
||||||||||||
| Diluted weighted average ordinary shares outstanding |
||||||||||||
| Direct subsidiaries |
Step subsidiaries |
Place of incorporation | ||
| WNS Global Services Netherlands B.V. |
The Netherlands | |||
WNS Global Services (Romania) S.R.L. |
Romania | |||
| WNS North America Inc. |
Delaware, USA | |||
| WNS Business Consulting Services Private Limited | India | |||
| WNS Global Services Inc. | Delaware, USA | |||
| WNS BPO Services Costa Rica, S.R.L. | Costa Rica | |||
| Denali Sourcing Services Inc. | Delaware, USA | |||
| WNS Assistance Limited (previously WNS Workflow Technologies Limited) | United Kingdom | |||
| WNS Assistance (Legal) Limited | United Kingdom | |||
| Accidents Happen Assistance Limited | United Kingdom | |||
| WNS Legal Assistance LLP | United Kingdom | |||
| WNS (Mauritius) Limited |
Mauritius | |||
| WNS Capital Investment Limited | Mauritius | |||
| - WNS Customer Solutions (Singapore) Private Limited |
Singapore | |||
| - WNS Global Services (Australia) Pty Ltd |
Australia | |||
| - WNS New Zealand Limited |
New Zealand | |||
| - Business Applications Associates Beijing Ltd |
China | |||
| - WNS Global Services Malaysia Sdn. Bhd. (1) |
Malaysia | |||
| WNS Global Services Private Limited (2) (3) (4) |
India | |||
| - Vuram Technology Solutions Private Limited (4) |
India | |||
| - Vuram Australia Pty Ltd (4) |
Australia | |||
| - Vuram Canada Inc. (4) |
Canada | |||
| - Vuram Technologies B.V. (4) |
The Netherlands | |||
| - Vuram, Inc. (4)(5) |
USA | |||
| - Solucionesen Tecnologia Vuram Mexico, S De R.L. de C.V. (4)(5) |
Mexico | |||
| - Vuram UK Private Limited (4) |
United Kingdom | |||
| - WNS Global Services (UK) Limited (6) (9) (10) |
United Kingdom | |||
| - WNS Global Services SA (Pty) Limited |
South Africa | |||
| - WNS B-BBEE Staff Share Trust (7) |
South Africa | |||
| - Ucademy (Pty) Limited |
South Africa | |||
| - WNS South Africa (Pty) Limited (8) |
South Africa | |||
| - The Smart Cube Limited (9) |
United Kingdom | |||
| - Smart Cube India Private Limited |
India | |||
| - The Smart Cube S.R.L. |
Romania | |||
| - The Smart Cube (Switzerland) GmbH |
Switzerland | |||
| - The Smart Cube Inc. |
USA | |||
| - The Smart Cube Consulting Services (Dalian) Co. Ltd. |
China | |||
| - OptiBuy sp. z o.o. (10) |
Poland | |||
| - Nextbuy sp. z o.o. |
Poland | |||
| - OptiBuy GmbH |
Germany | |||
| - MTS HealthHelp Inc. |
Delaware, USA | |||
| - HealthHelp Holdings LLC |
Delaware, USA | |||
| - HealthHelp LLC |
Delaware, USA | |||
| - WNS-HealthHelp Philippines Inc. |
Philippines | |||
| - Value Edge Inc. |
Delaware, USA | |||
| - Value Edge AG. |
Switzerland | |||
| -VE Value Edge GmbH |
Germany | |||
| WNS Global Services (Private) Limited | Sri Lanka | |||
| WNS Global Services (Dalian) Co. Ltd. | China | |||
| WNS Global Services (UK) International Limited | United Kingdom | |||
| - WNS Global Services North Americas Inc. |
Delaware, USA | |||
| - WNS Global Services AG (11) |
Switzerland | |||
| - WNS Global Services Lisbon Unipessoal LDA (12) |
Portugal | |||
| WNS Business Consulting Netherlands B.V. (13) |
The Netherlands | |||
| WNS Global Services Philippines Inc. | The Philippines | |||
| WNS Gestion des Processus d’Affaire Inc. |
Canada | |||
| WNS BPM Americas Holdings Inc. (14) |
Delaware, USA | |||
| WNS BPM Americas LLC (15) |
Delaware, USA | |||
(1) |
WNS Global Services Malaysia Sdn. Bhd., a wholly-owned subsidiary of WNS Customer Solutions (Singapore) Private Limited, was incorporated on July 21, 2022. |
(2) |
WNS Global Services Private Limited is held jointly by WNS (Mauritius) Limited, WNS Global Services Netherlands B.V. and WNS Customer Solutions (Singapore) Private Limited. The percentage of holding of WNS (Mauritius) Limited is |
(3) |
On August 1, 2021, the Company acquired all outstanding shares of MOL Information Processing Services (I) Private Limited. The name of the entity was changed to WNS Information Services (India) Private Limited with effect from December 1, 2021. WNS Information Services (India) Private Limited was merged with and into WNS Global Services Private Limited pursuant to a Scheme of Amalgamation approved by the National Company Law Tribunal dated August 4, 2022 with effect from August 1, 2021. |
(4) |
On July 1, 2022, WNS Global Services Private Limited acquired all ownership interests of Vuram Technology Solutions Private Limited, including its subsidiaries that existed on that date. |
(5) |
Solucionesen Tecnologia Vuram Mexico, S De R.L. de C.V is jointly held by Vuram Technology Solutions Private Limited and Vuram, Inc. The percentage of holding of Vuram Technology Solutions Private Limited is |
(6) |
WNS Global Services (UK) Limited is jointly held by WNS Global Services Private Limited and WNS (Holdings) Limited. The percentage of holding of WNS Global Services Private Limited is |
(7) |
The WNS B-BBEE Staff Share Trust (the “trust”) was registered on April 26, 2017 in relation to the grant of share appreciation rights by WNS Global Services SA (Pty) Limited. During the year ended March 31, 2020, the trust subscribed to one participating preference share issued by WNS Global Services SA (Pty) Limited, which entitles the trust to |
(8) |
WNS South Africa (Pty) Limited was incorporated as a subsidiary of WNS Global Services SA (Pty) Limited on December 19, 2018. The name of the entity was changed to WNS South Africa (Pty) Ltd with effect from September 25, 2019. |
(9) |
On December 16, 2022, WNS Global Services (UK) Limited acquired all ownership interests of The Smart Cube Limited, including its subsidiaries that existed on that date. |
(10) |
On December 14, 2022, WNS Global Services (UK) Limited acquired all ownership interests of OptiBuy sp. z o.o., including its subsidiaries that existed on that date. |
(11) |
WNS Global Services AG, a wholly-owned subsidiary of WNS Global Services (UK) International Limited, was incorporated on July 16, 2021. |
(12) |
WNS Global Services Lisbon Unipessoal LDA, a wholly-owned subsidiary of WNS Global Services (UK) International Limited, was incorporated on August 13, 2021. |
(13) |
WNS Business Consulting Netherlands B.V., a wholly-owned subsidiary of WNS (Holdings) Limited, was incorporated on March 17, 2020, pursuant to the execution of deed of demerger on March 16, 2020. The shares of WNS Global Services Philippines Inc. were transferred from WNS Global Services Netherlands B.V. to WNS Business Consulting Netherlands B.V. pursuant to the proposal of demerger. As at March 31, 2023, the entity is jointly held by WNS (Holdings) Limited and WNS Global Services Private Limited. The percentage of holding of WNS (Holdings) Limited is |
(14) |
WNS BPM Americas Holdings Inc. , a wholly-owned subsidiary of WNS (Holdings) Limited, was incorporated on March 1, 2023 |
(15) |
WNS BPM Americas LLC, a wholly-owned subsidiary of WNS BPM Americas Holdings Inc, was incorporated on March 3, 2023. |
| Key management personnel |
||
| Adrian T. Dillon (Ceased to be Chairman from September 20, 2021) | Chairman | |
| Timothy L. Main (Appointed on September 21, 2021) | Chairman | |
| Keshav R. Murugesh | Director and Group Chief Executive Officer | |
| Jason Liberty | Director | |
| Swaminathan Rajamani | Chief People Officer | |
| Gautam Barai (Resigned on February 15, 2023, effective May 15, 2023) | Chief Operating Officer | |
| Sanjay Puria | Group Chief Financial Officer | |
| Gareth Williams (Ceased to be Director from December 31, 2022) | Director | |
| Michael Menezes (Ceased to be Director from December 31, 2022) | Director | |
| John Freeland | Director | |
| Françoise Gri | Director | |
| Keith Haviland | Director | |
| Mario P. Vitale | Director | |
| Lan Tu (Appointed on February 4, 2022) | Director | |
Year ended March 31, |
||||||||||||
| Nature of transaction with related parties |
2023 |
2022 |
2021 |
|||||||||
| Key management personnel* |
||||||||||||
| Remuneration and short-term benefits |
$ | $ | $ | |||||||||
| Defined contribution plan |
||||||||||||
| Other benefits |
||||||||||||
| Share-based compensation expense |
||||||||||||
| * | Defined benefit plan related costs are not disclosed as these are determined for the Company as a whole. |
Year ended March 31, 2023 |
||||||||||||||||
WNS Global BPM |
WNS Auto Claims BPM |
Inter segments (1) |
Total |
|||||||||||||
| Revenue from external customers |
$ | $ | $ | — | $ | |||||||||||
| Segment revenue |
$ | $ | $ | ( |
) | $ | ||||||||||
| Payments to repair centers |
— | — | ||||||||||||||
| |
|
|
|
|
|
|
|
|||||||||
| Revenue less repair payments (non-GAAP) |
( |
) | ||||||||||||||
| Depreciation |
— | |||||||||||||||
| Other costs |
( |
) | ||||||||||||||
| |
|
|
|
|
|
|
|
|||||||||
| Segment operating profit/(loss) |
( |
) | — | |||||||||||||
| Other income, net |
( |
) | ( |
) | — | ( |
) | |||||||||
| Finance expense |
— | |||||||||||||||
| |
|
|
|
|
|
|
|
|||||||||
| Segment profit/(loss) before income taxes |
( |
) | — | |||||||||||||
| Income tax expense |
( |
) | — | |||||||||||||
| |
|
|
|
|
|
|
|
|||||||||
| Segment profit/(loss) |
( |
) | — | |||||||||||||
| Amortization of intangible assets |
— | — | — | |||||||||||||
| Share-based compensation expense |
— | — | — | |||||||||||||
| |
|
|||||||||||||||
| Profit after tax |
$ | |||||||||||||||
| |
|
|||||||||||||||
| Addition to non-current assets (2) |
$ | $ | $ | ( |
) | $ | ||||||||||
| Total assets, net of elimination |
— | |||||||||||||||
| Total liabilities, net of elimination |
$ | $ | $ | — | $ | |||||||||||
(1) |
Transactions between inter segments represent business process management services rendered by WNS Global BPM to WNS Auto Claims BPM. |
(2) |
Addition to non-current assets include additions made to property and equipment, right-of-use |
Year ended March 31, 2022 |
||||||||||||||||
WNS Global BPM |
WNS Auto Claims BPM |
Inter segments (1) |
Total |
|||||||||||||
Revenue from external customers |
$ | $ | $ | — | $ | |
||||||||||
Segment revenue |
$ | $ | $ | ( |
) | $ | ||||||||||
Payments to repair centers |
— | — | ||||||||||||||
Revenue less repair payments (non-GAAP) |
( |
) | ||||||||||||||
Depreciation |
— | |||||||||||||||
Other costs |
( |
) | ||||||||||||||
Segment operating profit/(loss) |
( |
) | — | |||||||||||||
Other income, net |
( |
) | ( |
) | — | ( |
) | |||||||||
Finance expense |
— | |||||||||||||||
Segment profit/(loss) before income taxes |
( |
) | — | |||||||||||||
Income tax expense |
( |
) | — | |||||||||||||
Segment profit/(loss) |
( |
) | — | |||||||||||||
Amortization of intangible assets |
||||||||||||||||
Share-based compensation expense |
||||||||||||||||
Profit after tax |
$ | |||||||||||||||
Addition to non-current assets (2) |
$ | $ | $ | — | $ | |||||||||||
Total assets, net of elimination |
— | |||||||||||||||
Total liabilities, net of elimination |
$ | $ | $ | — | $ | |||||||||||
(1) |
Transactions between inter segments represent business process management services rendered by WNS Global BPM to WNS Auto Claims BPM. |
(2) |
Addition to non-current assets include additions made to property and equipment, right-of-use |
Year ended March 31, 2021 |
||||||||||||||||
WNS Global BPM |
WNS Auto Claims BPM |
Inter segments (1) |
Total |
|||||||||||||
Revenue from external customers |
$ | |
$ | $ | — | $ | ||||||||||
Segment revenue |
$ | $ | $ | ( |
) | $ | ||||||||||
Payments to repair centers |
— | — | ||||||||||||||
Revenue less repair payments (non-GAAP) |
( |
) | ||||||||||||||
Depreciation |
— | |||||||||||||||
Other costs |
( |
) | ||||||||||||||
Segment operating profit/(loss) |
( |
) | — | |||||||||||||
Other income, net |
( |
) | ( |
) | — | ( |
) | |||||||||
Finance expense |
— | |||||||||||||||
Segment profit/(loss) before income taxes |
( |
) | — | |||||||||||||
Income tax expense |
— | |||||||||||||||
Segment profit/(loss) |
( |
) | — | |||||||||||||
Amortization of intangible assets |
||||||||||||||||
Share-based compensation expense |
||||||||||||||||
Profit after tax |
$ | |||||||||||||||
Addition to non-current assets (2) |
$ | $ | $ | — | $ | |||||||||||
Total assets, net of elimination |
— | |||||||||||||||
Total liabilities, net of elimination |
$ | $ | $ | — | $ | |||||||||||
(1) |
Transactions between inter segments represent business process management services rendered by WNS Global BPM to WNS Auto Claims BPM. |
(2) |
Addition to non-current assets include additions made to property and equipment, right-of-use |
Year ended March 31, |
||||||||||||
2023 |
2022 |
2021 |
||||||||||
Jersey, Channel Islands |
$ | $ | $ | |||||||||
North America (primarily the US) |
||||||||||||
UK |
||||||||||||
Australia |
||||||||||||
Europe (excluding the UK) |
||||||||||||
South Africa |
||||||||||||
Rest of the world |
||||||||||||
Total |
$ |
$ |
$ |
|||||||||
As at March 31, |
||||||||
2023 |
2022 |
|||||||
Jersey, Channel Islands |
$ | $ | ||||||
India |
||||||||
Philippines |
||||||||
South Africa |
||||||||
North America |
||||||||
UK |
||||||||
Rest of the world |
||||||||
Total |
$ |
$ |
||||||
As at March 31, |
||||||||||||
2023 |
2022 |
% Change |
||||||||||
Total equity attributable to the equity shareholders of the Company |
$ | $ | % | |||||||||
As percentage of total capital |
% | % | ||||||||||
Long-term debt (1) |
( |
)% | ||||||||||
Total debt |
$ | $ | ( |
)% | ||||||||
As percentage of total capital |
% | |||||||||||
Total capital (debt and equity) |
$ |
$ |
% | |||||||||
| (1) | Before netting off debt issuance cost of $ |
Exhibit 8.1
WNS (HOLDINGS) LIMITED
LIST OF SUBSIDIARIES
| S/No. |
Name of Subsidiary |
Place of Incorporation | ||
| 1. | WNS Global Services Netherlands B.V. | Netherlands | ||
| 2. | WNS North America, Inc. | Delaware, USA | ||
| 3. | WNS Global Services (UK) Limited | United Kingdom | ||
| 4. | WNS (Mauritius) Limited | Mauritius | ||
| 5. | WNS Global Services (Romania) S.R.L. | Romania | ||
| 6. | WNS Global Services Philippines, Inc. | Philippines | ||
| 7. | WNS Business Consulting Services Private Limited | India | ||
| 8. | WNS Assistance Limited | United Kingdom | ||
| 9. | Accidents Happen Assistance Limited | United Kingdom | ||
| 10. | WNS Global Services LLC | Delaware, USA | ||
| 11. | Denali Sourcing Services LLC | Delaware, USA | ||
| 12. | Business Applications Associates Beijing Limited | China | ||
| 13. | WNS Capital Investment Limited | Mauritius | ||
| 14. | WNS Global Services (Private) Limited | Sri Lanka | ||
| 15. | WNS Customer Solutions (Singapore) Private Limited | Singapore | ||
| 16. | WNS Global Services Private Limited | India | ||
| 17. | WNS BPO Services Costa Rica, S.R.L. | Costa Rica | ||
| 18. | WNS Global Services (Australia) Pty Ltd | Australia | ||
| 19. | WNS Mauritius Limited ME (Branch) | Dubai Airport Free Zone | ||
| 20. | WNS Cares Foundation | India | ||
| 21. | WNS Global Services (UK) Limited (Branch) Poland | Poland | ||
| 22. | WNS Global Services SA (Pty) Limited | South Africa | ||
| 23. | Business Applications Associates Beijing Limited Guangzhou Branch (Branch) | China | ||
| 24. | WNS Global Services (Dalian) Co. Ltd. | China | ||
| 25. | WNS Global Services Private Limited (Singapore Branch) | Singapore | ||
| 26. | WNS Legal Assistance LLP | United Kingdom | ||
| 27. | WNS Assistance (Legal) Limited | United Kingdom | ||
| 28. | WNS Global Services (UK) Limited London (Bucharest Branch) | Romania | ||
| 29. | WNS Global Services (UK) Limited (France Branch) | France | ||
| 30. | WNS Global Services Netherlands B.V Merkezi Hollanda Istanbul Merkez Subesi (Turkey Branch) | Turkey | ||
| 31. | MTS HealthHelp Inc. | Delaware, USA | ||
| 32. | HealthHelp Holdings LLC | Delaware, USA | ||
| 33. | HealthHelp LLC | Delaware, USA | ||
| 34. | Value Edge AG | Switzerland | ||
| 35. | Value Edge Inc. | Delaware, USA | ||
| 36. | VE Value Edge Gmbh | Germany | ||
| 37. | WNS Global Services (Dalian) Co. Ltd. Shanghai Branch | China | ||
| 38. | Ucademy (Pty) Ltd | South Africa | ||
| 39. | The WNS B-BBEE Staff Share Trust | South Africa | ||
| 40. | WNS Global Services Netherlands B.V. (Ireland Branch) | Ireland | ||
| 41. | WNS New Zealand Limited | New Zealand | ||
| 42. | WNS Global Services (UK) International Limited | United Kingdom | ||
| 43. | WNS-HealthHelp Philippines Inc. | Philippines | ||
| 44. | WNS Global Services North Americas Inc. | Delaware, USA | ||
| 45. | WNS South Africa (Pty) Ltd. | South Africa | ||
| 46. | WNS Global Services (UK) Limited (SUCURSAL EN ESPANA Branch) | Spain | ||
| 47. | WNS Business Consulting Netherlands B.V. | Netherlands | ||
| 48. | WNS Gestion des Processus d’Affaire Inc. | Canada | ||
| 49. | WNS Global Services Lisbon Unipessoal LDA | Portugal | ||
| 50. | WNS Global Services (Romania) SRL-Punct De Lucru Sibiu (Branch) | Romania | ||
| 51. | WNS Global Services AG | Switzerland | ||
| 52. | WNS Global Services Malaysia Sdn. Bhd(3) | Malaysia | ||
| 53. | Vuram Technology Solutions Private Limited(4) | India | ||
| 54. | Vuram Australia Pty Ltd | Australia | ||
| 55. | Vuram Canada Inc. | Canada | ||
| 56. | Vuram Technologies B.V. | Netherlands | ||
| 57. | Vuram, Inc. | USA | ||
| 58. | Soluciones en Tecnologia Vuram Mexico, S De R.L. de C.V. | Mexico | ||
| 59. | Vuram UK Private Limited | United Kingdom | ||
| 60. | The Smart Cube Limited(5) | United Kingdom | ||
| 61. | The Smart Cube India Private Limited | India | ||
| 62. | The Smart Cube S.R.L. | Romania | ||
| 63. | The Smart Cube (Switzerland) GmbH | Switzerland | ||
| 64. | The Smart Cube Inc. | USA | ||
| 65. | The Smart Cube Consulting Services (Dalian) Co. Ltd. | China | ||
| 66. | OptiBuy sp. z o.o.(5) | Poland | ||
| 67. | Nextbuy sp. z o.o. | Poland | ||
| 68. | Optibuy GmbH | Germany | ||
| 69. | WNS BPM Americas Holdings Inc.(6) | USA | ||
| 70. | WNS BPM Americas LLC(7) | USA | ||
Notes:
| (1) | WNS Denali Sourcing Services, Inc. a fully owned subsidiary of Denali Sourcing Services Inc. has been dissolved with effect from April 20, 2022. |
| (2) | WNS Information Services (India) Private Limited which was a subsidiary of WNS (Mauritius) Limited was amalgamated (Merger by Absorption) with WNS Global Services Private Limited effective from August 30, 2022. |
| (3) | WNS Global Services Malaysia Sdn. Bhd., a wholly-owned subsidiary WNS Customer Solutions (Singapore) Private Limited, was incorporated in Malaysia on July 21, 2022. |
| (4) | On July 1, 2022, we acquired Vuram Technology Solutions Private Limited. |
| (5) | On December 16, 2022, we acquired The Smart Cube Limited & OptiBuy sp.z.o.o. |
| (6) | WNS BPM Americas Holdings Inc., a wholly-owned subsidiary of WNS (Holdings) Limited, was incorporated in Delaware on March 01, 2023. |
| (7) | WNS BPM Americas LLC, a wholly-owned subsidiary of WNS BPM Americas Holdings Inc., was incorporated in Delaware on March 03, 2023. |
Exhibit 12.1
Certification of Chief Executive Officer
Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
I, Keshav R. Murugesh, certify that:
| 1. | I have reviewed this annual report on Form 20-F of WNS (Holdings) Limited; |
| 2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
| 3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the company as of, and for, the periods presented in this report; |
| 4. | The company’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15(d)-15(f)) for the company and have: |
| (a) | designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
| (b) | designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
| (c) | evaluated the effectiveness of the company’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
| (d) | disclosed in this report any change in the company’s internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the company’s internal control over financial reporting; and |
| 5. | The company’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the company’s auditors and the Audit Committee of the company’s Board of Directors (or persons performing the equivalent functions): |
| (a) | all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the company’s ability to record, process, summarize and report financial information; and |
| (b) | any fraud, whether or not material, that involves management or other employees who have a significant role in the company’s internal control over financial reporting. |
Date: May 16, 2023
| By: | /s/ Keshav R. Murugesh | |
| Name: | Keshav R. Murugesh | |
| Title: | Group Chief Executive Officer |
Exhibit 12.2
Certification of Chief Financial Officer
Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
I, Sanjay Puria, certify that:
| 1. | I have reviewed this annual report on Form 20-F of WNS (Holdings) Limited; |
| 2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
| 3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the company as of, and for, the periods presented in this report; |
| 4. | The company’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15(d)-15(f)) for the company and have: |
| (a) | designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
| (b) | designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
| (c) | evaluated the effectiveness of the company’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
| (d) | disclosed in this report any change in the company’s internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the company’s internal control over financial reporting; and |
| 5. | The company’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the company’s auditors and the Audit Committee of the company’s Board of Directors (or persons performing the equivalent functions): |
| (a) | all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the company’s ability to record, process, summarize and report financial information; and |
| (b) | any fraud, whether or not material, that involves management or other employees who have a significant role in the company’s internal control over financial reporting. |
Date: May 16, 2023
| By: | /s/ Sanjay Puria | |
| Name: | Sanjay Puria | |
| Title: | Group Chief Financial Officer |
Exhibit 13.1
Certification of Chief Executive Officer
Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
Pursuant to 18 U.S.C. Section 1350, as created by Section 906 of the Sarbanes-Oxley Act of 2002, the undersigned officer of WNS (Holdings) Limited (the “Company”) hereby certifies, to such officer’s knowledge, that:
| (i) | the accompanying annual report on Form 20-F of the Company for the year ended March 31, 2023 (the “Report”) fully complies with the requirements of Section 13(a) or Section 15(d), as applicable, of the Securities Exchange Act of 1934, as amended; and |
| (ii) | the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
Date: May 16, 2023
| By: | /s/ Keshav R. Murugesh | |
| Name: | Keshav R. Murugesh | |
| Title: | Group Chief Executive Officer |
The foregoing certification is being furnished solely to accompany the Report pursuant to 18 U.S.C. Section 1350, and is not being “filed” either as part of the Report or as a separate disclosure statement, and is not to be incorporated by reference into the Report or any other filing of the Company, whether made before or after the date hereof, regardless of any general incorporation language in such filing. The foregoing certification shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of Section 18 or Sections 11 and 12(a)(2) of the Securities Act of 1933, as amended.
Exhibit 13.2
Certification of Chief Financial Officer
Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
Pursuant to 18 U.S.C. Section 1350, as created by Section 906 of the Sarbanes-Oxley Act of 2002, the undersigned officer of WNS (Holdings) Limited (the “Company”) hereby certifies, to such officer’s knowledge, that:
| (i) | the accompanying annual report on Form 20-F of the Company for the year ended March 31, 2023 (the “Report”) fully complies with the requirements of Section 13(a) or Section 15(d), as applicable, of the Securities Exchange Act of 1934, as amended; and |
| (ii) | the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
Date: May 16, 2023
| By: | /s/ Sanjay Puria | |
| Name: | Sanjay Puria | |
| Title: | Group Chief Financial Officer |
The foregoing certification is being furnished solely to accompany the Report pursuant to 18 U.S.C. Section 1350, and is not being “filed” either as part of the Report or as a separate disclosure statement, and is not to be incorporated by reference into the Report or any other filing of the Company, whether made before or after the date hereof, regardless of any general incorporation language in such filing. The foregoing certification shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of Section 18 or Sections 11 and 12(a)(2) of the Securities Act of 1933, as amended.
Exhibit 15.1
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We have issued our reports dated May 16, 2023 with respect to the consolidated financial statements and internal control over financial reporting included in the Annual Report of WNS (Holdings) Limited on Form 20-F for the year ended March 31, 2023.
We hereby consent to the incorporation by reference of said reports in the Registration Statements of WNS (Holdings) Limited on Form S-8 (File No. 333-136168, File No. 333-157356, File No. 333-176849, File No. 333-191416, File No. 333-214042, File No. 333-228070 and File No. 333-249577).
| /s/ GRANT THORNTON BHARAT LLP |
| Gurugram, India |
| May 16, 2023 |