SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 20-F

o		REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR 12(g) OF THE SECURITIES EXCHANGE ACT OF 1934

OR

þ		ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended March 31, 2009

OR

o		TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                      to                     

OR

o		SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Date of event requiring this shell company report                     

WNS (Holdings) Limited

(Exact Name of Registrant as Specified in Its Charter)

Not Applicable (Translation of Registrant’s Name Into English)		Jersey, Channel Islands (Jurisdiction of Incorporation or Organization)

Gate 4, Godrej & Boyce Complex
Pirojshanagar, Vikhroli(W)
Mumbai 400 079, India
(91-22) 4095-2100
(Address and Telephone Number of Principal Executive Offices)

Vikas Gupta
General Counsel
Gate 4, Godrej & Boyce Complex
Pirojshanagar, Vikhroli(W)
Mumbai 400 079, India
(91-22) 4095-2100
vikas.gupta@wnsgs.com
(Name, Telephone, E-mail and/or Facsimile number and Address of Company Contact Person)

Securities registered or to be registered pursuant to Section 12(b) of the Act:

Title of Each Class		Name of Each Exchange on Which Registered
American Depositary Shares, each represented by one Ordinary Share, par value 10 pence per share		The New York Stock Exchange

Securities registered or to be registered pursuant to Section 12(g) of the Act:
None
(Title of Class)

Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act
None
(Title of Class)

     Indicate the number of outstanding shares of each of the issuer’s classes of capital or common stock as of the close of the period covered by the annual report.

     As of March 31, 2009, 42,607,403 ordinary shares, par value 10 pence per share, were issued and outstanding, of which 19,821,789 ordinary shares were held in the form of 19,821,789 American Depositary Shares, or ADSs. Each ADS represents one ordinary share.

     Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

Yes o          No þ

     If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.

Yes o          No þ

     Note — Checking the box above will not relieve any registrant required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 from their obligations under those Sections.

     Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes þ          No o

     Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes o          No o

     Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer o		Accelerated filer þ		Non-accelerated filer o

     Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:

U.S. GAAP þ		International Financial Reporting Standards as issued by the International Accounting Standards Board o		Other o

     If “Other” has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has elected to follow:

Item 17 o          Item 18 o

     If this report is an annual report, indicate by check mark if the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes o          No þ

 

 

TABLE OF CONTENTS

WNS (HOLDINGS) LIMITED

				Page
PART I
ITEM 1.		IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS			2
ITEM 2.		OFFER STATISTICS AND EXPECTED TIMETABLE			2
ITEM 3.		KEY INFORMATION			2
ITEM 4.		INFORMATION ON THE COMPANY			20
ITEM 4A.		UNRESOLVED STAFF COMMENTS			46
ITEM 5.		OPERATING AND FINANCIAL REVIEW AND PROSPECTS			46
ITEM 6.		DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES			75
ITEM 7.		MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS			93
ITEM 8.		FINANCIAL INFORMATION			95
ITEM 9.		THE OFFER AND LISTING			96
ITEM 10.		ADDITIONAL INFORMATION			98
ITEM 11.		QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK			122
ITEM 12.		DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES			123
PART II
ITEM 13.		DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES			123
ITEM 14.		MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS			123
ITEM 15.		CONTROLS AND PROCEDURES			124
ITEM 16A.		AUDIT COMMITTEE FINANCIAL EXPERT			126
ITEM 16B.		CODE OF ETHICS			126
ITEM 16C.		PRINCIPAL ACCOUNTANT FEES AND SERVICES			126
ITEM 16D.		EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES			127
ITEM 16E.		PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS			127
ITEM 16F.		CHANGE IN REGISTRANT’S CERTIFYING ACCOUNTANT			127
ITEM 16G.		CORPORATE GOVERNANCE			127
PART III
ITEM 17.		FINANCIAL STATEMENTS			128
ITEM 18.		FINANCIAL STATEMENTS			128
ITEM 19.		EXHIBITS			128
SIGNATURES					131
INDEX TO WNS (HOLDINGS) LIMITED’S CONSOLIDATED FINANCIAL STATEMENTS					F-1
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 Offier 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 Ernst & Young independent registered public accounting firm.

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 “India” are to the Republic of India. References to “$” or “dollars” or “US dollars” are to the legal currency of the US and references to “Rs.” or “rupees” or “Indian rupees” are to the legal currency of India. References to “pound sterling” or “£” are to the legal currency of the UK. References to “pence” are to the legal currency of Jersey, Channel Islands. Our financial statements are presented in US dollars and are prepared in accordance with US generally accepted accounting principles, or US GAAP. References to a particular “fiscal” year are to our fiscal year ended March 31 of that year. Any discrepancies in any table between totals and sums of the amounts listed are due to rounding. Names of our clients are listed in alphabetical order in this annual report, unless otherwise stated.

We also refer in various places within this annual report to “revenue less repair payments,” which is a non-GAAP measure that is calculated as revenue less payments to automobile repair centers and more fully explained in “Item 5. Operating and Financial Review and Prospects.” The presentation of this non-GAAP information is not meant to be considered in isolation or as a substitute for our financial results prepared in accordance with US GAAP.

We also refer to information regarding the business process outsourcing, or BPO, 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.

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. We caution you that reliance on any forward-looking statement 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 factors include but are not limited to:

•		worldwide economic and business conditions;
•		political or economic instability in the jurisdictions where we have operations;
•		regulatory, legislative and judicial developments;
•		our ability to attract and retain clients
•		technological innovation;
•		telecommunications or technology disruptions;
•		future regulatory actions and conditions in our operating areas;
•		our dependence on a limited number of clients in a limited number of industries;
•		our ability to expand our business or effectively manage growth;

•		our ability to hire and retain enough sufficiently trained employees to support our operations;
•		negative public reaction in the US or the UK to offshore outsourcing;
•		increasing competition in the BPO industry;
•		our ability to successfully grow our revenue, expand our service offerings and market share and achieve accretive benefits from our acquisition of Aviva Global Services Singapore Pte. Ltd. (which we have renamed as WNS Customer Solutions (Singapore) Private Limited following our acquisition), or Aviva Global, and our master services agreement with Aviva Global Services (Management Services) Private Limited, or AVIVA MS, as described below; and
•		our ability to successfully consummate strategic acquisitions.

These and other factors are more fully discussed in “Item 3. Key Information — D. Risk Factors,” “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.

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. Selected Financial Data

The selected consolidated statement of income data presented below for fiscal 2009, 2008 and 2007, and the selected consolidated balance sheet data as of March 31, 2009 and 2008, have been derived from our consolidated financial statements included elsewhere in this annual report. The selected consolidated statement of income data presented below for fiscal 2006 and 2005 and the selected consolidated balance sheet data as of March 31, 2007, 2006 and 2005 have been derived from our consolidated financial statements which are not included in this annual report. Our consolidated financial statements are prepared and presented in accordance with US GAAP. Our historical results do not necessarily indicate our results expected for any future period.

You should read the following information in conjunction with “Item 5. Operating and Financial Review and Prospects,” and our consolidated financial statements included elsewhere in this annual report.

		For the Year Ended March 31,
		2009				2008				2007				2006				2005
		(US dollars in millions, except share and per share data)
Consolidated Statement of Income Data:
Revenue		$	539.3			$	459.9			$	352.3			$	202.8			$	162.2
Cost of revenue(1)			410.4				363.3				271.2				145.7				140.3
Gross profit			128.9				96.5				81.1				57.1				21.9

		For the Year Ended March 31,
		2009				2008				2007				2006				2005
		(US dollars in millions, except share and per share data)
Operating expenses:
Selling, general and administrative expenses(1)			75.5				72.7				52.5				36.3				24.9
Amortization of intangible assets			24.9				2.9				1.9				0.9				1.4
Impairment of goodwill, intangibles and other assets(2)			—				15.5				—				—				—
Operating income (loss)			28.5				5.5				26.8				19.9				(4.4	)
Other (expense) income, net			(5.6	)			9.2				2.5				0.5				0.2
Interest expense			(11.8	)			—				(0.1	)			(0.4	)			(0.5	)
Income (loss) before income taxes			11.1				14.7				29.2				19.9				(4.7	)
Provision for income taxes			(3.3	)			(5.2	)			(2.6	)			(1.6	)			(1.1	)
Income (loss) before minority interest		$	7.8			$	9.5			$	26.6			$	18.3			$	(5.8	)
Minority interest			0.3				—				—				—				—
Net income (loss)			8.1				9.5				26.6				18.3				(5.8	)
Income (loss) per share/ADS:
Basic		$	0.19			$	0.23			$	0.69			$	0.56			$	(0.19	)
Diluted		$	0.19			$	0.22			$	0.65			$	0.52			$	(0.19	)
Weighted—average shares/ADSs outstanding (basic)			42,520,404				42,070,206				38,608,188				32,874,299				30,969,658
Weighted—average shares/ADSs outstanding (diluted)			43,108,599				42,945,028				41,120,497				35,029,766				30,969,658

		As of March 31,
		2009				2008				2007				2006				2005
		(US dollars in millions)
Consolidated Balance Sheet Data:
Assets
Cash and cash equivalents		$	38.9			$	102.7			$	112.3			$	18.5			$	9.1
Bank deposits and marketable securities			8.9				8.1				12.0				—				—
Accounts receivable, net			61.3				47.9				40.6				28.1				25.2
Other current assets(3)			54.4				23.4				18.5				10.8				9.7
Total current assets			163.5				182.1				183.4				57.4				44.0
Deposits and deferred tax asset			21.9				15.4				6.2				4.3				2.6
Goodwill and intangible assets, net			299.1				96.9				44.5				42.5				26.7
Other assets			11.4				1.3				—				—				—
Property, plant and equipment, net			56.0				50.8				41.8				30.6				24.7
Total assets			551.9				346.5				275.9				134.8				98.0
Liabilities and Shareholders’ Equity
Current portion of long term debt and note payable			45.0				—				—				—				10.0
Accrual for earn-out payment			—				33.7				—				—				—
Other current liabilities(4)			122.7				78.1				63.4				53.3				54.8
Total current liabilities			167.7				111.8				63.4				53.3				64.8
Deferred tax liabilities			9.9				1.8				0.0				2.3				—
Other non-current liabilities(5)			186.3				5.7				7.0				1.0				0.2
Total shareholders’ equity			188.0				227.2				205.5				78.2				43.0
Total liabilities and shareholders’ equity		$	551.9			$	346.5			$	275.9			$	134.8			$	98.0

The following tables set forth for the periods indicated selected consolidated financial data:

		For the Year Ended March 31,
		2009				2008				2007				2006				2005
		(US dollars in millions, except percentages and employee data)
Other Consolidated Financial Data:
Revenue		$	539.3			$	459.9			$	352.3			$	202.8			$	162.2
Gross profit as a percentage of revenue			23.9	%			21.0	%			23.0	%			28.1	%			13.5	%
Operating income (loss) as a percentage of revenue			5.3	%			1.2	%			7.6	%			9.8	%			(2.7	)%
Other Unaudited Consolidated Financial and Operating Data:
Revenue less repair payments(6)		$	386.4			$	290.7			$	219.7			$	147.9			$	99.0
Gross profit as a percentage of revenue less repair payments			33.4	%			33.2	%			36.9	%			38.6	%			22.1	%
Operating income (loss) as a percentage of revenue less repair payments			7.4	%			1.9	%			12.2	%			13.4	%			(4.4)	%
Number of employees (at period end)			21,356				18,104				15,084				10,433				7,176

		For the Year Ended March 31,
		2009				2008				2007				2006				2005
		(US dollars in millions)
Cost of revenue		$	3.6			$	2.4			$	1.0			$	0.1			$	0.0
Selling, general and administrative expenses			9.8				4.4				2.7				1.8				0.2

(2)		In fiscal 2008, we recorded an impairment charge of $9.1 million on goodwill and $6.4 million on intangible assets acquired in the purchase of Trinity Partners Inc., or Trinity Partners.
(3)		Consists of funds held for clients, employee receivables, prepaid expenses, prepaid income taxes, deferred tax assets and other current assets.
(4)		Consists of obligations under accounts payable, short term line of credit, accrued employee costs, deferred revenue, income taxes payable, deferred tax liabilities and other current liabilities.
(5)		Consists of obligations under long term debt — non-current, liability on outstanding derivative contracts — non-current, capital leases — non-current, deferred revenue — non-current, deferred rent and accrued pension liability.
(6)		Revenue less repair payments is a non-GAAP measure. See the explanation below, as well as “Item 5. Operating and Financial Review and Prospects — Overview” and notes to our consolidated financial statements included elsewhere in this annual report. The following table reconciles our revenue (a GAAP measure) to revenue less repair payments (a non-GAAP measure):

		For the Year Ended March 31,
		2009				2008				2007				2006				2005
		(US dollars in millions)
Revenue		$	539.3			$	459.9			$	352.3			$	202.8			$	162.2
Less: Payments to repair centers			152.9				169.2				132.6				54.9				63.2
Revenue less repair payments		$	386.4			$	290.7			$	219.7			$	147.9			$	99.0

We have two reportable segments for financial statement reporting purposes — WNS Global BPO and WNS Auto Claims BPO. In our WNS Auto Claims BPO segment, we provide both “fault” and “non-fault” repairs. For “fault” repairs, we provide claims handling and accident management services, where we arrange for automobile repairs through a network of third party repair centers. In our accident management services, we act as the principal in our dealings with the third party repair centers and our clients. The amounts we invoice to our clients for payments made by us to third party repair centers is reported as revenue. Since we wholly subcontract the repairs to the repair centers, we evaluate our financial performance based on revenue less repair payments to third party repair centers which is a non-GAAP measure. We believe that revenue less repair payments for “fault” repairs reflects more accurately the value addition of the business process outsourcing services that we directly provide to our clients. For “non-fault” repairs, revenue including

repair payments is used as a primary measure to allocate resources and measure operating performance. As we provide a consolidated suite of accident management services including credit hire and credit repair for our “non-fault” repairs business, we believe that measurement of that line of business has to be on a basis that includes repair payments in revenue.

Revenue less repair payments is a non-GAAP measure which is calculated as revenue less payments to repair centers. We believe that the presentation of this non-GAAP measure in this annual report provides useful information for investors regarding the financial performance of our business and our two reportable segments. See “Item 5. Operating and Financial Review and Prospects — Results by Reportable Segment.” The presentation of this non-GAAP information is not meant to be considered in isolation or as a substitute for our financial results prepared in accordance with US GAAP. Our revenue less repair payments may not be comparable to similarly titled measures reported by other companies due to potential differences in the method of calculation.

B. Capitalization and Indebtedness

Not applicable.

C. Reasons for the Offer and Use of Proceeds

Not applicable.

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 and results of operations could suffer and the trading price of our ADSs could decline.

Risks Related to Our Business

Recent global economic conditions have been unprecedented and challenging and have had, and 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, our financial performance and the prices of our equity shares and ADSs.

In the United States, Europe and Asia, recent market and economic conditions have been unprecedented and challenging with tighter credit conditions during fiscal 2009 and continuing into fiscal 2010. In fiscal 2009 and continuing into fiscal 2010, continued concerns about the systemic impact of inflation, energy costs, geopolitical issues, the availability and cost of credit, the mortgage market and a declining real estate market have contributed to increased market volatility and diminished expectations for the economy globally. These conditions, combined with volatile oil prices, declining business and consumer confidence and increased unemployment have, in fiscal 2009 and continuing into fiscal 2010, contributed to volatility of unprecedented levels.

These economic conditions may affect our business in a number of ways. The general level of economic activity, such as decreases in business and consumer spending, could result in a decrease in demand for our services, thus reducing our revenue. The cost and availability of credit has been and may continue to be adversely affected by illiquid credit markets and wider credit spreads. Continued turbulence in the US and international markets and economies may adversely affect our liquidity and financial condition, and the liquidity and financial condition of our customers. If these market conditions continue, they may limit our ability to access financing or increase our cost of financing to meet liquidity needs, and affect the ability of our customers to use credit to purchase our services or to make timely payments to us, resulting in adverse effects on our financial condition and results of operations. Furthermore, a weakening of the rate of exchange for the US dollar or the pound sterling (in which our revenue is principally denominated) against the Indian rupee (in which a significant portion of our costs are denominated) will also adversely affect our results. Fluctuations between the pound sterling or the Indian rupee and the US dollar also expose us to translation risk when transactions denominated in pound sterling or Indian rupees are translated to US dollars, our reporting currency. For example, the average pound sterling/US dollar exchange rate for fiscal 2009 depreciated 14.3% as compared to the average exchange rate for fiscal 2008 (based on the spot rate released by the Federal Reserve Board, or the spot rate) which adversely impacted our results of operations. Uncertainty about current global economic conditions could also continue to increase the volatility of our share price. We cannot predict the timing or duration

of the economic slowdown or the timing or strength of a subsequent economic recovery generally or in our targeted industries, including the travel and insurance industry. If macroeconomic conditions worsens or the current global economic condition continues for a prolonged period of time, we are not able to predict the impact such worsening conditions will have on our targeted industries in general, and our results of operations specifically.

We may be unable to effectively manage our rapid growth and maintain effective internal controls, which could have a material adverse effect on our operations, results of operations and financial condition.

Since we were founded in April 1996, and especially since Warburg Pincus & Co., or Warburg Pincus, acquired a controlling stake in our company in May 2002, we have experienced rapid growth and significantly expanded our operations. Our revenue has grown at a compound annual growth rate of 23.7% to $539.3 million in fiscal 2009 from $352.3 million in fiscal 2007. Our revenue less repair payments has grown at a compound annual growth rate of 32.6% to $386.4 million in fiscal 2009 from $219.7 million in fiscal 2007. Our employees have increased to 21,356 as of March 31, 2009 from 15,084 as of March 31, 2007. Our majority owned subsidiary, WNS Philippines Inc., established a delivery center in the Philippines in April 2008. Additionally, in fiscal 2009, we established new delivery centers in Gurgaon and Pune, and streamlined our operations by consolidated our production capacities in various delivery centers in Bangalore, Mumbai and Pune. We now have delivery centers in six locations in India, Sri Lanka, Romania, the Philippines and the UK. In fiscal 2010, we intend to establish additional delivery centers, as well as continue to streamline our operations by further consolidating production capacities in our delivery centers.

We have also completed numerous acquisitions. For example, in July 2008, we entered into a transaction with AVIVA International Holdings Limited, or AVIVA, consisting of (1) a share sale and purchase agreement pursuant to which we acquired from AVIVA all the shares of Aviva Global and (2) a master services agreement with AVIVA MS, or the AVIVA master services agreement, pursuant to which we are providing BPO services to AVIVA’s UK and Canadian businesses. Aviva Global was the business process offshoring subsidiary of AVIVA. Through our acquisition of Aviva Global, we also acquired three facilities in Chennai, Bangalore and Sri Lanka in July 2008, and one facility in Pune in August 2008. See “Item 5. Operating and Financial Review and Prospects — Revenue — Our Contracts” for more details on this transaction.

This rapid 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 problems associated with expansion, our business, results of operations, financial condition and cash flows could be materially and adversely affected.

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 2009 and 2008, our five largest clients accounted for 54.6% and 57.3% of our revenue and 46.5% and 42.2% of our revenue less repair payments, respectively.

First Magnus Financial Corporation, or FMFC, a US mortgage lender, was one of our major clients from November 2005 to August 2007. FMFC was a major client of Trinity Partners which we acquired in November 2005 from the First Magnus Group. In August 2007, FMFC filed a voluntary petition for relief under Chapter 11 of the US Bankruptcy Code. In fiscal 2007, FMFC accounted for 4.3% of our revenue and 6.8% of our revenue less repair payments. The loss of revenue from FMFC materially reduced our revenue in fiscal 2008.

Our prior contracts with another major client, AVIVA, provided Aviva Global, which was AVIVA’s business process offshoring subsidiary, options to require us to transfer the relevant projects and operations of our facilities at Sri Lanka and Pune to Aviva Global. On January 1, 2007, Aviva Global exercised its call option requiring us to transfer the Sri Lanka facility to Aviva Global effective July 2, 2007. Effective July 2, 2007, we transferred the Sri Lanka facility to Aviva Global and we lost the revenue generated by the Sri Lanka facility. For the period from April 1, 2007 through July 2, 2007, the Sri Lanka facility contributed $2.0 million of revenue and

in fiscal 2007, it accounted for 1.9% of our revenue and 3.0% of our revenue less repair payments. We may in the future enter into contracts with other clients with similar call options that may result in the loss of revenue that may have a material impact on our business, results of operations, financial condition and cash flows, particularly during the quarter in which the option takes effect.

With the transaction that we entered into with AVIVA in July 2008 described under “Item 5. Operating and Financial Review and Prospects — Revenue — Our Contracts,” we have, through our acquisition of Aviva Global, resumed control of the Sri Lanka facility and we have continued to retain ownership of the Pune facility. We expect these facilities to continue to generate revenue for us under the AVIVA master services agreement. Further, through our acquisition of Aviva Global, we also acquired four facilities in Chennai, Pune, Bangalore and Sri Lanka. We expect revenue from AVIVA under the AVIVA master services agreement to account for a significant portion of our revenue. We therefore expect our dependence on AVIVA to continue for the foreseeable future.

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. 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 business process outsourcing service provider or return work in-house.

Our revenue is highly dependent on clients concentrated in a few industries, as well as clients located primarily in Europe and the United States. Economic slowdowns or factors that affect these industries or the economic environment in Europe or the United States could reduce our revenue and seriously harm our business.

A substantial portion of our clients are concentrated in the banking, financial services and insurance, or BFSI, industry, and the travel and leisure industry. In fiscal 2009 and 2008, 64.0% and 57.4% of our revenue, respectively, and 49.7% and 32.7% of our revenue less repair payments, respectively, were derived from clients in the BFSI industry. During the same periods, clients in the travel and leisure industry contributed 18.9% and 22.5% of our revenue, respectively, and 26.4% and 35.6% of our revenue less repair payments, 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. Since the second half of fiscal 2009 and continuing into fiscal 2010, there has been a significant slowdown in the growth of the global economy accompanied by a significant reduction in consumer and business spending worldwide. Certain of our targeted industries are especially vulnerable to the crisis in the financial and credit markets or to the economic downturn. A continuing downturn in any of our targeted industries, particularly the BFSI or travel and leisure industries, a slowdown or reversal of the trend to outsource business processes 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 example, as a result of the mortgage market crisis, in August 2007, FMFC, a US mortgage services client, filed a voluntary petition for relief under Chapter 11 of the US Bankruptcy Code. FMFC was a major client of Trinity Partners which we acquired in November 2005 from the First Magnus Group and became one of our major clients. In fiscal 2008 and 2007, FMFC accounted for 0.9% and 4.3% of our revenue, respectively, and 1.4% and 6.8% of our revenue less repair payments, respectively. The downturn in the mortgage market could result in a further decrease in the demand for our services and adversely affect our results of our operations.

Further, the current downturn in worldwide economic and business conditions has resulted in a few of our clients reducing or postponing their outsourced business requirements, which have in turn decreased the demand for our services and adversely affected our results of operations. In particular, our revenue is highly dependent on the economic environment in Europe and the United States, which are continuing to be very weak. In fiscal 2009 and 2008, 75.6% and 74.5% of our revenue, respectively, and 65.8% and 59.7% of our revenue less repair payments, respectively, were derived from clients located in Europe. During the same periods, 24.2% and 24.7% of our revenue, respectively, and 33.8% and 39.1% of our revenue less repair payments, respectively, were derived from clients located in North America (primarily the United States). Any further weakening of the European or United States 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 these industries. For example, the crisis in the financial and credit markets in the United States has led to a significant change in the financial services industry in the United States in recent times, with the United States federal government taking over or providing financial support to leading financial institutions and with leading investment banks going bankrupt or being forced to sell themselves in distressed circumstances. 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. 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.

Our 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 continued service and performance of the members of our 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 business process outsourcing industry, and we may not be able to retain our key personnel. 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 business process outsourcing 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 business process outsourcing industry, including our company, experiences high employee attrition. Our attrition rate for our employees who have completed six months of employment with us was 37% for each of the first and second quarters of fiscal 2009, 29% for the third quarter of fiscal 2009 and 22% for the fourth quarter of fiscal 2009. There is significant competition in India for professionals with the skills necessary to perform the services we offer to our clients. Increased competition for these professionals, in the business process outsourcing 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 businesses will depend, in large part, 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.

We may not be successful in achieving the expected benefits from our transaction with AVIVA in July 2008, which could have a material adverse effect on our business, results of operations, financial condition and cash flows. Furthermore, the term loan that we have incurred to fund the transaction may put a strain on our financial position.

In July 2008, we entered into a transaction with AVIVA consisting of (1) a share sale and purchase agreement pursuant to which we acquired all the shares of Aviva Global and (2) the AVIVA master services agreement pursuant to which we are providing BPO services to AVIVA’s UK and Canadian businesses. We completed our acquisition of Aviva Global in July 2008. Aviva Global was the business process offshoring subsidiary of AVIVA with facilities in Bangalore, India, and Colombo, Sri Lanka. In addition, through our acquisition of Aviva Global, we also acquired three facilities in Chennai, Bangalore and Sri Lanka in July 2008, and one facility in Pune in August 2008. The total consideration (including legal and professional fees) for this transaction with AVIVA amounted to approximately $249.0 million. See “Item 5. Operating and Financial Review and Prospects — Liquidity and Capital Resources.” We entered into a $200 million term loan facility with ICICI Bank UK Plc as agent (as described under “Item 5. Operating and Financial Review and Prospects — Liquidity and Capital Resources — Outstanding Loans”), or our $200 million Term Loan, to fund, together with cash on hand, the consideration for the transaction. We cannot assure you that we will be able to grow our revenue, expand our

service offerings and market share, or achieve the accretive benefits that we expected from our acquisition of Aviva Global and the AVIVA master services agreement.

Furthermore, the $200 million Term Loan may put a strain on our financial position. For example:

•		it could increase our vulnerability to general adverse economic and industry conditions;
•		it could require us to dedicate a substantial portion of our cash flow from operations to payments on the term loan, thereby reducing the availability of our cash flow to fund capital expenditures, working capital and other general corporate purposes;
•		it requires us to seek lender’s consent prior to paying dividends on our ordinary shares;
•		it limits our ability to incur additional borrowings or raise additional financing through equity or debt instruments; and
•		it imposes certain financial covenants on us which we may not be able to meet and this may cause the lenders to accelerate the repayment of the balance loan outstanding.

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 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 business process outsourcing to India, and increased competition for skilled employees in India may reduce this competitive advantage. 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.

Further, following our acquisition of Aviva Global, BizAps and Chang Limited, our operations in the UK have expanded and our wage costs for employees located in the UK now represent a larger proportion of our total wage costs. Wage increases in the UK may therefore also 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 fluctuation 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 year-end holiday season, as well as episodic factors such as adverse weather conditions. Transaction volumes can be impacted by market conditions affecting the travel and insurance industries, including natural disasters, outbreak of infectious diseases or other serious public health concerns in Asia or elsewhere (such as the outbreak of severe acute respiratory syndrome, or SARS, in 2003 in Asia, and more recently, the outbreak of the Influenza A (H1N1) virus in various parts of the world) and terrorist attacks. In addition, our contracts do not generally commit our clients to providing us with a specific volume of business.

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. 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 be delayed 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.

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, 2010 (including work orders/statement of works that will expire on or before March 31, 2010 although the related master services agreement has been renewed) represent approximately 13% of our revenue and 18% of our revenue less repair payments from our clients in fiscal 2009. 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.

Some of our client contracts contain provisions which, if triggered, could result in lower future revenue and have an adverse effect on our business.

If our clients agree to provide us with a specified volume and scale of business or to provide us with business for a specified minimum duration, we may, in return, agree to include certain provisions in our contracts with such clients which provide for downward revision of our prices under certain circumstances. For example, certain client contracts provide that if during the term of the contract, we were to offer similar services to any other client on terms and conditions more favorable than those provided in the contract, we would be obliged to offer equally favorable terms and conditions to the client. This may result in lower revenue and profits under these contracts. Certain other 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 client contracts provide that during the term of the contract and under specified circumstances, we may not provide similar services to their competitors. 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. Some of our client contracts also contain provisions that would require us to pay penalties to our clients if we do not meet pre-agreed service level requirements. Failure to meet these 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.

We enter into long-term contracts with our clients, and our failure to estimate the resources and time required for our contracts may negatively affect our profitability.

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 therefore bear the risk of cost overruns, completion delays and wage inflation in connection with these contracts. If we fail to estimate accurately the resources and time required for a contract, future wage inflation rates or currency exchange rates, or if we fail to complete our contractual obligations within the contracted timeframe, our revenue and profitability may be negatively affected.

Our profitability will suffer if we are not able to maintain our pricing and asset utilization levels and control our costs.

Our profit margin, and therefore our profitability, is largely a function of our asset utilization and the rates we are able to recover for our services. An important component 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 work stations, or seats. 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 engagement revenue, 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.

We have incurred losses in the past and have a limited operating history. We may not be profitable in the future and may not be able to secure additional business.

We incurred losses in each of the three fiscal years from fiscal 2003 through fiscal 2005. We expect our selling, general and administrative expenses to increase in future periods. If our revenue does not grow at a faster rate than these expected increases in our expenses, or if our operating expenses are higher than we anticipate, we may not be profitable and we may incur losses.

In addition, the offshore business process outsourcing industry is a relatively new industry, and we have a limited operating history. We started our business by offering business process outsourcing services as part of British Airways plc, or British Airways, in 1996. In fiscal 2003, we enhanced our focus on providing business process outsourcing services to third parties. As such, we have only focused on servicing third-party clients for a limited time. We may not be able to secure additional business or retain current business with third parties or add third party clients in the future.

If we cause disruptions to our clients’ businesses or provide inadequate service, 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 client’s customers. Failure to consistently meet service requirements of a client or errors made by our associates 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 result in lower payment to us. In addition, a failure or inability to meet a contractual requirement could seriously damage our reputation and affect our ability to attract new business.

Our dependence on our offshore delivery centers requires us to maintain active data and voice communications between our main delivery centers in India, Sri Lanka, Romania, the Philippines and the UK, our international technology hubs in the US and the UK 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. 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.

Under our contracts with our clients, our liability for breach of our obligations is generally 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. To the extent that our contracts 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. Although we have commercial general liability 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 and confidential information, whether through a breach of our computer systems, through our employees or otherwise.

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 on the information we receive from them. We seek to implement measures to protect sensitive and confidential client data and have not experienced any material breach of confidentiality to date. However, if any person, including any of our employees, penetrates our 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. Although 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 data centers could have a negative impact on our reputation which would harm our business.

Failure to adhere to the regulations that govern our business could result in us being unable to effectively perform our services. Failure to adhere to regulations that govern our clients’ businesses could result in breaches of contract with our clients.

Our clients’ business operations are subject to certain rules and regulations such as the Gramm-Leach-Bliley Act and the Health Insurance Portability and Accountability Act in the US and the Financial Services Act in the UK. Our clients may contractually require that we perform our services in a manner that would enable them to comply with such rules and regulations. Failure to perform our services in such a manner could result in breaches of contract with our clients and, in some limited circumstances, civil fines and criminal penalties for us. In addition, our UK operations are subject to the Financial Services Act in the UK and we are required under various Indian laws to obtain and maintain permits and licenses for the conduct of our business. If we fail to comply with the Financial Services Act in the UK or any other applicable regulations, or if we do not maintain our licenses or other qualifications 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.

The international nature of our business exposes us to several risks, such as significant currency fluctuations and unexpected changes in the regulatory requirements of multiple jurisdictions.

We have operations in India, Sri Lanka, Romania, the Philippines and the UK, and we service clients across Europe, North America and Asia. Our corporate structure also spans multiple jurisdictions, with our parent holding company incorporated in Jersey, Channel Islands, and intermediate and operating subsidiaries incorporated in India, Sri Lanka, Mauritius, Romania, the Philippines, China, the Netherlands, Singapore, the US and the UK. As a result, we are exposed to risks typically associated with conducting business internationally, many of which are beyond our control. These risks include:

•

significant currency fluctuations between the US dollar and the pound sterling (in which our revenue is principally denominated) and the Indian rupee (in which a significant portion of our costs are denominated);

•

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 regulatory requirements;

•

the burden and expense of complying with the laws and regulations of various jurisdictions; and

•

terrorist attacks and other acts of violence or war.

The occurrence of any of these events could have a material adverse effect on our results of operations and financial condition.

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. Historically, we have expanded some of our service offerings and gained new clients through strategic acquisitions. For example, we acquired Aviva Global in July 2008, Business Applications Associate Limited, or BizAps, in June 2008, Chang Limited in April 2008, and Flovate Technologies Limited, or Flovate (which we subsequently renamed as WNS Workflow Technologies Limited), in June 2007. It is possible that in the future we may not succeed in identifying suitable acquisition targets available for sale on reasonable terms, have access to the capital required to finance potential acquisitions or be able to consummate any acquisition. The inability to identify suitable acquisition targets or investments or the inability to complete such transactions may affect our competitiveness and our growth prospects. In addition, our management may not be able to successfully integrate any acquired business into our operations and any acquisition we do complete may not result in long-term benefits to us. For example, 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. The lack of profitability of any of our acquisitions could have a material adverse effect on our operating results. Future acquisitions may also result in the incurrence of indebtedness or the issuance of additional equity securities and may present difficulties in financing the acquisition on attractive terms. 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 can 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 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.

We recorded an impairment charge of $15.5 million to our earnings in fiscal 2008 and may be required to record a significant charge to earnings in the future when we review our goodwill, intangible or other assets for potential impairment.

As of March 31, 2009, we had goodwill and intangible assets of approximately $81.7 million and $217.4 million, respectively, which primarily resulted from the purchases of Aviva Global, BizAps, Chang Limited, Marketics Technologies (India) Private Limited, or Marketics, Flovate, Town & Country Assistance Limited (which we subsequently rebranded as WNS Assistance) and WNS Global Services Private Limited, or WNS Global. Under US GAAP, we are required to review our goodwill, intangible 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. We performed an impairment review and recorded an impairment charge of $15.5 million to our earnings in fiscal 2008 relating to Trinity Partners. Although our impairment review of goodwill and intangible assets in fiscal 2009 did not indicate any impairment, we may be required in the future to record a significant charge to earnings in our financial statements during the period in which any impairment of our goodwill or other intangible assets is determined. Such charges may have a significant adverse impact on our results of operations.

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, during the floods in Mumbai in July 2005, our operations were adversely affected as a result of the disruption of the city’s public utility and transport services making it difficult for our associates to commute to our office. Such natural disasters may lead to disruption to information systems and telephone service for sustained periods. Damage or destruction that interrupts our provision of outsourcing 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 commercial liability 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.

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. Offshore outsourcing is a politically sensitive topic in the UK, the US and elsewhere. For example, many organizations and public figures in the UK and the US have publicly expressed concern about a perceived association between offshore outsourcing providers and the loss of jobs in their home countries.

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.

A variety of US federal and state legislations have been proposed that, if enacted, could restrict or discourage US companies from outsourcing their services to companies outside the US. For example, legislation has been proposed that would require offshore providers of services requiring direct interaction with clients’ customers to identify to clients’ customers where the offshore provider is located. There is also no assurance that the UK would not introduce legislation that would restrict or discourage offshore outsourcing. Because some of our clients are located in the US and the UK, any expansion of existing laws or the enactment of new legislation restricting offshore outsourcing could adversely impact our ability to do business with US or UK clients, or restrict the ability of our UK subsidiaries from outsourcing our UK clients’ service requirements to our Indian subsidiaries. This could have a material and adverse effect on our business, results of operations, financial condition and cash flows. In addition, it is possible that legislation could be adopted that would restrict US private sector companies that have federal or state government contracts from outsourcing their services to offshore service providers. This would affect our ability to attract or retain clients that have such contracts.

We face competition from onshore and offshore business process outsourcing companies and from information technology companies that also offer business process outsourcing 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, 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 business process outsourcing 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. 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.

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.

Our controlling shareholder, Warburg Pincus, is able to control or significantly influence our corporate actions.

Warburg Pincus beneficially owns more than 50% of our shares. As a result of its ownership position, Warburg Pincus has the ability to control or significantly influence matters requiring shareholder and board approval including, without limitation, the election of directors, significant corporate transactions such as amalgamations and consolidations, changes in control of our company and sales of all or substantially all of our assets. These actions may be taken even if they are opposed by the other shareholders.

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 virtually all 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.

Risks Related to India

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, is incorporated in India, and a substantial portion of our assets and employees are located in India. We intend to continue to develop and expand our facilities 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 business process outsourcing 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. Various factors, including a collapse of the present coalition government due to the withdrawal of support of coalition members or the formation of a new unstable government with limited support, could trigger significant changes in India’s economic liberalization and deregulation policies and disrupt business and economic conditions in India generally and our business in particular. The government of India may decide to introduce the reservation policy. According to this policy, all companies operating in the private sector in India, including our subsidiaries in India, would be required to reserve a certain percentage of jobs for the economically underprivileged population in the relevant state where such companies are incorporated. If this policy is introduced, our ability to hire employees of our choice may be restricted. 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 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, on the value of our ADSs and on your investment in our ADSs.

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 could be negatively affected.

Under the Indian Finance Act, 2000, except for three delivery centers located in Mumbai, Nashik and Pune, all our delivery centers in India benefit from a holiday from Indian corporate income taxes. As a result, our service operations, including any businesses we acquire, have been subject to relatively low Indian tax liabilities. We incurred minimal income tax expense on our Indian operations in fiscal 2009 as a result of the tax holiday, compared to approximately $16.0 million that we would have incurred if the tax holiday had not been available for that period.

The Indian Finance Act, 2000 phases out the tax holiday for companies registered as an exporter of business process outsourcing services with the Software Technology Parks of India, or STPI, over a ten-year period from fiscal 2000 through fiscal 2009. In May 2008, the government of India passed the Indian Finance Act, 2008, which extended the tax holiday period by an additional year through fiscal 2010. The tax holiday enjoyed by our delivery centers located in Mumbai, Pune, Gurgaon, Bangalore, Chennai and Nashik will expire on April 1, 2010, except for the tax holiday enjoyed by three of our delivery centers located in Mumbai, Nashik and Pune which expired on April 1, 2007, April 1, 2008 and April 1, 2009, respectively. Our Sri Lankan subsidiaries and our joint venture company in the Philippines also benefit from similar tax exemptions. See “Item 5. Operating and Financial Review and Prospects — Critical Accounting Policies — Income Taxes.” When our tax holiday expires or terminates, or if the applicable government withdraws or reduces the benefits of a tax holiday that we enjoy, our tax expense will materially increase and this increase will have a material impact on our results of operations. For example, in the absence of a tax holiday in Inda, income derived from India would be taxed up to a maximum of the then existing annual tax rate which, as of March 31, 2009, was 33.99%.

In May 2007, the Indian Finance Act, 2007 was adopted, with the effect of subjecting Indian companies that benefit from a holiday from Indian corporate income taxes to the minimum alternate tax, or MAT, at the rate of 11.33% in the case of profits exceeding Rs. 10 million and 10.3% in the case of profits not exceeding Rs. 10 million with effect from April 1, 2007. As a result of this amendment to the tax regulations, we became subject to MAT and are required to pay additional taxes commencing fiscal 2008. To the extent MAT paid exceeds the actual tax payable on our taxable income, we would be able to set off such MAT credits against tax payable in the succeeding seven years, subject to the satisfaction of certain conditions.

In addition, in May 2007, the government of India implemented a fringe benefit tax on the allotment of shares pursuant to the exercise or vesting, on or after April 1, 2007, of options and restricted share units, or RSUs, granted to employees. The fringe benefit tax is payable by the employer at the current rate of 33.99% on the difference between the fair market value of the options and RSUs on the date of vesting of the options and RSUs, and the exercise price of the options and the purchase price (if any) for the RSUs, as applicable. In October 2007, the government of India published its guidelines on how the fair market value of the options and RSUs should be determined. The new legislation permits the employer to recover the fringe benefit tax from the employees. Accordingly, the terms of our award agreements with applicable employees in India under our 2002 Stock Incentive Plan and our Amended and Restated 2006 Incentive Award Plan (as described in “Item 6. Directors, Senior Management and Employees — B. Compensation — Employee Benefit Plans”) allow us to recover the fringe benefit tax from all our employees in India except those expatriate employees who are resident in India. In respect of these expatriate employees, we have sought and are waiting for clarification from the Indian and foreign tax authorities on the ability of such expatriate employees to set off the fringe benefit tax from the foreign taxes payable by them. If they are able to do so, we intend to recover the fringe benefit tax from such expatriate employees in the future.

In 2005, the government of India implemented the Special Economic Zones Act, 2005, or the SEZ legislation, with the effect that taxable income of new operations established in designated special economic zones, or 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. Our delivery center in Gurgaon benefits from this tax holiday which will expire in fiscal 2022. However, the Ministry of Finance in India has expressed concern about the potential loss of tax revenues as a result of the exemptions under the SEZ legislation. The SEZ legislation has been criticized on economic grounds by the International Monetary Fund and the SEZ legislation may be challenged by certain non-governmental organizations. It is possible that, as a result of such political pressures, the procedure for obtaining the benefits under the SEZ legislation may become more onerous, the types of land eligible for SEZ status may be further restricted or the SEZ legislation may be amended or repealed. Moreover, there is continuing uncertainty as to the governmental and regulatory approvals required to establish operations in the SEZs or to qualify for the tax benefit. This uncertainty may delay our establishment of operations in the SEZs.

Transfer pricing regulations to which we are subject require that any international transaction among WNS 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 the transactions among the WNS group enterprises do not meet arms’ 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. 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 a few orders of assessment outstanding and are vigorously disputing those assessments. In case of disputes, the Indian tax authorities may require us to deposit with them all or a portion of the disputed amount pending resolution of the matter on appeal. Any amount paid by us as deposits will be refunded to us with interest if we succeed in our appeals. In January 2009, we received an order of assessment from the Indian tax authorities that we believe could be material to us given the magnitude of the claim. The order assessed additional taxable income for fiscal 2005 on WNS Global, our wholly-owned Indian subsidiary, that could give rise to an estimated Rs. 728.1 million ($14.3 million based on the exchange rate on March 31, 2009) in additional taxes, including interest of Rs. 225.9 million ($4.4 million based on the exchange rate on March 31, 2009). The assessment order alleges that the transfer price we applied to international transactions between WNS Global and our other wholly-owned subsidiaries was not appropriate, disallows certain expenses claimed as tax deductible by WNS Global and disallows a tax holiday benefit claimed by us. Further, in March 2009, we received from the Indian service tax authority an assessment order demanding payment of Rs. 346.2 million ($6.9 million based on the exchange rate on March 31, 2009) of service tax and related interest and penalty for the period from March 1, 2003 to January 31, 2005. The assessment order alleges that service tax is payable on BPO services provided by WNS Global to clients in India. After consultation with our Indian tax advisors, we believe the chances that either of these assessments would be upheld against us are remote. We intend to continue to vigorously dispute the 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. See “Item 5. Operating and Financial Review and Prospects — Tax Assessment Orders.”

Terrorist attacks and other acts of violence involving India or its neighboring countries could adversely affect our operations, resulting in a loss of client confidence and adversely affecting our business, results of operations, financial condition and cash flows.

Terrorist attacks and other acts of violence or war involving India or its 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. South Asia has, from time to time, experienced instances of civil unrest and hostilities among neighboring countries, including India and Pakistan. 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 recent bombings of the Taj Mahal Hotel and Oberoi Hotel in Mumbai, a terrorist attack on the Indian Parliament, 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 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.

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 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. 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.

Currency fluctuations among the Indian rupee, the pound sterling and the US dollar could have a material adverse effect on our results of operations.

Although substantially all of our revenue is denominated in pound sterling or US dollars, 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. We report our financial results in US dollars and our results of operations would be adversely affected if the Indian rupee appreciates against the US dollar or the pound sterling depreciates against the US dollar. The exchange rates between the Indian rupee and the US dollar and between the pound sterling and the US dollar have changed substantially in recent years and may fluctuate substantially in the future.

The average Indian rupee/US dollar exchange rate was approximately Rs. 46.10 per $1.00 (based on the spot rate) in fiscal 2009, which represented a depreciation of the Indian rupee of 14.9% as compared with the average exchange rate of approximately Rs. 40.13 per $1.00 (based on the spot rate) in fiscal 2008, which in turn represented an appreciation of the Indian rupee of 11.1% as compared with the average exchange rate of approximately Rs. 45.12 per $1.00 (based on the spot rate) in fiscal 2007. The average pound sterling/US dollar exchange rate was approximately £0.58 per $1.00 (based on the spot rate) in fiscal 2009, which represented a depreciation of the pound sterling of 14.3% as compared with the average exchange rate of approximately £0.50 per $1.00 (based on the spot rate) in fiscal 2008, which in turn represented an appreciation of the pound sterling of 5.7% as compared with the average exchange rate of approximately £0.53 per $1.00 (based on the spot rate) in fiscal 2007.

Our results of operations may be adversely affected if the Indian rupee appreciates significantly against the pound sterling or the US dollar or if the pound sterling depreciates against the US dollar. 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.

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 business process outsourcing 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.

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 pay for acquisitions using our equity securities. As of April 30, 2009, we had 42,628,583 ordinary shares outstanding, including 19,850,969 shares represented by 19,850,969 ADSs. In addition, as of April 30, 2009, there were options and RSUs outstanding under our 2002 Stock Incentive Plan and our Amended and Restated 2006 Incentive Award Plan (as described in “Item 6. Directors, Senior Management and Employees — B. Compensation — Employee Benefits Plans”) to purchase a total of 3,456,627 ordinary shares or ADSs. All ADSs are freely transferable, except that ADSs owned by our affiliates, including Warburg Pincus, 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, or the Securities Act. The remaining ordinary shares outstanding may be sold in the United States 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 quarterly operating results;
•		changes in financial estimates by securities research analysts;
•		changes in the economic performance or market valuations of other companies engaged in business process outsourcing;
•		addition or loss of executive officers or key employees;
•		sales or expected sales of additional shares or ADSs; and
•		loss of one or more significant clients.

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.

Holders of ADSs may be restricted in their ability to exercise voting rights.

At our request, the depositary of the 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 US Securities and Exchange Commission, or 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.

We may be classified as a passive foreign investment company which could result in adverse United States federal income tax consequences to US Holders.

We believe we are not a “passive foreign investment company,” or PFIC, for United States federal income tax purposes for our current taxable year ended March 31, 2009. However, we must make a separate determination each year as to whether we are a PFIC after the close of each taxable year. A non-US corporation will be considered a PFIC for any taxable year if either (i) at least 75% of its gross income 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 a taxable year) is attributable to assets that produce or are held for the production of passive income. As noted in our annual report for our taxable year ended March 31, 2007, our PFIC status in respect of our taxable year ended March 31, 2007 was uncertain. 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 ADSs or ordinary shares, absent a special elections.

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 12 Castle Street, St. Helier, Jersey JE2 3RT, Channel Islands. 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 Companies (Jersey) Law, 1991, or the 1991 Law. We gave notice of this to the Jersey Financial Services Commission 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., 420 Lexington Avenue, Suite 2515, New York, New York 10170.

We began operations as an in-house unit of British Airways in 1996, and started focusing on providing business process outsourcing, or BPO, services to 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. In fiscal 2003, we acquired Town & Country Assistance Limited (which we subsequently rebranded as WNS Assistance and which constitutes WNS Auto Claims BPO, our reportable segment for financial statement purposes), a UK-based automobile claims handling company, thereby extending our service portfolio beyond the travel industry to include insurance-based automobile claims processing. In fiscal 2004, we acquired the health claims management business of Greensnow Inc. In fiscal 2006, we acquired Trinity Partners (which we merged into our subsidiary, WNS North America, Inc.), a provider of BPO services to financial institutions, focusing on mortgage banking. In August 2006, we acquired from PRG Airlines Services Limited, or PRG Airlines, its fare audit services business. In September 2006, we acquired from GHS Holdings LLC, or GHS, its financial accounting business. In May 2007, we acquired Marketics, a provider of offshore analytics services. In June 2007, we acquired Flovate, a company engaged in the development and maintenance of software products and solutions, which we subsequently renamed as WNS Workflow Technologies Limited. In April 2008, we acquired Chang Limited, an auto insurance claims processing services provider in the UK, through its wholly-owned subsidiary, Call 24-7 Limited, or Call 24-7. In June 2008, we acquired BizAps, a provider of systems applications and products, or SAP, solutions to optimize the enterprise resource planning functionality for our finance and accounting processes. In July 2008, we entered into a transaction with AVIVA consisting of (1) a share sale and purchase agreement pursuant to which we acquired from AVIVA all the shares of Aviva Global and (2) the AVIVA master services agreement pursuant to which we are providing BPO services to AVIVA’s UK and Canadian businesses. Aviva Global was the business process offshoring subsidiary of AVIVA. See “Item 5. Operating and Financial Review and Prospects — Revenue — Our Contracts” for more details on this transaction.

As a result of our various acquisitions described above, our organizational structure has increased in complexity, comprising 31 operating companies in 11 countries. We are currently in the process of restructuring our organizational structure in order to streamline our administrative operations, achieve operational and financial synergies, and reduce the costs and expenses relating to

regulatory compliance. This restructuring involves the amalgamation of the following seven Indian subsidiaries of WNS Global into WNS Global through a Scheme of Amalgamation to be approved by an order of court in India: NTrance Customer Services Private Limited, Marketics, WNS Workflow Technologies (India) Private Limited, WNS Customer Solutions Private Limited, WNS Customer Solutions Shared Services Private Limited, Customer Operational Services (Chennai) Private Limited and Noida Customer Operations Private Limited. WNS Global has filed the Scheme of Amalgamation with the Bombay High Court on April 16, 2009 to seek their approval for the amalgamation. We expect the restructuring to be completed in the second quarter of fiscal 2010.

We are headquartered in Mumbai, India, and we have client service offices in New York (US) and London (UK) and delivery centers in Ipswich and Manchester (UK), Bucharest (Romania), India, Sri Lanka and Manila (the Philippines). We completed our initial public offering in July 2006 and our ADSs are listed on the New York Stock Exchange, or the NYSE, under the symbol “WNS.”

Our capital expenditures in fiscal 2009, 2008 and 2007 amounted to $22.7 million, $28.1 million and $27.3 million, respectively. Our principal capital expenditures were incurred for the purposes of setting up new delivery centers or expanding existing delivery centers and setting up related technology to enable offshore execution and management of clients’ business processes. We expect our capital expenditure needs in fiscal 2010 to be approximately $15.0 million, a significant amount of which we expect to spend on building new facilities as well as continuing to streamline our operations by further consolidating production capacities in our delivery centers. We expect to meet these estimated capital expenditures from cash generated from operating activities and existing cash and cash equivalents. See “Item 5. Operating and Financial Review and Prospects — Liquidity and Capital Resources” for more information.

B. Business Overview

We are a leading provider of offshore BPO services. We provide comprehensive data, voice and analytical services that are underpinned by our expertise in our target industry sectors. We transfer the business processes of our clients which are typically companies headquartered in Europe and North America to our delivery centers located in India, Sri Lanka, the Philippines, Romania and the UK. We provide high quality execution of client processes, monitor these processes against multiple performance metrics, and seek to improve them on an ongoing basis.

We began operations as an in-house unit of British Airways in 1996, and started to provide business process outsourcing services to third parties in fiscal 2003. According to the National Association of Software and Service Companies, or NASSCOM, an industry association in India, we have been among the top two India-based offshore business process outsourcing companies in terms of revenue since 2004. As of March 31, 2009, we had 21,356 employees executing approximately 600 distinct business processes for more than 215 clients. Our largest clients in fiscal 2009 in terms of revenue contribution included AVIVA, Biomet Inc., British Airways, Centrica plc, Liverpool Victoria Insurance Company Ltd, or Liverpool, Marsh & McLennan Companies Inc., or MMC, SAGA Group Limited, or SAGA, Société Internationale de Télécommunications Aéronautiques, or SITA, Travelocity.com LP, or Travelocity, and Virgin Atlantic Airways Ltd. See “— Clients.”

We design, implement and operate comprehensive business processes for our clients, involving one or more data, voice and analytical components. Our services include industry-specific processes that are tailored to address our clients’ business and industry practices, particularly in the travel and leisure, and banking, financial services and insurance, or BFSI, industries, as well as businesses in the consumer products, retail, professional services, pharmaceutical, media and entertainment, manufacturing, logistics, telecommunications, and utilities industries. As we scale our business in particular industries, we create business units that allow us to invest in deepening our domain expertise. For example, in April 2008, we created a new industrial and infrastructure business unit to focus specifically on the industrial and infrastructure industry such as the manufacturing, logistics, telecommunications, and utilities industry sectors. In addition, we deliver shared services applicable across multiple industries, in areas such as finance and accounting, and market, business and financial research and analytics, which we collectively refer to as finance and accounting services, and research and analytics services (formerly referred to as knowledge services), respectively. In addition, we recently reorganized our industry-specific capabilities to form a new core functional service capability called business transformation services. These services seek to help our clients identify business and process optimization opportunities through technology-enabled solutions, process design and improvements, including the Six Sigma principles, and other techniques and leveraging program management to achieve cost savings.

We generate revenue primarily from providing business process outsourcing services. A portion of our revenue includes payments which we make to automobile repair centers. We evaluate our business performance based on revenue net of these payments in the case of “fault” repairs, since we believe that revenue less repair payments reflects more accurately the value of the business process outsourcing services we directly provide to our clients. See “Item 5. Operating and Financial Review and Prospects — Results by Reportable Segment.” In fiscal 2009, our revenue was $539.3 million, our revenue less repair payments was $386.4 million and our net income was $8.1 million.

Between fiscal 2007 and fiscal 2009, our revenue grew at a compound annual growth rate of 23.7% and our revenue less repair payments grew at a compound annual growth rate of 32.6%. During this period, we grew both organically and through acquisitions. We believe we have achieved rapid growth and industry leadership through our understanding of the industries in which our clients operate, our focus on operational excellence, and a senior management team with significant experience in the global outsourcing industry. Our revenue is characterized by client, industry, geographic and service diversity, which we believe offers us a sustainable business model.

Industry Overview

Companies globally are outsourcing a growing proportion of their business processes to streamline their organizations, reduce costs, create flexibility, and improve their processes to increase shareholder returns. More significantly, many of these companies are outsourcing to offshore locations such as India to access a high quality and cost-effective workforce. We are a pioneer in the offshore business process outsourcing industry and continue to be well positioned to benefit from the combination of the outsourcing and offshoring trends.

While a limited number of global corporations such as General Electric Company, British Airways (through our subsidiary, WNS Global) and American Express Company established in-house business process outsourcing facilities in India in the mid-1990s, offshore business process outsourcing growth only accelerated significantly from 2000 onwards with the emergence of third party providers. This has been followed by a shift in focus from largely call center related outsourcing in areas such as telemarketing and client services to a wider range of more complex business processes such as finance and accounting, insurance claims administration and market research analysis.

The global business process outsourcing industry is large and growing rapidly. According to a June 2008 study conducted by Nelson-Hall, a BPO specialist research firm, the global business process outsourcing market was estimated at $314.7 billion in 2008 and is projected to grow at a 10% compound annual growth rate from 2008 through 2012 to $450.6 billion.

The following charts set forth the relative growth rate and size of the global business process outsourcing industry and the global information technology industry in addition to the expected growth rate of the Indian offshore business process outsourcing industry:

Global IT Outsourcing vs. BPO Market ($ in billions)		Indian BPO Industry Exports ($ in billions)
Source: Gartner Outsourcing Worldwide Forecast Database, April 2009		Source: NASSCOM Factsheet, updated February 2009
Note: Years ending December 31		Note: Years ending March 31

We believe that India is widely considered to be the most attractive destination for offshore business process outsourcing. According to a report published by NASSCOM Everest Research Institute in January 2008, or the NASSCOM Everest BPO Study, India-based players account for 37.0% of offshore business process outsourcing revenue in 2007, and India will retain its position as the most favored offshore business process outsourcing destination for the foreseeable future. The key factors for India’s predominance include its large, growing and highly educated English-speaking workforce coupled with a business and regulatory environment that is conducive to the growth of the business process outsourcing industry.

Offshore business process outsourcing is typically a long-term strategic commitment for companies. The processes that companies outsource are frequently complex and integrated with their core operations. These processes require a high degree of customization and, often, a multi-stage offshore transfer program. Clients would therefore incur high switching costs to transfer these processes back to their home locations or to other business process outsourcing providers. As a result, once an offshore business process outsourcing provider gains the confidence of a client, the resulting business relationship is usually characterized by multi-year contracts with predictable annual revenue.

Given the long-term, strategic nature of these engagements, companies undertake a rigorous process in evaluating their business process outsourcing provider. Based on our experience, a client typically seeks several key attributes in a business process outsourcing provider, including:

•		established reputation and industry leadership;
•		demonstrated ability to execute a diverse range of mission-critical and often complex business processes;
•		capability to scale employees and infrastructure without a diminution in quality of service; and
•		ability to innovate, add new operational expertise and drive down costs.

As the offshore business process outsourcing industry evolves further, we believe that scale, reputation and leadership will increasingly become more important factors in this selection process.

Competitive Strengths

We believe that we have the following seven competitive strengths necessary to maintain and enhance our position as a leading provider of offshore business process outsourcing services:

Offshore business process outsourcing market leadership

We have received recognition as an industry leader from various industry bodies or publications. For example:

•		NASSCOM has named us among the top two India-based offshore business process outsourcing companies in terms of revenue since 2004;
•		The Global Services Magazine, in conjunction with a leading outsourcing advisor, neoIT, named us the “Best Performing Finance and Accounting Outsourcing Provider” in 2008 and the top two best performing business process outsourcing company in 2008 and 2009;
•		KLM Royal Dutch Airlines recognized us with the “Partners in Innovation Challenge Award” in 2008;
•		The CIO Magazine (Indian Edition) granted us an award for “Innovative Strategic Solutions” in 2008;

•		The Auto Body Professionals Club, a UK automobile repair trade organization, ranked us as the best accident management company in 2007;
•		The Global Six Sigma experts and practitioners ranked us the best achievement of “Six Sigma in Outsourcing” in 2007;
•		FAO Research Inc., an independent research firm worldwide, recognized us for “Outstanding Finance and Accounting Best Practices” on two client engagements in 2007; and
•		The Institute of Directors, an association promoting the development of Indian business leadership, recognized us with the “Golden Peacock Innovation Award” in 2007.

We have closely followed industry trends in order to target services with high potential For example, since our emergence as a third party business process outsourcing provider, we have aggressively invested in finance and accounting, and research and analytics services, two services which are enjoying strong demand in today’s challenging economic climate. As demand has ramped up in the industrials and infrastructure sector, in April 2008, we set up a team to focus on the industrial and infrastructure industry sectors. We have also focused our service portfolio on more complex processes, avoiding the delivery of services that are less integral to our clients’ operations, such as telemarketing and technical helpdesks, which characterized the offshore business process outsourcing industry in its early days. For example, we recently reorganized our industry-specific capabilities to form a new core functional service capability called business transformation services. These services seek to help our clients identify business and process optimization opportunities through technology-enabled solutions, process design and improvements, including the Six Sigma principles, and other techniques and leveraging program management to achieve cost savings.

We believe our early differentiation from other players and the length of our working relationship with many industry-leading clients has significantly contributed to our reputation as a proven provider of offshore business process outsourcing services. We believe that this reputation is a key differentiator in our attracting and winning clients.

Deep industry expertise

We have established deep expertise in the industries we target. We have developed our business by creating focused business units that provide industry-specific services. Our industry-focused strategy allows us to retain and enhance expertise thereby enabling us to:

•		offer a suite of services that deliver a comprehensive industry-focused business process outsourcing program;
•		leverage our existing capabilities to win additional clients and identify new industry-specific service offerings;
•		cultivate client relationships that may involve few processes upon initial engagement to develop deeper engagements ultimately involving a number of integrated processes;
•		provide proprietary technology platforms for use in niche areas in specific sectors such as auto insurance and travel;
•		recruit and retain talented employees by offering them industry-focused career paths; and
•		achieve market leadership in several of the industries we target.

Experience in transferring processes offshore and running them efficiently

Many of the business processes that are outsourced by clients to us are mission-critical and core to their operations, requiring substantial program management expertise. We have developed a sophisticated program management methodology intended to ensure smooth transfer of business processes from our clients’ facilities to our delivery centers. For example, our highly experienced program management team has transferred approximately 600 distinct business processes for more than 215 clients in the last eight years.

We focus on delivering our client processes effectively on an ongoing basis. We have also invested in a quality assurance team that satisfies the International Standard Organization, or ISO, 9001:2000 standards for quality management systems, and applies Six Sigma, a statistical methodology for improving consistent quality across processes, and other process re-engineering methodologies to further improve our process delivery. The composition of our revenue enables us to continuously optimize the efficiency of our operations.

Diversified client base across multiple industries and geographic locations

We serve a large, diversified client base of more than 215 clients across Europe and North America, including clients who are market leaders within their respective industries. We have clients across the multiple sectors of the travel and leisure, and BFSI industries as well as other industries such as consumer products, retail, professional services, pharmaceutical, media and entertainment, manufacturing, logistics, telecommunications, and utilities. To date, many of our clients have transferred a limited number of their business processes offshore. We believe, therefore, that we have a significant opportunity to increase the revenue we generate from these clients in the future as they decide to expand their commitment to offshore business process outsourcing. See “— Clients.”

Extensive investment in human capital development

Our extensive recruiting process helps us screen candidates on multiple parameters and to appropriately match employees to the most suitable positions. We have established the WNS Learning Academy which provides ongoing training to our employees for the purpose of continuously improving their leadership and professional skills. We seek to promote our team leaders and operations managers from within, thereby offering internal advancement opportunities and clear long-term career paths.

Ability to manage the rapid growth of our organization

We have invested significant management effort toward ensuring that our organization is positioned to continuously scale to meet the robust demand for offshore business process outsourcing services. We are capable of evaluating over 10,000 potential employees and recruiting, hiring and training over 500 employees each month, enabling us to rapidly expand and support our clients. We have also established a highly scalable operational infrastructure in multiple locations supported by a world-class information technology and communications network infrastructure.

Experienced management team

We benefit from the effective leadership of a global management team with diverse backgrounds including extensive experience in outsourcing. A majority of our core senior management team members have been with us since fiscal 2003, and have successfully executed the growth strategy that has increased our client base from 14 clients as of May 2002 to more than 215 clients as of March 31, 2009 and increased our revenue from $352.3 million in fiscal 2007 to $539.3 million in fiscal 2009 and our revenue less repair payments from $219.7 million in fiscal 2007 to $386.4 million in fiscal 2009. Moreover, we believe that our management has successfully guided our rapid expansion while increasing client satisfaction, as demonstrated by our in-house customer feedback surveys.

Business Strategy

Our objective is to strengthen our position as a leading global business process outsourcing provider. To achieve this, we will seek to expand our client base and further develop our industry expertise, enhance our brand to attract new clients, develop organically new business services and industry-focused operating units and make selective acquisitions. The key elements of our strategy are described below.

Drive rapid growth through penetration of our existing client base

We have a large and diverse existing client base that includes many leading global corporations, most of whom have transferred only a limited number of their business processes offshore. We leverage our expertise in providing comprehensive process solutions by identifying additional processes that can be transferred offshore, cross-selling new services, adding technology-based offerings, and expanding and deepening our existing relationships. We have account managers tasked with maintaining a thorough understanding of

our clients’ outsourcing roadmaps as well as identifying and advocating new offshoring opportunities. As a result of this strategy, we have a strong track record of extending the scope of our client relationships over time.

Enhance awareness of the WNS brand name

Our reputation for operational excellence among our clients has been instrumental in attracting and retaining new clients as well as talented and qualified employees. We believe we have benefited from strong word-of-mouth brand equity in the past to scale our business. However, as the size and the complexity of the offshore business process outsourcing market grows, we are actively increasing our efforts to enhance awareness of the WNS brand in our target markets and among potential employees. To accomplish this, we have a dedicated global marketing team comprised of experienced industry talent. We are also focusing on developing channels to increase market awareness of the WNS brand, including through internet marketing techniques, exposure in industry publications, participation in industry events and conferences, and thought leadership initiatives in the form of publication of articles and white papers, webinars and podcasts. In addition, we are aggressively targeting BPO industry analysts, general management consulting firms, and boutique outsourcing firms, who are usually retained by prospective clients to provide strategic advice, act as intermediaries in the sourcing processes, develop scope specifications and aid in the partner selection process.

Reinforce leadership in existing industries and penetrate new industry sectors

We have a highly successful industry-focused operating model through which we have established a leading offshore business process outsourcing practice in the travel and leisure, and BFSI sectors. We intend to leverage our in-depth knowledge of these industries to penetrate additional sectors within these industries. For example, through our recent acquisition of Aviva Global, we see opportunities to penetrate the multi-line insurance and other segments of the insurance industry. Our success in penetrating the market for finance and accounting services across industries drives us to invest in talent and technology platforms with the goal of scaling our business in order to acquire industry-specific expertise. In addition, in April 2008, we established a dedicated team to focus specifically on the industrial and infrastructure industries such as the manufacturing, logistics, telecommunications and utilities industry sectors. We continue to leverage our existing expertise in the emerging businesses to develop our practice in the consumer products, retail, professional services, pharmaceutical, and media and entertainment sectors.

Broaden industry expertise and enhance growth through selective acquisitions

Our acquisition strategy is focused on adding new capabilities and industry expertise. Our acquisition track record demonstrates our ability to integrate, manage and develop the specific capabilities we acquire. Our intention is to continue to pursue targeted acquisitions in the future and to rely on our integration capabilities to expand the growth of our business.

Business Process Outsourcing Service Offerings

We offer our services to four main categories of clients through industry-focused business units. First, we serve clients in the travel and leisure industry, including airlines, travel intermediaries and other related service providers, for whom we perform services such as customer service and revenue accounting. Second, we serve clients in the BFSI industry for whom we perform services such as insurance claims management, account set-up and other related services, and asset management support. Third, we serve clients in the industrial and infrastructure industry, including manufacturing, logistics, telecommunications and utilities. Fourth, we serve clients in several other industries, including consumer products, retail, professional services, pharmaceutical, and media and entertainment, which we refer to as emerging businesses. In addition to industry-specific services, we offer a range of services across multiple industries, in the areas of finance and accounting services and market, business and financial research and analytical services, which we collectively refer to as finance and accounting services, and research and analytics services (formerly referred to as knowledge services), respectively. Further, we recently reorganized our industry-specific capabilities to form a new core functional service capability called business transformation services. These services seek to help our clients identify business and process optimization opportunities through technology-enabled solutions, process design and improvements, including the Six Sigma principles, and other techniques and leveraging program management to achieve cost savings. This structure is depicted in the graphic below:

To achieve in-depth understanding of our clients’ industries and provide industry-specific services, we manage and conduct our sales processes in our two key markets — North America and Europe. In addition, we recently established a small team to focus on the Asia Pacific market. Our sales teams are led by senior professionals who focus on target industries or processes. Each business unit is staffed by a dedicated team of managers and employees engaged in providing business process outsourcing client solutions. In addition, each business unit draws upon common support services from our information technology, human resource, training, corporate communications, corporate finance, risk management and legal departments, which we refer to as our corporate-enabling units.

Travel and Leisure Services

We believe that we currently have one of the largest and most diverse service offerings among offshore business process outsourcing service providers in the travel and leisure services domain.

Our service portfolio includes processes that support air, car, hotel, marine and packaged travel and leisure services offered by our clients. The key travel and leisure industry sectors we serve include:

•

airlines;

•

travel intermediaries; and

•

others such as global distribution systems and network providers.

We served a diverse client base in this business unit that included British Airways, Virgin Atlantic Airways Ltd, SITA and Travelocity in fiscal 2009. In fiscal 2009, we served 19 airlines and 13 travel intermediaries. As of March 31, 2009, we had 6,191 employees in this business unit, several hundred of whom have International Air Transport Association, or IATA, certifications. In fiscal 2009 and 2008, this business unit represented 18.9% and 22.5% of our revenue, and 26.4% and 35.6% of our revenue less repair payments, respectively.

The following graphic illustrates the key areas in which we provide services to clients in this business unit:

Case Study. We were retained by a major airline client that was faced with increasing competitive pressure from other carriers and needed to reduce its costs. We worked with this client to develop an offshore business process outsourcing strategy to fundamentally alter its service delivery model with the goal of increasing its cost efficiency. We initially started providing business process outsourcing services to this client with 12 employees handling a single process. As of March 31, 2009, 1,013 employees were executing over 60 different processes for this client, which included a variety of complex processes. We categorize these processes into six broad areas:

•

customer interaction: customer complaint resolution, loyalty program management;

•

passenger revenue accounting: refunds, fare audit, ticket coupon matching, sales accounting;

•

cargo operations and accounting: scheduling, booking, flight planning, mail revenue accounting;

•

revenue management: seat allocation, processing meal requests, yield maximization through inventory management, fare filing, fare construction and quotation;

•

reporting and analytics: aircraft load factor, costs, market share, revenue and competition reports; and

•

other miscellaneous services: updating employee records, calculation of medical leave and overtime for staff.

We believe that by transferring these processes to us, the client has achieved significant cost savings, and increased its levels of end-customer satisfaction. These benefits are in addition to process-specific productivity improvements such as higher quality and accuracy levels.

BFSI Services

We were ranked as the leading insurance outsourcer in India by the International Association of Outsourcing Professionals in The Global Outsourcing 100 list for 2008. We also have growing expertise in the retail and mortgage banking, and asset management sectors.

The key BFSI industry sectors we serve include:

•

integrated financial services companies;

•

life, annuity, and property and casualty insurers;

•

insurance brokers and loss assessors;

•

self-insured auto fleet owners;

•

commercial and retail banks;

•

mortgage banks and loan servicers;

•

asset managers and financial advisory service providers; and

•

healthcare payors, providers and device manufacturers.

We served a diverse client base in this business unit that included AVIVA, MMC, SAGA and Liverpool in fiscal 2009. We also serve a large US-based financial advisory provider, a top ten UK auto insurer, a large insurance loss adjuster, several self-insured fleet owners and several mortgage-related companies. As of March 31, 2009, we had 8,629 employees working in this business unit. In fiscal 2009 and 2008, revenue from this business unit represented 64.0% and 57.4% of our revenue, and revenue less repair payments from this business unit represented 49.7% and 32.7% of our revenue less repair payments, respectively.

In April 2008, we acquired Chang Limited, an auto insurance claims processing services provider in the UK through its wholly-owned subsidiary, Call 24-7. Call 24-7 provides comprehensive end-to-end solutions to the UK insurance industry by leveraging cost efficient claims processing, technology, and engineering and collision repair expertise to deliver quality service to its insurer clients through the accident management process. Call 24-7 offers a comprehensive suite of back-office insurance claims services, including first notification of loss, third party claims handling, replacement vehicle provisioning and repair management through a national network of approved body shops.

The following graphic illustrates the key areas in which we provide services to clients in this business unit:

Our BFSI business unit includes our auto claims business, branded WNS Assistance, which is comprised of our WNS Auto Claims BPO segment. WNS Assistance offers a blended onshore-offshore delivery model that enables us to handle the entire automobile insurance claims cycle. We offer comprehensive accident management services to our clients where we arrange for repair of automobiles through a network of repair centers. We also offer claims management services where we process accident insurance claims for our clients. Our employees receive telephone calls reporting automobile accidents, generate electronic insurance claim forms and arrange for automobile repairs in cases of automobile damage. We also provide third party claims handling services including the administration and settlement of property and bodily injury claims while providing repair management and rehabilitation services to our insured and self-insured fleet clients and the end-customers of our insurance company clients. Our service for uninsured losses focuses on recovering repair costs and legal expenses directly from negligent third parties. See “Item 5. Operating and Financial Review and Prospects — Results by Reportable Segment.”

Case Study. A Fortune 300 US financial planning and investment services company was undergoing a spin-off which resulted in the client losing its brand name. The client retained us to transform its operating model and improve its baseline performance so as to ensure that it continued to deliver enhanced services to its customers and retain the confidence of its distribution network following the spin-off and the loss of its brand name. To accomplish this, we established a complex operation involving 450 employees across three delivery locations to manage 31 processes as of March 31, 2009. Our efforts allowed the company to better manage variable volumes, improve customer service and reduce payout due to adverse claims from customers. The services performed for this client include:

•

sales and marketing support activities such as broker and advisor support;

•

customer account set-up and maintenance processes such as application processing, application verification, credit evaluation and customer care; and

•

trading and securities operations such as order entry, reconciliation, reporting and exceptions research.

We also delivered significant reduction in the client’s operational costs by changing their fixed-cost structure to a fully variable-pricing model that enabled them to manage volumes in a predictable way.

Industrial and Infrastructure Services

Our industrial and infrastructure services business unit used to be part of our emerging businesses business unit. In April 2008, we created a new industrial and infrastructure services business unit to focus specifically on the needs of the manufacturing, logistics, telecommunications and utilities industries.

We served a diverse client base that included Centrica plc in fiscal 2009. Our industrial and infrastructure services business unit is considered as a separate business unit from our emerging businesses beginning from fiscal 2009. As of March 31, 2009, we had 2,735 employees in this business unit. In fiscal 2009, our industrial and infrastructure services business unit represented 6.6% of our revenue and 9.3% of our revenue less repair payments.

The following graphic illustrates the key areas in which we provide services to clients in this business unit:

Case Study. A leading global gas utility, which is also a Fortune 100 company, retained us in January 2006 for the outsourcing of its transaction processing and finance and accounting services. The client selected us based on our reputation for operational excellence, process improvement, process migration expertise and our global footprint. Our dedicated transition team conducted a detailed evaluation of their existing processes and successfully transferred their back-office and financial and accounting processes, as well as their correspondence, house and voice processes which enables them to communicate with their customers and respond to their queries and complaints via written communications, emails and on the telephone, on a new enterprise resource planning platform to our facilities in India within three months. In April 2006, the first process went live in Mumbai and we ramped up the process across multiple locations in a span of six months. As of March 31, 2009, we had approximately 960 employees across two cities. During the transition period, a dedicated Six Sigma process improvement team worked hand in hand with the operations team in stabilizing the processes, thereby reducing the learning curve and enabling faster delivery of key metrics.

Emerging Businesses

Prior to April 2008, our emerging businesses unit addressed the needs of the manufacturing, logistics, telecommunications, utilities, consumer products, retail, professional services, pharmaceutical, and media and entertainment industries. In April 2008, we created a new industrial and infrastructure services business unit to focus specifically on the needs of the manufacturing, logistics, telecommunications and utilities industries. We believe several industries are at an accelerating stage of offshore business process outsourcing adoption, and therefore present significant opportunities for growth. These industries include consumer products, retail, professional services, pharmaceutical and, media and entertainment industries.

As of March 31, 2009, we had 2,804 employees in this business unit. In fiscal 2009 and 2008, this business unit represented 10.5% and 20.1% of our revenue and 14.6% and 31.8% of our revenue less repair payments. For fiscal 2008, this included revenue from our industrial and infrastructure business unit which started being reported as a separate business unit from fiscal 2009.

Our strategy for our emerging businesses is to nurture and develop emerging industry-specific capabilities up to a point of critical mass from which new industry-focused operating units may emerge. We utilize three core functional service capabilities to penetrate our emerging businesses. These capabilities are broadly classified as:

•

finance and accounting services focused on finance and accounting services;

•

research and analytics services focused on market, business and, financial research and analytical services; and

•

business transformation services focused on business and process optimization services.

Finance and Accounting Services

In our finance and accounting services area, we offer critical finance and accounting services to our clients.

In June 2008, we acquired BizAps, a provider of SAP solutions to optimize the enterprise resource planning functionality for our finance and accounting processes. The acquisition of BizAps has enabled us to further assist our global customers in improving their shared services finance and accounting functions, including core processes such as procure-to-pay and order-to-cash. Based in the UK and US, with development capabilities in China, BizAps offers SAP optimization services and SAP certified solutions designed to simplify SAP roll-out and enhance functionality for internal and outsourced shared services centers.

The following graphic illustrates the key finance and accounting services we provide:

Case Study. A large media and entertainment conglomerate sought to outsource the processes of its internal treasury services department that was in charge of providing treasury support services such as foreign exchange hedging, providing financial advice and financial reporting for its affiliated companies. After a rigorous process of security-related due diligence, the client selected us as its partner to enhance its treasury services capabilities and reduce operational costs while maintaining a high standard in regulatory compliance. The services we provided can be categorized as follows:

•

Planning services — providing daily updates of current and future cash flows of the client’s 150 affiliated companies;

•

Back-office services — managing core treasury functions;

•

Middle office services — providing processes such as credit monitoring, and hedging analysis;

•

Accounting services — providing end-to-end accounting services in enterprise resource planning including book closing, account reconciliation and budget preparation; and

•

Treasury operations services — providing reports on hedging positions, outstanding balance and money market dividend.

By engaging us to perform critical treasury support services with a strong focus on process integrity and regulatory compliance, the client achieved a substantial reduction in operational costs and compliance with internal controls audit pursuant to the US Sarbanes-Oxley Act of 2002.

Research and Analytics Services

In the research and analytics services area, we offer market, business, and financial research and analytical services such as business and financial research, market research, domain specific analytical services, data services and business services to our clients who are typically pharmaceutical companies, consulting firms, market research companies and investment banks. These services range from low complexity data collection services to complex and high-end analytics which require specialized skill sets. Our research and analytics services also include industry-specific processes that are tailored to address our clients’ business and industry practices in the pharmaceutical, retail, financial services and insurance, consumer products and other emerging industries like travel, manufacturing, technology, media and telecommunications. Our analysts have either a bachelor or masters degree in statistics, management, business administration, finance and accountancy or economics which enables us to support many of our clients’ highly complex and mission critical processes. We have institutionalized processes around staffing, internal training, knowledge transfer, transition, team management and client communication that are unique to high-end knowledge process outsourcing relationships.

In May 2007, we acquired Marketics, a provider of offshore analytics services. Over the last three years, Marketics has developed a wide range of technology-enabled analytic services, primarily targeting the sales and marketing organizations of consumer-centric companies. Marketics’ value proposition is focused on enhancing business decision making through the use of complex analytics such as predictive modeling to understand consumer behavior patterns and sales data analytics to support inventory allocation.

The following graphic illustrates the key research and analytics services we provide:

Case Study. WNS partnered with its client, one of the world’s leading research-based pharmaceutical and healthcare companies, in 2005 to transform the client’s business intelligence function by setting up an offshore dedicated knowledge center for research and analytics. WNS established a dedicated knowledge center in India staffed by highly qualified professionals including doctors and postgraduates in fields such as pharmaceuticals, life sciences, and business administration. Although the knowledge center initially started with the delivery of data analytics and knowledge performance indicator dashboards to enable informed decision-making by the client’s European commercial team, it has since expanded its scope to cover three primary areas:

•

sales force effectiveness analytics utilizing a range of analytical tools and statistical techniques to transform datasets into simple and conclusive insight;

•

product and therapeutic area evaluation which involves a combination of analytics and qualitative research, including pricing and forecasting support; and

•

performance tracking, which provides management information by capturing key performance indicators for various business functions.

The key features of our solution are:

•

standardizing and integrating processes to enable data analytics across all commercial centers in Europe;

•

institutionalizing knowledge through sharing of best practices globally, thereby fostering innovation;

•

improving process efficiency through automation in report-generation, thereby reducing turnaround time;

•

creating a knowledge repository comprising process and training manuals, standard outputs, templates and guide books;

•

instituting a proactive error-prevention mechanism by creating standard operating procedures, and instituting strong knowledge-sharing practices; and

•

building a sizable team of research and analytics resources, tapping the talent of individuals with deep domain expertise, such as medical and pharmaceutical industry knowledge, and augmenting this with those that possess deep analytics, business intelligence and research skills.

We believe that our services have enabled the client to centralize its analytical support team to provide consistent support across different parts of the client’s business, standardize reporting across the client’s business in all European countries thereby ensuring a more informed decision making process, reduce cost of operations and significantly improved turnaround time on report generation. Given the success of the partnership to date, the client has significantly expanded the number of our employees in the center, and the scope of the center has been enlarged to include support for other parts of the client’s operations. As of March 31, 2009, we had over 220 employees working for this client. The complexity of work has also increased with the team now performing highly complex and business-critical analytics across a broad range of functional areas.

Business Transformation Services

We recently reorganized our industry-specific capabilities to form a new core functional service capability called business transformation services. These services seek to help our clients identify business and process optimization opportunities through technology-enabled solutions, process redesigning and improvements using a variety of techniques, and leveraging technical and management development programs to achieve cost savings. Because the economic climate is dynamic, our clients seek cost savings beyond labor arbitrage and look for step changes in productivity and the ability to manage variability. To more effectively address our clients’ needs, we have restructured our existing capabilities in process and domain consulting, program management, and quality and technology analytics into a comprehensive service. Our services include implementation of best practices, technology-enabled solutions optimization and leading-edge analytics. We use various processes, tools and methodologies to deliver our business transformation services, including the Six Sigma & Lean methodologies, engagement models tied to results, analytics-based business insights, domain and process expertise, process re-engineering, best practices, and standardization and automation.

The following graphic illustrates the key transformation services that we provide:

Sales and Marketing

The offshore business process outsourcing services sales cycle is time consuming and complex in nature. The extended sales cycle generally includes initiating client contact, submitting requests for information and proposals for client business, facilitating client visits to our operational facilities, performing diagnostics studies and conducting pilot implementations to test our delivery capabilities. Due to the complex nature of our sales cycle, we have organized our sales teams by business units and staffed them with professionals who have specialized industry knowledge. This industry focus enables our sales teams to better understand the prospective client’s business needs and offer appropriate industry-focused solutions.

As of March 31, 2009, we had 117 sales and sales support professionals based in the US, Eastern Europe, the UK and India. Our sales teams work closely with our sales support team in India, which provides critical analytical support throughout the sales cycle. Our front-line sales teams are responsible for identifying and initiating discussions with prospective clients, and selling services in new areas to existing clients. We have strategically recruited our sales teams primarily from the US and the UK.

We also assign dedicated account managers to each of our key clients. These managers work day-to-day with the client and our service delivery teams to address the client’s needs. More importantly, by using the detailed understanding of the client’s business and outsourcing objectives gained through this close interaction, our account managers actively identify and target additional processes that can be outsourced to us. Through this methodology, we have developed a strong track record of increasing our sales to existing clients over time.

Clients

As of March 31, 2009, we had a diverse client base of more than 215 clients across a variety of industries and process types, including companies that we believe are among the leading players in their respective industries. We define significant clients as those who represent an ongoing business commitment to us, which includes substantially all of our clients within our WNS Global BPO segment

and some of our clients within our WNS Auto Claims BPO segment. These clients offer only occasional business to us because of the small size of their automobile fleets and the consequent infrequent requirement of our auto claims services.

We believe the diversity in our client profile differentiates us from our competitors. See “Item 5. Operating and Financial Review and Prospects — Revenue” for additional information on our client base.

In fiscal 2009, the following were among our top 25 clients (including their affiliates) by revenue:

AVIVA		MMC
Biomet Inc.		SAGA
British Airways		SITA
Centrica plc		Travelocity
Liverpool		Virgin Atlantic Airways Ltd.

The table below sets forth the number of our clients by revenue less repair payments for the periods indicated. We believe that the growth in the number of clients who generate more than $1 million of annual revenue less repair payments indicates our ability to extend the depth of our relationships with existing clients over time.

		Year Ended March 31,
		2009				2008
Below $1.0 million			161				145
$1.0 million to $5.0 million			40				36
$5.0 million to $10.0 million			5				8
More than $10.0 million			10				6

Competition

Competition in the business process outsourcing services industry is intense and growing steadily. See “Item 3. Key Information — D. Risk Factors — Risks Related to Our Business — We face competition from onshore and offshore business process outsourcing companies and from information technology companies that also offer business process outsourcing 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 business process outsourcing service companies based in offshore locations (primarily India), such as Genpact Limited, Firstsource Solutions Ltd. and ExlService Holdings, Inc.;

•

business process outsourcing divisions of numerous information technology service companies located in India such as Infosys BPO Ltd (formerly Progeon Ltd) owned by Infosys Technologies Limited, or Infosys, Tata Consultancy Services Limited, or TCS, and Wipro BPO, owned by Wipro Technologies Limited; and

•

global companies such as Accenture Ltd., Affiliated Computer Services Inc., 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.

However, while companies such as Infosys (through its business process outsourcing subsidiary, Infosys BPO Ltd) and TCS can offer clients integrated information technology and business outsourcing services, we believe these companies focus on information technology as their core business.

In addition, departments of certain companies may choose to perform their business processes in-house, 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 clients’ software systems, third-party software platforms and systems and, in some cases, our own proprietary software and platforms to provide our services. Our principal proprietary software includes our platform for passenger revenue accounting called JADE, which we use in our travel and leisure business unit, and an auto claims software platform called Claimsflo, which we use in WNS Assistance. Our proprietary and licensed software allows us to market our services with an integrated solution that combines a technology platform with our core business process outsourcing service offering.

We customarily enter into licensing and non-disclosure agreements with our clients with respect to the use of their software systems and platforms. Our contracts usually provide that all intellectual property created for the use of our clients will be assigned to them. Our employees are also required to sign confidentiality agreements as a condition to their employment.

We have registered the trademark “WNS” and “WNS-Extending Your Enterprise” in the US and India (in certain relevant categories) and have applied to register these trademarks in the European Union, or the EU.

Technology

We have a dedicated team of technology experts who support clients at each stage of their engagement with us. The team conducts diagnostic studies for prospective clients and designs and executes technology solutions to enable offshore execution and management of the clients’ business processes. We also have wide-area-network, or WAN, local-area-network, or LAN, and desktop teams that focus on creating and maintaining our large pool of 15,485 workstations, or seats, and seek to ensure that our associates face minimal loss in time and efficiency in their work processes.

We have a well-developed international telecommunications infrastructure. We use a global wide area network, which we refer to as the WNSNet to connect our clients’ data centers in the UK, Europe, North America and Asia with our delivery centers. WNSNet has extensive security and virus protection capabilities built in to protect the privacy of our clients and their customers and to protect against computer virus attacks. We believe our telecommunications network is adaptable to our clients’ legacy systems as well as to new and emerging technologies. Our telecommunications network is supported by a 24/7 network management system. Our network is designed to eliminate any “single-point-of-failure” in the delivery of services to clients.

Process and Quality Assurance and Risk Management

Our process and quality assurance compliance programs are critical to the success of our operations. We have an independent quality assurance team to monitor, analyze, provide feedback on and report process performance and compliance. Our company-wide quality management system, which employs over 211 quality assurance analysts, focuses on managing our client processes effectively on an ongoing basis. Our process delivery is managed by independent empowered teams and measured regularly against pre-defined operational metrics. We also have over 600 employees in our quality assurance team that satisfies the ISO 9001:2000 standards for quality management systems. We apply the Six Sigma & Lean methodologies which are statistical methodologies for improving consistent quality across processes as well as quality management principles for improving the operation of our clients’ processes and providing a consistent level of service quality to our clients. As of March 31, 2009, more than 96 of our projects were run according to the Six Sigma methodologies. We also apply other process re-engineering methodologies to further improve our process delivery and undertake periodic audits of both our information systems policy and implemented controls.

Our risk management framework focuses on two important elements: business continuity planning and information security.

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.

Our approach to information security involves implementation of an organization-wide information security management system, or ISMS, which complies with the ISO 27001:2005 for optimal implementation of systems to manage organizational information security risks. These standards seek to ensure that sensitive company information remains secure. Currently, information security systems at eight delivery centers are ISO 27001:2005 certified, and we expect to seek similar certifications in our other delivery centers. In addition, we comply with the Payment Card Industry (PCI) Data Security Standard which is a multifaceted security standard aimed at helping companies proactively protect cardholder data or sensitive authentication data through the adoption of 12 security requirements.

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 or in their home jurisdictions 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 clients’ employees. The control and monitoring procedures defined by this function are separate from and in addition to our periodic internal audits.

Human Capital

As of March 31, 2009, we had 21,356 employees, of whom 16,452 were employees who execute client operations, whom we refer to as associates. Of these employees, 15,298 associates are based in India, with 380, 418, 56 and 300 associates in Sri Lanka, the Philippines, Romania, and the UK, respectively. Most of our associates hold university degrees. As of March 31, 2008 and 2007, we had 18,104 and 15,084 employees, respectively. Our employees are not unionized and we have not experienced any work stoppages except for an eight-hour work stoppage at our delivery center at Nashik in April 2008 arising from minor employee grievances which have been resolved. We believe that our employee relations are good. We focus heavily on recruiting, training and retaining our employees.

Recruiting and Retention

We believe that we have developed effective human resource strategies and a strong track record in recruiting. As part of our recruiting strategy, we encourage candidates to view joining our organization as choosing a long-term career in the field of travel, BFSI or another specific industry or service area. We use a combination of recruitment from college campuses and professional institutes, via recruitment agencies, job portals, advertisements and walk-in applications. In addition, a significant number of our applicants are referrals by existing employees. We currently recruit an average of 796 employees per month.

Our attrition rate for our employees who have completed six months of employment with us was 37% for each of the first and second quarters of fiscal 2009, 29% for the third quarter of fiscal 2009 and 22% for the fourth quarter of fiscal 2009.

Training and Development

We devote significant resources to the training and development of our associates. Our training typically covers modules in leadership and client processes, including the functional aspects of client processes such as quality and transfer. Training for new associates may also include behavioral and process training as well as culture, voice and accent training, as required by our clients. We have established the WNS Learning Academy where we offer specialized skills development, such as interviewing, coaching and presentation skills, and leadership development programs for associates as they move up the corporate hierarchy. The WNS Learning Academy is staffed with over 34 full-time trainers and content designers. We customize our training programs according to the nature of the client’s business, the country in which the client operates and the services the client requires. By offering such training programs, we seek to ensure that associates who assume leadership positions within our organization are equipped with the necessary skills. Further, the WNS Learning Academy has an in-house e-learning unit which creates computer or web-based learning modules to support ongoing learning and development. The WNS Learning Academy also caters to our knowledge management.

In addition to the training and development of our associates, we also place an emphasis on the learning and development of our team leaders and managers. In fiscal 2008, we implemented a specially designed five-day leadership program focused on professional and leadership skills and process improvement for approximately 880 team leaders and managers. A similar program has also been implemented for our full-time and part-time trainers to enhance their performance. In fiscal 2009, we implemented the Harvard

Leadership and Management series programs for over 178 of our team leaders and launched six workshops for our Assistant Vice Presidents under our leadership development programs. In addition, we offer higher education opportunities through tie-ups with leading institutions such as the Indian Institute of Management and the Symbiosis Institute of Business Management.

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 India, Sri Lanka, the Philippines, Europe and the US that regulate various aspects of our business. See “Item 3. Key Information — D. Risk Factors — Risks Related to our Business — Failure to adhere to the regulations that govern our business could result in us being unable to effectively perform our services. Failure to adhere to regulations that govern our clients’ businesses could result in breaches of contract with our clients.”

Regulation of our industry by the Indian government affects our business in several ways. We benefit from certain tax incentives promulgated by the Indian government, including a tax holiday from Indian corporate income taxes for the operation of most of our Indian facilities. The tax holiday enjoyed by our delivery centers located in Mumbai, Pune, Gurgaon, Bangalore, Chennai and Nashik will expire on April 1, 2010, except for the tax holiday enjoyed by three of our delivery centers located in Mumbai, Nashik and Pune which expired on April 1, 2007, April 1, 2008 and April 1, 2009, respectively. As a result of these incentives, our operations have been subject to lower Indian tax liabilities. In May 2007, the Indian Finance Act, 2007 was adopted, with the effect of subjecting Indian companies that benefit from a holiday from Indian corporate income taxes to the MAT at the rate of 11.33% in the case of profits exceeding Rs. 10 million and 10.3% in the case of profits not exceeding Rs. 10 million with effect from April 1, 2007. As a result of this amendment to the tax regulations, we became subject to MAT and are required to pay additional taxes commencing fiscal 2008. To the extent MAT paid exceeds the actual tax payable on the taxable income, we would be able to set off such MAT credits against tax payable in the succeeding seven years, subject to the satisfaction of certain conditions. In addition to this tax holiday, our Indian subsidiaries are also entitled to certain benefits under relevant state legislation/regulations. These benefits include preferential allotment of land in industrial areas developed by the state agencies, incentives for captive power generation, rebates and waivers in relation to payments for transfer of property and registration (including for purchase or lease of premises) and commercial usage of electricity. Further, our subsidiaries in India are subject to certain currency transfer restrictions.

Our Sri Lankan subsidiaries and our joint venture company in the Philippines also benefit from certain tax exemptions.

See “Item 5. Operating and Financial Review and Prospects — Critical Accounting Policies — Income Taxes” and Note 2 to our consolidated financial statements included elsewhere in this annual report for more details regarding foreign currency translations.

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 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, that does not mean that awards of punitive damages are not necessarily contrary to public policy. 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 amount which may be payable by such defendant may be limited by virtue of 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, which provides 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 United Kingdom is responsible or a person carrying on business in Jersey.

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 India would, and Mourant du Feu & Jeune, our counsel as to Jersey law, have advised us that 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.

Section 44A of the Code of Civil Procedure, 1908 (India), or the Civil Code, as amended, 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 the relevant superior court in India. 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.

A judgment of a foreign court may be enforced in India only by a suit upon the judgment, subject to Section 13 of the Civil Code and not by proceedings in execution. This section, which is the statutory basis for the recognition of foreign judgments, 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 the judgment appears on the face of the proceedings to be 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. Generally, there are considerable delays in the disposal of suits by Indian courts. 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 Indian practice. 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. Any judgment in a foreign currency would be converted into Indian rupees on the date of judgment and not on the date of payment.

C. Organizational Structure

The following diagram illustrates our company’s organizational structure and the place of organization of each of our subsidiaries as of the date hereof. Unless otherwise indicated, each of our subsidiary is 100% owned, directly or indirectly, by WNS (Holdings) Limited.

D. Property, Plant and Equipment

As of April 30, 2009, we have an installed capacity of 15,485 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. In fiscal 2009, we purchased the delivery center at Magarpatta, Pune, which was previously leased by us. We also have one sales office each in the US, Romania and the UK. The following table describes each of our delivery centers and sales offices, including centers under construction, and sets forth our lease expiration dates:

Total Space

Total Number of

Location

(square feet)

Workstations/Seats

Lease Expiration

Extendable Until(1)

India:

Mumbai

417,675

2,882

Plant 10

February 12, 2011

May 15, 2011

Plant 11 (old)

May 31, 2010/

February 28, 2013/

January 31, 2011

February 28, 2013

Plant 11

October 23, 2011

July 23, 2014

Plant 5

February 28, 2010

August 31, 2015

Total Space

Total Number of

Location

(square feet)

Workstations/Seats

Lease Expiration

Extendable Until(1)

Airoli(2)

October 31, 2013

October 31, 2018

Gurgaon

293,051

2,158

Towers A & B

October 31, 2009/

April 30, 2014/

November 30, 2009

May 31, 2014

Tower C

September 30, 2010

March 31, 2015

DLF Building 6(3)

March 15, 2012

September 15, 2017

Pune

621,064

5,269

Sofotel

December 31, 2011

N/A

Magarpatta(4)

N/A

N/A

Panschil Level 2

August 30, 2011

N/A

Weikfield(5)

August 14, 2013

August 14, 2017

Nashik

109,741

827

Unity(6)

January 31, 2010

January 31, 2010

Shreeniketan

June 30, 2010

N/A

Vascon(6)

See footnote no. 7

N/A

Bangalore

202,955

2,036

RMZ Continental

May 6, 2010

May 17, 2025

Indiranagar

August 31, 2009

Option to renew for a further

period of nine months(8)

Chennai

82,905

875

RMZ Millenia

October 19, 2010

Option to extend for a further

term of six years

Sri Lanka:

33,024

368

Colombo (HNB)

July 31, 2010/

N/A

September 30, 2011

UK:

27,327

414

Ipswich WNSA

August 26, 2012

N/A

Ipswich(SFH)-WNSA

October 31, 2009

N/A

Ipswich-WNSWT

August 26, 2012

N/A

Marple-Call-24-7

April 3, 2013

N/A

The Lodge—WNS UK Sales

December 15, 2009

N/A

US:

6,859

17

New York

May 31, 2011

N/A

BizAps

December 31, 2010/

N/A

December 31, 2009

Romania:

13,971

150

Bucharest

January 1, 2013

See footnote no. 8

The Philippines:

76,900

489

Superstone

December 31, 2010

N/A

Our delivery centers are equipped with fiber optic connectivity and have backups to their power supply designed to achieve uninterrupted operations.

In order to streamline our operations and to increase seat utilization, in fiscal 2009, we closed our delivery centers in Raheja, Mumbai, Marisoft, Pune, and Prestige Garnet, Bangalore, and terminated the leases in respect of a portion of the premises at Panschil Level 2, Pune, and RMZ Millenia, Chennai. The production capacities at these locations have been consolidated with other premises available at our company. In fiscal 2010, we intend to establish additional delivery centers, as well as continue to streamline our operations by further consolidating production capacities in our delivery centers.

ITEM 4A. UNRESOLVED STAFF COMMENTS

None.

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 “Item 3 . Key Information — D. Risk Factors.”

Overview

We are a leading provider of offshore business process outsourcing, or BPO, services. We provide comprehensive data, voice and analytical services to our clients, which are typically companies located in Europe and North America. As of March 31, 2009, we had 21,356 employees across all our delivery centers. According to NASSCOM, we have been among the top two India-based offshore business process outsourcing companies in terms of revenue since 2004.

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 business process outsourcing 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 focus, however, is on deepening our client relationships and maximizing shareholder value over the life of a client’s relationship with us.

Our revenue is generated primarily from providing business process outsourcing services. We have two reportable segments for financial statement reporting purposes — WNS Global BPO and WNS Auto Claims BPO. In our WNS Auto Claims BPO segment, we provide both “fault” and “non-fault” repairs. For “fault” repairs, we provide claims handling and accident management services,

where we arrange for automobile repairs through a network of third party repair centers. In our accident management services, we act as the principal in our dealings with the third party repair centers and our clients. The amounts we invoice to our clients for payments made by us to third party repair centers is reported as revenue. Since we wholly subcontract the repairs to the repair centers, we evaluate our financial performance based on revenue less repair payments to third party repair centers which is a non-GAAP measure. We believe that revenue less repair payments for “fault” repairs reflects more accurately the value addition of the business process outsourcing services that we directly provide to our clients. For “non-fault” repairs, revenue including repair payments is used as a primary measure to allocate resources and measure operating performance. As we provide a consolidated suite of accident management services including credit hire and credit repair for our “non-fault” repairs business, we believe that measurement of that line of business has to be on a basis that includes repair payments in revenue. Revenue less repair payments is a non-GAAP measure which is calculated as revenue less payments to repair centers. The presentation of this non-GAAP information is not meant to be considered in isolation or as a substitute for our financial results prepared in accordance with US GAAP. Our revenue less repair payments may not be comparable to similarly titled measures reported by other companies due to potential differences in the method of calculation.

Between fiscal 2007 and fiscal 2009, our revenue grew from $352.3 million to $539.3 million, representing a compound annual growth rate of 23.7%, and our revenue less repair payments grew from $219.7 million to $386.4 million, representing a compound annual growth rate of 32.6%. During this period, we grew both organically and through acquisitions.

The following table reconciles our revenue (a GAAP measure) to revenue less repair payments (a non-GAAP measure) for the periods indicated:

		For the Year Ended March 31,
		2009				2008				2007
		(US dollars in millions)
Revenue		$	539.3			$	459.9			$	352.3
Less: Payments to repair centers			152.9				169.2				132.6
Revenue less repair payments		$	386.4			$	290.7			$	219.7

Recent Global Economic Conditions

In the United States, Europe and Asia, recent market and economic conditions have been unprecedented and challenging with tighter credit conditions and slower growth during fiscal 2009 and continuing into fiscal 2010. In fiscal 2009 and continuing into fiscal 2010, continued concerns about the systemic impact of inflation, energy costs, geopolitical issues, the availability and cost of credit, the mortgage market and a declining real estate market have contributed to increased market volatility and diminished expectations for the economy globally. These conditions, combined with volatile oil prices, declining business and consumer confidence and increased unemployment have, in fiscal 2009 and continuing into fiscal 2010, contributed to volatility of unprecedented levels.

These economic conditions may affect our business in a number of ways. The general level of economic activity, such as decreases in business and consumer spending, could result in a decrease in demand for our services, thus reducing our revenue. The cost and availability of credit has been and may continue to be adversely affected by illiquid credit markets and wider credit spreads. Continued turbulence in the US and international markets and economies may adversely affect our liquidity and financial condition, and the liquidity and financial condition of our customers. If these market conditions continue, they may limit our ability to access financing or increase our cost of financing to meet liquidity needs, and affect the ability of our customers to use credit to purchase our services or to make timely payments to us, resulting in adverse effects on our financial condition and results of operations. Furthermore, a weakening of the rate of exchange for the US dollar or the pound sterling (in which our revenue is principally denominated) against the Indian rupee (in which a significant portion of our costs are denominated) will also adversely affect our results. Fluctuations between the pound sterling or the Indian rupee and the US dollar also expose us to translation risk when transactions denominated in pound sterling or Indian rupees are translated to US dollars, our reporting currency. For example, the average pound sterling/US dollar exchange rate for fiscal 2009 depreciated 14.3% as compared to the average exchange rate for fiscal 2008 (based on the spot rate released by the Federal Reserve Board, or the spot rate), which adversely impacted our results of operations. Uncertainty about current global economic conditions could also continue to increase the volatility of our share price. We cannot predict the timing or duration of the economic slowdown or the timing or strength of a subsequent economic recovery generally or in our targeted industries, including the travel and leisure, and insurance industries. If macroeconomic conditions worsens or the current global economic

condition continues for a prolonged period of time, we are not able to predict the impact such worsening conditions will have on our targeted industries in general, and our results of operations specifically.

Our History and Milestones

We began operations as an in-house unit of British Airways in 1996, and became a focused third-party business process outsourcing service provider in fiscal 2003. The following are the key milestones in our operating history since Warburg Pincus acquired a controlling stake in our company from British Airways in May 2002 and inducted a new senior management team:

•		In fiscal 2003, we acquired Town & Country Assistance Limited (which we subsequently rebranded as WNS Assistance and which constitutes WNS Auto Claims BPO, our reportable segment for financial statement purposes), a UK-based automobile claims handling company, thereby extending our service portfolio beyond the travel and leisure industry to include insurance-based automobile claims processing.
•		In fiscal 2003, we invested in capabilities to begin providing enterprise services, and research and analytics services to address the requirements of emerging industry segments in the offshore outsourcing context.
•		In fiscal 2003 and 2004, 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, and banking, financial services and insurance, or BFSI, industries.
•		In fiscal 2004, we acquired the health claims management business of Greensnow Inc.
•		In fiscal 2005, we opened facilities in Gurgaon, India, and Colombo, Sri Lanka, thereby expanding our operating footprints across India, Sri Lanka and the UK.
•		In fiscal 2006, we acquired Trinity Partners (which we subsequently merged into our subsidiary, WNS North America, Inc.), a provider of business process outsourcing services to financial institutions, focusing on mortgage banking.
•		In fiscal 2007, we expanded our facilities in Pune, Gurgaon and Mumbai.
•		In fiscal 2007, we acquired the fare audit services business of PRG Airlines and the financial accounting business of GHS.
•		In May 2007, we acquired Marketics, a provider of offshore analytics services.
•		In June 2007, we acquired Flovate, a company engaged in the development and maintenance of software products and solutions, which we subsequently renamed as WNS Workflow Technologies Limited.
•		In July 2007, we completed the transfer of our delivery center in Sri Lanka to AVIVA.
•		In January 2008, we launched a 133-seat facility in Bucharest, Romania.
•		In April 2008, we opened a facility in Manila, the Philippines.
•		In April 2008, we acquired Chang Limited, an auto insurance claims processing services provider in the UK through its wholly-owned subsidiary, Call 24-7.
•		In June 2008, we acquired BizAps, a provider of SAP solutions to optimize the enterprise resource planning functionality for our finance and accounting processes.
•		In July 2008, we entered into the transaction with AVIVA consisting of (1) a share sale and purchase agreement pursuant to which we acquired from AVIVA all the shares of Aviva Global and (2) the AVIVA master services agreement pursuant to

which we are providing BPO services to AVIVA’s UK and Canadian businesses, as described under “— Revenue — Our Contracts.”

As a result of these acquisitions and other corporate developments, our financial results in corresponding periods may not be directly comparable. Since fiscal 2003, the primary driver of our revenue growth has been organic business development, supplemented to a lesser extent by strategic acquisitions.

Revenue

We generate revenue by providing business process outsourcing services to our clients. In fiscal 2009, our revenue was $539.3 million as compared to $459.9 million in fiscal 2008, representing an increase of 17.3%. In fiscal 2009, our revenue less repair payments was $386.4 million as compared to $290.7 million in fiscal 2008, representing an increase of 32.9%.

We believe that we have been successful in achieving strong revenue growth due to a number of factors, including our understanding of our clients’ industries, our focus on operational excellence and our world-class management team with significant experience in the global outsourcing industry. We have been successful in adding new clients who are diversified across industries and geographies to our existing large client base. Our client base grew from 14 clients in May 2002 to more than 215 clients as of March 31, 2009 (for our definition of “significant clients,” see “Item 4. Information on the Company — B. Business Overview — Clients”). In fiscal 2009, 2008 and 2007, we added 20, 45 and 25 significant clients, respectively.

Our revenue is characterized by client, industry and geographic diversity, as the analysis below indicates.

Revenue by Top Clients

Since the time of the Warburg Pincus investment in our company, we have increased our client base and significantly reduced our client concentration. Prior to this investment, our largest client contributed over 90% of our revenue. In comparison, during fiscal 2009, our largest client contributed 16.6% of our revenue and 20.9% of our revenue less repair payments.

The following table sets forth the percentage of revenue and revenue less repair payments that we derived from our largest clients for the periods indicated:

		Revenue												Revenue Less Repair Payments
		Year Ended March 31,												Year Ended March 31,
		2009				2008				2007				2009				2008				2007
Top five clients			54.6	%			57.3	%			55.2	%			46.5	%			42.2	%			45.7	%
Top ten clients			68.0	%			68.2	%			70.1	%			60.9	%			56.0	%			61.9	%
Top 20 clients			78.3	%			77.8	%			79.3	%			74.3	%			70.7	%			74.7	%

In fiscal 2009, we had three clients that individually contributed more than 10% of our revenue — SAGA, AVIVA and Liverpool, which collectively contributed 43.1% of our revenue in fiscal 2009. AVIVA individually contributed more than 10% of our revenue less repair payments.

Revenue by Industry

For financial statement reporting purposes, we aggregate several of our operating segments, except for WNS Auto Claims BPO (which we market under the WNS Assistance brand) as it does not meet the aggregation criteria under US GAAP. See “— Results by Reportable Segment.”

To achieve in-depth domain expertise and provide industry-specific services to our clients, we organize our business delivery along industry-focused business units. These business units seek to leverage our domain expertise to deliver industry-specific services to our clients. Accordingly, our industry-focused business units are:

•

travel and leisure;

•		BFSI (which includes our WNS Auto Claims BPO segment);
•		emerging businesses (which serves the consumer products, retail, professional services, pharmaceutical, and media and entertainment industries using core service capabilities provided by our finance and accounting services, and research and analytics services capabilities); and
•		industrial and infrastructure which was spun off from emerging businesses to become a separate business unit in April 2008.

In May 2002, when Warburg Pincus acquired a majority stake in our business, we were primarily providing business process outsourcing services to airlines. Since then we have expanded our service portfolio across the travel and leisure industry and have also established significant operations in BFSI and other industries, which we include in our emerging businesses business unit. Our revenue and revenue less repair payments are diversified along these business units in the proportions and for the periods set forth in the table below:

		Revenue												Revenue Less Repair Payments
		Year Ended March 31,												Year Ended March 31,
Business Units		2009				2008				2007				2009				2008				2007
Travel and leisure			18.9	%			22.5	%			22.8	%			26.4	%			35.6	%			36.6	%
BFSI			64.0	%			57.4	%			61.8	%			49.7	%			32.7	%			38.7	%
Industrial and infrastructure(1)			6.6	%			—				—				9.3	%			—				—
Emerging businesses			10.5	%			20.1	%			15.4	%			14.6	%			31.7	%			24.7	%
Total			100.0	%			100.0	%			100.0	%			100.0	%			100.0	%			100.0	%

Revenue by Geography

The majority of our clients are located in Europe (primarily the UK) and North America (primarily the US). The share of our revenue from the UK increased to 55.6% in fiscal 2009 from 49.1% in fiscal 2008 and the share of our revenue less repair payments from the UK increased to 58.4% in fiscal 2009 from 50.3% in fiscal 2008 due primarily to our acquisition of Aviva Global. Since the time of the Warburg Pincus investment in our company in fiscal 2003, we have invested in establishing a sales and marketing presence in North America, which has resulted in our revenue coming from North America representing a significant portion of our revenue.

The following table sets forth the composition of our revenue and revenue less repair payments based on the location of our clients in our key geographies for the periods indicated:

		Revenue												Revenue Less Repair Payments
		Year Ended March 31,												Year Ended March 31,
Locations		2009				2008				2007				2009				2008				2007
UK			55.6	%			49.1	%			53.9	%			58.4	%			50.3	%			50.5	%
Europe (excluding the UK)			20.0	%			25.4	%			22.4	%			7.5	%			9.4	%			11.5	%
North America (primarily the US)			24.2	%			24.7	%			22.9	%			33.8	%			39.1	%			36.8	%
Rest of World			0.2	%			0.8	%			0.8	%			0.3	%			1.2	%			1.2	%
Total			100.0	%			100.0	%			100.0	%			100.0	%			100.0	%			100.0	%

Our Contracts

We provide our services under contracts with our clients, the majority of which have terms ranging between three and 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 notice periods ranging from three to six months. 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 two to 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 BPO segment, we charge for our services primarily based on three pricing models — per full-time-equivalent; per transaction; or cost-plus — as follows:

•		per full-time-equivalent arrangements typically involve billings based on the number of full-time employees (or equivalent) deployed on the execution of the business process outsourced;
•		per transaction arrangements 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); and
•		cost-plus arrangements typically involve billing the contractually agreed direct and indirect costs and a fee based on the number of employees deployed under the arrangement.

In July 2006, we entered into a definitive contract with one of our major clients, British Airways, to replace our prior contract with them. The new contract will expire in May 2012. Under the new contract the parties have agreed to change the basis of pricing for a portion of the contracted services over a transition period from a “per full time equivalent basis” to a “per unit transaction basis.” This change has had the effect of reducing the amount of revenue that we receive under this contract for the same level of services. The change to a “per unit transaction price” basis allows us to share benefits from increases in efficiency in performing services under this contract. In fiscal 2008 and 2009, this change in the basis of pricing resulted in a decrease in the amount of revenue that we received under this contract for the same level of services provided by us but an increase in profitability due to increases in efficiency, as compared to fiscal 2007 under the “per full time equivalent basis” under the prior contract.

Our prior contracts with another major client, AVIVA, granted Aviva Global the option to require us to transfer our facilities at Sri Lanka and Pune to Aviva Global. Aviva Global was the business process offshoring subsidiary of AVIVA with facilities in Bangalore, India, and Colombo, Sri Lanka. Since 2004, we have provided BPO services to AVIVA pursuant to build-operate-transfer, or BOT, contracts from facilities in Pune, India, and Colombo, Sri Lanka. On January 1, 2007, Aviva Global exercised its call option requiring us to transfer the Sri Lanka facility to Aviva Global effective July 2, 2007. Effective July 2, 2007, we transferred the Sri Lanka facility to Aviva Global and we lost the revenue generated by the Sri Lanka facility. For the period from April 1, 2007 through July 2, 2007, the Sri Lanka facility contributed $2.0 million of revenue and in fiscal 2007, it accounted for 1.9% of our revenue and 3.0% of our revenue less repair payments. The Sri Lanka facility was transferred at book value and did not result in a material gain or loss. We may in the future enter into contracts with other clients with similar call options that may result in the loss of revenue that may have a material impact on our business, results of operations, financial condition and cash flows, particularly during the quarter in which the option takes effect.

In July 2008, we entered into a transaction with AVIVA consisting of a share sale and purchase agreement with AVIVA and a master services agreement with AVIVA MS. Pursuant to the share sale and purchase agreement with AVIVA, we acquired all the shares of Aviva Global in July 2008. With our acquisition of Aviva Global, we have resumed control of the Sri Lanka facility that we had transferred to Aviva Global in July 2007 (as described above) as well as acquired Aviva Global’s Bangalore facilities. Further, the Pune facility has remained with us. In addition, through our acquisition of Aviva Global, we acquired two facilities in Chennai and Pune which were operated by third party BPO providers for Aviva Global under similar BOT contracts. Aviva Global exercised its option to require the third party BPO providers to transfer these facilities to Aviva Global. The completion of the transfers of the Chennai and Pune facilities to Aviva Global occurred in July and August 2008, respectively. See “— Liquidity and Capital Resources” for details on the purchase price paid to AVIVA for the AVIVA transaction.

Pursuant to the master services agreement with AVIVA MS, or the AVIVA master services agreement, we have agreed to provide BPO services to AVIVA’s UK and Canadian businesses for a term of eight years and four months. Under the terms of the agreement, we have agreed to provide a comprehensive spectrum of life and general insurance processing functions to AVIVA, including policy administration and settlement, along with finance and accounting, customer care and other support services. In addition, we have the exclusive right to provide certain services such as finance and accounting, insurance back-office, customer interaction and analytics services to AVIVA’s UK and Canadian businesses for the first five years, subject to the rights and obligations of the AVIVA group under their existing contracts with other providers. In addition, we are providing BPO services to AVIVA’s Irish subsidiary, Hibernian Aviva Direct Limited, or Hibernian, and certain of its affiliates, under the terms of the AVIVA master services agreement.

Our clients customarily provide one to three month rolling forecasts of their service requirements. Our contracts with our clients do not generally provide for a committed minimum volume of business or committed amounts of revenue, except for our contract with one of our top five clients based on revenue less repair payments in fiscal 2009, and the AVIVA master services agreement that we entered into in July 2008 as described above. Under the terms of our agreement with one of our top five clients, the annual forecasted revenue to be provided to us for calendar years 2010 and 2011 amounts to $41.1 million and $39.9 million, respectively. In the event actual revenue provided to us in any year is less than 75% of the annual forecasted revenue for that year, or the Annual Minimum Revenue Commitment, the client has agreed to pay us 65% of the difference between the Annual Minimum Revenue Commitment and the actual revenue provided for that year after certain deductions. However, notwithstanding these minimum revenue commitments, there are also termination at will provisions which permit the client to terminate the individual statements of work without cause with 180 days’ notice upon payment of a termination fee. These termination provisions dilute the impact of the minimum revenue commitment. In the case of the AVIVA master services agreement, AVIVA MS has agreed to provide a minimum volume of business, or Minimum Volume Commitment, to us during the term of the contract. The Minimum Volume Commitment is calculated as 3,000 billable full-time employees, where one billable full time employee is the equivalent of a production employee engaged by us to perform our obligations under the contract for one working day of at least nine hours for 250 days a year. In the event the mean average monthly volume of business in any rolling three-month period does not reach the Minimum Volume Commitment, AVIVA MS has agreed to pay us a minimum commitment fee as liquidated damages. Notwithstanding the Minimum Volume Commitment, there are termination at will provisions which permit AVIVA MS to terminate the AVIVA master services agreement without cause at any time after the expiry of 24 months from October 9, 2008, except in the case of the Chennai facility which was transferred to Aviva Global in July 2008, at any time after expiry of 24 months from September 19, 2008, and in the case of the Pune facility which was transferred to Aviva Global in August 2008, at any time after expiry of 24 months from October 10, 2008, in each case, with six months’ notice upon payment of a termination fee. The Annual Minimum Revenue Commitment and the Minimum Volume Commitment under these two contracts were met in fiscal 2009.

FMFC, a US mortgage lender, was one of our major clients from November 2005 to August 2007. FMFC was a major client of Trinity Partners which we acquired in November 2005 from the First Magnus Group. In August 2007, FMFC filed a voluntary petition for relief under Chapter 11 of the US Bankruptcy Code. For fiscal 2007, FMFC accounted for 4.3% and 6.8% of our revenue and revenue less repair payments, respectively. Contractually, FMFC was obligated to provide us with annual minimum revenue, or pay the shortfall, through fiscal 2011. We have filed claims in FMFC’s Chapter 11 case both for the payment of unpaid invoices for services rendered to FMFC before FMFC filed for Chapter 11 bankruptcy, for our entitlement under FMFC’s annual minimum revenue commitment, and for administrative expenses. The amount of outstanding claims filed totaled $15.6 million; however, the realizability of these claims cannot be determined at this time. We have provided an allowance for doubtful accounts for the entire amount of accounts receivable from FMFC.

A small portion of our revenue is comprised of reimbursements of out-of-pocket expenses incurred by us in providing services to our clients. In our WNS Auto Claims BPO segment, we earn revenue from claims handling and accident management services. For claims

handling, we charge on a per claim basis or a fixed fee per vehicle over a contract period. For automobile accident 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 consolidated suite of services towards accident management including credit hire and credit repair for “non-fault” repairs business. Overall, we believe that we have established a sustainable business model which offers revenue visibility over a substantial portion of our business. We have done so by:

•		developing a broad client base which has resulted in limited reliance on any particular client;
•		seeking to balance our revenue base by targeting industries that offer significant offshore outsourcing potential;
•		addressing the largest markets for offshore business process outsourcing services, which provide geographic diversity across our client base; and
•		focusing our service mix on diverse data, voice and analytical processes, resulting in enhanced client retention.

Expenses

The majority of our expenses are comprised of cost of revenue and operating expenses. The key components of our cost of revenue is payments to repair centers, employee costs and infrastructure-related costs. Our operating expenses include selling, general and administrative, or SG&A, expenses and amortization of intangible assets. Our non-operating expenses include interest expenses, other income and other expenses.

Cost of Revenue

Our WNS Auto Claims BPO segment includes automobile accident management services, where we arrange for repairs through a network of repair centers. The payments to repair centers represent the largest component of cost of revenue. The value of these payments in any given period is primarily driven by the volume of accidents and the amount of the repair costs related to such accidents.

Employee costs are also a significant component of cost of revenue. In addition to employee salaries, employee costs include costs related to recruitment, training and retention. Historically, our employee costs have increased primarily due to increases in 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 “Item 4. Information on the Company — B. Business Overview — Human Capital.” We expect our employee costs to increase as we continue to increase our headcount to service additional business and as wages continue to increase in India. See “Item. 3. Key Information. — D. Risk Factors — Risks Related to Our Business — Wage increases in India 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 infrastructure costs are comprised of depreciation, lease rentals, 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 commencing between three and five years from the start of the lease. Most of these agreements have clauses that cap 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. Therefore, our cost of revenue in relation to our revenue may be higher until the transfer phase is completed, which may last for two to six months.

SG&A Expenses

Our SG&A expenses are primarily comprised of corporate employee costs for sales and marketing, general and administrative and other support personnel, travel expenses, legal and professional fees, share-based compensation expense, brand building expenses, and other general expenses not related to cost of revenue.

SG&A expenses as a proportion of revenue were 14.0% in fiscal 2009 as compared with 15.8% for fiscal 2008. SG&A expenses as a proportion of revenue less repair payments were 19.5% in fiscal 2009 as compared with 25.0% for fiscal 2008. We expect SG&A expenses to increase but at a lower rate than the increase in our revenue less repair payments.

We expect our corporate employee costs for general and administrative and other support personnel to increase in fiscal 2010 but at a lower rate than the increase in our revenue less repair payments.

We expect the employee costs associated with sales and marketing and related travel costs to increase in fiscal 2010. See “Item 4. Information on the Company — B. Business Overview — Business Strategy — Enhance awareness of the WNS brand name.” Our sales team is compensated based on achievement of business targets set at the beginning of each fiscal year. Accordingly, we expect this variable component of the sales team costs to increase in line with overall business growth.

Amortization of Intangible Assets

Amortization of intangible assets is associated with our acquisitions of PRG Airlines’ fare audit services business in August 2006, GHS’ financial accounting business in September 2006, Marketics in May 2007, Flovate in June 2007, Call 24-7 in April 2008, BizAps in June 2008 and Aviva Global in July 2008.

Other Income, Net

Other income (expense), net is comprised of interest expenses, interest income and foreign exchange gains or losses. Interest expense primarily relates to interest charges payable on our $200 million Term Loan taken to finance our transaction with AVIVA and interest charges arising from our short-term note payable and our line of credit.

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 work stations. Generally, an improvement in the 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 of the dates indicated:

		As of March 31,
		2009				2008				2007
Total headcount			21,356				18,104				15,084
Built up seats(1)			15,485				11,062				8,794
Used seats(1)			12,456				8,559				7,769
Seat utilization rate(2)			1.4				1.6				1.7

Foreign Exchange

Exchange Rates

Although a substantial portion of our revenue and revenue less repair payments is denominated in pound sterling (72.4% and 61.5%, respectively, in fiscal 2009, 70.8% and 53.8%, respectively, in fiscal 2008, and 71.5% and 54.4%, respectively, in fiscal 2007) and US dollars (24.6% and 34.3%, respectively, in fiscal 2009, 25.6% and 40.5%, respectively, in fiscal 2008, and 24.8% and 39.8%, respectively, in fiscal 2007), most of our expenses (net of payments to repair centers) (61.1% in fiscal 2009, 72.0% in fiscal 2008 and 86.0% in fiscal 2007) are incurred and paid in Indian rupees. The exchange rates between the Indian rupee and the US dollar and between the pound sterling and the US dollar have changed substantially in recent years and may fluctuate substantially in the future. The average Indian rupee/US dollar exchange rate was approximately Rs. 46.10 per $1.00 (based on the spot rate) in fiscal 2009, which represented a depreciation of the Indian rupee of 14.9% as compared with the average exchange rate of approximately Rs. 40.13 per $1.00 (based on the spot rate) in fiscal 2008, which in turn represented an appreciation of the Indian rupee of 11.1% as compared with the average exchange rate of approximately Rs. 45.12 per $1.00 (based on the spot rate) in fiscal 2007. The average pound sterling/US dollar exchange rate was approximately £0.58 per $1.00 (based on the spot rate) in fiscal 2009, which represented a depreciation of the pound sterling of 14.3% as compared with the average exchange rate of approximately £0.50 per $1.00 (based on the spot rate) in fiscal 2008, which in turn represented an appreciation of the pound sterling of 5.7% as compared with the average exchange rate of approximately £0.53 per $1.00 (based on the spot rate) in fiscal 2007. We report our financial results in US dollars and our results of operations may be adversely affected if the pound sterling depreciates against the US dollar or the Indian rupee appreciates against the US dollar. See “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 shareholder’s equity. Foreign currency transaction gains and losses are recorded as other income or expense.

Currency Regulation

Our Indian subsidiary, WNS Global, is registered as an exporter of business process outsourcing services with the Software Technology Parks of India, or STPI. According to the prevailing foreign exchange regulations in India, an exporter of business process outsourcing services registered with the STPI is required to receive its export proceeds in India within a period of 12 months from the date of such exports in order to avail itself of the tax and other benefits associated with STPI status. Units which are not registered with STPI are required to receive these proceeds within six months. 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 12 months from the date of such receipt. If WNS Global 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, US dollars and Euros. For most of our clients, our operating subsidiaries in the UK and the US enter into contractual agreements directly with our clients for the provision of business process outsourcing services by WNS Global. WNS Global holds the foreign currency it receives 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 India, Sri Lanka, Romania, the Philippines, the Netherlands, Singapore, Mauritius, the UK and the US. As a result, our effective tax rate will change 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 pretax book income and the implementation of various global tax strategies, as well as non-recurring events.

Our Indian operations are eligible to claim income tax exemption with respect to profits earned from export revenue by various delivery centers registered with STPI. This benefit used to be available from the date of commencement of operations to March 31, 2009, subject to a maximum of ten years. In May 2008, the government of India passed the Indian Finance Act, 2008, which extended the tax holiday period by an additional year through fiscal 2010. We have 14 such delivery centers in fiscal 2009, 14 such delivery centers in India in fiscal 2008 and ten such delivery centers in fiscal 2007. The tax benefits of our other delivery centers located in Mumbai, Pune, Gurgaon, Bangalore and Nashik will expire on April 1, 2010 while the tax benefits enjoyed by three of our delivery centers located in Mumbai, Nashik and Pune expired on April 1, 2007, 2008 and 2009, respectively.

Our Sri Lankan subsidiaries are also eligible to claim income tax exemption with respect to profits earned from export revenue by our delivery centers registered with the Board of Investment, Sri Lanka. This tax holiday is available for five years from the year of assessment in which the subsidiary commences to make profits or any year of assessment not later than two years from the date of commencement of operations, whichever is the earlier. This tax holiday for one of our Sri Lankan subsidiaries expired in the year of assessment 2009 and this tax holiday for the other Sri Lankan subsidiary expires in the year of assessment 2011. Upon expiry of the tax holiday, income tax will be leviable at the rate of 15% on the first Sri Lankan rupees five million of income and at the rate of 35% on income exceeding Sri Lankan rupees five million.

Our joint venture company in Philippines, WNS Philippines Inc., is also eligible to claim income tax exemption with respect to profits earned from export revenue by our delivery centers registered with the Board of Investment, the Philippines. This tax holiday is available for four years from the date of grant of the tax exemption, which we expect to receive by the end of June 2009. Upon expiry of the tax holiday, income generated by WNS Philippines Inc. will be taxed at the then prevailing annual tax rate which is currently 30%.

In May 2007, the Indian Finance Act, 2007 was adopted, with the effect of subjecting Indian companies that benefit from a holiday from Indian corporate income taxes to the MAT at the rate of 11.33% in the case of profits exceeding Rs. 10 million and 10.3% in the case of profits not exceeding Rs. 10 million with effect from April 1, 2007. To the extent MAT paid exceeds the actual tax payable on the taxable income, such companies would be able to set off such MAT credits against tax payable in the succeeding seven years, subject to the satisfaction of certain conditions. As a result of this amendment to the tax regulations, we became subject to MAT and are required to pay additional taxes commencing fiscal 2008. To the extent MAT paid exceeds the actual tax payable on our taxable income, we would be able to set off such MAT credits against tax payable in the succeeding seven years, subject to the satisfaction of certain conditions. We expect to be able to set off our MAT payments against our increased tax liability based on taxable income when our tax holiday expires or is withdrawn by the Indian tax authorities.

As a result of the foregoing, the additional income tax expense we would otherwise have had to pay at the statutory rates in India and Sri Lanka, if the tax exemption was not available, would have been approximately $16.0 million for fiscal 2009, $11.5 million for fiscal 2008 and $8.7 million for fiscal 2007. When our tax holiday expires or is withdrawn by Indian tax authorities, our tax expense will materially increase. In the absence of a tax holiday, income derived from India would be taxed up to a maximum of the then prevailing annual tax rate which, as of March 31, 2009, was 33.99%. We have not recognized a deferred tax asset on carried forward losses as there is uncertainty regarding the availability of such operating losses in subsequent years.

In addition, in May 2007, the government of India implemented a fringe benefit tax on the allotment of shares pursuant to the exercise or vesting, on or after April 1, 2007, of options and RSUs granted to employees. The fringe benefit tax is payable by the employer at the current rate of 33.99% on the difference between the fair market value of the options and RSUs on the date of vesting of the options and RSUs and the exercise price of the options and the purchase price (if any) for the RSUs, as applicable. In October 2007, the government of India published its guidelines on how the fair market value of the options and RSUs should be determined. The new legislation permits the employer to recover the fringe benefit tax from the employees. Accordingly, the terms of our award agreements with applicable employees in India under our 2002 Stock Incentive Plan and our Amended and Restated 2006 Incentive Award Plan (as described in “Item 6. Directors, Senior Management and Employees — B. Compensation — Employee Benefit Plans”) allow us to recover the fringe benefit tax from all our employees in India except those expatriate employees who are resident in India. In respect of these expatriate employees, we have sought and are waiting for clarification from the Indian and foreign tax authorities on the ability of such expatriate employees to set off the fringe benefit tax from the foreign taxes payable by them. If they are able to do so, we intend to recover the fringe benefit tax from such expatriate employees in the future.

In May 2005, the government of India implemented a fringe benefit tax based on the value of fringe benefits such as entertainment expenses, the use of our guest house, employee welfare benefits, gifts, club expenses and travel expenses provided or deemed to have been provided by us to our employees during the previous fiscal year. This fringe benefit tax is payable by the employer at the current rate of 33.99%. However, pursuant to the legislation, we recover this fringe benefit tax from our employees with respect to certain expenses incurred by us for the benefit of our employees.

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 tax exemption equal to (i) 100% of their profits or gains derived from export income for the first five years from the commencement of operations; (ii) 50% of those profits or gains derived from export income for the next five years; and (iii) 50% of those profits or gains derived from export income for a further five years, subject to satisfying certain capital investment requirements. Our delivery center in Gurgaon benefits from this tax holiday which will expire in fiscal 2022.

We may establish one or more new operations centers in designated SEZs that would be eligible for the benefits of the SEZ legislation, subject to the receipt of requisite governmental and regulatory approvals. In fiscal 2008, we established an operation center in a designated SEZ in Gurgaon that is eligible for the benefits of the SEZ legislation. The Ministry of Finance in India has, however, expressed concern about the potential loss of tax revenues as a result of the exemptions under the SEZ legislation. The SEZ legislation has been criticized on economic grounds by the International Monetary Fund and may be challenged in courts by certain non-governmental organizations. It is possible that, as a result of such political pressures, the procedure for obtaining the benefits of the SEZ legislation may become more onerous, the types of land eligible for SEZ status may be further restricted or the SEZ legislation may be amended or repealed. Moreover, there is continuing uncertainty as to the governmental and regulatory approvals required to establish operations in the SEZs or to qualify for the tax benefit. This uncertainty may delay the establishment of additional operations in the SEZs.

Critical Accounting Policies

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 US GAAP. 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 policies. By “critical accounting policies,” we mean policies that are both important to the portrayal of 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.

Revenue Recognition

We generate revenue by providing BPO services to our clients, which primarily include providing back-office administration, data management, contact center management and automobile claims handling services. We recognize revenue when we have persuasive evidence of an arrangement, services have been rendered, the fee is determinable and collectibility is reasonably assured. We conclude that we have persuasive evidence of an arrangement when we enter into an agreement with our clients with terms and conditions that describe the service and the related payments and are legally enforceable. We consider revenue to be determinable when the services

have been provided in accordance with the agreement. When the terms of the agreement specify service level parameters that must be met, we monitor such service level parameters and determine if there are any service credits or penalties that we need to account for. Revenue is recognized net of any service credits that are due to a client. A substantial portion of our revenue is from large companies, where we do not believe we have a significant credit risk.

In limited instances we have entered into minimum commitment arrangements, wherein the service contracts either provide for a minimum revenue commitment on an annual basis or a cumulative basis over multiple years, stated in terms of annual minimum amounts. In such minimum commitment arrangements where a minimum commitment is specific to an annual period, any revenue shortfall is invoiced and recognized at the end of this period. However, when the shortfall in a particular year can be offset with revenue received in excess of minimum commitments in subsequent years, we recognize deferred revenue for the shortfall which has been invoiced and received. To the extent we have sufficient experience to conclude that the shortfall will not be satisfied by excess revenue in a subsequent period, the deferred revenue will be recognized as revenue in that period. In order to determine whether we have sufficient experience, we consider several factors which include (i) the historical volume of business done with a client as compared with initial projections of volume as agreed to by the client and us; (ii) the length of time for which we have such historical experience; (iii) future volume expected based on projections received from the client; and (iv) our internal expectations of the ongoing volume with the client. Otherwise the deferred revenue will remain until such time we can conclude that it will not receive revenue in excess of the minimum commitment. For certain agreements, we have retroactive discounts related to meeting agreed volumes. In such situations, we record revenue at the discounted rate, although we initially bill at the higher rate, unless we can determine that the agreed volumes will not be met.

We invoice our clients depending on the terms of the arrangement, which include billing based on a per employee, per transaction or cost-plus basis. Amounts billed or payments received, where all the conditions for revenue recognition have not been met, are recorded as deferred revenue and are recognized as revenue when all recognition criteria have been met. However, the costs related to the performance of such work are recognized in the period the services are rendered. For certain of our clients, we perform process transition activities upon execution of the contract with such client. We defer the revenue and the cost attributable to certain process transition activities with respect to our clients where such activities do not represent the culmination of a separate earning process. Such revenue and cost are subsequently recognized ratably over the period in which the related services are performed. The deferment of cost is limited to the amount of the deferred revenue. Any cost in excess of the deferred revenue will be recognized during the period it was incurred.

Our revenue is net of value-added taxes and includes reimbursements of out-of-pocket expenses, with the corresponding out-of-pocket expenses included in cost of revenue.

We provide automobile claims handling services, which include claims handling and administration, or claims handling, and arranging for car hire and repairs with repair centers across the UK and the related payment processing for such repairs, or accident management. With respect to claims handling, we enter into contracts with our clients to process all their claims over the contract period, where the fees are determined either on a per claim basis or is a fixed payment for the contract period. Where our 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. Where the fee is a fixed payment for the contract period, revenue is recognized on a straight line basis over the period of the contract. In certain cases, where the fee is contingent upon the successful recovery of a claim by the client, revenue is not recognized until the contingency is resolved.

In order to provide accident management services, we negotiate with and set up a network of repair centers where vehicles involved in an accident can be repaired. We are the principal in these transactions between the repair center and the client. The repair centers bill us for the negotiated costs of the repair and we invoice such costs to the client. We recognize the amounts invoiced to the client as revenue as we have determined that we meet the criteria established by Emerging Issues Task Force, or EITF, No. 99-19, “Reporting Revenue Gross as a Principal versus Net as an Agent.” Factors considered in determining that we are the principal in the transaction include whether (i) we negotiate the labor rates with repair centers; (ii) we determine which repair center should be used; (iii) we are responsible for timely and satisfactory completion of repairs; and (iv) we bear the credit risk. In certain circumstances, a portion of the repair costs may be insured. In such situations, the payment received from the insurance company is not recognized as revenue or cost of revenue. We invoice the repair center for referral fees and recognize it as revenue.

Share-based Compensation

We provide share-based awards such as stock options and RSUs to our employees, directors and executive officers through various equity compensation plans. We recognize the share based compensation in accordance with SFAS No. 123 (revised 2004), “Share-Based Payment” (“SFAS No. 123(R)”). SFAS No. 123(R) addresses the accounting for share-based payment transactions in which an enterprise receives employee services in exchange for equity instruments of the enterprise or liabilities that are based on the fair value of the enterprise’s equity instruments or that may be settled by the issuance of such equity instruments.

In accordance with the provisions of SFAS No. 123(R), share-based compensation for all awards granted, modified or settled on or after April 1, 2006, that we expect to vest, is recognized on a straight line basis over the requisite service period, which is generally the vesting period of the award.

SFAS No. 123(R) requires the use of a valuation model to calculate the fair value of share-based awards. Based on our judgment, we have elected to use the Black-Scholes-Merton pricing model to determine the fair value of share-based awards on the date of grant. RSUs are measured based on the fair market value of the underlying shares on the date of grant.

We believe the Black-Scholes-Merton model to be the most appropriate model for determination of fair value of the share-based awards. In determining the fair value of share-based awards using the Black-Scholes-Merton option pricing model, we are required to make certain estimates of the key assumptions that include expected term, expected volatility of our shares, dividend yield and risk free interest rate. Estimating these key assumptions involves judgment regarding subjective future expectations of market prices and trends. The assumptions for expected term and expected volatility have the most significant effect on calculating the fair value of our stock options. We use the historical volatility of our ADSs in order to estimate future share price trends. In order to determine the estimated period of time that we expect employees to hold their share-based options, we have used historical exercise pattern of employees. The aforementioned inputs entered into the option valuation model that we use to determine the fair value of our stock awards are subjective estimates and changes to these estimates will cause the fair value of our share-based awards and related share-based compensation expense we record to vary.

We are required to estimate the share-based awards that we expect to vest and to reduce share-based compensation expense for the effects of estimated forfeitures of awards over the expense recognition period. Although we estimate forfeitures based on historical experience, actual forfeitures in the future may differ. To the extent our actual forfeitures are different than our estimates, we record a true-up for the difference in the period in which the awards vest, and such true-ups could materially affect our operating results.

We record deferred tax assets for share-based awards that result in deductions on our income tax returns, based on the amount of share-based compensation recognized and the statutory tax rate in the jurisdiction in which we will receive a tax deduction. Because the deferred tax assets we record are based upon the share-based compensation expenses in a particular jurisdiction, the aforementioned inputs that affect the fair value of our stock awards also indirectly affect our income tax expense. In addition, differences between the deferred tax assets recognized for financial reporting purposes and the actual tax deduction reported on our income tax returns are recorded in additional paid-in capital. If the tax deduction is less than the deferred tax asset, such shortfalls reduce our pool of excess tax benefits. If the pool of excess tax benefits is reduced to zero, then subsequent shortfalls would increase our income tax expense.

Business Combinations

Our acquisitions have been accounted using the purchase method of accounting under SFAS 141 “Business Combinations.” As a part of acquisition accounting, we allocate the purchase price of acquired companies to the identified tangible and intangible assets based on the estimated fair values on the date of the acquisition. The purchase price allocation process requires management to make significant estimates and assumptions, especially at acquisition date with respect to intangible assets, income taxes and estimated restructuring liabilities. Although we believe the assumptions and estimates we have made in the past have been reasonable and appropriate, they are based in part on historical experience and information obtained from the management of the acquired companies and are inherently uncertain. Examples of critical estimates in valuing certain of the intangible assets we have acquired or may acquire in the future include but are not limited to appropriate method of valuation, future cash flow projections, weighted average cost of capital, discount rates, risk-free rates, market rate of return and risk premiums.

Unanticipated events and circumstances may occur which may affect the accuracy or validity of such assumptions, estimates or actual results.

In fiscal 2010, we will adopt FASB Statement No. 141 (revised 2007), “Business Combinations.” See Note 2 of the notes to our consolidated financial statements included elsewhere in this annual report for additional information.

Impairment of Goodwill, Intangible Assets and Property and equipment

The goodwill impairment test is a two-step process. The first step of the process consists of estimating the fair value of each of our reporting units, based on a discounted cash flow model, using revenue and profit forecasts and comparing those estimated fair values with the carrying values which include the allocated goodwill.

We determine reporting units and estimate the goodwill to be allocated to each reporting unit under SFAS No. 142 “Goodwill and Other Intangible Assets.” The identification of the reporting units is based on the economic characteristics and availability of discrete financial data with respect to the reporting unit.

If the estimated fair value is less than the carrying value, a second step is performed to compute the amount of the impairment by determining the implied fair value of goodwill. The determination of a reporting unit’s implied fair value of goodwill requires the allocation of the estimated fair value of the reporting unit to the assets and liabilities of the reporting unit. Any unallocated fair value representing the implied fair value of goodwill is then compared to its corresponding carrying value. If the carrying value exceeds the implied fair value of goodwill, the difference is recognized as an impairment charge.

Determining the fair value of a reporting unit involves the use of significant estimates and assumptions. These estimates and assumptions include revenue growth rate, and operating margins used to calculate projected future cash flows, weighted average cost of capital, discount rates, risk-free rates, market rate of return, risk premiums, future economic and market conditions, and determination of appropriate market comparables. We base our fair value estimates on assumptions we believe to be reasonable but that are unpredictable and inherently uncertain. Actual future results may differ from those estimates. In addition, we make certain judgments and assumptions in allocating shared assets and liabilities to determine the carrying values for each of our reporting units. Our most recent annual goodwill impairment analysis, which was performed during the fourth quarter of fiscal 2009, did not result in an impairment charge.

We amortize intangible assets with definite lives and purchased property and equipment over the estimated useful lives and review them for impairment, if indicators of impairment arise. We estimate the useful lives of intangible assets and purchase property and equipment after consideration of historical results and anticipated results based on our current plans.

We perform impairment reviews of intangible assets and property and equipment when events or circumstances indicate that the value of the assets may be impaired. Indicators of impairment include operating or cash flow losses, significant decreases in market value or changes in the physical condition of the property and equipment. When indicators of impairment are present, the evaluation of impairment is based upon a comparison of the carrying amount of the intangible asset or property and equipment to the estimated future undiscounted net cash flows expected to be generated by the asset. If estimated future undiscounted cash flows are less than the carrying amount of the asset, the asset is considered impaired. The impairment expense is determined by comparing the estimated fair value of the intangible asset or property and equipment to its carrying value, with any shortfall from fair value recognized as an expense in the current period. The estimate of undiscounted cash flows and the fair value of assets require several assumptions and estimates like the weighted average cost of capital, discount rates, risk-free rates, market rate of return and risk premiums and can be affected by a variety of factors, including external factors such as industry and economic trends, and internal factors such as changes in our business strategy and our internal forecasts. Although we believe the historical assumptions and estimates we have made are reasonable and appropriate, different assumptions and estimates could materially impact our reported financial results.

We cannot predict the occurrence of future events that might adversely affect the reported value of goodwill, intangible assets or property and equipment. Such events include, but are not limited to, strategic decisions made in response to economic and competitive conditions, the impact of the environment on our customer base, and material negative change in relationship with significant customers.

Income Taxes

We apply the asset and liability method of accounting for income taxes as described in SFAS No. 109, “Accounting for Income Taxes,” or SFAS 109. Under this method, deferred tax assets and liabilities are recognized for future tax consequences attributable to differences between the financial statements carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carry-forwards. Deferred tax assets and liabilities are measured using tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.

We record a valuation allowance to reduce our deferred tax assets to the amount that is more likely than not to be realized. In order for us to realize our deferred tax assets, we must be able to generate sufficient taxable income in those jurisdictions where the deferred tax assets are located. We consider future growth, forecasted earnings, future taxable income, the mix of earnings in the jurisdictions in which we operate, and prudent and feasible tax planning strategies in determining the need for a valuation allowance. In the event we were to determine that we would not be able to realize all or part of our net deferred tax assets in the future, an adjustment to the deferred tax assets would be charged to earnings in the period in which we make such a determination. Likewise, if we later determine that it is more likely than not that the net deferred tax assets would be realized, we would reverse the applicable portion of the previously provided valuation allowance

We calculate our current and deferred tax provision based on estimates and assumptions that could differ from the actual results reflected in income tax returns filed during the subsequent year. Adjustments based on filed returns are generally recorded in the period when the tax returns are filed and the global tax implications are known, which can materially impact our effective tax rate.

Significant judgment is required in determining our worldwide income tax provision. In the ordinary course of a global business, there are many transactions and calculations where the ultimate tax outcome is uncertain. Some of these uncertainties arise as a consequence of revenue sharing and cost reimbursement arrangements among related entities, eligibility of our operations for the tax holidays, segregation of foreign and domestic earnings and expenses to avoid double taxation and carry forward of losses for set off against future taxable income. Although we believe that our estimates are reasonable, the final tax outcome of these matters could be different from that which is reflected in our historical income tax provisions and accruals. Such differences could have a material effect on our income tax provision and net income in the period in which such determination is made.

The amount of income tax we pay is subject to ongoing audits by income tax authorities, which often result in adjustments to our taxable profits. Our estimate of the potential outcome for any uncertain tax issue is highly judgmental. We believe we have adequately provided for any reasonably foreseeable outcome related to these matters. However, our future results may include favorable or unfavorable adjustments to our estimated tax liabilities in the period the assessments are made or resolved, tax examinations are closed or when statutes of limitation on potential assessments expire. Additionally, the jurisdictions in which our earnings or deductions are realized may differ from our current estimates. As a result, our effective tax rate may fluctuate significantly on a quarterly basis.

As part of our accounting for business combinations, some of the purchase price is allocated to goodwill and intangible assets. Impairment charges associated with goodwill are generally not tax deductible and will result in an increased effective income tax rate in the quarter any impairment is recorded. Amortization expenses associated with acquired intangible assets are generally not tax deductible pursuant to our existing tax structure; however, deferred taxes have been recorded for non-deductible amortization expenses as a part of the purchase price allocation process. We have taken into account the allocation of these identified intangibles among different taxing jurisdictions, including those with nominal or zero percent tax rates, in establishing the related deferred tax liabilities. Income tax contingencies existing as of the acquisition dates of the acquired companies are evaluated quarterly and any adjustments are recorded as adjustments to goodwill.

Further Financial Accounting Standards Board Interpretation No. 48, “Accounting for Uncertainty in Income Taxes — an interpretation of FASB Statement No. 109,” or FIN 48 requires us to recognize a provision for uncertainty in income taxes based on minimum recognition threshold. Evaluation of tax positions and recognition of provisions, under FIN 48, involves interpretation of tax laws, estimates of probabilities of tax positions being sustained and the amounts of payments to be made under various scenarios. Although we believe we have adequately reserved for our uncertain tax positions, no assurance can be given with respect to the final outcome of these matters. To the extent that the final outcome of these matters is different than the amounts recorded, such differences will impact our provision for income taxes in the period in which such a determination is made.

Derivative Financial Instruments

The primary risks managed by using derivative instruments are foreign currency exchange risk and interest rate risk. Forward and option contracts on various foreign currencies are entered into to manage the foreign currency exchange rate risk on forecasted revenue denominated in foreign currencies. Interest rate swaps are entered into to manage interest rate risk associated with our floating rate borrowings. Our primary exchange rate exposure is with the US dollars, pound sterling and the Indian rupee. For derivative instruments which qualify for cash flow hedge accounting, we record the effective portion of gain or loss from changes in the fair value of the derivative instruments in accumulated other comprehensive income (loss), which is reclassified into earnings in the same period during which the hedged item affects earnings. Derivative instruments qualify for hedge accounting when the instrument is designated as a hedge; the hedged item is specifically identifiable and exposes us to risk; and it is expected that a change in fair value of the derivative instrument and an opposite change in the fair value of the hedged item will have a high degree of correlation. Determining the high degree of correlation between the change in fair value of the hedged item and the derivative instruments involves significant judgment including the probability of the occurrence of the forecasted transaction. When it is probable that a forecasted transaction will not occur, we discontinue the hedge accounting and recognize immediately in the consolidated statement of income, the gains and losses attributable to such derivative instrument that were accumulated in other comprehensive income (loss). Although we believe that our estimates of the forecasted transactions are reasonable and based on historical experience, the final occurrence of such transactions could be different as a result of external factors such as industry and economic trends, and internal factors such as changes in our business strategy and our internal forecasts, which will have a material effect on our earnings.

Fair value measurements

SFAS No. 157, “Fair Value Measurements” defines fair value as the price that would be paid upon sale of an asset or upon transfer of a liability in an orderly transaction between market participants at the measurement date and in the principal or most advantageous market for that asset or liability. The fair value should be calculated based on assumptions that market participant would use in pricing the asset or liability, not on assumptions specific to us. In addition, the fair value of assets and liabilities should include consideration of non-performance risk including credit risk.

SFAS No. 157 also discusses valuation techniques, such as the market approach (comparable market prices), the income approach (present value of future income or cash flow), and the cost approach (cost to replace the service capacity of an asset or replacement cost). The statement utilizes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. The following is a brief description of those three levels:

•		Level 1: Observable inputs such as quoted prices (unadjusted) in active markets for identical assets or liabilities.
•		Level 2: Inputs other than quoted prices that are observable for the asset or liability, either directly or indirectly. These include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active.
•		Level 3: Unobservable inputs that reflect the reporting entity’s own assumptions.

Where applicable, we use quoted prices in active markets for identical assets or liabilities to determine fair value. This pricing methodology applies to our Level 1 assets, which consists of cash equivalents and marketable securities. If quoted market prices in active markets for identical assets or liabilities are not available to determine fair value, then we use quoted market prices for similar assets and liabilities or inputs other than the quoted prices that are observable, either directly or indirectly. This pricing methodology applies to our Level 2 items, which consist of our interest rate swaps and foreign currency derivative instruments. The estimate of fair value of interest rate swaps and foreign currency derivative instruments require several assumptions and estimates like the future interest rates and discounting factor and can be affected by a variety of factors, including volatility and forward rates. Although we believe the assumptions and estimates we have made are reasonable and appropriate, different assumptions and estimates could materially impact our reported financial position.

Results of Operations

The following table sets forth certain financial information as a percentage of revenue and revenue less repair payments:

		Revenue												Revenue Less Repair Payments
		Year Ended March 31,												Year Ended March 31,
		2009				2008				2007				2009				2008				2007
														Unaudited				Unaudited				Unaudited
Cost of revenue			76.1	%			79.0	%			77.0	%			66.6	%			66.8	%			63.1	%
Gross profit			23.9	%			21.0	%			23.0	%			33.4	%			33.2	%			36.9	%
Operating expenses:
SG&A			14.0	%			15.8	%			14.9	%			19.5	%			25.0	%			23.9	%
Amortization of intangibles assets			4.6	%			0.6	%			0.5	%			6.4	%			1.0	%			0.9	%
Impairment of goodwill, intangibles and other assets			—				3.4	%			—				—				5.3	%			—
Operating income			5.3	%			1.2	%			7.6	%			7.4	%			1.9	%			12.1	%
Other (expense) income, net			(1.0	)%			2.0	%			0.7	%			(1.5	)%			3.2	%			1.1	%
Interest expense			(2.2	)%											(3.0	)%
Provision for income taxes			(0.6	)%			(1.1	)%			(0.7	)%			(0.9	)%			(1.8	)%			(1.2	)%
Income before minority interest			1.4	%			2.1	%			7.6	%			2.0	%			3.3	%			12.0	%
Minority interest			0.1	%			—				—				0.1	%			—				—
Net income			1.5	%			2.1	%			7.6	%			2.1	%			3.3	%			12.0]	%

The following table reconciles revenue (a GAAP measure) to revenue less repair payments (a non-GAAP measure) across our business:

		Year Ended March 31,
		2009				2008				2007
Revenue			100.0	%			100.0	%			100.0	%
Less: Payments to repair centers			28.4	%			36.8	%			37.6	%
Revenue less repair payments			71.6	%			63.2	%			62.4	%

Fiscal 2009 Compared to Fiscal 2008

Revenue. Revenue in fiscal 2009 was $539.3 million, an increase of $79.4 million, or 17.3%, over our revenue of $459.9 million in fiscal 2008. This increase in revenue of $79.4 million was primarily attributable to an increase in revenue from new clients of $59.0 million and, to a lesser extent, an increase in revenue from existing clients of $20.4 million. Of the $79.4 million increase in revenue, Call 24-7 and BizAps, which we acquired in April 2008 and June 2008, respectively, contributed $38.4 million and $3.3 million, respectively. Some of the clients of Call 24-7 and BizAps that contributed to such revenue were existing clients of WNS prior to the respective acquisitions and some were new to WNS. The increase in revenue from existing clients was primarily attributable to Aviva Global. The increase in revenue from existing clients was on account of expansion of the number of processes that we executed for these clients and an increase in volumes for the existing processes. Revenue from the UK and North America (primarily the US) accounted for $299.6 million and $130.5 million, respectively, of our revenue for fiscal 2009, representing an increase of 32.5% and 14.9%, respectively, from fiscal 2008. The increase in revenue from UK was primarily attributable to Aviva Global. Revenue from Europe (excluding the UK) accounted for $107.7 million of our revenue for fiscal 2009, representing a decrease of 7.8% from fiscal 2008 primarily on account of a decrease in the volume of business from existing clients.

Revenue Less Repair Payments. Revenue less repair payments in fiscal 2009 was $386.4 million, an increase of $95.7 million, or 32.9%, over our revenue less repair payments of $290.7 million in fiscal 2008. This increase in revenue less repair payments of $95.7 million was primarily attributable to an increase in revenue less repair payments from new clients of $55.3 million and an increase in revenue less repair payments from existing clients of $40.4 million. Of the $95.7 million increase in revenue less repair payments, Call 24-7 and BizAps, which we acquired in April 2008 and June 2008, respectively, contributed $37.8 million and $3.3 million, respectively. Some of the clients of Call 24-7 and BizAps that contributed to such revenue were existing clients of WNS prior to their respective acquisitions and some were new to WNS. The increase in revenue less repair payments from existing clients was primarily attributable to Aviva Global. The increase in revenue less repair payments from existing clients on account of expansion of the number of processes that we executed for these clients and an increase in volumes for the existing processes. Contract prices across the various types of processes remained substantially stable over this period. Revenue less repair payments from the UK,

Europe (excluding the UK) and North America (primarily the US) accounted for $225.5 million, $28.9 million and $130.5 million, respectively, of our revenue less repair payments in fiscal 2009, representing an increase of 54.1%, 5.2% and 14.9%, respectively, from fiscal 2008. We realized an increase in revenue less repair payments in our BFSI business unit, and to a lesser extent, our emerging businesses, and travel and leisure business units. However, we experienced a decrease in revenue less repair payments in our industrial and infrastructure business unit.

Cost of Revenue. Cost of revenue in fiscal 2009 was 76.1% of revenue as compared to 79.0% of revenue in fiscal 2008. Cost of revenue in fiscal 2009 was $410.3 million, an increase of $47.0 million, or 12.9%, over our cost of revenue of $363.3 million in fiscal 2008. Cost of revenue excluding payments made to repair centers for our “fault” repair services increased by $63.3 million for fiscal 2009 as compared to fiscal 2008. Payments made to repair centers decreased by $16.3 million to $152.9 million in fiscal 2009 from $169.2 million in fiscal 2008 mainly due to decreased business from existing clients of WNS Assistance, our auto claims business. Infrastructure costs increased by $43.5 million mainly on account of payments made to the repair centers by Call 24-7 for its “non-fault” repair services. In addition, operating employee compensation increased by $18.5 million due to an increase in headcount and wages. The increase in headcount was primarily attributable to our acquisition of Aviva Global. Share-based compensation cost included in operating employee compensation increased by $1.2 million in fiscal 2009 as compared to fiscal 2008 due to the grant of new RSUs in fiscal 2009. Depreciation cost increased by $3.2 million mainly due to the opening of new delivery centers, one each in the Philippines and Romania, and the acquisition of delivery centers in Pune, Bangalore, Chennai and Sri Lanka in connection with our acquisition of Aviva Global. The increase was partially offset by a decrease in travel costs by $2.0 million

Gross Profit. Gross profit in fiscal 2009 was $128.9 million, or 23.9% of revenue, as compared to $96.5 million, or 21.0% of revenue, in fiscal 2008. Gross profit as a percentage of revenue less repair payments was 33.4% in fiscal 2009 compared to 33.2% in fiscal 2008. Gross profit as a percentage of revenue less repair payments increased by approximately 0.2% in fiscal 2009 as compared to fiscal 2008 primarily on account of an increase in revenue less repair payments of $95.7 million as discussed above.

SG&A Expenses. SG&A expenses in fiscal 2009 were $75.5 million, an increase of 3.9% over our SG&A expenses of $72.7 million in fiscal 2008. This increase was primarily on account of (i) an increase in non-operating employee compensation cost by $11.0 million due to an increase in headcount and wages, including an increase in share-based compensation costs by $5.4 million, and (ii) an increase in facilities costs by $1.7 million due primarily to the setting up of new delivery centers, one each in Romania and the Philippines, and the acquisition of delivery centers in Pune, Bangalore, Chennai and Sri Lanka in connection with our acquisition of Aviva Global. The increase was partially offset (i) a decrease in other administration related expenses such as communication costs and marketing costs by $2.0 million, (ii) a decrease in fringe benefit tax payable by us on the allotment of shares pursuant to the exercise, on or after April 1, 2008, of options and RSUs granted to employees by $1.8 million, (iii) a decrease in other employee related costs such as recruitment and training costs by $1.8 million, (iv) a decrease in travel expenses by $1.4 million, (v) a decrease in the provision for bad debts by $1.2 million, (vi) a decrease in professional fees by $0.9 million, and (vii) a decrease in other taxes by $0.8 million. The decreases in respect of items (i), (iii), (iv) and (vi) were primarily on account of cost control measures implemented by us in fiscal 2009. SG&A expenses as a percentage of revenue was 14.0% in fiscal 2009 as compared to 15.8% in fiscal 2008. SG&A expenses as a percentage of revenue less repair payments was 19.5% in fiscal 2009 as compared to 25.0% in fiscal 2008.

Amortization of Intangible Assets. Amortization of intangible assets was $24.9 million in fiscal 2009, an increase of $22.0 million over $2.9 million in fiscal 2008. The increase was on account of amortization of intangible assets acquired through our acquisitions of Marketics in May 2007 (for the full 12-month period ended March 31, 2009 as opposed to the partial period for fiscal 2008), Flovate in June 2007 (for the full 12-month period ended March 31, 2009 as opposed to the partial period for fiscal 2008), Call 24-7 in April 2008, BizAps in June 2008 and Aviva Global in July 2008.

Impairment of Goodwill, Intangibles and Other Assets. We performed impairment reviews of goodwill and intangible assets when FMFC filed a voluntary petition for relief under Chapter 11 of the US Bankruptcy Code in August 2007. Based on the impairment review, all unamortized goodwill and intangible assets acquired in connection with the acquisition of Trinity Partners in November 2005 was impaired in August 2007. We had $15.5 million of impairment of goodwill, intangibles and other assets in fiscal 2008 consisting of impairment of $9.1 million of goodwill and an impairment of $6.4 million of intangible and other assets acquired with the acquisition of Trinity Partners in November 2005. We had no impairment of goodwill, intangibles and other assets in fiscal 2009.

Operating Income. Income from operations in fiscal 2009 was $28.5 million compared to $5.5 million in fiscal 2008, due to the reasons discussed above. Income from operations as a percentage of revenue was 5.3% in fiscal 2009 as compared to 1.2% in fiscal

2008. Income from operations as a percentage of revenue less repair payments was 7.4% in fiscal 2009 as compared to 1.9% in fiscal 2008.

Other (Expense) Income, Net. Other expense, net in fiscal 2009 was $5.6 million as compared to other income, net of $9.2 million in fiscal 2008, primarily on account of (1) a decrease in interest income by $3.6 million to $2.7 million in fiscal 2009 as compared to $6.3 million in fiscal 2008 as a result of lower cash balance in fiscal 2009 with the use of cash to fund our acquisitions in fiscal 2009, and (2) a foreign exchange loss of $8.3 million in fiscal 2009 as compared to a foreign exchange gain of $2.9 million in fiscal 2008.

Interest Expense. Interest expense in fiscal 2009 was $11.8 million primarily due to the $200 million Term Loan taken to fund the AVIVA transaction. We had no interest expense in fiscal 2008.

Provision for Income Taxes. Provision for income taxes in fiscal 2009 was $3.3 million, a decrease of 36.4% over our provision for income taxes of $5.2 million in fiscal 2008. This decrease is primarily on account of higher deferred tax credits, attributable to higher intangibles due to acquisitions made by us in fiscal 2009, resulting in lower tax expense. Tax as a percentage of net income before tax was 29.8% in fiscal 2009 as compared to 35.3% in fiscal 2008.

Minority Interest. Minority interest in fiscal 2009 was a benefit of $0.3 million. This was primarily on account of losses in our joint venture in the Philippines. There was no minority interest in fiscal 2008.

Net Income. Net income in fiscal 2009 was $8.1 million as compared to net income of $9.5 million in fiscal 2008. Net income as a percentage of revenue was 1.5% in fiscal 2009 as compared to 2.1% in fiscal 2008. Net income as percentage of revenue less repair payments was 2.1% in fiscal 2009 as compared to 3.3% in fiscal 2008.

Fiscal 2008 Compared to Fiscal 2007

Revenue. Revenue in fiscal 2008 was $459.9 million as compared to $352.3 million in fiscal 2007, representing an increase of $107.6 million, or 30.5%. This increase in revenue of $107.6 million was primarily attributable to an increase in revenue from existing clients of $92.6 million on account of an increase in capacity, an expansion of the number of processes that we executed for these clients, and an increase in volumes for the existing processes, and an increase in revenue from new clients of $15.0 million (including $9.0 million and $0.1 million in revenue from new clients as a result of our acquisitions of Marketics in May 2007 and Flovate in June 2007, respectively). Revenue from the UK, Europe (excluding the UK) and North America (primarily the US) accounted for $225.9 million, $116.9 million and $113.7 million, respectively, of our revenue for fiscal 2008, representing an increase of 19.0%, 48.0% and 40.8%, respectively, from fiscal 2007.

Revenue Less Repair Payments. Revenue less repair payments in fiscal 2008 was $290.7 million, an increase of 32.3% over our revenue less repair payments of $219.7 million in fiscal 2007. This increase in revenue less repair payments of $71.0 million was primarily attributable to an increase in revenue less repair payments from existing clients of $56.6 million on account of an increase in capacity, an expansion of the number of processes that we executed for these clients and an increase in volumes for the existing processes. The increase in revenue less repair payments from new clients was $14.4 million (including $9.0 million and $0.1 million in revenue less repair payments from new clients as a result of our acquisitions of Marketics in May 2007 and Flovate in June 2007, respectively). Contract prices across the various types of processes remained substantially stable over this period. Revenue less repair payments from the UK, Europe (excluding the UK) and North America (primarily the US) accounted for $146.2 million, $27.4 million and $113.7 million, respectively, of our revenue in fiscal 2008, representing increases of 31.8%, 8.5% and 40.8%, respectively, from fiscal 2007. We realized an increase in revenue less repair payments across all our business units in fiscal 2008, most significantly in our emerging businesses unit, followed by our travel services business unit and, to a lesser degree, in our BFSI business units.

Cost of Revenue. Cost of revenue in fiscal 2008 was 79.0% of revenue as compared to 77.0% of revenue in fiscal 2007. Cost of revenue in fiscal 2008 was $363.3 million, an increase of $92.1 million or 34.0% over our cost of revenue of $271.2 million in fiscal 2007. Payments made to repair centers increased by $36.6 million to $169.2 million in fiscal 2008 from $132.6 million in fiscal 2007 mainly due to increased business from existing clients. Operating employee compensation increased by $42.1 million due to an increase in headcount and wages which were partially offset by a decrease in travel costs by $0.8 million. In addition, infrastructure costs increased by $11.0 million and depreciation cost increased by $3.2 million due to the opening of new delivery centers, one each in Mumbai, Pune, Gurgaon and Bangalore. Share-based compensation cost included in operating employee compensation increased by $1.4 million in fiscal 2008 as compared to fiscal 2007.

Gross Profit. Gross profit in fiscal 2008 was $96.5 million, or 21.0% of revenue, as compared to $81.1 million, or 23.0% of revenue, in fiscal 2007. Gross profit as a percentage of revenue less repair payments was 33.2% in fiscal 2008 compared to 36.9% in fiscal 2007. Gross profit as a percentage of revenue less repair payments decreased by approximately 3.7% in fiscal 2008 as compared to fiscal 2007 primarily on account of the loss of FMFC, a mortgage services client and an increase in cost of revenue of $92.1 million as discussed above.

SG&A Expenses. SG&A expenses in fiscal 2008 were $72.7 million, an increase of 38.6% over our SG&A expenses of $52.5 million in fiscal 2007. Non-operating employee compensation was higher by $5.0 million and related travel expenses were higher by $0.7 million largely on account of our increased marketing efforts and the expansion of our management team. Share-based compensation costs, which are included in non-operating employee compensation, increased by $1.7 million in fiscal 2008 as compared to fiscal 2007. Other SG&A cost elements such as (i) professional fees increased by $3.4 million partially on account of legal expenses incurred in relation to our claims filed in FMFC’s voluntary petition for relief under Chapter 11 of the Bankruptcy Code in August 2007, (ii) other employee related costs such as recruitment and training costs increased by $1.5 million due to our continued expansion and increase in headcount, (iii) provision for bad debts increased by $1.4 million on account of the provision for doubtful accounts for the accounts receivable from FMFC for services through June 2007, (iv) the fringe benefit tax payable by us on the allotment of shares pursuant to the exercise or vesting, on or after April 1, 2007, of options and RSUs granted to employees of $2.5 million, (v) facilities costs increased by $1.5 million due primarily to the setting up of new delivery centers, one each in Mumbai, Pune, Gurgaon and Bangalore, (vi) fringe benefit tax on other expenses increased by $1.2 million, (vii) depreciation cost increased by $0.5 million due to the opening of new delivery centers, one each in Mumbai, Pune, Gurgaon and Bangalore, and (viii) other administration related expenses such as communication costs, computer maintenance cost and marketing cost increased by $2.5 million. SG&A expenses as a percentage of revenue was 15.8% in fiscal 2008 as compared to 14.9% in fiscal 2007. SG&A expenses as a percentage of revenue less repair payments was 25.0% in fiscal 2008 as compared to 23.9% in fiscal 2007.

Amortization of Intangible Assets. Amortization of intangible assets was $2.9 million in fiscal 2008, an increase of 51.3% over $1.9 million in fiscal 2007. The increase was primarily on account of amortization of intangible assets acquired through our acquisitions of Marketics in May 2007 and Flovate in June 2007 which was partially offset by a decrease in amortization charge on account of the impairment of intangible assets acquired through our acquisition of Trinity Partners arising from FMFC’s voluntary petition for relief under Chapter 11 of the US Bankruptcy Code in August 2007.

Impairment of Goodwill, Intangibles and Other Assets. We performed impairment reviews of goodwill and intangible assets when FMFC filed a voluntary petition for relief under Chapter 11 of the US Bankruptcy Code in August 2007. Based on the impairment review, all unamortized goodwill and intangible assets acquired in connection with the acquisition of Trinity Partners in November 2005 was impaired in August 2007. We had $15.5 million of impairment of goodwill, intangibles and other assets in fiscal 2008 consisting of impairment of $9.1 million of goodwill recognized and an impairment of $6.4 million of intangible and other assets acquired with the acquisition of Trinity Partners in November 2005. We had no impairment of goodwill, intangibles and other assets in fiscal 2007.

Operating Income. Income from operations in fiscal 2008 was $5.5 million compared to $26.8 million in fiscal 2007, due to the reasons discussed above. Income from operations as a percentage of revenue was 1.2% in fiscal 2008 as compared to 7.6% in fiscal 2007. Income from operations as a percentage of revenue less repair payments was 1.9% in fiscal 2008 as compared to 12.1% in fiscal 2007.

Other Income, Net. Other income, net in fiscal 2008 was $9.2 million as compared to $2.5 million in fiscal 2007, an increase of $6.7 million, primarily on account of an increase in interest income by $1.8 million to $5.3 million in fiscal 2008 as compared to $3.5 million in fiscal 2007, and a foreign exchange gain of $2.9 million in fiscal 2008 as compared to a foreign exchange loss of $1.4 million in fiscal 2007.

Interest Expense. We had no interest expense in fiscal 2008 compared to an interest expense of $0.1 million in fiscal 2007.

Provision for Income Taxes. Provision for income taxes in fiscal 2008 was $5.2 million, an increase of 101.8% over our provision for income taxes of $2.6 million in fiscal 2007. This increase is primarily on account of higher profits in our WNS Auto Claims BPO segment resulting in higher tax expense. Profits earned from our WNS Auto Claims BPO segment are generated from our operations in UK while profits earned from our WNS Global BPO segment are primarily generated from our operations in India which are eligible for tax exemptions with respect to profits earned from export revenue by various delivery centers that benefit from a tax holiday. Tax as a percentage of net income before tax was 35.3% in fiscal 2008 as compared to 8.8% in fiscal 2007.

Net Income. Net income in fiscal 2008 was $9.5 million as compared to $26.6 million in fiscal 2007. Net margin was 2.1% in fiscal 2008 as compared to 7.5% in fiscal 2007. Net margins as percentage of revenue less repair payments was 3.3% in fiscal 2008 as compared to 12.1% in fiscal 2007.

Results by Reportable Segment

For purposes of evaluating operating performance and allocating resources, we have organized our company by operating segments. See Note 15 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 SFAS No. 131, “Disclosures about Segments of an Enterprise and Related Information,” or SFAS 131. We have separately reported our auto claims segment (or WNS Assistance), as it does not meet the aggregation criteria under SFAS 131. Accordingly, pursuant to SFAS 131, we have two reportable segments: WNS Global BPO and WNS Auto Claims BPO.

WNS Global BPO is primarily delivered out of our offshore delivery centers in India, Sri Lanka, Romania and the Philippines. This segment includes all of our business activities with the exception of WNS Auto Claims BPO. WNS Auto Claims BPO is our automobile claims management business which is primarily based in the UK and is part of our BFSI business unit. See “Item 4. Information on the Company — B. Business Overview — Business Process Outsourcing Service Offerings.” We report WNS Auto Claims BPO 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 automobile repair centers, resulting in lower long-term gross margins when measured on the basis of revenue, relative to the WNS Global BPO segment.

Our revenue is generated primarily from providing business process outsourcing services. In our WNS Auto Claims BPO segment, we provide both “fault” and “non-fault” repairs. For “fault” repairs, we provide claims handling and accident management services, where we arrange for automobile repairs through a network of third party repair centers. In our accident management services, we act as the principal in our dealings with the third party repair centers and our clients. The amounts we invoice to our clients for payments made by us to third party repair centers is reported as revenue. Since we wholly subcontract the repairs to the repair centers, we evaluate our financial performance based on revenue less repair payments to third party repair centers which is a non-GAAP measure. We believe that revenue less repair payments for “fault” repairs reflects more accurately the value addition of the business process outsourcing services that we directly provide to our clients, For “non-fault” repairs, revenue including repair payments is used as a primary measure to allocate resources and measure operating performance. As we provide a consolidated suite of accident management services including credit hire and credit repair for our “non-fault” repairs business, we believe that measurement of that line of business has to be on a basis that includes repair payments in revenue. Revenue less repair payments is a non-GAAP measure which is calculated as revenue less payments to repair centers. The presentation of this non-GAAP information is not meant to be considered in isolation or as a substitute for our financial results prepared in accordance with US GAAP. Our revenue less repair payments may not be comparable to similarly titled measures reported by other companies due to potential differences in the method of calculation.

Our management allocates resources based on segment revenue less repair payments and measures segment performance based on revenue less repair payments and to a lesser extent on segment operating income. The accounting policies of our reportable segments are the same as those of our company. See “— Critical Accounting Policies.” We may in the future change our reportable segments based on how our business evolves.

The following table shows revenue and revenue less repair payments for our two reportable segments for the periods indicated:

		Year Ended March 31,
		2009								2008								2007
		WNS Global				WNS Auto				WNS Global				WNS Auto				WNS Global				WNS Auto
		BPO				Claims BPO				BPO				Claims BPO				BPO				Claims BPO
		(US dollars in millions)
Segment revenue(1)		$	322.9			$	217.1			$	261.2			$	199.7			$	195.0			$	158.8
Less: Payments to repair centers			—				152.9				—				169.1				—				132.6
Revenue less repair payments(1)			322.9				64.2				261.2				30.6				195.0				26.2
Cost of revenue(2)			213.1				41.4				181.7				11.1				122.1				17.0
Other costs(3)			59.3				6.4				63.3				5.0				45.6				4.2
Segment operating income		$	50.5			$	16.4			$	16.2			$	14.5			$	27.3			$	5.1

In fiscal 2009, WNS Global BPO accounted for 59.7% of our revenue and 83.4% of our revenue less repair payments, as compared to 56.6% of our revenue and 89.5% of our revenue less repair payments in fiscal 2008.

WNS Global BPO

Segment Revenue. Revenue in the WNS Global BPO segment increased by 23.6% to $322.9 million in fiscal 2009 from $261.2 million in fiscal 2008. This increase was primarily driven by an increase in the volume of transactions executed for existing clients, which contributed $44.3 million of the increase, and an increase in revenue from new clients, which contributed $17.4 million of the increase. BizAps, which we acquired in June 2008, contributed $3.3 million of revenue.

Revenue in the WNS Global BPO segment increased by 34.0% to $261.2 million in fiscal 2008 from $195.0 million in fiscal 2007. This increase was primarily driven by an increase in the volume of transactions executed for existing clients, which contributed $54.3 million of the increase, and an increase in revenue from new clients, which contributed $11.9 million of the increase (including $9.0 million of revenue contributed by Marketics which we acquired in May 2007).

Contract prices across the various types of processes remained substantially stable over these periods.

Segment Operating Income. Segment operating income in the WNS Global BPO segment increased by 211.1% to $50.5 million in fiscal 2009 from $16.2 million in fiscal 2008. The increase was primarily attributable to an increase in segment revenue.

The key components of our cost of revenue are employee costs (which comprise employee salaries and costs related to recruitment, training and retention), infrastructure-related costs (which comprise depreciation charges, lease rentals, facilities management costs and telecommunication network costs), and travel related costs. Employee related costs represent the largest component of our cost of revenue for the WNS Global BPO segment. Our cost of revenue increased by $31.4 million to $213.1 million in fiscal 2009 from $181.7 million in fiscal 2008, primarily on account of an increase in infrastructure costs by $18.0 million, an increase in depreciation costs by $3.6 million due to the opening of new delivery centers, one each in Romania and the Philippines, and the acquisition of delivery centers in Pune, Bangalore, Chennai and Sri Lanka in connection with our acquisition of Aviva Global, and an increase in employee costs and wages by $11.9 million due to the increase in headcount primarily on account of the acquisition of Aviva Global. The increase in cost of revenue was partially offset by a decrease in travel cost by $2.1 million.

The key components of our other costs are corporate employee costs for sales and marketing, general and administrative and other support personnel, travel expenses, legal and professional fees, brand building expenses, and other general expenses not related to cost of revenue. Our other costs decreased by $4.0 million to $59.3 million in fiscal 2009 from $63.3 million in fiscal 2008. The decrease in other costs was primarily on account of a decrease in our administration costs by $5.7 million, a decrease in travel expenses by $1.4 million and a decrease in professional fees by $1.1 million, partially offset by an increase in non-operating employee compensation by $4.1 million. The decrease in our administration costs by $5.7 million was primarily due to (i) a decrease in the fringe benefit tax payable by us on the allotment of shares pursuant to the exercise, on or after April 1, 2008, of options and RSUs granted to employees by $1.8 million, (ii) a decrease in other employee related costs such as recruitment and training cost by $1.8 million, (iii) a decrease in other administrative expense by $1.7 million, (iv) a decrease in bad debts provision of $1.3 million, (v) a decrease in fringe benefit tax on other expenses by $0.5 million, and (vi) a decrease in other tax expense by $0.3 million, which was partially offset by an increase in infrastructure cost of $1.6 million and an increase in depreciation cost of $0.2 million due to the opening of new delivery centers, one each in Romania and the Philippines, and the acquisition of delivery centers in Pune, Bangalore, Chennai and Sri Lanka in connection with our acquisition of Aviva Global. Segment operating margin for fiscal 2009 increased by 9.4% to 15.6% of revenue as compared to fiscal 2008.

Segment operating income in the WNS Global BPO segment decreased by 40.6% to $16.2 million in fiscal 2008 from $27.3 million in fiscal 2007. The decrease was primarily attributable to higher cost of revenue and other costs.

Our cost of revenue increased by $59.6 million to $181.7 million in fiscal 2008 from $122.1 million in fiscal 2007, primarily on account of an increase in employee costs and wages by $42.9 million due to the increase in headcount. In addition, infrastructure costs increased by $13.4 million and depreciation costs increased by $3.9 million due to the opening of new delivery centers, one each in Mumbai, Pune, Gurgaon and Bangalore, which was partially offset by a decrease in travel cost by $0.7 million.

Our other costs increased by $17.7 million to $63.3 million in fiscal 2008 from $45.6 million in fiscal 2007. The increase in other costs was primarily on account of an increase in non-operating employee compensation by $3.3 million, an increase in travel expenses by $0.7 million and an increase in professional fees by $3.5 million due to an increase in our marketing efforts and the expansion of our management team. In addition, administration costs increased by $10.2 million primarily due to (i) the fringe benefit tax payable by us on the allotment of shares pursuant to the exercise, on or after April 1, 2007, of options and RSUs granted to employees of $2.5 million, (ii) an increase in fringe benefit tax on other expenses by $1.2 million, (iii) an increase in bad debts provision of $1.4 million, (iv) an increase in infrastructure cost of $1.3 million and depreciation cost of $0.4 million due to the opening of new delivery centers, one each in Mumbai, Pune, Gurgaon and Bangalore, (v) an increase in other employee related costs such as recruitment and training cost of $1.5 million, and (vi) an increase in other administrative expense of $1.8 million. Segment operating margin for fiscal 2008 decreased by 7.8% to 6.2% of revenue as compared to fiscal 2007.

WNS Auto Claims BPO

Segment Revenue. Revenue in the WNS Auto Claims BPO segment increased by 8.7% to $217.1 million in fiscal 2009 from $199.7 million in fiscal 2008, primarily due to our acquisition of Chang Limited in April 2008. This increase of $17.4 million was primarily on account of an increase in revenue from new clients of $41.6 million which was partially offset by a decrease in revenue from existing clients of $24.2 million. Payments made to repair centers in fiscal 2009 were $152.9 million, a decrease of 9.6% from $169.2 million in fiscal 2008. The decrease in revenue from existing clients and the decrease in payments made to repair centers are primarily due to a decrease in the volume of transactions executed for the existing clients of WNS Assistance. Revenue less repair payments in this segment increased by 110.0% to $64.2 million in fiscal 2009 from $30.6 million in fiscal 2008, primarily due to our acquisition of Chang Limited.

Revenue in the WNS Auto Claims BPO segment increased by 25.8% to $199.7 million in fiscal 2008 from $158.8 million in fiscal 2007, primarily due to an increase in the volume of transactions executed for our existing clients, which contributed $37.9 million of the increase, and an increase in revenue from new clients, which contributed $3.0 million of the increase (including $0.1 million of revenue contributed by Flovate which we acquired in June 2007). Payments made to repair centers in fiscal 2008 were $169.2 million, an increase of 27.6% from $132.6 million in fiscal 2007. This was primarily due to an increase in the volume of transactions executed for our new clients and the addition of new clients. Revenue less repair payments in this segment increased by 16.8% to $30.6 million in fiscal 2008 from $26.2 million in fiscal 2007 due to additional revenue from existing and new clients of $2.0 million and $2.4 million, respectively.

Segment Operating Income. Segment operating income increased by 13.1% to $16.4 million in fiscal 2009 from $14.5 million in fiscal 2008. The increase of $1.9 million was primarily on account of an increase in revenue from the addition of new clients due to our acquisition of Chang Limited which was partially offset by an increase in our cost of revenue and other costs. Our cost of revenue increased by $14.1 million to $194.3 million in fiscal 2009 from $180.2 million in fiscal 2008. The increase in cost of revenue was primarily on account of an increase in infrastructure related costs by $25.6 million, an increase in our employee costs by $5.1 million, and an increase in travel costs by $0.1 million. This increase was partially offset by a decrease in payments to repair centers by $16.3 million to $152.9 million in fiscal 2009 from $169.2 million in fiscal 2008 and a decrease in depreciation cost by $0.5 million. Our other costs increased by $1.4 million to $6.4 million in fiscal 2009 from $5.0 million in fiscal 2008 due to an increase in employee costs by $1.4 million and an increase in professional expenses by $0.2 million, which was partially offset by a decrease in the administration costs by $0.2 million. Our travel costs remained stable during this period. Segment operating margin for fiscal 2009 increased by 0.3% to 7.5% of revenue as compared to 7.2% in fiscal 2008. Segment operating income as a percentage of revenue less repair was 25.5% in fiscal 2009 as compared to 47.3% in fiscal 2008.

Segment operating income increased by 184.3% to $14.5 million in fiscal 2008 from $5.1 million in fiscal 2007. This increase of $9.4 million was primarily on account of an increase in revenue which was partially offset by an increase in our cost of revenue and other costs. As claims management revenue is recognized over the period that claims are processed, a portion of such revenue is deferred at the end of a period. Our processing period generally ranges between one to two months. Claims management revenue deferred at March 31, 2007 was higher than claims management revenue deferred at March 31, 2008 by $0.3 million. Our cost of revenue increased by $30.6 million to $180.2 million in fiscal 2008 from $149.6 million in fiscal 2007. The largest component of our cost of revenue is payments to repair centers as part of our automobile management services where we arrange for repairs through a network of repair centers. Other primary components of our cost of revenue are employee costs (which comprise employee salaries and costs related to recruitment, training and retention), infrastructure-related costs (which comprise depreciation charges, lease rentals, facilities management costs and telecommunication network costs), and travel related costs. The increase in cost of revenue was primarily on account of an increase in payments to repair centers by $36.5 million to $169.1 million in fiscal 2008 from $132.6 million in fiscal 2007 due to the addition of new clients. This increase was partially offset by a decrease in our employee costs by $2.6 million, a decrease in infrastructure related costs by $2.4 million, a decrease in depreciation cost by $0.7 million and a decrease in travel costs by $0.2 million. The key components of our other costs are non-operating employee compensation, travel costs, professional expenses and administration related costs. Our other costs increased by $0.8 million to $5.0 million in fiscal 2008 from $4.2 million in fiscal 2007 due to an increase in administration costs by $0.9 million which was partially offset by a decrease in our professional expenses by $0.1 million. Our travel costs and employee costs remained stable during this period. Segment operating margin for fiscal 2008 increased by 4.0% to 7.2% of revenue as compared to 3.2% in fiscal 2007. Segment operating income as a percentage of revenue less repair was 47.3% in fiscal 2008 as compared to 19.4% in fiscal 2007.

Quarterly Results

The following table presents unaudited quarterly financial information for each of our last eight fiscal quarters on a historical basis. We believe the quarterly information contains all adjustments necessary to fairly present this information. As a business process outsourcing services provider, we anticipate and respond to demand from our clients. Accordingly, we have limited control over the timing and circumstances under which our services are provided. Typically, we show a decrease in our first-quarter margins as a result of salary increases. For these and other reasons, we can experience variability in our operating results from quarter to quarter. The operating results for any quarter are not necessarily indicative of the results for any future period.

		Fiscal 2009																Fiscal 2008
		Three Months Ended																Three Months Ended
		March				December				September				June				March				December				September				June
		2009				2008				2008				2008				2008				2007				2007				2007
		(Unaudited, US dollars in millions)
Revenue(1)		$	132.5			$	134.0			$	149.8			$	122.9			$	116.1			$	115.6			$	115.6			$	112.5
Cost of revenue			99.9				97.0				114.9				98.4				88.8				91.9				92.5				90.2
Gross profit			32.6				37.0				34.9				24.5				27.3				23.8				23.1				22.3
Operating expenses:
SG&A expenses(2)			17.1				18.9				21.3				18.2				21.4				17.8				18.8				14.7