UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 6-K

Report of Foreign Private Issuer
Pursuant to Rule 13a-16 or 15d-16 of the Securities Exchange Act of 1934

For the quarter ended June 30, 2010

Commission File Number 001—32945

WNS (HOLDINGS) LIMITED

(Exact name of registrant as specified in the charter)

Not Applicable
(Translation of Registrant’s name into English)

Jersey, Channel Islands
(Jurisdiction of incorporation or organization)

Gate 4, Godrej & Boyce Complex
Pirojshanagar, Vikroli (W)
Mumbai 400 079, India
+91-22 - 4095 -2100
(Address of principal executive offices)

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

Form 20-F þ          Form 40-F o

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

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

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

Yes o          No þ

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

 

 

TABLE OF CONTENTS

Part I — FINANCIAL INFORMATION
CONDENSED CONSOLIDATED BALANCE SHEETS
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Part II — MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Part III — RISK FACTORS
SIGNATURE
EXHIBIT INDEX
Ex-99.1 Facility agreement dated July 2, 2010

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

CONVENTIONS USED IN THIS REPORT

In this report, references to “US” are to the United States of America, its territories and its possessions. References to “UK” are to the United Kingdom. References to “India” are to the Republic of India. References to “$” 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.

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

We also refer in various places within this 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 “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” 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.

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This report contains “forward-looking statements” that are based on our current expectations, assumptions, estimates and projections about our company and our industry. The forward-looking statements are subject to various risks and uncertainties. Generally, these forward-looking statements can be identified by the use of forward-looking terminology such as “anticipate,” “believe,” “estimate,” “expect,” “intend,” “will,” “project,” “seek,” “should” and similar expressions. Those statements include, among other things, the discussions of our business strategy and expectations concerning our market position, future operations, margins, profitability, liquidity and capital resources. 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 risks and uncertainties include but are not limited to:

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

•		the implications of the accounting changes and restatement of our financial statements described in “Explanatory Note Regarding our Consolidated Financial Statements” for our reporting with the Commission, and any adverse developments in existing legal proceedings or the initiation of new legal proceedings;
•		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., or Aviva Global (which we have renamed as WNS Customer Solutions (Singapore) Private Limited, or WNS Global Singapore following our acquisition) and our master services agreement with Aviva Global Services (Management Services) Private Limited, or AVIVA MS, as described below;
•		our ability to successfully consummate strategic acquisitions; and
•		volatility of our ADS price.

These and other factors are more fully discussed in our other filings with the Securities and Exchange Commission, or the SEC, including in “Risk Factors,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and elsewhere in our annual report on Form 20-F for our fiscal year ended March 31, 2010. 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 — FINANCIAL INFORMATION

WNS (HOLDINGS) LIMITED

		June 30,				March 31,
		2010				2010
		(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents		$	38,830			$	32,311
Bank deposits and marketable securities			50				45
Accounts receivable, net of allowance of $3,371 and $3,152 respectively			58,573				44,082
Accounts receivable — related parties			594				739
Unbilled revenue			32,352				40,892
Funds held for clients			10,067				11,372
Employee receivables			1,458				1,526
Prepaid expenses			2,979				2,101
Prepaid income taxes			5,387				5,602
Deferred tax assets			2,200				1,959
Other current assets			29,020				36,308
Total current assets			181,510				176,937
Goodwill			89,308				90,662
Intangible assets, net			179,984				188,079
Property and equipment, net			47,232				51,700
Other assets			7,307				10,242
Deposits			6,739				7,086
Deferred tax assets			26,366				25,184
TOTAL ASSETS		$	538,446			$	549,890
LIABILITIES, REDEEMABLE NONCONTROLLING INTEREST AND EQUITY
Current liabilities:
Accounts payable		$	30,893			$	27,900
Current portion of long term debt			46,000				40,000
Short term debt			6,000				—
Short term line of credit			103				—
Accrued employee cost			23,319				30,977
Deferred revenue			4,762				4,891
Deferred tax liabilities			34				—
Income taxes payable			2,118				2,550
Other current liabilities			66,775				67,585
Total current liabilities			180,004				173,903
Long term debt			89,000				95,000
Deferred revenue			8,544				3,515
Other liabilities			3,234				3,727
Accrued pension liability			4,334				3,921
Deferred tax liabilities			8,388				8,343
Derivative contracts			4,550				7,600
TOTAL LIABILITIES			298,054				296,009
Commitments and contingencies

		June 30,				March 31,
		2010				2010
		(Unaudited)
Redeemable noncontrolling interest			—				278
WNS (Holdings) Limited shareholders’ equity:
Ordinary shares, $0.16 (10 pence) par value, authorized:
50,000,000 shares; Issued and outstanding: 44,117,085 and 43,743,953 shares, respectively			6,904				6,848
Additional paid-in-capital			204,604				203,531
Retained earnings			44,688				50,797
Accumulated other comprehensive loss			(15,804	)			(7,573	)
Total WNS (Holdings) Limited shareholders’ equity			240,392				253,603
TOTAL LIABILITIES, REDEEMABLE NONCONTROLLING INTEREST AND EQUITY		$	538,446			$	549,890

See accompanying notes.

WNS (HOLDINGS) LIMITED

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited, amounts in thousands, except per share data)

		Three months ended June 30
		2010				2009
						(As restated
						See Note 2)
Revenue
Third parties		$	149,054			$	133,043
Related parties			910				50
			149,964				133,093
Cost of revenue			123,227				95,948
Gross profit			26,737				37,145
Operating expenses:
Selling, general and administrative expenses			19,580				20,766
Amortization of intangible assets			7,980				8,200
Operating (loss) income			(823	)			8,179
Other expenses, net			2,306				2,824
Interest expense			2,693				4,116
(Loss) income before income taxes			(5,822	)			1,239
Provision for income taxes			497				316
Net (loss) income			(6,319	)			923
Less: Net loss attributable to redeemable noncontrolling interest			(274	)			(114	)
Net (loss) income attributable to WNS (Holdings) Limited shareholders		$	(6,045	)		$	1,037
Earnings per share of ordinary share
Basic		$	(0.14	)		$	0.02
Diluted		$	(0.14	)		$	0.02

See accompanying notes.

WNS (HOLDINGS) LIMITED

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited, amounts in thousands)

		Three months ended
		June 30,
		2010				2009
						(As restated
						See Note 2)
Cash flows from operating activities
Net cash provided by operating activities		$	4,515			$	7,423
Cash flows from investing activities
Facility and property cost			(2,750	)			(3,766	)
Proceeds from sale of assets, net			55				301
Marketable securities and deposits (purchased) sold, net			(7	)			9,226
Net cash (used in) provided by investing activities			(2,702	)			5,761
Cash flows from financing activities
Proceeds from exercise of stock options			447				107
Excess tax benefits from share-based compensation			749				498
Repayment of long term debt			—				(5,000	)
Payment of debt issuance cost			(534	)			(47	)
Proceeds from (repayments of) short term borrowings, net			6,104				(439	)
Principal payments under capital leases			—				(45	)
Net cash provided by (used in) financing activities			6,766				(4,926	)
Effect of exchange rate changes on cash and cash equivalents			(2,060	)			3,158
Net change in cash and cash equivalents			6,519				11,416
Cash and cash equivalents at beginning of period			32,311				38,931
Cash and cash equivalents at end of period		$	38,830			$	50,347

See accompanying notes.

WNS (HOLDINGS) LIMITED

1. Basis of presentation

The accompanying unaudited condensed consolidated financial statements of WNS (Holdings) Limited (the “Company” or “WNS”) have been prepared in accordance with United States generally accepted accounting principles (“US GAAP”) for interim financial reporting and with the instructions of Rule 10-01 of Regulation S-X. Accordingly, they do not include all information and footnotes required by US GAAP for complete financial statements. In the opinion of management, all adjustments (including normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three month period ended June 30, 2010 are not necessarily indicative of the results that may be expected for the year ending March 31, 2011.

The balance sheet at March 31, 2010 has been derived from the audited financial statements at that date, but does not include all of the information and footnotes required by US GAAP for complete financial statements. For further information, refer to the audited consolidated financial statements and footnotes thereto of the Company for the year ended March 31, 2010.

     Consolidation

The Company consolidates all the subsidiaries where it holds, directly or indirectly, more than 50% of the total voting power or where it exercises control.

2. Restatement and reclassification of previously issued consolidated financial statements

In the audited consolidated financial statements for the year ended March 31, 2010, the Company restated its previously issued consolidated financial statements for the years ended March 31, 2009 and 2008. The Company also restated its previously issued condensed consolidated income statements for the first, second and third quarters of fiscal year ended March 31, 2010 included in its annual report on Form 20-F for the year ended March 31, 2010 filed with the US Securities and Exchange Commission. The restatement resulted from a correction in the income statement characterization of referral fees and the timing of recognition of revenue and cost for completed but unbilled repair costs. The restatement adjustments resulted in a decrease in previously reported revenue and cost of revenue and an increase in net income by $3,602, $3,561 and $30, respectively, for the quarter ended June 30, 2009. Accordingly, the consolidated financial information presented in the accompanying unaudited condensed consolidated financial statements for the three month period ended June 30, 2009 is restated to give effect to such adjustments.

3. Adoption of new accounting principles

Effective January 1, 2010, Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2010-06, “Improving Disclosures about Fair Value Measurements”, to amend the disclosure requirements related to recurring and nonrecurring fair value measurements. The guidance requires new disclosures on the transfers of assets and liabilities between Level 1 (quoted prices in active market for identical assets or liabilities) and Level 2 (significant other observable inputs) of the fair value measurement hierarchy, including the reasons and the timing of the transfers. Additionally, the guidance requires a roll forward of activities on purchases, sales, issuance, and settlements of the assets and liabilities measured using significant unobservable inputs (Level 3 fair value measurements). The guidance is effective for interim and annual reporting period beginning after December 15, 2009, except for the disclosure about purchases, sales, issuance, and settlements in the roll forward of activity in level 3 fair value measurements which are effective for fiscal years beginning after December 15, 2010, and for interim periods within those fiscal years. The Company adopted the disclosure provisions on the transfers of assets and liabilities between Level 1 and Level 2 in the quarter ended December 31, 2009.

WNS (HOLDINGS) LIMITED
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
JUNE 30, 2010
(Amounts in thousands, except share and per share data)

4. Acquisitions

Business Applications Associates Limited (“BizAps”)

On June 12, 2008, the Company acquired all outstanding shares of Business Applications Associates Limited (“BizAps”), a provider of systems applications and products (“SAP”) solutions to optimize enterprise resource planning (“ERP”) functionality for finance and accounting processes. The purchase price for the acquisition was a cash payment of £5,000 ($9,749) plus direct transaction costs of $469. The consideration also included a contingent earn-out consideration of up to £4,500 ($9,000) based on satisfaction of certain performance obligation over a two-year period up to June 2010 as set out in the share purchase agreement.

Consequent to the satisfaction of certain performance obligations for the 12 month period ended June 30, 2009; the Company paid an earn-out consideration of $1,111. Such amount was recorded as an addition to goodwill. On June 6, 2010, the Company entered into an amendment to the acquisition agreement with the sellers, pursuant to which, the Company settled the earn-out consideration for performance obligations for the period ending on June 30, 2010 at $471. Such amount is recorded as an addition to goodwill.

5. Property and equipment, net

Property and equipment, net consist of the following:

		As at June 30, 2010				As at March 31, 2010
Property and equipment, gross		$	168,699			$	171,505
Less: Accumulated depreciation			(121,467	)			(119,805	)
Property and equipment, net		$	47,232			$	51,700

Depreciation expense on property, plant and equipment for the three months ended June 30, 2010 and 2009 was $5,339 and $5,306 respectively.

6. Stock-based compensation

Share-based compensation expense during the three months ended June 30, 2010 and 2009 are as follows:

		Three months ended
		June 30,
		2010				2009
Share-based compensation recorded in
— Cost of revenue		$	102			$	876
— Selling, general and administrative expenses			391				2,420
Total share-based compensation expense			493				3,296
Estimated income tax benefit			(49	)			(803	)
Share-based compensation expense, net of estimated taxes		$	444			$	2,493

During the three months ended June 30, 2010 and 2009, the Company issued 373,132 and 212,253 shares, respectively, upon exercise of stock options and RSUs.

WNS (HOLDINGS) LIMITED
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
JUNE 30, 2010
(Amounts in thousands, except share and per share data)

7. Comprehensive income (loss)

The changes in the components of comprehensive income (loss), net of taxes for the three months ended June 30, 2010 and 2009 are as follows:

		Three months ended
		June 30,
		2010				2009
						(As restated See Note 2)
Net (loss) income		$	(6,319	)		$	923
Cumulative translation adjustment			(5,403	)			18,137
Change in fair value of cash flow hedges, net of tax			(2,707	)			(8,255	)
Unrecognized actuarial (loss) gain and prior service cost on pension liability			(189	)			101
Total comprehensive (loss) income			(14,618	)			10,906
Less : Comprehensive loss attributable to redeemable noncontrolling interest			(342	)			(122	)
Comprehensive (loss) income attributable to WNS (Holdings) Limited shareholders		$	(14,276	)		$	11,028

The components of accumulated other comprehensive loss, net of taxes, were as follows:

		As at,
		June 30, 2010				March 31, 2010
Net unrealized gain on cash flow hedges		$	1,892			$	4,415
Cumulative translation adjustment			(16,896	)			(11,534	)
Unamortized net actuarial loss and prior service cost on pension plans			(800	)			(454	)
Accumulated other comprehensive loss		$	(15,804	)		$	(7,573	)

WNS (HOLDINGS) LIMITED
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
JUNE 30, 2010
(Amounts in thousands, except share and per share data)

8. Equity and redeemable noncontrolling interest

A summary of the changes in equity and redeemable noncontrolling interest for the three months ended June 30, 2010 and 2009 is provided below:

		Three months ended June 30,
		2010								2009
		WNS (Holdings)				Redeemable				WNS (Holdings)				Redeemable
		Limited				noncontrolling				Limited shareholders'				noncontrolling
		shareholders' equity				interest				equity				interest
										(As restated See Note 2)
Balance at beginning of period		$	253,603			$	278			$	188,126			$	13
Shares issued for exercised options			447				—				107				—
Share-based compensation charge			494				—				3,317				—
Excess tax benefits from exercise of share-based options, net			188				—				(258	)			—
Accretion to redeemable noncontrolling interest (Refer note 18)			(64	)			64				(109	)			109
Comprehensive income (loss) :			—				—				—				—
Consolidated net income (loss)			(6,045	)			(274	)			1,037				(114	)
Foreign currency translation gain (loss)			(5,362	)			(41	)			18,145				(8	)
Change in fair value of cash flow hedges, net of tax			(2,523	)			(184	)			( 8,255	)			—
Pension adjustments			(346	)			157				101				—
Balance at end of period		$	240,392			$	—			$	202,211			$	—

WNS (HOLDINGS) LIMITED
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
JUNE 30, 2010
(Amounts in thousands, except share and per share data)

9. Income (loss) per share of ordinary shares

The following table sets forth the computation of basic and diluted net income (loss) per share:

		Three months ended
		June 30
		2010				2009
					(As restated See Note 2)
Numerator:
Net (loss) income attributable to WNS (Holdings) Limited shareholders		$	(6,045	)		$	1,037
Less: Impact on net loss attributable to WNS (Holdings) Limited shareholders through changes in redeemable noncontrolling interest (Refer Note 18)			(64	)			(109	)
		$	(6,109	)		$	928
Denominator:
Basic weighted average ordinary shares outstanding			43,979,924				42,733,867
Dilutive impact of equivalent stock options and RSUs outstanding			—				618,506
Diluted weighted average ordinary shares outstanding			43,979,924				43,352,373

The Company computes net income per share in accordance with Accounting Standards Codification (“ASC”) 260-10, “Earnings Per Share”. The computation of net income (loss) per ordinary share was determined by dividing net (loss) income attributable to the Company’s shareholders by the weighted average ordinary shares outstanding during the respective periods.

The Company excludes options with exercise price that are greater than the average market price from the calculation of diluted EPS because their effect would be anti-dilutive. In the three months ended June 30, 2010 and 2009, the Company excluded from the calculation of diluted EPS options to purchase 1,079,378 shares and 1,467,652 shares, respectively.

Due to net losses in the three months ended June 30, 2010, the assumed exercise of stock options and RSUs had an antidilutive effect and therefore was excluded from the computation of diluted loss per share.

WNS (HOLDINGS) LIMITED
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
JUNE 30, 2010
(Amounts in thousands, except share and per share data)

10. Retirement benefits

Defined Contribution Plan

The following table sets forth the Company’s contribution to defined contribution plans:

		Three months ended
		June 30,
		2010				2009
India		$	1,364			$	1,298
Philippines			12				6
Sri Lanka			84				136
United Kingdom			217				122
United States			98				130
		$	1,775			$	1,692

Defined Benefit Plan — Gratuity

The following table sets forth the net periodic cost recognized by the Company in respect of gratuity payments under the Company’s gratuity plans covering eligible employees of the Company in India, Philippines and Sri Lanka.

		Three months ended
		June 30,
		2010				2009
Net periodic gratuity cost
Service cost		$	351			$	262
Interest cost			111				85
Expected return on plan asset			(4	)			(9	)
Recognized net actuarial loss			23				59
Net periodic gratuity cost for the period		$	481			$	397

WNS (HOLDINGS) LIMITED
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
JUNE 30, 2010
(Amounts in thousands, except share and per share data)

11. Segments

The Company has several operating segments based on a mix of industry, geography, customers and the types of services. The composition and organization of these operating segments is fluid and the structure changes regularly in response to the growth of the overall business acquisitions and changes in reporting structure, customers, services, industries served and delivery centers. These operating segments include travel, insurance, Philippines, research and analytics, legal, financial services, AVIVA, auto claims and others. The Company believes that the business process outsourcing services that it provides to customers other than automobile claims handling services are similar in terms of services, service delivery methods, use of technology, and long-term gross profit and hence meet the aggregation criteria under ASC 280, “Segmental Reporting” (“ASC 280”) and referred to as WNS Global BPO. WNS Auto Claims BPO, which provides automobile claims handling services, does not meet the aggregation criteria under ASC 280. Accordingly, the Company has determined that it has two reportable segments “WNS Global BPO” and “WNS Auto Claims BPO”.

In the WNS Auto Claims BPO segment, in order to provide accident management services, the Company arranges for the repair through a network of repair centers. Repair costs paid to automobile repair centers are invoiced to customers and recognized as revenue. The Company uses revenue less repair payments for “Fault” repairs as a primary measure to allocate resources and measure segment performance. Revenue less repair payments is a non-GAAP measure which is calculated as revenue less payments to repair centers. For “Non-fault repairs”, revenue including repair payments is used as a primary measure. As the Company provides a consolidated suite of accident management services including credit hire and credit repair for its “Non-fault” repairs business, the Company believes that measurement of that line of business has to be on a basis that includes repair payments in revenue. The Company believes that the presentation of this non-GAAP measure in the segmental information provides useful information for investors regarding the segment’s financial performance. The presentation of this non-GAAP information is not meant to be considered in isolation or as a substitute for the Company’s financial results prepared in accordance with US GAAP.

WNS (HOLDINGS) LIMITED
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
JUNE 30, 2010
(Amounts in thousands, except share and per share data)

Segmental information for the three ended June 30, 2010 and 2009 are as follows:

		Three months ended June 30, 2010
		WNS Global				WNS Auto				Inter
		BPO				Claims BPO				Segments				Total
Revenue from external customers		$	80,005			$	69,959			$	—			$	149,964
Segmental revenue		$	80,208			$	69,959			$	(203	)		$	149,964
Payments to repair centers			—				60,656				—				60,656
Revenue less repair payments			80,208				9,303				(203	)			89,308
Depreciation			5,074				265				—				5,339
Other costs			69,882				6,640				(203	)			76,319
Segment operating income			5,252				2,398				—				7,650
Other expense (income), net			2,426				(120	)			—				2,306
Interest expense			2,693				—				—				2,693
Segment income before income taxes			133				2,518				—				2,651
Provision for income taxes			35				462				—				497
Segment net income			98				2,056				—				2,154
Unallocated share-based compensation expense															493
Amortization of intangible assets															7,980
Net loss															(6,319	)
Less: Net loss attributable to redeemable noncontrolling interest															(274	)
Net loss attributable to WNS (Holdings) Limited shareholders														$	(6,045	)
Capital expenditure		$	2,210			$	540			$	—			$	2,750
Segment assets, net of eliminations		$	430,968			$	107,478			$	—			$	538,446

WNS (HOLDINGS) LIMITED
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
JUNE 30, 2010
(Amounts in thousands, except share and per share data)

		Three months ended June 30, 2009 (As restated See Note 2)
		WNS Global				WNS Auto				Inter
		BPO				Claims BPO				Segments				Total
Revenue from external customers		$	85,375			$	47,718			$	—			$	133,093
Segmental revenue		$	85,695			$	47,718			$	(320	)		$	133,093
Payments to repair centers			—				35,207				—				35,207
Revenue less repair payments			85,695				12,511				(320	)			97,886
Depreciation			5,089				217				—				5,306
Other costs			63,150				9,918				(320	)			72,748
Segment operating income			17,456				2,376				—				19,832
Other expense (income), net			3,012				(188	)			—				2,824
Interest expense			4,014				102				—				4,116
Segment income before income taxes			10,430				2,462				—				12,892
Provision (benefit) for income taxes			(416	)			732				—				316
Segment net income			10,846				1,730				—				12,576
Unallocated share-based compensation expense (includes related fringe benefit taxes — $157)															3,453
Amortization of intangible assets															8,200
Net income															923
Less: Net loss attributable to noncontrolling interest															(114	)
Net income attributable to WNS (Holdings) Limited shareholders														$	1,037
Capital expenditure		$	2,878			$	888			$	—			$	3,766
Segment assets, net of eliminations		$	477,141			$	106,955			$	—			$	584,096

WNS (HOLDINGS) LIMITED
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
JUNE 30, 2010
(Amounts in thousands, except share and per share data)

12. Other expense, net

Components of other expense (income) for the three months ended June 30, 2010 and 2009 are as follows:

		Three months ended
		June 30,
		2010				2009
Foreign exchange (gain) loss, net		$	(1,770	)		$	181
Interest income			(34	)			(88	)
Ineffective portion of interest rate swap (Refer Note 15)			4,851				(171	)
(Gain) loss on forward/option contract			(932	)			3,071
Other			191				(169	)
Total other expense, net		$	2,306			$	2,824

13. Fair value disclosures

Fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market based measurement that should be determined based on assumption that market participant would use in pricing an asset or a liability. A three tier fair value hierarchy is established as a basis for considering such assumptions and for inputs used in the valuation methodologies in measuring fair value:

Level 1		Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets
Level 2		Includes other inputs that are directly or indirectly observable in the market price
Level 3		Unobservable inputs which are supported by little or no market activity

The fair value hierarchy also requires an entity to maximize the use of observable inputs and minimize the use unobservable inputs when measuring fair value. The Company measures derivative instruments at fair value. The derivative instruments are classified within Level 2 as the valuation inputs are based on quoted prices and market observable data of similar instruments in inactive markets. The Company holds non speculative forwards, options and swaps to hedge certain foreign currency and interest rate exposures. When active quotes are not available, the Company uses industry standard valuation models. Where applicable, these models project future cash flows and discount the future amounts to a present value using market-based observable inputs including interest rate curves, credit risk, foreign exchange rates, and forward and spot prices for currencies.

WNS (HOLDINGS) LIMITED
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
JUNE 30, 2010
(Amounts in thousands, except share and per share data)

The assets and liabilities measured at fair value on a recurring basis are summarized below:-

						Fair value measurement at reporting date using
						Quoted prices in				Significant
						active markets				other				Significant
						for identical				observable				unobservable
		June 30,				assets				inputs				inputs
Description		2010				(Level 1)				(Level 2)				(Level 3)
Assets
Derivative contracts
— current		$	16,228			$	—			$	16,228			$	—
— non current			5,531				—				5,531				—
Total Assets		$	21,759			$	—			$	21,759			$	—
Liabilities
Derivative contracts
— current		$	8,833			$	—			$	8,833			$	—
— non current			864				—				864				—
Total liabilities		$	9,697			$	—			$	9,697			$	—

						Fair value measurement at reporting date using
						Quoted prices in				Significant
						active markets				other				Significant
						for identical				observable				unobservable
		March 31,				assets				inputs				inputs
Description		2010				(Level 1)				(Level 2)				(Level 3)
Assets
Derivative contracts
— current		$	22,808			$	—			$	22,808			$	—
— non current			8,374				—				8,374				—
Total Assets		$	31,182			$	—			$	31,182			$	—
Liabilities
Derivative contracts
— current		$	6,750			$	—			$	6,750			$	—
— non current			1,992				—				1,992				—
Total liabilities		$	8,742			$	—			$	8,742			$	—

WNS (HOLDINGS) LIMITED
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
JUNE 30, 2010
(Amounts in thousands, except share and per share data)

Fair value of cash equivalents, funds held for clients, bank deposits and marketable securities, accounts receivable, employee receivables, other current assets, accounts payables, short term loan, accrued expenses and other current liabilities appropriate their fair values due to short term maturing of these items. The fair value of deposits and long term debt is $6,724 and $85,198, respectively, at June 30, 2010 and $7,073 and $91,192, respectively, at March 31, 2010. The fair value is estimated using the discounted cash flow approach and market rates of interest. The valuation technique involves assumption and judgments’ regarding risk characteristics of the instruments, discount rates, future cash flows and other factors.

As of June 30, 2010, the Company did not have any significant non-recurring measurements of nonfinancial assets and nonfinancial liabilities.

14. Debt

Long term debt

On July 11, 2008, the Company entered into a term loan facility agreement to provide for a secured term loan of $200,000 which was fully utilized by the Company to finance the acquisition of Aviva Global Services. In connection with the financing, the Company incurred $1,891 as debt issuance costs, which was deferred and amortized as an adjustment to interest expense over the term of the loan using the effective interest method.

The term loan bore interest at three month US dollar LIBOR plus a margin of 3.5% per annum (3% through January 9, 2009), payable on a quarterly basis. The Company had a deposit of $1,400 as restricted balance fixed deposit with a bank, as agent under the facility agreement, in accordance with the facility agreement to secure payment of interest for a quarter which was recorded under “Other current assets” on the consolidated balance sheet. The variable interest rate at June 30, 2010 was 3.79% per annum. Effective October 10, 2008, the Company entered into interest rate swap agreements with the notional amount totaling $200,000, to effectively convert the term loan into a fixed-rate debt and the weighted average effective fixed interest rate on the term loan at June 30, 2010 was 7.31% per annum. The Company had an option to prepay the whole or a part of the debt without any prepayment penalty by giving ten days’ prior notice to the lenders. Pursuant to the prepayment option, the Company made a prepayment of $5,000 on April 14, 2009, $5,000 on July 10, 2009 and $15,000 on January 11, 2010. The Company also repaid the scheduled repayment installments of the loan of $20,000 each on July 10, 2009, January 11, 2010 and July 12, 2010. As of June 30, 2010 the Company was in compliance with all of its financial covenants.

As on July 12, 2010 the balance of $115,000 has been prepaid with cash on hand and proceeds from a new term loan facility for $94,000 obtained pursuant to a facility agreement dated July 2, 2010.

The new facility provides for a term loan of $94,000 with interest equal to the three month US dollar LIBOR plus a margin of 2% per annum. This term loan is repayable in semi-annual installments of $20,000 each on January 10, 2011 and July 11, 2011 and $30,000 on January 10, 2012 with the final installment of $24,000 payable on July 10, 2012. The facility is secured by, among other things, guarantees and pledges of shares provided by the Company and certain of its subsidiaries, a pari-passu fixed and floating charge over the assets of a UK subsidiary of the Company and charges over certain bank accounts. The facility agreement contains certain restrictive covenants on the indebtedness of the Company, total borrowings to tangible net worth ratio, total borrowings to EBITDA ratio and a minimum interest coverage ratio.

WNS (HOLDINGS) LIMITED
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
JUNE 30, 2010
(Amounts in thousands, except share and per share data)

The Company has also established a $30,000 line of credit in UK pursuant to a facility agreement dated June 30, 2010. This facility consists of a two year term loan facility of GBP equivalent of $15,000 at the Bank of England base rate plus a margin of 1.95% per annum and a working capital facility of GBP equivalent of $15,000 at the Bank of England base rate plus a margin of 2.45% per annum. This facility is secured by, among other things, guarantees and pledges of shares provided by the Company and certain of its subsidiaries, a pari-passu fixed and floating charge over the assets of the Company’s UK subsidiaries and a charge over a bank account. This facility agreement contains certain restrictive covenants on the indebtedness of the Company, total borrowings to tangible net worth ratio, total borrowings to EBITDA ratio, a minimum interest coverage ratio and a minimum current ratio. On July 7, 2010, out of the $30,000 line of credit, the Company borrowed $15,000 (£9,880) against the term loan facility and $5,553 (£3,657) was utilized from the working capital facility.

In connection with the refinancing of the debt, the Company has incurred an upfront fees and debt issuance cost totaling $1,150, a portion of which will be amortized as an adjustment to interest expense over the remaining term of the new loan. As both the old and the new loan are syndicated loan, to the extent that the loan was refinanced by the existing lenders, the Company has determined that the new loan is not substantially different from the old loan under the guidance provided by ASC 470-50“Modifications and Extinguishments”, and accordingly the existing unamortized costs of $228 pertaining to existing lenders continuing as new lenders will be recorded as an adjustment to interest expense over the remaining term of the modified loans and the debt issuance cost for the new loan of $333 pertaining to existing lenders continuing as new lenders is charged to the income statement. Under ASC 860 “Transfers and Servicing”, the Company determined that since the outstanding amount from one of the existing lenders not continuing as a new lender is fully repaid, it is an extinguishment of a loan, and thus the balance of unamortized debt cost of $424 of the existing loan have been charged to the income statement in the current period, since the Company determined that all substantive refinancing activities were completed by June 30, 2010. The balance of unamortized cost as of June 30, 2010 after the above adjustment is $1,045.

Short-term debt and line of credit

As at June 30, 2010, the unsecured line of credit of the Company’s Indian subsidiary from a bank has been increased to $10,076 from $8,202 as at March 31, 2010, interest on which is determined on the date of borrowing. As at June 30, 2010, $6,000 of short term debt and $103 of short term line of credit were utilized for working capital requirement and $342 was utilized for obtaining bank guarantees. The short term debt was taken at 2.35% per annum and short term line of credit was taken at 9.50% per annum

15. Derivative instruments and hedging activities

The Company is exposed to certain risks relating to its ongoing business operations. The primary risks managed by using derivative instruments are foreign currency exchange risk and interest rate risk. Forward 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 the Company’s floating rate borrowings.

WNS (HOLDINGS) LIMITED
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
JUNE 30, 2010
(Amounts in thousands, except share and per share data)

Cash flow hedges

The Company has instituted a foreign currency cash flow hedging program to protect against the reduction in value of forecasted foreign currency cash flows resulting from forecasted revenue of up to two years denominated in foreign currencies. The Company’s subsidiary in Mauritius and UK uses foreign currency forward and option contracts designated as cash flow hedges to hedge its forecasted revenue transactions denominated in a currency other than its functional currency. The operating subsidiaries in India, Philippines and Sri Lanka also hedge a part of their forecasted inter-company revenue denominated in US dollar, British Pound and Euro, with foreign currency forward and option contracts. These hedges mature on a monthly basis and the hedging contracts have a term of up to two years. When the functional currency of the subsidiary strengthens against a currency other than its functional currency, the decline in value of future foreign currency revenue is offset by gains in the value of the derivative contracts designated as hedges. Conversely, when the functional currency of the subsidiary weakens, the increase in the value of future foreign currency cash flows is offset by losses in the value of the forward contracts. The fair value of both the foreign currency forward contracts and options are reflected in other assets or other liabilities as appropriate . The forecasted inter-company revenue relates to cost of revenue of certain subsidiaries and is recorded by those subsidiaries in their functional currency at the time services are provided. The resulting difference upon the elimination of inter-company revenue with the related cost of revenue is recorded in other income.

The Company had entered into interest rate swap agreements to manage interest rate risk exposure. The swap agreements cover the outstanding amount of the term loan described in note 14. The swaps convert the floating rate of three month US dollar LIBOR rate under the loan to an average fixed rate of 3.81% per annum. The cash flows under the swap cover the entire tenor of the original loan and exactly match the interest payouts under the original loan. The interest rate swap effectively modified the Company’s exposure to interest rate risk by converting the Company’s floating rate debt to a fixed rate basis for the entire term of the debt, thus reducing the impact of interest rate changes on future interest expense. This agreement involves the receipt of floating rate amounts in exchange for fixed rate interest payments over the life of the agreement without an exchange of the underlying principal amount.

Pursuant to the refinancing described in note 14, in accordance with the guidance in ASC 815-20-55 “Implementation Guidance and Illustrations” the hedge relationship on $115,000 in connection with the original term loan facility was discontinued as it is probable that the forecasted transactions on the specific loan identified in the hedge documentation would not occur by the end of the date originally specified. Hence the Company has reclassified the mark-to-market loss of $4,654 on the $115,000 interest rate swap from other comprehensive income into earnings.

Other

The Company has entered into foreign currency average rate option contracts to cover the foreign currency risk associated with the translation of the forecasted profits of up to 12 months of a subsidiary, the functional currency of which is not US dollars. The Company has also entered into foreign currency forward contract to cover the foreign currency risk associated with revaluation of assets/liabilities. The Company’s subsidiary in India and UK has also entered foreign currency forward contracts to hedge a part of the risk associated with its forecasted inter-company revenue denominated in Canadian dollars and Romanian Leu of up to 24 months. These contracts do not qualify for hedge accounting and have not been designated as hedging instruments under ASC 815-10. The Company does not use derivative instruments for trading purposes.

WNS (HOLDINGS) LIMITED
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
JUNE 30, 2010
(Amounts in thousands, except share and per share data)

The fair values of derivative instruments are reflected in the consolidated balance sheet as follows:

		June 30, 2010
		Foreign
		exchange				Foreign				Interest
		forward				Exchange				rate				Total
		contracts				option contracts				contracts				derivatives
Assets
Derivatives not designated as hedging instruments
Other current assets		$	340			$	358			$	—			$	698
Other assets — non current			5				24				—				29
Total		$	345			$	382			$	—			$	727
Derivatives designated as hedging instruments
Other current assets		$	7,358			$	8,172			$	—			$	15,530
Other assets — non current			172				5,330				—				5,502
Total		$	7,530			$	13,502			$	—			$	21,032
Total assets		$	7,875			$	13,884			$	—			$	21,759
Liabilities
Derivatives not designated as hedging instruments
Other current liabilities		$	2,221			$	—			$	—			$	2,221
Derivative contracts			62				—				—				62
Total		$	2,283			$	—			$	—			$	2,283
Derivatives designated as hedging instruments
Other current liabilities		$	1,813			$	—			$	4,799			$	6,612
Derivative contracts			802				—				—				802
Total		$	2,615			$	—			$	4,799			$	7,414
Total liabilities		$	4,898			$	—			$	4,799			$	9,697

WNS (HOLDINGS) LIMITED
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
JUNE 30, 2010
(Amounts in thousands, except share and per share data)

		March 31, 2010
		Foreign
		exchange				Foreign				Interest
		forward				exchange				rate				Total
		contracts				option contracts				contracts				derivatives
Assets
Derivatives not designated as hedging instruments
Other current assets		$	1,501			$	550			$	—			$	2,051
Other assets — non current			28				76				—				104
Total		$	1,529			$	626			$	—			$	2,155
Derivatives designated as hedging instruments
Other current assets		$	11,281			$	9,476			$	—			$	20,757
Other assets — non current			642				7,628				—				8,270
Total		$	11,923			$	17,104			$	—			$	29,027
Total assets		$	13,452			$	17,730			$	—			$	31,182
Liabilities
Derivatives not designated as hedging instruments
Other current liabilities		$	415			$	—			$	—			$	415
Derivative contracts			11				—				—				11
Total		$	426			$	—			$	—			$	426
Derivatives designated as hedging instruments
Other current liabilities		$	1,836			$	—			$	4,499			$	6,335
Derivative contracts			86				—				1,895				1,981
Total		$	1,922			$	—			$	6,394			$	8,316
Total liabilities		$	2,348				—			$	6,394			$	8,742

WNS (HOLDINGS) LIMITED
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
JUNE 30, 2010
(Amounts in thousands, except share and per share data)

The following tables summarize activities in the consolidated statement of income for the three months ended June 30, 2010 related to derivative instruments that are classified as cash flow hedges in accordance with ASC 815-10:

Location of gain

Location of gain (loss)

Amount of gain (loss)

Amount of gain

(loss)

recognized in

recognized in income

(loss)

reclassified from

Amount of gain

income on derivative

on

recognized

AOCI

(loss)

(ineffective portion

derivative (ineffective

in AOCI on

into income

reclassified from

and

portion and amount

derivatives

(effective

AOCI into income

amount excluded from

excluded from

(effective portion)

portion)

(effective portion)

effectiveness testing)

effectiveness testing)

Three months ended

Three months ended

As of June 30, 2010

June 30, 2010

June 30, 2010

Derivatives designated as hedges

Foreign exchange forward contracts

$

4,915

Revenue

$

(479

)

$

—

Other expense, net

2,629

Other expense, net

13

Foreign exchange option contracts

(2,872

)

Revenue

(880

)

—

Other expense, net

53

Other expense, net*

(392

)

Interest rate swaps

(145

)

Interest expense

(1,200

)

Other expense, net*

(4,851

)

$

1,898

$

123

$

(5,230

)

		Location of gain or				Amount of gain (loss)
		(loss)				recognized in income
		recognized in income on				on
		derivatives				Derivatives
						Three months ended
						June 30, 2010
Derivatives not designated as hedging instruments
Foreign exchange forward contracts		Other expense, net				$	(1,245	)
Foreign exchange option contracts		Other expense, net					(126	)
						$	(1,371	)

WNS (HOLDINGS) LIMITED
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
JUNE 30, 2010
(Amounts in thousands, except share and per share data)

The following tables summarize activities in the consolidated statement of income for the three months ended June 30, 2009 related to derivative instruments that are classified as cash flow hedges in accordance with ASC 815-10:

														Location of gain (loss)				Amount of gain (loss)
														recognized in				recognized in income on
		Amount of gain (loss)				Location of gain (loss)				Amount of gain (loss)				income on derivative				derivative (ineffective
		recognized				reclassified from AOCI				reclassified from				(ineffective portion and				portion and amount
		in AOCI on derivatives				into income (effective				AOCI into income				amount excluded from				excluded from
		(effective portion)				portion)				(effective portion)				effectiveness testing)				effectiveness testing)
		As of June 30, 2009								Three months ended June 30, 2009								Three months ended June 30, 2009
Derivatives designated as hedges
Foreign exchange forward contracts		$	(8,726	)		Revenue				$	(103	)			—				—
						Other expense, net					(2,213	)
Foreign exchange option contracts			(7,368	)		Revenue					1,320				—				—
						Other expense, net					(196	)
Interest rate swaps			(8,592	)		Interest expense					(1,304	)		Other expense, net*				$	171
		$	(24,686	)						$	(2,496	)						$	171
		Location of gain or (loss) recognized in income on derivatives																Amount of gain or (loss) recognized in income on Derivatives
																		Three months ended
																		June 30, 2009
Derivatives not designated as hedging instruments
Foreign exchange forward contracts		Other expense, net																$	(237	)
Foreign exchange option contracts		Other expense, net																	(424	)
																		$	(661	)

WNS (HOLDINGS) LIMITED
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
JUNE 30, 2010
(Amounts in thousands, except share and per share data)

16. Taxes

Income taxes

Income tax expense for the three months ended June 30, 2010 was $497, as compared to income tax expense of $316 for the three months ended June 30, 2009. The increase in income tax expenses is primarily on account of the change in income tax rate by the Government of India.

In May 2010, the Government of India vide Finance Act, 2010 (“the Act”) has reduced the rate of income tax from 33.99% to 33.22%. Further, the Act has increased the minimum alternate tax (“MAT”) rate from 16.995% to 19.93%. Consequent to such amendment, the Company has recorded a charge due to a decrease in deferred tax asset as a result of the lower tax rates. The increase in MAT rate is expected to increase the cash outflow for the payment of income taxes in future.

In January 2009 and November 2009, the Company received orders from the Indian tax authorities that could give rise to an estimated $15,609 and $16,291, respectively, in additional taxes, including interest of $4,843 and $5,057 respectively. The assessment order alleges that the transfer price the Company applied to international transactions between one of its Indian subsidiary and its other wholly owned subsidiaries was not appropriate. The order also disallowed certain expenses claimed as tax deductible by Indian subsidiaries and a tax holiday benefit claimed by the Company. The Company has contested both of these orders. The Company believes that it is more likely than not that the Company’s position will prevail in the ultimate outcome of the matters.

Others

On March 21, 2009, the Company received an order from the Indian service tax authority, demanding $7,421 of service tax and related penalty for the period from March 1, 2003 to January 31, 2005. The assessment order alleges that service tax is payable in India on BPO services provided by WNS Global to clients. After consultation with Indian tax advisors, the Company believes the chances that the assessment would be upheld are remote. The Company intends to continue to vigorously dispute the assessment.

17. Commitments and contingencies

Certain subsidiaries in India hold bank guarantees aggregating $392 and $366 as at June 30, 2010 and March 31, 2010, respectively. These guarantees have a remaining expiry term of approximately one to five years.

Restricted time deposits placed with bankers as security for guarantees given by them to regulatory authorities in India, aggregating to $62 and $358 at June 30, 2010 and March 31, 2010, respectively, are included in other current assets. These deposits represent cash collateral against bank guarantees issued by the banks on behalf of the Company to third parties.

In the ordinary course of business, the Company is involved in lawsuits, claims and administrative proceedings. While uncertainties are inherent in the final outcome of these matters, the Company believes, after consultation with counsel, that the disposition of these proceedings will not have a material adverse effect on the Company’s financial position, results of operations or cash flows.

WNS (HOLDINGS) LIMITED
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
JUNE 30, 2010
(Amounts in thousands, except share and per share data)

18. Redeemable noncontrolling interest

In April 2008, the Company formed a joint venture, WNS Philippines, with Advanced Contact Solutions, Inc (“ACS”), a BPO services and customer care provider, in the Philippines. ACS has assigned its rights and obligations under the joint venture agreement in favour of its holding company Paxys Inc. Philippines (“Paxys”). This joint venture is majority owned by the Company (65%) and the balance by Paxys. This joint venture offers contact center services to global clients across industries. This joint venture enables the Company to bring a large scale talent pool to help solve the business challenges of its clients while diversifying the geographic concentration of delivery. Pursuant to the joint venture agreement, the Company has a call option to acquire from Paxys the remaining shares owned by Paxys and Paxys has a put option to sell all of its shareholding in the joint venture to the Company, upon the occurrence of certain conditions, as set forth in the joint venture agreement, or after August 6, 2012. The Company accounts for securities with redemption features that are not solely within its control in accordance with ASC 480-10 “Distinguishing Liabilities from Equity”. Accordingly, as certain of the conditions of the put option and call option are not within the control of the Company, this redeemable noncontrolling interest has been classified as temporary equity. The Company recognizes changes in the redemption value of the redeemable noncontrolling interest immediately and adjusts the carrying value of the security to equal the redemption value at the end of each reporting period. Reductions in the carrying amount are only recorded to the extent that increases in the carrying amount had been previously recorded. The redeemable noncontrolling interest is first adjusted with its share of profits/losses in WNS Philippines and, to the extent that this is less than the redemption amount determined in accordance with ASC 480-10, the difference is charged to retained earnings. The charge to retained earnings does not affect net income attributable to WNS (Holdings) Limited shareholders’ in the Company’s income statement, but reduces the numerator in the calculation of earnings per share. The redeemable noncontrolling interest has been valued based on the terms of the call option, because the Company’s call option has priority over the put option. If, in the future, the redemption amount under the call option (which is based on a multiple of WNS Philippines’ net income) is greater than the put option (which is based on Paxys’ initial investment in WNS Philippines), the redeemable noncontrolling interest will be valued at the redemption amount under the put option.

At June 30, 2010 the carrying amount of the redeemable noncontrolling interest adjusted for its share of losses exceeds the redemption amount, and accordingly, $64 is charged to retained earnings and reduced from the numerator in the calculation of earnings per share (refer to note 9).

19. Other current assets

Other current assets comprises of:

		As at,
		June 30, 2010				March 31,2010
Derivative instruments		$	16,228			$	22,808
VAT receivables			7,979				8,644
Deferred cost			1,701				1,340
Advances			1,174				1,035
Other current assets			1,938				2,481
Total		$	29,020			$	36,308